Final Response to IRS TAS for Distribution

8/3/2019 Final Response to IRS TAS for Distribution

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Tax Advocate Services4041 N. Central Ave MS 1005 PHXPhoenix Arizona 85012Attention: Barbara Richardson

Case Number: xxxxxxxxxID # used in your system: xxx-xx-xxxx

Dear xxxxxxxx,

This letter is in response to your letter dated April 21, 2010, which you sent to meregarding my client, xxxxxxxx, for the years 1994 thru 2009.

In your letter you made a statement, which I believe goes to the heart of the issue before

us both now. IRS will not accept the original filed returns unless all the income is

included on the tax returns submitted to IRS. I believe if we can resolve this issue, we

will be on the way to clearing up any misunderstanding between xxxxxxxxx and the IRS.

I would propose that we follow the statutes, regulations and IRM provisions along with

the U.S. Supreme Court who are the final word on what the statutes mean or say. Since

you have taken an Oath of Office to uphold the U.S. Constitution and the laws I would

not see this as being an objection by you.

I have reviewed the tax returns filed by xxxxxxxxxx for the years in question. It appears

that she and her husband submitted corrected Information Returns declaring that what

was previously reported was incorrect. Although I was not personally involved with the

preparation of these returns nor did I advise them to file the returns this way, representing

my client before the IRS, I must use and apply the law to understand if what they did is

correct and if what the IRS did is correct. I am sure you would agree with this.

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So the first thing I looked at are they authorized by law to correct Information Returns

or other documents submitted to the IRS, which they believe are not correct? The

answer is yes according to the statutes, IRS and the US Supreme Court.

The IRS has trained its employees to believe that a taxpayer may not rebut and/or correct

erroneous information submitted by third parties, PAYERS. This appears to be false and

fraudulent training, since no statute exists to support the IRSs claim. While the truth is,

that the US Supreme Court does authorize this and the statutes demand that what ever is

submitted to the IRS be true and accurate.

1. The IRS also authorizes this action, as evident by the fact the IRS has created a Form

4852 to correct a W-2. It states on the form in the instructions Purpose of form.

Form 4852 serves as a substitute for Forms W-2, W-2c, and 1099-R and is completed

by taxpayers or their representatives when (a) their employer or payer does not give

them a Form W-2 or Form 1099-R, or(b) when an employer or payer has issued an

incorrect Form W-2 or Form 1099-R. Attach this form to your income tax return.

2. The statute 26 U.S.C. 6065 requires that Except as otherwise provided by the

Secretary, any return, declaration, statement, orother document required to be

made under any provision of the internal revenue laws or regulations shall contain

or be verified by a written declaration that it is made under the penalties of

perjury. This statute applies to everyone including the IRS, and their documents that

they are required to make. In 8 years I have not seen one document signed under

penalty of perjury by an IRS employee as required by 6065. It is not done, because

they know that they could go to jail for perjury.

3. The US Supreme Court has provided the authority to everyone to rebut any

presumption or assumption.

United States v. Hover, 268 F.2d 657(1959) Presumption of correctness which

attends determination of Commissioner of Internal Revenue may be rebutted by

showing that such determination is arbitrary or erroneous.

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Portillo v. C.I.R., 932 F.2d 1128 (5th Cir. 1991) The tax collectors presumption

of correctness has a Herculean mascularity of Goliath like reach, but we strike an

Achilles heel when we find no muscles, no tendons, no ligaments of fact.

Vlandis v. Kline, 412 U.S. 441 (1973) "...irrebuttable presumptions have long

been disfavored under the Due Process Clauses of the Fifth and Fourteenth

Amendments."United States Supreme Court.

4. xxxxxxxxxx is not only authorized and entitled to rebut incorrect information, but she

is required by law to correct any known false information or presumption, which

may have been made as to the nature, amount and source of such payments that

were made to her by these third parties. Any erroneous Information Returns,

submitted by PAYERS, were in violation of 6721(a)(2)(B), which states; any

failure to include all of the information required to be shown on the return or the

inclusion of incorrect information; Therefore, by statute they needed to be

corrected either byPAYERS, or by xxxxxxxxxx herself since the PAYERS have

refused.

5. A PAYER may include incorrect information by reporting non-taxable income as

taxable income to the IRS. This error of reporting non-taxable income astaxable income is known as BAD PAYER DATA and is defined in Internal

Revenue Manual (IRM) at 4.2.2.4. (4)Examples of bad payer data include but are

not limited to: (E)Nontaxable income reported as taxable.

