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Title: MEETING BETWEEN KEN EVANS AND TWO IRS AGENTS
Source:
http://www.reasons2vote.com/
URL Source: http://www.reasons2vote.com/
Published: Sep 9, 2006
Author: Ken Evans
Post Date: 2006-09-09 22:43:09 by Uncle Bill
Keywords: SEND THE, IRS, TO IRAQ
Views: 57
THE FOLLOWING IS A TRANSCRIPT OF A MEETING BETWEEN KEN EVANS AND TWO IRS AGENTS that took place on November 15, 2004. Every attempt has been made to make this transcript as accurate as possible. If the colors bother you, just cut and paste it as unformatted text. THE PLAYERS: KE: Ken Evans MT: Mike Taibi, IRS Revenue Agent SH: Sue Hough (pronounced Huff), IRS Group Manager K: Karen, observer. {comments added by Ken Evans after the fact} MT : Today is Monday November 15, 2004. KE: : It is. MT: It is approximately 9:00 in the morning. We’re in the Lancaster IRS office in the State of Pennsylvania. My name is Mike Taibi, I’m a Revenue Officer with the Internal Revenue Service. This young lady to my left is Sue Hough. She is my Group Manager. You are Mr. Evans? KE: I am Ken Evans. MT: And you are? K: Karen (last name omitted). MT: Karen ---. Now, Ken I’d like for you to acknowledge that Miss ----- is here and she has your permission to be here. We might be disclosing some information that would be private to yourself and I’d like for you to acknowledge that she may be present. KE: Ms. ----- is certainly allowed to be present. And for the record she is here solely as an observer. But, she is a lawyer with her Masters in Taxation. MT: Ok. The purpose of our meeting today is the filing of a federal income tax return, of which we have none for tax year 2002 and 2003 for yourself. And I was wondering if you were going to submit such a document to us today or if you need any assistance from me to prepare one. KE: Well, I’d like to preface the meeting by taking an affirmation {I should have said "making an affirmation"}. [ RAISES RIGHT HAND ] I affirm that the testimony and information I’m about to give is under penalties of perjury true and correct and that I am making an attempt to gain answers or admissions from the agency of the government relating to the proper application of the income tax laws as it relates to me. I would certainly invite both of you to do the same. MT: Well, I kind of don’t understand what you’re asking for because this is civil proceeding. KE: I am asking that simply everything that you say, that you agree is true and correct under penalties of perjury. MT: Well, we’re kind of held by following the law and not obscuring the law and not telling any tales or falsehoods. SH : We’re, we’re obligated to not tell you anything intentionally wrong as far as we know. I mean and that’s what we’ll go with. {So, they can tell me things that are wrong as long as they don't realize it. Plausible deniability, a mainstay at the IRS} KE: Is that an affirmation? SH: It’s exactly what I just told you {in other words, its not an affirmation}. KE: Ok. Well, in relation to your question, the Internal Revenue Manual section 4.10.7.1 states that “it is imperative that examiners can identify the applicable law, correctly interpret its meaning in light of Congressional intent, and in a fair and impartial manner correctly apply the law based on the facts and circumstances of the case.” Now, I saw a copy of the written communication that I sent you. I guess a week and a half, two weeks ago. MT: Yes. KE: It has very specific questions related to what is the applicable law in determining what, if any, liability I have. Are you prepared to answer those eleven questions? MT: Ok, if you’re referring to those questions you sent in, I believe those questions were answered via the bulletin that I sent to you with my original appointment letter {I sent my questions AFTER he sent me his bulletin, how does he expect the bulletin to have answered my questions?} KE: They were not in any way answered by those. And I did address that in my communication. MT: What I think what you’re asking for, is you’re asking for information in Code section, in reference to Code section 861. {Notice that Mr. Taibi brings up Section 861 first. If fact, THE FIRST NINE TIMES Section 861 is mentioned are all made by the IRS} KE: Well, what I’m asking for is a list of all the specific statutes that you’re using to determine what, if any, liability I have. Identified within the Internal Revenue Manual. MT: At at the, at the end of my investigation in reference to whether you are required to file a tax return I will place such a list in writing in addition to a report which I will send to you. My concern at this point is you have not filed a tax return and I need to understand why you believe you are not required to file a tax return or if indeed you believe you are required to file a tax return, that if you need my assistance, I will assist you in any way I can. KE: It is my true and correct belief that I have no liability for federal income tax and therefore I am not required to file an income tax return. MT: Ok. And under which sections of the Code do you believe that you are not required to file? KE: The. Well, let me just walk through the specific sections of the Code, as well as their applicable regulations, that I have examined that lead me to believe that I have no liability for federal income tax. And the first section would be section one. Section one imposes the income tax on individuals, married individuals etc. It states clearly, “there is hereby imposed on the taxable income.” Therefore, we need to determine what, if any, taxable income I received as related to questions one and two of the communication that I sent you. The regulations under Section One state very clearly in relation to Citizens and Residents liable for the tax that, “Citizens of the United States wherever resident and all resident alien individuals are liable for the income tax imposed by the Code, whether the income is received from sources within or without the United States.” And you can certainly have this copy of the regulation. Before moving on to the next regulation I would also point out that Internal Revenue Manual section (4.10.7.2.3.1) reads “The federal income tax regulations are the official Treasury interpretation of the Internal Revenue Code and follow in numbering sequence.” Section 4.10.7.2.3.4 states very clearly, “The Service is bound by the regulations.” Do you admit that you are required to follow the regulations? MT: We are required to follow the Code, the regulations and any applicable court cases. KE: Specifically, Supreme Court cases. MT: Specifically the IRS. And any other Tax Court cases. Tax Court memos. Tax Court decisions. SH: You know, we’re not going to get into the validity of the law with you today {You can clearly see the brainwashing kicking in here. I never said anything about the validity of the law. }. KE: And neither am I. The tax laws… SH: [interrupting] I know 861 is where you’re going next, however. Do you realize that that has been shown to be a frivolous argument? There have been promoters across the country who have been enjoined for such action. We will not, we will not listen to 861 arguments today or any other frivolous argument. KE: I would ask you not to speak to my intent. SH: Now, wait a minute. Let me finish. KE: You said you know where I’m going with this. SH: Well, you nodded your head as I said, as though agreeing that that’s where you were going, with 861. KE: I gave no affirmation of that. SH: Ok. Well, then I’ll let you go on. But, if 861 is where you’re going next then I will start this conversation again. KE: I am going to read from federal regulations which bind the IRS. SH: Like I said, we are not going to sit here and waste your time and our time arguing frivolous arguments. KE: There is nothing frivolous about the federal regulations. Let me cite a section of Code. SH: It is with the, with the the way that you’re going with this {What way? Do you mean citing the law? How dare I!}. I mean it doesn’t. It’s a waste of your time, it’s a waste of my time, that when I’m telling you that, 861, to my knowledge. No one has ever. No one has ever won a case. KE: To my knowledge, there is no Supreme Court decision. There is no Supreme Court decision that has addressed this issue. {Good point} SH: There’ve been promoters that have been enjoined on this issue. {Uh huh. Like Thurston Bell. I was IN the courtroom and I heard a DoJ attorney make the following argument "It's frivolous because its frivolous." I'm sorry, but as a rational person that is NOT a good enough argument} We have cases backing us time after time after time. If you want to go down this road, then fine, we’re going to continue with the examination. This will not stop the examination. KE: That’s fine. SH: So, I don’t know why you’re here today. If your only reason being here is to tell us about 861. We’ve heard it over and over and over. KE: My reason is to cite for you specifically ... SH: [interrupting] We said that over and over again too. KE: ...the federal laws and regulations And I would like to continue to do so without interruption. SH: [interrupting] If you’d like to continue to do so. But, at some point we are going to cut you off and tell you that you know you’ve had your say. But, we are not here to argue the validity of the tax laws. {Why am I imagining this woman holding her ears and saying loudly 'La la la la la, I am not listening to you...la la la la la'?} KE: As I tried to say to you. The law is perfectly valid. It’s perfectly Constitutional. All of the applicable laws apply {that's redundant Ken} in determining what, if any individual owes. Everything is valid that I am about to say. These are straight from the federal regulations. There is nothing invalid about the laws. SH: [interrupting] unintelligible KE: Well, that’s an incorrect statement when you said that. SH: No it’s not incorrect. What I am telling you. KE [interrupting] I’m not arguing the validity of any law. SH: What I’m, What I’m telling you is that the slant that you’ve taken thus far {What slant? Citing the law and asking questions has become a 'slant' to the IRS}, and which I will let you go on, is a frivolous position. We will be issuing you a letter telling you we will not respond to any additional frivolous correspondence or frivolous information which you give to us. That is the way we are going to go with this. Today is your day to tell us what you have to say. If you want to just tell us about 861. KE: It doesn’t seem like you’re letting me tell you what I have to say. SH: I will. I will. But, you have to let me speak as well. If, if 861 is what you’re here to tell us about today and I mean and take a frivolous position, this is your opportunity to talk to us. If that’s the way you want to go. We will let you go for a period of time. But, we are not going to spend all day today. {If she would just shut up for a few minutes and stop interrupting me......} KE: What I would ask then, as well, is that you provide specific answers to those eleven questions in writing. All of the eleven questions. {click the link to read the questions} SH: We will provide you what we are required to provide you. Most of what we are required to provide you has already been given to you. {In other words, we will not answer your questions} KE: Section 7701 of the Internal Revenue Code (Title 26) subsection fourteen defines the word ‘taxpayer.’ It defines the term taxpayer as ‘any person subject to any Internal Revenue Tax.” MT: Is, is what you’re telling us today a part of your communication that you have already sent? KE: Not entirely. MT: Ok SH: Why don’t you just tell us what’s new? What you haven’t already sent over. KE: Well, Section 863 of the Internal Revenue Code, of the regulations, 26 CFR 1.863-1(3), “The determination of taxable income” which is absolutely necessary to determine what, if anything, any individual owes reads, “The taxpayer’s taxable income from sources within or without the United States will be determined under the rules of 1.861-8 through 1.861-14T for determining taxable income from sources within the United States.” Does that bind you to determine what if anything I owe? MT: Code section 861 has already been determined in reference to United States citizens. SH: He means 863, but still. MT: Or residents. Well, any of the eight sixty sections are not applicable to your income at this point in time according to any court cases that have been cited {Did you notice he hasn't cited any court cases?}. Those court cases I will cite to you when I send you the report concluding our interview. {I brought this issue to court in my refund lawsuit for 2000 & 2001. That federal Judge, Charles Wiener, REFUSED to even address it. He didn't so much as mention the proper application of Section 861. If EVER there was an opportunity for a court to show how The 861 Evidence isn't correct, THAT was it!} KE As I’m sure you are well aware, any court decision below the Supreme Court is not binding on the IRS in any way. You can ignore them. You can cite them. They do not relate to my individual situation. They are only related to the individual situation in which those court decisions were decided. SH: Do you have a court decision that or something to back your position? {OR SOMETHING? Do you mean, for example, the written law?} KE: I sure do. I have a bunch of them. SH: Ok. KE: As a matter of fact, I have Supreme Court decisions… SH: Mm, hmm. KE: …which do bind you. Unintelligible KE: Are you saying? Well, let me start off from the beginning as we deal with the questions. Does section one apply to determine whether or not I owe income tax? MT: We, we’re not going to get into that kind of an argument. KE: It’s not an argument. It’s a question. MT: We’re not going to answer that question. {Do you believe this crap?! This one is a gimme for the government. Section 1 is the section that imposes the tax. The answer is obviously yes. But, he refuses to even answer this?