6. The law allows anyone with first hand knowledge to file an affidavit or statement

sworn under penalty of perjury. Since xxxxxxxxx has first hand knowledge that the

information submitted by PAYERS to the IRS was not correct, this right or obligation

to correct the incorrect information by affidavit has been exercised. If the IRS has

any facts, evidence or sworn testimony, which rebuts her claim, or the US Supreme

Court decisions, then they certainly can rebut her testimony under penalty of perjury

if they wish.

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7. Also under 5 U.S.C. 552(d)(2)(B)(i) & (ii) permits an individual to request an agency

to correct the records and the Agency must respond with either correcting the record

or their written refusal within 30 days. The IRS has failed to respond or correct the

record. Under 5 U.S.C. 552(d)(3) The individual is then allowed to have a hearing on

the written refusal, however this right is being denied since the IRS has failed to

provide a written refusal.

(d)Access to Records.Each agency that maintains a system of records shall(2)permit the individual to request amendment of a record pertaining to himand (A) not later than 10 days (excluding Saturdays, Sundays, and legalpublic holidays) after the date of receipt of such request, acknowledge inwriting such receipt; and

(B)promptly, either

(i) make any correction of any portion thereof which theindividual believes is not accurate, relevant, timely, or complete;or(ii) inform the individual of its refusal to amend the record inaccordance with his request, the reason for the refusal, the

procedures established by the agency for the individual to

request a review of that refusal by the head of the agency or an

officer designated by the head of the agency, and the name and

business address of that official;

(3)permit the individual who disagrees with the refusal of the agency to amend

his record to request a review of such refusal, and not later than 30 days(excluding Saturdays, Sundays, and legal public holidays) from the date on whichthe individual requests such review, complete such review and make a finaldetermination unless, for good cause shown, the head of the agency extends such30-day period; and if, after his review, the reviewing official also refuses toamend the record in accordance with the request, permit the individual to filewith the agency a concise statement setting forth the reasons for his disagreementwith the refusal of the agency, and notify the individual of the provisions forjudicial review of the reviewing officials determination under subsection (g)(1)(A) of this section;

8. xxxxxxxxx could not truthfully sign the tax return (1040) under penalty of perjury

as required by law, knowing that all of the information or dataprovided on the

return was not true and accurate to the best of her knowledge, and understanding.

Since she has gained additional knowledge and understanding regarding what is

taxable income under the law, her moral character and the law forces her to correct

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any and all information, to make it true and accurate, before submitting the tax return.

Realize, that this tax return is an affidavit.

9. The corrected Information Returns were signed under penalty of perjury, making

them evidence and testimony of a witness under the law. There are many statutes,

which deal with the proper handling of evidence and testimony. I can assure you, to

conceal, remove or ignore evidence is a crime. The US Supreme Court ruled that

income taxes constitute the compelled testimony of a witness:

Garner v. United States, 424 U.S. 648 (1975): "The information revealed in the

preparation and filing of an income tax return is, for the purposes of Fifth

Amendment analysis, the testimony of a witness." "Government compels the

filing of a return much as it compels, for example, the appearance of a`witness' before a grand jury."

REGARDING CIVIL PENALTIES

In talking with xxxxxxxxx I understand that the IRS has issued a civil penalty of $5,000

for each of these years to xxxxxxxxxx for filing the tax returns as she did. So first of all

lets see what the law states about the issuance of civil penalties and if the IRS followed

the law and were justified in their actions.

So does the IRS have the legal authority to issue Civil Penalties under the authority of 26

U.S.C. 6702 against my client? Well the answer will certainly shock you since the

answer is NO!

1. The IRS claims that 26 U.S.C. 6702 authorized them to issue civil penalties against

my client. However if you read this statute it says in part;

(a) Civil penalty for frivolous tax returnsAperson shall pay a penalty of $5,000 if(1) suchperson files what purports to be a return of a tax imposed by this title butwhich

Notice two things;

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a) It does not state the type of tax return. In other words it did not state Income Tax

Return. This is important since there are no regulations written for this statute, which

apply to income tax.

b) I have bolded and underlined the word person in this statute. This word is very

important because it identifies to whom this statute applies, and to whom the penalty may

be issued.

2. The word person as it is used in this statute has been defined by Congress and may

be found at 26 U.S.C. 6671(b) in the code. A reading of this definition makes it

clear that it does not apply to my client xxxxxxxxx or her husband. In fact it does not

mean you or I, either.

Note: Congress has written a very restrictive definition of person as it is used in this

section of code. In fact the word person is defined three times in the Internal

Revenue Code.

Person (26 USC 6671(b)) Chapter 68 (Sections 6671 - 6725)

Person (26 USC 7343) Chapter 75 (Sections 7201 -7344)

Person (26 USC 7701(a)(1)) Every place but Chapter 68 and 75

Under the law the IRS is mandated by Congress to use the definition of a person

which is codified at 26 U.S.C. 6671(b) to issue a penalty under 6702. This is

because this definition applies to all the statutes from 6671 through 6725 in

which 6702 is in this section. Now lets read this definition:

6671. Rules for application of assessable penalties

(b)Person defined

The term person, as used in this subchapter, includes an officer or employee of acorporation, or a member or employee of a partnership, who as such officer,employee, or member is under a duty to perform the act in respect of which theviolation occurs.

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Do not be deceived by the terms includes and including when used in statutory

construction. These are placed in the statute to LIMIT the definition to those other

things WITHIN the genus of the words being defied NOT to expand outside

of the defined terms. This is because there is an important principle of statutory

construction, which states that anything not mentioned in a law, statute, code, or

regulation is excluded by implication.

Expressio unius est exclusio alterius. A maxim of statutory interpretation meaning

that the expression of one thing is the exclusion of another. Burgin v. Forbes, 293

Ky. 456, 169 S.W.2d 321, 325;Newblock v. Bowles, 170 Okl. 487, 40 P.2d 1097,

1100. Mention of one thing implies exclusion of another.

When certain persons or things are specified in a law, contract, or will, an

intention to exclude all others from its operation may be inferred . Under this

maxim, if a statute specifies one exception to a general rule or assumes to specify the

effects of a certain provision, other exceptions or effects are excluded. [Blacks Law

Dictionary, Sixth Edition, page 581]

The determining word is, of course, the word including. It may have the sense of

addition, as we have seen, and of also; but, we have also seen, may merely specify

particularly that which belongs to the genus. Hiller v. United States, 45 C.C.A.

229, 106 Fed. 73, 74. It is the participle of the word 'include,' which means, according

to the definition of the Century Dictionary, (1) 'to confine within something; hold

as in an inclosure; inclose; contain.' (2) 'To comprise as a part, or as something

incident or pertinent; comprehend; take in; as the greater includes the less; . . .

the Roman Empire included many nations.' 'Including,' being a participle, is in the

nature of an adjective and is a modifier. Id., at 465.

One last thing, the Supreme Court instructs you and I to disregard the dictionary

definition of a term being statutorily defined, when construing the term:

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When a statute includes an explicit definition, we must follow thatdefinition, even if it varies from that term's ordinary meaning. Stenberg v.Carhart, 530 U.S. 914 (2000),

It is axiomatic that the statutory definition of the term excludes

unstated meanings of that term. Meese v. Keene, 481 U.S. 465 (1987); see alsoWestern Union Telegraph Co. v. Lenroot, 323 U.S. 490 (1945)).

3. FACT: It should be clear by now that the only person a civil penalty may be issued

to is a person as defined by 6671(b). The application of this statute to other

persons is via operation under color of law and is a crime under 26 USC 7214 (a)

(1) Willful extortion and oppression under color of law.

4. As mentioned above, there is no regulation written for 6702 for income tax. You

may search the book of federal regulations and you will not find a 26 CFR 1.6702.

In fact you will not find any regulation written for this statute.

Lets review what the courts have said: California Bankers Association v. Shultz,416 U.S. 255 (1974) "...the Act's civil and criminal penalties attach only uponviolation of the regulation promulgated by the Secretary; if the Secretary

were to do nothing, the Act itself would impose no penalties on anyone ...TheGovernment urges that since only those who violate these regulations [not theCode] may incur civil or criminal penalties, it is the actual regulations issued bythe Secretary of the Treasury, and not the broad authorizing language of the

statute, which are to be tested against the standards of the Fourth Amendment;and that when so tested they are valid." [California Bankers Assoc. v. Shultz, 416U.S. 25, 39 L. Ed 2nd 812 (1974)] This case is significant because it reveals thatwithout implementing regulations that enforce penalties for a particular tax, nocivil or criminal penalties for noncompliance can be imposed.

U.S. v. Mersky, 361 U.S. 431 (1960) "An administrative regulation, of course, isnot a "statute." While in practical effect regulations may be called "little laws,"they are at most but offspring of statutes. Congress alone may pass a statute, andthe Criminal Appeals Act calls for direct appeals if the District Court's dismissalis based upon the invalidity or construction of a statute. See United States v.