} We will answer specifically in writing when we send you your report. What we’re interested in today is that according to what you just said, we are not allowed to use or we are not binded by any other court, but the Supreme Court. KE: That’s correct. MT: And I’d really like to see. KE: Well, you’re bound by the statutes and regulations as well. MT: Well, we obviously know that and that’s not at issue. What is at issue here is what your statement says about the Supreme Court and that we’re only bounded. We would like to see some information that says that we are only bound by Supreme Court decisions and no other decisions. KE: Gladly. SH: And you also said you have some Supreme Court decisions. KE: I do. SH: I see you've given us a little disk. Can I ask where you got that from? KE: I purchased it. SH: From? KE: From the website that is listed on the disk. {I wanted to laugh out loud here soooo bad} SH: Ok. KE: Did you watch the presentation by chance? SH: We don’t. I did not watch that particular one. I have seen one very similar. A video. Which I believe is the same thing. KE: No, its not the same thing. SH: Well, its virtually the same. It has a lot of the same information. {How does she know whether its the same if she hasn't seen the disk?} KE: Well, that disk has a video interview of me personally. And you are hereby instructed, before you make any determinations, to watch that, as it contains a video interview of me personally. {Me being redundant again} SH: Ok. Do you sell that? KE: I do not. SH: Ok. Do you sell any other things? KE: I give it away. SH: or any other activities. KE: I do not. I give it away. Because I want people to know the truth. That’s all. SH: Do you, do you attend seminars in which you…? KE: No, I do not. I do not give…. SH: Do you talk to others about this? KE: You better believe I talk to others about this issue. My first amendment right guarantees me to talk to anyone I like. SH: Do you….? KE: I sell no service. I give no advice. SH: Ok. Where did you learn this? KE: By reading the tax Code. My undergraduate degree is in the Administration of Justice. I interned with the Allegheny County Sheriff’s department during college. I have had and continue to have great respect for the law itself. My belief is that you two, as well, are being lied to. You remember Enron? – The greatest bankruptcy and fraud in history up to that point. Well, a very few limited individuals within Enron lied not only to the general public, but also to the people that worked for Enron. And there is no doubt in my mind that you are being lied to as well. I understand your position, because you have been taught this. I perfectly understand that. But, I hope you realize the frustration when questions are being asked saying, “Are you using Section 861 to determine what if anything I owe?” and the response is, “We’re not going to answer that.” MT: We will answer, {wanna bet?} but we’re not going to play word games. We will answer it specifically in writing, again, as I stated earlier. With the report to you, citing the Code sections, the Treasury regulations and the court cases that we’re relying upon. Now you have since said that you have Supreme Court court cases that state that we at the IRS are only limited to using the Code, the regulations and Supreme Court, not any other Tax Court. KE: Absolutely. MT: Ok KE: Well, I’m saying Tax Court decisions are not binding on the IRS or any other individual. MT: Ok. Not only Tax Court decisions, memorandums, Tax Court cases, appeals. Your statement is a blanket statement saying that we are only relegated to using Supreme Court cases within our tax matters. KE: No, I’m saying that only Supreme Court decisions, statutes and regulations are binding. That you are required to follow them for all cases. SH: It’s really not pertinent one way or the other. Because we’re here today to determine your taxable income. {And what does THE LAW have to do with that, silly?} At that point, after we determine your taxable income we will cite you every code section that we are saying is taxable for you. KE: Ok. SH: But what we need is for you to provide us with the information. Did you today bring with you anything that would be used for us in the examination of your income tax liability. KE: Absolutely, I’ve brought you copies of regulations. SH: Besides regulations. KE: and the statutes. SH: Besides statutes. Any personal documents? Books, records, W-2s? KE: No. SH: You brought nothing with you today? KE: Books, records as to what I earn are irrelevant? SH: So, you brought nothing for us? To give to us to determine your personal income tax liability today? KE: All you need, first, is the statutes, regulations… SH: Like I said, we’re not going to argue the. KE: I’m not arguing. SH: Heh heh. We’re not going to discuss with you the, whether or not the tax laws are pertinent {huh?}, um apply to the tax Code of the United States {Again, huh?}. What we’re here today is to determine your tax liability. That was the purpose of our meeting today. {So, stop bringing up the applicable laws!} KE: Are you here to determine my taxable income from sources within the United States? SH: We are here to determine your taxable income. KE: From? Ok. And taxable income is defined in Section 63. I have a copy of that. I’m sure you already know that. MT: We’ve already discussed this issue. I think we’re going in circles. {Mike's getting dizzy from info overload} SH: Yeah. I mean we had this discussion. KE: We haven’t discussed Section 63 at all yet. SH: But, you have provided us with your information. MT: We have your argument. SH: And we will tell you exactly what code sections apply to you. KE: Ok, you have my information. I’ve provided answers to all those eleven questions. SH: No, your, your wages? Any self employment income? KE: I do not receive wages. ‘Wages’ is a term that’s defined within the Internal Revenue Code. You receive wages as a federal employee. SH: Again, we’re we’re going using, KE: Legal definitions. SH: you know, words. {Yeah, its funny how we use words when we discuss things isn't it?} KE: Legal definition. SH: No. No we’re not. We’ve heard this argument multiple multiple times. It has never, to my knowledge, won. Now, if you would like to continue down this line. KE: Well. SH: We are going cut you off at some point. But, we will continue with our examination. KE: I understand. And that’s why I asked you to look at these regulations. For instance, as I stated, you’re here to determine my taxable income. Well, this says, section 863 of the regulations, ‘the taxpayer’s taxable income from sources within or without the United States will be determined under the rules of 1.861-8 through 1.861-14T for determining taxable income from sources within the United States.” MT: Let me interrupt you for a minute. Up until 2001 you filed a federal income tax return. Correct? KE: No. MT: You didn’t file a 2001 return? KE: I filed 2000 and 2001 and I stated correctly, at the instruction of an IRS agent to file a return stating zero income. And I have that instruction on tape from an audit that I had in the fall of 2001. John Vastardis, IRS agent, stated on tape, “You have to file a return stating zero income.” MT: Stating zero income? Well, that I’m not aware of. KE: That is exactly what he said. SH: Well, not having the tape and knowing the whole context of that discussion, we’re not going to comment on that. {The context, when Mr. Vastardis made his correct, but probably unwitting remark, was that Mr. Vastardis and I were talking about my first refund lawsuit, which was, at that time in the 3rd Circuit Court of Appeals .