Jones, 345 U.S. 377(1953). This Court has always construed the CriminalAppeals Act narrowly, limiting it strictly "to the instances specified." UnitedStates v. Borden Co., 308 U.S. 188, 192 (1939). See also United States v. Swift &Co., 318 U.S. 442(1943). Here the statute is not complete by itself, since itmerely declares the range of its operation and leaves to its progeny the means

to be utilized in the effectuation of its command. But it is the statute, whichcreates the offense of the willful removal of the labels of origin and provides thepunishment for violations. The regulations, on the other hand, prescribe the

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identifying language of the label itself, and assign the resulting tags to theirrespective geographical areas. Once promulgated, [361 U.S. 431, 438] theseregulations, called for by the statute itself, have the force of law, and violationsthereof incur criminal prosecutions, just as if all the details had been incorporatedinto the congressional language. The result is that neither the statute nor the

regulations are complete without the other, and only together do they haveany force. In effect, therefore, the construction of one necessarily involves the

construction of the other."[U.S. v. Mersky, 361 U.S. 431 (1960)]

This case is very important, because it reveals that a statute has no force and

effect unless there is an implementing and enforcing regulation behind it. Statutes

without implementing regulations are unenforceable and create no obligation on

the part of the Citizen. All of the enforcement provisions of the Internal Revenue

Code found In Subtitle F, Procedures and Administration, therefore, must have

implementing regulations applying the enforcement provision to the particular tax

in question. There is no regulations al all written for 26 U.S.C. 6702

5. In addition, there are many be other statutes, regulations and IRM provisions with

which the IRS fails to comply when they issue a civil penalty.

26 U.S.C. 6751(b)(1)(b) Approval of assessment(1) In generalNo penalty under this title shall be assessed unless the initial determination ofsuch assessment is personally approved (in writing) by the immediatesupervisor of the individual making such determination or such higher levelofficial as the Secretary may designate.

A search of my clients records will show that no document exists which meet this

requirement, i.e., has the approval of the supervisor in writing. So this is a second

violation of a statute by the IRS.

In addition you will find that the IRS has also failed to follow IRM 4.10.6.3.4 (05-14-

1999) Managerial Involvement which states;

1. Thegroup managermust be actively involved with the development ofpenalty issues if:

A. The examination of income reveals a understatement of income ina given year, the case should be discussed with the group manager.This discussion is mandatory for any examination with an

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understatement greater than$10,000. The purpose of the discussionis to consider possible expansion of the examination scope/depth andthe potential of fraudulent activity by the taxpayer.B. Coordination with Criminal Investigation, the Director of Practicein Headquarters Office, and/or area specialists such as the Return

Preparer Coordinatoror the Penalty Screening Committee,isrequired.2. Managerial involvement should be documented on Form 9984,Examining Officers Activity Record.

Once again if you search the records you will not find a Form 9984 completed as

required by this provision. So, either the IRS failed to comply with this provision,

or it does not apply, since my client did not under report her income.

6. In addition a Penalty Screening Committee Case Approval Record, Form 13130 mustbe signed by Group Manager, Penalty Screening Committee and Quality Review

Section Chief to be valid.

Again a search of my client records will show that there are also none of these.

7. In addition, right on this Form 13130 it states; Approval must be secured from the

Group Manager, the Penalty Screening Committee and the Quality Review Section

Chief prior to assessment of the penalty(ies).

REGARDING YOUR STATEMENT & INCOME

Going back to your statement, IRS will not accept the original filed returns unless all

the income is included on the tax returns submitted to IRS. Believe it or not, I agree

with your statement in general. The issue here appears to be that the IRS feels that my

client, xxxxxxxx, did not included all of her income on the tax returns that she filed.

So the only question, which needs to be answered, is: did my client, xxxxxxxx, include

all income on her tax returns? Well the statutes and the U.S. Supreme Court said that

she did!

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1. Certainly Title 26 U.S.C. 1 Imposed a tax on taxable income. But to understand

what is taxable income you must understand the definition. Congress has codified

this at 26 U.S.C. 63. Taxable Income Defined.

(a) In general Except as provided in subsection (b), for purposes of this subtitle,

the term "taxable income" means gross incomeminus the deductions

allowedby this chapter (other than the standard deduction).

2. Now a taxpayer must understand what Gross Income means. Congress once again

defined this in statute and it is codified at 26 U.S.C. 61.Gross Income Defined.

"General Definition Except as otherwise provided in this subtitle, gross

incomemeans all income from whatever source derived, including (but not

limited to) the following items: (1) Compensation for services, including fees,

commissions, fringe benefits, and similar items; . . ." (emphasis added)

3. A careful review of this statute reveals that Congress lists 15 types of income to be

included in Gross Income subject to taxation but does not mentionwages or

salary.

(1) Compensation for services, including fees, commissions, fringe benefits, andsimilar items;

(2) Gross income derived from business;(3) Gains derived from dealings in property;(4) Interest;(5) Rents;(6) Royalties;(7) Dividends;(8) Alimony and separate maintenance payments;(9) Annuities;(10) Income from life insurance and endowment contracts;(11) Pensions;(12) Income from discharge of indebtedness;

(13) Distributive share of partnership gross income;(14) Income in respect of a decedent; and(15) Income from an interest in an estate or trust.

4. So, to understand Gross Income we must understand what income is. A search of

the Internal Revenue Code for the definition of income only turned up the

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definition for Ordinary Income in statute codified at 26 U.S.C. 64. Ordinary

Income Defined.

"For purposes of this subtitle, the term "ordinary income" includes anygain fromthe sale or exchange of property which is neither a capital asset nor property

described in section 1231(b). Any gain from the sale or exchange of propertywhich is treated or considered, under other provisions of this subtitle, as"ordinary income" shall be treated as gain from the sale or exchange of propertywhich is neither a capital asset nor property described in section 1231(b)."

5. I think you would agree that ordinary income" is not the same as income under

the law. So how can any taxpayer apply the definition of income under the law in

order to calculate the gross income to report taxable income.

Taxable Income = (Gross Income Deductions allowed)

Gross Income = (All Income from whatever source derived)

Income = (Still Unknown)

6. An exhaustive search was conducted and the term income is not defined in the

Internal Revenue Code. Additional research found that the word income is not

specifically defined in the IRM, either.

A continual search for what income is I discovered this court case:

U.S. v. Ballard, 400 F2d 404 (1976): "The general term 'income' is notdefined in the Internal Revenue Code."

7. After additional searching I discovered that Congress may not define income

because the Constitution does. This is confirmed by the following US Supreme Court

cases;

Eisner v. Macomber, 252 U.S. 189 (1920), 40 S. Ct. at 193: "It becomesessential to distinguish between what is and what is not 'income' . . . Congress

may not, by any definition it may adopt, conclude the matter, since itcannot by legislation alter the Constitution, from which alone it derives

its power to legislate, and within whose limitations alone, that power can

be lawfully exercised." (Bold and Underline emphasis)

Goodrich v. Edwards, 255 U.S. 527, 535 (1921): ... the definition of'income' approved by this Court is: "The gain derived from capital, from

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labor, or from both combined,' provided it be understood to include profitsgained through sale or conversion of capital assets.' ... It is thus very plainthat the statute imposes the incometax on the proceeds of the sale ofpersonal property to the extent only that gains are derived there from by

the vendor... (Bold and Underline emphasis)

Helvering v. Edison Brothers' Stores, 8 Cir. 133 F2d 575 17 (1943) "TheTreasury cannot by interpretive regulations, make income of that which isnot income within the meaning of the revenue acts of Congress, nor canCongress, without apportionment, tax as income that which is not income

within the meaning of the 16th Amendment."(Bold emphasis)

Regal Drug Co v. Wardell, 260 US 386 (1922): "Congress may not, underthe taxing power, assert a power not delegated to it by the Constitution."

(Bold emphasis)

The cases above clearly state why income is not defined in the Internal Revenue

Code. Therefore we must use the definition of income as the U.S. Supreme

Court had defined it. Although the U.S. Supreme Court has defined income as a

profit or gain I have found the following cases, which clearly define what

profit or gain is NOT! The Supreme Court has ruled that Income or Profit

does not include compensation for our labor. The exchange of labor for pay of

equal value has never been income.

Commercial League Assoc. v. The People, 90 Ill. 166 (1878)."The object ofthe statute, no doubt, was to prevent the corporation from making dividends ofprofits among the members, as do corporations organized for pecuniary profit;and while the statute might subserve a useful purpose if construed in thismanner, we fail to perceive any benefit which would result if a member of theassociation, who happened to fill an office, should be deprived of receivingcompensation for his labor as an officer. . Compensation for labor cannot beregarded as profit within the meaning of the law. The word 'profit' asordinarily used, means the gain made upon business or investment - adifferent thing altogether from mere compensation for labor." (Bold andunderline emphasis). Still controlling and NEVER OVERTURNED.