} KE: Well if you have internet, you can pull it up. Because its on. MT: Go back farther. When is the last time you filed an income tax return? KE: 2001. MT: And was that a good tax return? {Are you a good witch or a bad witch?} KE: Yes. It was a perfect income tax return. MT: Was there income? KE: There was no income listed because I did not receive taxable income. MT: Ok. When was the last time you filed a return with taxable income? KE: Never. {Watch how Mr. Tabai gets confused by this. Since I (and most Americans) have never had 'taxable income' I could never actually file a return with taxable income. The reality is that for the years leading up to 1998, I was incorrectly testifying that I had taxable income. I'll admit that for the years 1997 & 1998, I was pretty sure that I did NOT have taxable income, but I still wasn't confident enough to stop filing and I then had a wife to worry about too. Technically, I may have committed perjury, but I would love to see the government try to prosecute me for INCORRECTLY stating that I DID have taxable income.} MT: You have never filed a tax return? {See how he misunderstands my answer? He equates 'never filing a tax return with taxable income' to 'never filing a tax return period'} KE: No. {He asked me to affirm or deny that I had never filed a tax return and I have previously (albeit incorrectly) filed returns. Therefore, the correct answer to this question is no.} MT: With wages? Compensation? KE: Up until 1998 I incorrectly filed tax returns, incorrectly stating…. SH: [interrupting] That wasn’t the question. His question was when did you file a tax return? KE: 2001. SH: Yes, but you said never at one point. KE: I said I never filed an income tax return with taxable income. That’s what I said. SH: I could be wrong. But I don’t think so. {Nope, she's wrong} MT: Based on, based on, based on semantics and everything else. KE: It’s not semantics. We’re dealing with the law and the law is made up of words. MT: You filed a tax return for 1998 with taxable income on it. KE: No I did not. That is incorrect. MT: What is incorrect about my statement? KE: That taxable income is a term that is defined within the law and according to the law I have never had taxable income, ever. MT: Have you ever filed a return asking for a refund? KE: Yes. 2000 and 2001. MT: Ok. Did you get those refunds? KE: I did not. I even went to court. MT: Why do you think? What is the purpose for not getting the refund? KE: [laughing] Well, if you read the court decision, you’ll see that just like you’re doing here, the court refused to address the issue and fabricated an issue, an argument that I specifically contradicted. MT: Ok. Well, I don’t think we’re going to get anywhere today. It seems like from what you’re telling us, you and you yourself alone have studied the code, the regulations. KE: Actually, I have a letter from a tax attorney [Guy Curtis], as well. MT: Can I see that? SH: Well, ok, let me ask you, you said that you lost in court, so you’ve been told in court that this argument [unintelligible] { but my guess is she said 'frivolous'} KE: No. I just said, the judge refused to address the issue. The DoJ. I filed a motion, a motion for summary judgment that the DoJ did not respond to. I filed interrogatories, much like the questions that I gave you... SH: [interrupting] KE: Let me finish. SH: Go ahead. KE: The judge ordered the DOJ to answer and the DOJ has still never answered the questions. The DOJ is in violation of a court order, to answer these questions and I’m finding severe resistance from you two to answer the questions as well. MT: No, we’ve already stated, and I’ve stated specifically, that at the conclusion of our interview and at the conclusion of my investigation I will specifically put, in writing, step by step, the regulations, the Code sections and the court cases that apply to your particular situation. SH: You said you have a web site. Could you give us that web site? KE: Sure. It’s reasons2vote.com. SH: reasons2vote. The number 2? KE: Reason with an s. The number 2, vote dot com. MT: Is this a copy for me? [referring to the letter from Guy Curtis] Or can I make a copy? KE: It is not. SH: That is what? Run by you? KE: The IRS already has copies. You can check my files from 99, 2000, 2001. MT: Well, see the problem is, your files are somewhere else and I don’t know if I’ll be able to get that and make it relevant to your current file. Each year stands by itself. So, that’s why I’m saying I don’t know if I can get it? So, can I make a copy of this? [referring to the Guy Curtis letter] KE: Absolutely. But, I’ll let you know that that letter from that Tax Attorney does not address the issue of the proper application of the federal income tax laws, specifically section 861. MT: Ok. That’s fine. KE: I’m very curious. I am very very curious, that multiple federal regulations state that the taxpayer's taxable income will be determined under section 861. Now, I understand that you’ve been told over and over and over that it doesn’t apply. When the reality is, if you look at the bulletin. The bulletin is worded very meticulously. Talk about playing semantics. The bulletin states that there is no authority within 861 for anyone to take the position that their income is not taxable and that is a correct statement. Do you understand that? SH: I’m not going to get into arguing 861 with you. I told you. KE: As an American? Doesn’t this.. SH: It has been found to be a frivolous position. KE: Not it has not. The Tax Court. SH: There is case after case. KE: [interrupting] The Tax Court. SH: After case. KE: The Tax Court only. The Tax Court is actually an administrative branch of the IRS. It’s not an actual court. And no one goes to the Tax Court unless they surrender jurisdiction to the Tax Court. SH: I’m not going to argue this position with you. I’m not. I mean its not. KE: It’s not an argument. It’s a discussion SH: I’m not going to discuss this position with you. {Then WHAT was the purpose of this meeting ?