Stratton's Independence v. Howbert, 231 US 309 (1913): "Income ... may bedefined as the gain derived from capital or from labor or from both

combined." (Bold emphasis)

Edwards v. Keith, 231 F 110, 113 (1916)"... one does not derive income byrendering services and charging for them." (Bold emphasis)

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Evans V. Gore, 253 U.S. 245 (1920)"The 16th Amendment does not justifythe taxation of persons or things previously immune. It was intended only toremove all occasions for any apportionment of income taxes among the states.It does not authorize a tax on a salary"(Bold emphasis)

Staples v. United States, 21 F.Supp 737 at 739 (1937)"Income means gains/profit from property severed from capitol, howeverinvested or employed. Income is not a wage or compensation for any typeof labor"(Bold emphasis)

Lauderdale Cemetery Assoc. v. Mathews, 345 PA 239, 47 A. 2d 277, 280(1946) "... reasonable compensation for labor or services rendered is notprofit." (Bold emphasis)

McCutchin v. Commissioner of IRS, 159 F2d 472 5th Cir. (1947)"The 16thAmendment does not authorize laying of an income tax upon one person

for the income derived solely from another." (Bold emphasis)

So. Pacific v. Lowe, 238 F. Supp. 736, 247 US 330 (1918) "'income' as usedin the statute should be given a meaning so as not to include everything

that comes in. The true function of the words 'gains' and 'profits' is to

limit the meaning of the word 'income'. (Bold emphasis)

Oliver v. Halstead, 86 S.E. Rep 2nd 85e9 (1955)"There is a clear distinctionbetween `profit' and 'wages', or a compensation for labor. Compensation forlabor (wages) cannot be regarded as profit within the meaning of the law.The word `profit', as ordinarily used, means the gainmade upon any

business or investment- - - a different thing altogether from the merecompensation for labor."

Penn Mutual Indemnity Co. v. Commissioner,32 Tax Court page 681 (1959)"The rule ofEisner v. Macomberhas been reaffirmed on so many occasionsthat citation of the cases to this effect would be unnecessarily burdensome. Todepart from the rule at this late date would ignore the sound principles uponwhich that case was decided and would throw into confusion the fundamentalincome tax structure and law as it has developed in the almost half centurywhich has elapsed since adoption of the 16th amendment. That there cannotbe 'income' without a 'gain' accords with the common understanding of

the term, a test of construction which is particularly appropriate in oursystem of self-assessed Federal income tax ... Moreover, that which is notincome in fact manifestly cannot be made such by the legislative

expedient of calling it income ...."

Commissioner of IRS v. Duberstein, 80 S. Ct. 1190 (1960)"Propertyacquired by gift is excluded from gross income." (Bold emphasis)

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Tennessee Supreme Court in Jack Cole v. Commissioner MacFarland, 337SW2d 453 (1960) "The right to receive income or earnings is a rightbelonging to every person, and realization and receipt of income is

therefore not a "privilege that can be taxed."

Conner v. U.S.,303 F.Supp. 1187 (1969)"... whatever may constitute income,therefore, must have the essential feature of gain to the recipient. This wastrue when the 16th Amendment became effective, it was true at the time ofEisner v. Macomber supra, it was true under Section 22(a) of the InternalRevenue Code of 1938, and it is likewise true under Section 61(a) of the I.R.S.Code of 1954. If there is not gain, there is not income ...Congress hastaxed income not compensation." (Bold emphasis)

8. Everyone is required to follow the US Supreme Court decisions, including the

IRS. This fact is stated in the IRM [Internal Revenue Manual] 4.10.7.2.9.8 (01-01-

2006) Importance of Court Decisions Part 2:

Certain court cases lend more weight to a position than others. A case decided by theU.S. Supreme Court becomes the law of the land and takes precedence over decisionsof lower courts. The Internal Revenue Service must follow Supreme Court decisions.

So the facts are the U.S. Supreme Court has defined income as it is used in the

Revenue Act (Internal Revenue Code) and it does not include what was paid in exchange

for most peoples labor unless they are an employee as defined by 3401(c) in which

case by statute what they earned are wages as defined by 3401(a) and wages are

taxable.

9. I am very aware that the IRS has taught its employees Income is everything that

comes in. This of course is false information, as is evident by the following US

Supreme Court cases that clearly say:

United States Supreme Court, So. Pacific v. Lowe, 247 U.S. 330, (1918) Wemust reject... the broad contention submitted in behalf of the government that allreceipts - everything that comes in - are income

Lucas v. Earl, 281 U.S. 111 (1930) "The claim that salaries, wages, andcompensation for personal services are to be taxed as an entirety and thereforemust be returned by the individual who has performed the services which producethe gain is without support, eitherin the language of the Act or in the

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decisions of the courts construing it... It is to be noted that, by the language ofthe Act, it is not salaries, wages, or compensation for personal services thatare to be included in gains, profits, and income derived from salaries, wages,or compensation for personal services." (Bold emphasis)

10. There really is not much else to say other than the IRS is in violation of the law,

operating under the color of law, and not following the law as written by Congress.

So are you going to follow the law as required by 26 U.S.C. 7214(a)(8)? Offenses

by officers and employees of the United States

(a) Unlawful acts of revenue officers or agentsAny officer or employee of the United States acting in connection with anyrevenue law of the United States(8) who, having knowledge or information of the violation of any revenue lawby any person, or of fraud committed by any person against the United States

under any revenue law,fails to report, in writing, such knowledge orinformation to the Secretary; or

OUR RIGHT TO YOUR ANSWERS

So, as a matter of law, I must demand that you and the IRS respond correctly and

completely to these requests and questions. Failure on your part to answer these demands

and questions, is an admission that you are willfully participating in the FRAUD and are

conspiring to violate my clients rights and due process. Understanding that the only way

to prove that you are not part of this is for you to uphold the law and file a written

complaint as required by 26 U.S.C. 7214(a)(8)who, having knowledge or information

of the violation of any revenue law by any person . fails to report, in writing, such

knowledge or information to the Secretary;

1. Please provide the statute written by Congress, which doesnt allow a taxpayer to

correct any record or information submitted as the IRS falsely claims.

2. Please provide the statute written by Congress, which allows the IRS to not accept the

returns filed by my client after she corrected erroneous information and sworn to the

correctness. Or as you stated in your letter the IRS will not accept the original filed

returns unless all the income is included on the tax returns submitted to IRS.

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3. Please provide the name of the IRS employee who has first hand knowledge, and

made the determination that the corrected information returns submitted by my client

are not legally correct or accurate?

4. Please provide the statute written by Congress, which allows anyone within the IRS

to ignore sworn testimony presented by a taxpayer.

5. Please provide any evidence held by the IRS that what was paid to my client was

indeed income as legally defined by the U.S. Supreme Court.

Ms. Barbara Richardson, is it your intention to violate IRM 21.3.3.1.1 (10-01-2007)

Policy Statement P-6-12 items 2 & 3and not respond to this letter and address or

resolve the taxpayers issues, as required by the IRM?

6. Ms. Barbara Richardson, is it your intention to violate IRM 21.3.3.3.4 (11-09-2006)

Quality and Timely Responses, and not respond to this letter and answer these

questions as required by the IRM?

7. Ms. Barbara Richardson, now that you are aware of what the statutes says, is it your

intention to ignore the violations of other IRS Employee who operate under color

of law, by using statues such as 6702, which do not apply to Subtitle A Income Tax

or use statutes, which do not have any enforcement regulations written authorizing

their use for Subtitle A Income Tax?

8. Ms. Barbara Richardson is it your intention, not to report these violations to the

Secretary as required per 26 U.S.C. 7214(a)(8).

9. Ms. Barbara Richardson, now that you are aware of the facts, is it your intention to

ignore the unlawful behavior of other IRS employees who have chosen to ignore

corrected information returns, along with tax returns, which were submitted under

penalty of perjury, and notarized, which by legal definition is sworn testimony,

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submitted by a person with first hand knowledge as defined by IRM 4.10.7.3.3 (01-

01-2006) in favor of hearsay evidence as defined by IRM 4.10.7.3.5. (01-01-2006)?

10. Ms. Barbara Richardson, now that you are aware of the facts and the law, is it still

your intention to claim that my client failed to report income on her tax returns as

you have claimed?

11. Ms. Barbara Richardson, now that you are aware of the facts, is it your intention to

claim that my Client earned wages as defined by 3401(a) even though she is not

an employee as defined by 3401(c), and that you have first hand knowledge that

she has earned wages as defined by 3401(a)?

26 USC 3401 Definitions (c) Employee.For purposes of this chapter, the term

"employee" includes an officer, employee or elected official of the United States,

a State, or any political subdivision thereof, or the District of Columbia, or any

agency or instrumentality of any one or more of the foregoing. The term

"employee" also includes an officer of a corporation.

12. Ms. Barbara Richardson, is it your intention to force my client to change her tax

return to state something that is not true and accurate in violation of 26 C.F.R

601.201(e)(1), and 26 U.S.C. 6065, which requires her to submit and attest to the

truth and accuracy of matters set forth in any given instrument submitted for Internal

Revenue Service consideration?

13. Ms. Barbara Richardson, is it your intention to ignore the US Supreme Court

deceisions which support the taxpayers postion, even though this would be a

violation of IRM 4.10.7.3 (01-01-2006) Evaluating Evidence?