} KE: Your job, and Mike’s job is to enforce the law. And I’m showing you specifically what the law says. SH: And we determine your income we will specifically tell you what code sections apply to you and you will see the code sections that you’re saying do or don’t apply to you, we will tell you how they do or don’t apply to you. KE: Now, where’s Gould vs. Gould? Unintelligible KE: I wanted to show you a Supreme Court decision. Oh, here it is. Which states, and I’m reading into the record, “in the interpretation of statutes levying taxes, it is the established rule not to extend their provisions by implication beyond the clear import of the language used or to enlarge their operations so as to embrace matters not specifically pointed out, in the case of doubt they are to be construed most strongly against the government and in favor of the citizen.” Section 63, which is the definition of taxable income is according to the law itself a general definition. It states so. 61 is a general definition. Those sections do not specifically point out anything. Even section 861, the statute, is a general definition. MT: Where there is a question as to what is to be followed. We follow the Code and the regulations there under. And if there is a question in reference to the regulations, you have your Appeals rights and that’s why the courts are there. And those court cases that have already come out and spoken on this issue are what we are going to follow KE: You know, no district court … SH: [interrupting] If you’d like us to keep a copy of that? KE: I’m going to give all of these as a matter of fact. Are you saying that you believe that I have US Source Income effectively connected with a United States business? SH: We’re here today to determine that. That’s why we’d like you to provide any records that you might. KE: So, is it currently the position of the IRS that I do have US Source Income effectively connected with a United States business? SH: It depends on how you’re wording that. I mean. If you’re saying that you’re a W-2 employee. {It's a yes or no freaking question} KE: No. SH: I mean I’m not going to go back and forth with you. You tell me. Do you work? Do you earn? I know you’re not going to use the term wages. KE: You’re right, because that’s a legally defined term. SH: So, we’re not going to go back and forth on this. KE: I do make earnings. I do work for a living as every American has the inherent right to do. SH: Ok, could you tell. Ok, you said you make earnings. Could you tell us how much? KE: Not [unintelligible]. SH: From what occupation? KE: That’s absolutely none of your business. SH: Ok. KE: And besides you already get it from the company I work for and you know that. SH: Do you have any self-employment income? KE: Absolutely not. SH: Do you sell anything else? KE: No. SH: Ok. Do you receive money for any other activity? KE: To the best of my knowledge, right now, no. {It's really irrelevant. Anything that I received from commerce within the several States is not taxed} SH: Do you have any bartering income? KE: I don’t know what that is. SH: Or do you receive bartering? {How can one 'receive' bartering? } KE: I don’t know what that is. {It's irrelevant for the purposes of determining my taxable income.} SH: Bartering is an exchange of services. If you do something for someone else. KE: I would need to see a law that applies to that to understand it. Anyway, to address the questions that you refused to answer. You’ll notice that I’m answering your questions but you’re not answering mine. SH: We’ve answered yours. {HAS ANYBODY SEEN THOSE ANSWERS?} We’ve given you bulletins. We will not, as I said, we will not argue a frivolous position. We believe that the position you’re taking is frivolous. We’ve been through this. The courts have been through this and I know you’ll tell me, the Supreme Court and so on. {The Supreme Court and so on? Way to dismiss the highest Court of the land, lady.} But, the courts have been through this. It’s a frivolous position. KE: I brought this issue up directly to a Federal District Judge. I filed a motion for Summary Judgment, 30 pages long, that mentioned this section of law over 50 times. The Department of Justice did not respond to my motion for Summary Judgment. Then, in the Judge’s ruling, granting Summary Judgment for the government he did not address the issue. This was specifically presented to a judge, in my case, and the judge refused to address the issue. SH: Ah, it could be because the 861 position, which is a frivolous argument as well.... {Any person who reads the entirety of my case will see that Federal Judge Charles Weiner LIED and fabricated an argument that I DID NOT MAKE in order to rule in favor of the government} KE: [to MT] Pull up my lawsuit. You can read my motion for Summary Judgment. << {click the link to read it for yourself} SH: We will not continue to respond to frivolous arguments. MT: What tax years were involved? KE: 2000 and 2001. With my court case? MT: Yes. And we’re dealing with 2002 and 2003. So, again. KE: First of all, your letter mentioned nothing about 2003. MT: Well, we’re going to go into 2003 now as we’re required to, because the time period for filing a return and extension has passed and you have done neither. KE: Because [unintelligible] MT: So we are required to follow up both before and after the current year that we are in. So, we’re in 2002 and we’re going to move into 2003. As long as I have you case open, if we need to go into 2004, we will also go into 2004. Let me tell you that from what I understand, your commission is paid to you as a W-2. KE: I do not receive commission. I am salaried and I receive a bonus. MT: Ok. How ever you want to call it. Salary. Commission. Wage. KE: Well, I don’t want to call it a wage. That’s a legal term. MT: You have no withholding. I just wanted to let you know that I have contacted our Ogden Service Center and I have asked them to look into your W-4, where you’re claiming exempt status. {How long will it take for my company to receive a "Notice of Levy" which leaves out subsection (a), which states on whom a levy may be made}? KE: Wonderful. {sarcasm} MT: And they will be in touch with your employer. KE: I do not have an employer. That is again, a legal term, that is defined specifically within federal law. MT: Avantis, is it? KE: Aventis is the company for which I work. But, they do not fit the definition of an employer. MT: Call Aventis what you’d like to call it, there is money going from them to you and it is some kind of a wage, compensation, salary or commission. KE: And you realize you need a court order to change my withholding? You do realize that? MT: I haven’t the faintest idea what we need to do at this level. {Here we gain insight into how the individual IRS jobs are so compartmentalized. This allows individual agents to not think about the repercussions of THEIR actions} KE: That’s disturbing. MT: Because that is not something, that is not something that I deal with or we handle. Our Ogden Service Center {Can I get some scary music please?