14. Ms. Barbara Richardson, is it your intention to violate your Oath of Office that you

took, to support and defend the Constitution of the United States against both foreign

and domestic threats?

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15. Ms. Barbara Richardson, is it your intention to ignore U.S. Supreme Court Decisions

which clearly define income as again or profit, and state that payment for my

clients labor is NOT income under the law?

16. Ms. Barbara Richardson, is it your intention to violate IRM 4.10.7.1 (01-01-2006),

which requires examiners to identify the applicable law, correctly interpret its

meaning in light of congressional intent, and, in a fair and impartial manner when you

cannot identify the applicable law that makes my client, xxxxxxxxxx, liable for

Income Tax?

17. Ms. Barbara Richardson, is it your intention to ignore published, never overturned

U.S. Supreme Court cases, which define income knowing that in doing so, they are

in violation of IRM 4.10.7.2.9.8 (01-01-2006) Importance of Court Decisions?

18. Ms. Barbara Richardson, is it your intention to ignore the law which states that a

Civil Penality may only be issued against a person as defined by 6671(b),

knowing that my client, xxxxxxxxx does not meet this defination?

19. Ms. Barbara Richardson, now that you know what the law says, is it your intention to

allow (not speak up) about other IRS employees who violated IRM 20.1.5.1.6 (07-01-

2008) Managerial Approval of Penalties, and the statute 6751(b)(1), which requires

the written approval of the immediate supervisor before any assessment of a penalty,

knowing that in doing this you would be violating 26 U.S.C. 7214(a)(8)?

20. Ms. Barbara Richardson, is it your intention to accept as evidence that the IRS met

the conditions set forth by IRM 20.1.5.1.6 (07-01-2008) Managerial Approval of

Penalties, and the statute 6751(b)(1), a Form 8278 Commutation and Assessment of

Miscellaneous Penalties which is being fraudulently presented to met these

requirements, knowing for a fact that this Form 8278 does not have the signature of

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the immediate supervisors as required by law, and the form says Reviewer not

Approval.

21. Ms. Barbara Richardson, is it your intention to allow others to violate 26 C.F.R

601.105 (2) (ii), by failing to hold them accountable, to conduct the required

examination by the only two authorized methods, and failing to ask for supporting

evidence from my Client, xxxxxxxxxx, as required, or ignoring the amount my client

has declared on her returns as non-taxable?

22. Ms. Barbara Richardson, now that you are aware of the IRM provisions is it your

intention to ignore the fact that the IRS employees have violated IRM 4.10.6.3.4 (05-

14-1999), by failing to get the group manager actively involved with the

development of penalty(ies)?

23. Ms. Barbara Richardson, now that you are aware of the IRM provisions pointed out in

this letter, is it your intention to ignore the fact that the IRS has failed to comply with

IRM 4.10.6.3.4 (05-14-1999), by failing to complete a Form 13130 Screening

Committee Case Approval Record, which states right on the front of this form

Approval must be secured from the Group Manager, the Penalty Screening

Committee and the Quality Review Section Chief prior to assessment of the

penalty(ies)?

24. Ms. Barbara Richardson, now that you are aware of the IRM provisions pointed out in

this letter, is it your intention to ignore the fact that my clients records have no Form

9984 Examining Officers Activity Record as required to be completed by IRM

4.10.6.3.4 (05-14-1999), Managerial Involvement, thus showing that they fail to

comply with the requirement set forth by the IRM?

25. Ms. Barbara Richardson, is it your intention to ignore the wrong doings and

violations of the statutes, regulations and IRM provisions by other employees in the

handling of my clients tax return?

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defense against government employees, such as yourself, for the protection of their

rights.

Government employees who have sworn an oath to protect and defend the Constitution,

such as yourself, are to be held strictly accountable to following the law exactly as the

intent of Congress has been entered into the Statutes at Large, not what some supervisor

or fellow employee may havesaidthe law was. It is the duty of the government

employees who are afforded the privilege of serving the public to protect the rights of the

Citizens so served.

Please send all of your responses and evidentiary documentation to me (with copies of

same to my client, xxxxxxx) attending to this correspondence in its entirety to me at the

address noted above within 10 days, as my client, xxxxxxx, has been notified that her

home is being threatened by rogue agents of the IRS who have been shown to be

operating undercolor of law in violation of many, if not most, of the subjects addressed

herein and time is of the essence for the resolution sought.

Sincerely,

Michael A. Bigley

Final Response to IRS TAS for Distribution

Documents

Transcript of Final Response to IRS TAS for Distribution