} office handles that and I’m sure they’re well aware of what they need to do to change your withholding. Now, if you don’t have anything else for us. KE: I do. I’ve got a whole bunch. I’ve got cross references to the United States Code. MT: I still want to see the court case for the Supreme Court that says that the IRS is only limited to using Supreme Court rulings. KE: That’s your. And again, that’s not what I said. MT: What did you say? KE: I said that the IRS is bound by Supreme Court rulings, is bound by the Code and its bound by the regulations. In other words, you as IRS employees are required to follow those in every case. Lower court decisions are not binding on the IRS. MT: Can we see the case that says that? KE: That’s from your Internal Revenue Manual. You do have a copy of that, don’t you? {Watch Sue jump in to save Mike} SH: It doesn’t make any difference. It really doesn’t make any difference. {Told you} KE: It does to him. SH: Well I don’t want to get off on any tangents on this. KE: Here’s copies of United States Code references and cross references that state that income from sources within the United States, see section 861. The United States Code Service, “income from sources within the United States, section 861.” The United States Code Annotated. SH: That’s ok. Yes, I mean, we’ll take copies of anything. But, there’s no sense in you taking up your time today reading it to us. KE: Well, I thoroughly enjoy talking with you. Because, like I said, I believe that you’re being lied to. I understand your position, because that’s what you’ve been taught. But, trust me, I have researched the Code and the regulations, as well as, as you are required to, the history of the statutes. If you look at the history of ‘gross income’ which was found in section 22 of the 1925 Code {Whoops. It was actually section 213 and I make the correction in a moment}, there was a subsection of that specific statute that said refer to, actually it was 213, section 213, refer to section 217 to determine income from sources within or without the United States. MT: And what we’re basically saying here is that we’re going to go, but so far to enforce the regulations. {WOW!! That's a pretty big admission, don't you think? They're only going to go "so far" to enforce the regulations. In other words, they're not going to enforce those regulations that they don't want to enforce. There you have it folks, in red and white} KE: But, you are required to enforce the regulations. {Good point} MT: And after that point in time your appeal is to go to appeal and possibly go to Tax Court and that’s where your argument will be settled. We're not going to settle it here. {this is a text book example of denial} SH: The third party letter. Make sure you get that to him today. MT: It’s out. SH: Ok, he’s gotten that? MT: He’s gotten the third party letter, he’s got no response letter with the bulletin basically telling him about the frivolous arguments. SH: Do you want to ask him any more questions? MT: Bank accounts? During 2002 and 2003 were there any bank accounts that you used? KE: That’s absolutely none of your business. {Especially since any interest that I would have earned is AUTOMATICALLY reported to the IRS. The only other reason they would want this information is so that their "Ogden Service Center" could send out an unauthorized "Notice of Levy"} MT: Ok. So, its obvious based on that and other answers that we’re not going to get any of the information that we need. We’re going to have to do our investigation on our own using third party contacts and summonses. KE: What I would like to give you as a gift, as well. SH: We can’t accept gifts. KE: Alright, as information. This is part of my case to research. This is in relation to what the Internal Revenue Service is being used to do. It’s a great book [handing MT "The Creature from Jekyll Island] that deals with the Federal Reserve and the banking system. MT: Do you have the tape that goes along with this? KE: Unfortunately it isn’t in tape form just yet. MT: There is a tape that’s out there that explains this. KE: Oh, you’ve read it? MT: No. I’ve heard the tape. KE: It’s a CD. It’s not very long and it doesn’t go into much detail. But, once again, Section 1. MT: How did you get a hold of this? I didn’t even know it was in print. KE: I bought it over the internet. MT: What web site? KE: [laughing] Realityzone.com This is not in any way taken as advice by me, this is simply good reading that helps you understand the Federal Reserve. Once again, for the record, section one imposes the tax. The regulations under section one state that whether the income is from sources within or without the United States. Subchapter N, of Chapter 1, of Subtitle A, of Title 26 is Tax Based on Income from Sources Within or Without the United States. And I can see that this is going in one ear and out the other [referring to SH]. SH: We’ve heard it before. MT: How much did you pay for this? [referring to The Creature from Jekyll Island] SH: We’ve heard it many many times before. KE: I have no idea. MT: You don’t know how much you paid for this? KE: Why do you ask? MT: Well its interesting. It’s a pretty thick book. {Not used to thick books, are you Mike? You should try the IRC sometime} I’ve seen bigger volumes of other… KE: That question sounds like a leading question. Like there’s some other reason behind it. MT: Well, no. If you got it from this web site, are they giving out for nothing? KE: No, I paid something for it. MT: Ok. SH: Well we’ve heard this argument many many times before. You’re not telling anything I have heard before. {That must be why they WON'T answer my questions, right?} KE: Have you seen that disk? [referring to The 861 Evidence] SH: I have seen the disk. Mike showed it to me the other day. KE: Have you watched it? SH: No, I have not. KE: Well, it contains an interview with me and before you move on I think you need to see it to make a. SH: [interrupting] Who was interviewing you? KE: No one was interviewing me. It is just a statement by me. SH: Ok. KE: It’s just me making a statement about my court case and how I brought this to a federal judge and he refused to... SH: [interrupting] Did you make this disk? KE: No. SH: Who made the disk? KE: I don’t know who made the disk. { 3rd Ear productions, but I couldn't think of that then} SH: You don’t know who made the disk? KE: It’s produced by Larken Rose. SH. Ok. KE: I’m sure you’ve heard that name. LONG PAUSE Let me ask you a question, do you think I’m committing a crime? SH: I really can’t comment on that. I believe that you have taxable income. KE: Really? SH: Uh-huh. KE: Do you believe I have taxable income from … SH: [interrupting] Right now. Right now we’re doing the civil end. That doesn’t mean it couldn’t become criminal. But, right now its civil. KE: Yes, I understand that. Do you believe I have taxable income from sources within the United States? SH: Yes, I do. KE: And what section of law? There is a section of law that deals specifically with that. SH: You know, you mentioned a few of them today. And you’re telling me they don’t apply. I say that. {OH MY GOD!! Can you believe this woman? THEY are the ones that incorrectly say that 861 doesn't apply. More brainwashing evident here!} KE: [interrupting] No, I never said that. SH: [interrupting] You’re telling me, section one…. KE: [interrupting] No, they do apply. The statutes that are used to determine for anyone, who receives money within the United States, need to reference section 1, section 61, section 63, and section 861. There are other operative sections of the Code, Parts II through IV of Subchapter N which specifically identify certain individuals as being taxable under Section 1. For instance, Section 871, I have a copy of it here if you’d like it. SH: [interrupting] Like, I said if you want to give us any of these Code sections KE: Can I please just finish this sentence? SH: We have access to the Codes. KE: Can I please just finish? I’d like to read it to the tape. SH: You you can. I don’t want you to sit there and read Code sections to us, because anyone can read a Code section. KE: Everyone is required to read and understand the Code sections. Section 871(b) states very clearly that a non-resident alien engaged in a trade or business within the United States is taxable under section 1. Can you cite for me an operative section of the Code that identifies an American as taxable under section 1? SH: I’m not going to keep going over and giving you the same answers over and over again. KE: That was an entirely different question. SH: No, I’ve told you. I’ve told you you mentioned. No, I think you have asked that before. And I’ve told you section 1, section 61. Both of those sections will say that you’ve got taxable income. {NEITHER of those sections say anything about how taxable income is defined} KE: Those are general definitions. The Supreme Court said they have to be specific. You are required to obey the Supreme Court, are you not? SH: We will show you when we send you a report or whatever the next process is. KE: I’ve already received. I’ve received a report and they don’t cite... MT: [interrupting] No, you haven’t received a report from me. KE: No, I haven’t. I’ve received reports in relation to 1999, 2000, 2001. MT: Do you those with you? KE: I do not. MT: Ok. So it’s mute. {Yes, he did say “mute” not "moot"} KE: But, they don’t cite sections of the code. MT: I will cite the sections of the Code and the court cases. KE: [interrupting] Will you answer my specific questions? MT: No, I will not answer that specifically. KE: Why? SH: We ask… MT: We are not here to determine what laws as far as court cases apply. We are here to determine whether you are required to file a return. [unintelligible] {huh?} KE: [reading from the Internal Revenue Manual] "It is imperative that examiners can identify the applicable law..." MT: And I will identify it in writing. SH: If you provide us with the income information, then we will go through the Code section and tell you where it is. {Is she trying to bribe me?} You provide us with the money you have received. KE: You already have that and you know it. SH: We want to make sure we have gotten everything. What bank accounts do you have? KE: That’s none of your business. SH: So you. KE: And this is part of this fraud. {I was referring to how the IRS sends "Third Party Letters" and "Notices of Levy" to banks and takes money illegally without a court order} SH: But, I will tell you, that 1 and 61, you may say that they’re general, but they are applicable in your case. KE: You’re absolutely right. They are applicable in my case. SH: And both show that you have... KE: [interrupting] You’re right they are applicable, but they are not the only sections that apply. You’re misapplying those general definitions. SH: Well, like I said, once we determine what we believe to be your taxable income we will, at that point, quote the Code sections once again for you. And I can tell you we will quote some of the same Code sections we just quoted. KE: I know you’re going to cite, 1, 61 and 63 and those are general definitions and the Supreme Court says that the laws have to be specific and you’re not being specific. MT: We’re going to go a little further than that. We’re also going to cite court cases. And once that is done. KE: And again, those are not applicable with my situation. MT: Then you need to take that up with our Appeals Division and then from there further on if you need to go further. KE: I am hereby requesting in writing an Appeals Division. SH: We’re not at that point. We need to determine your taxable income first. {without using the law, of course} When it gets to the point where there Appeals… KE: [interrupting] Let me ask you, what is this type of meeting? How is it identified in the Internal Revenue Manual? Is this an examination? SH: Yes it is. MT: This meeting is to determine… SH: But we are not finished with the examination. MT: ..whether you have a filed a tax return and then if we determine in that point in time that a return needs to be filed we will conduct an investigation to determine… KE: But, you have not yet determined whether a return has to be filed? MT: Well we have some base information that says you have income and it looks like according to that income that you need to file a return. KE: Are you identifying that as taxable income from sources within the United States? MT: Yes. KE: Are you using Section 861 to determine that? MT: No. {Here is a blatant admission by Mike Taibi that he is BREAKING THE LAW! It's no wonder he didn't want these statements to be made under penalties of perjury.} KE: Why not? MT: unintelligible KE: You are bound by the regulations and the regulations state… SH: [interrupting] We are using the sections that apply. 861 is not applicable to you... KE: Really? As I said, the federal regulations. You are bound by the federal regulations. I will cite another SH: [interrupting] We are, we are, we are taxing you under Code sections such as Code section 1, Code section 61. Not every Code section applies to you. KE: You’re right. You are absolutely right, not every Code section does. But, section 861 absolutely does and the federal regulations state that. SH: Again. MT: There are court cases that basically state that your income, as a United States Citizen is taxable under 1, 61 and that 861 does not apply. KE: If you read those court cases…. MT: Those are those court cases that we will cite. KE: If you read those court decisions you’ll see that they skirt the issue as well. I’ve read them all. MT: Ok. And at this point in time I’ve got to say that we’re not going to get anywhere here today with your issue. Your issue needs to be taken up above what we can do and what we’re relegated to do. We will make the decisions and the determination. If you disagree with it again you have your appeals rights and if you need to go further than that you can go further. But, what you’re arguing is not going here. KE: I’m not arguing anything. I’m citing the law and I’ll do it again. Section 861(b) states in general terms… MT: [interrupting] Ok, you can stop right there. If you have other information that you would like to give us. (They REALLY don't like to hear the law, do they?} KE: I have information that I’d like to give you and I’d like it to be on the record. MT: Other than the Code sections and the regulations? KE: Well, those are what you use to determine …. MT: Then we’re done. Then we’re done. SH: There’s no sense to get any of the Code sections or the regs., because the Code sections are in the Code {Brilliant. Absolutely, brilliant}. The Internal Revenue Code. Why do you need that on tape? KE: Because I’d like it on tape. Because I know that the IRS has illegally prosecuted people for things and I’d like it on tape. SH: It’s not up to us to determine… KE: [interrupting] Oh, I understand that. SH: …that other taxpayers, that you believe the Internal Revenue Service has illegally prosecuted them. There’s no reasons. If that’s your reason, there’s no reason for you to continue. KE: Section 861 states in general terms how to determine income from sources within the United States. MT: [interrupting] Mr. Evans. Mr. Evans. SH: There’s no need for you to stay any longer. You can.. KE: [interrupting] You are required to obey these. SH: We will follow the Internal Revenue Code sections and regulations. KE: You are required to obey the regulations. The regulations say that to determine taxable income from sources within the United States you are required to use that section. SH: Do you want to hand any of that to us? Or did you want to keep it? It’s up to you. KE: I’m giving you all of this. SH: Ok. KE: Actually, I have a couple of last things I’d like to mention before you turn that off. I would like a copy of the Referral Report that was generated to initiate this meeting. MT: The referral report? KE: Yes, the referral report. I received one for 1999 during my 2001 audit and I know there’s one in that file. SH: What kind of a referral report? KE: It’s titled referral report. How did you begin this investigation? What caused you to begin this? SH: What? Was this a? Was he on a client list of someone? Or? I don’t know. But, we will look through the file and determine… often times there’s not a referral report if you’re talking about an information referral report or a criminal referral report. There’s often nothing like that in the file. KE: I would also like my eleven questions submitted for technical advice. SH: I think you’ve already given us that. KE: Well, I’m going to give you this officially in writing, as well. Submitting them for technical advice and you’ll see that the IRS lawyers have never addressed this issue. SH: Mike, we can take a check on that later. MT: Yeah. I don’t see anything in here except maybe a letter generated by Mr. Evans. SH: It could be your own letter generated it, I don’t know. I’d have to go back and check. KE: Once again, I understand where you’re coming from. I really do. Because, you know what? Ten years ago, when I started looking into the issue I was, back then, under the impression that I owed this. SH: All right. KE: But, I now have come to the undeniable conclusion that you’re being lied to just like I am. SH: Well, we thank you for your time. KE: I sincerely hope that you watch that disk. Because it includes interviews with attorneys, accountants, a former federal prosecutor, two former IRS agents. I personally know. MT: I believe you stated that in your letter. KE: I know two, three IRS agents, who once they looked into the issue, they found that the IRS is lying not only to us, but to you as well. SH: Ok. KE: And I sincerely hope you do. Because, in all honesty, our country is being undermined from within and you are being used in the process. SH: Ok, well. Thank you for your time today. We appreciate you coming in. KE: I want to give you copies of all of these regs. SH: You will receive, if we do have to go to third parties, you will receive copies of anything. KE: By the way, for the year 1999, I know that the IRS at one point sent a letter to the bank I was using back then and told them to begin backup withholding. After getting in touch with my Congressman who contacted the IRS, I received a letter from the IRS stating that they had stopped the backup withholding because, according to IRS records, I reported and paid all tax due on the interest I received during 1999. I did not file a return for 1999. The IRS admitted that I did not owe tax on that interest. SH: And it could be that if you don’t include, and I know you, what I call wages. But, if you don’t include what I call wages, that maybe you had such a small amount of interest income that it would not have been taxable for you. That could have been the reason for that. KE: Well, if what you’re arguing is correct, then it would be included with the same and it go above that. And of course, look at, specifically with interest, if you look at the legislative history you’ll see that the Codes sections that language was specifically removed which existed before the changes in 1939 and 1954 when there were major revisions made to the Code, you’ll see that there was language in there that used to show specifically who owes the tax. Now the language is still there, but its hidden in the regulations under 861. And I know you believe that it doesn’t apply, but the law specifically says that it does. To determine what someone owes, you have to look at the specifics and the types of commerce in which they’re engaged. There’s a section of the regulations that defines non-exempt income or income that is actually subject to the tax. It lists the same types of income that are found in the operative sections of Parts II through V. There are multiple ways that you can get through the Code and I know you’ve been taught to believe that if you hear 861 don’t listen to it because its just a frivolous argument. But, read my court decision. You’ll see that this is clearly my argument. For 2000 and 2001 I was in federal court in August of 2003 arguing against an attorney for the Department of Justice. You’ll see that my motion for Summary Judgment lays out clearly the path through the law. Don’t you think that it’s a little odd that the DoJ didn’t file a response. SH: You lost that court decision? KE: Summary Judgment was granted for the government. SH: Right. KE: But, the court did not say that I owe anything. The DoJ didn’t argue that I owe anything. The DoJ misstated my argument by saying that I’m saying that only foreign income is taxable and that is not true. SH: Subsequently though, you were, you did receive a bill for the tax. KE: No. I’ve never received a Notice and Demand for payment for any year. For 1999, 2000, 2001. The law requires a Notice and Demand for payment. SH: Was money paid, was money paid to the government for those two years. KE: For 2000 and 2001 money was withheld from my paychecks and sent. SH: Ok. KE: And during the phone conversation, the phone hearing, the judge asked the attorney for the DoJ, “Well what is government saying Mr. Evans owes.” And the DoJ attorney said, “Oh, I’m not ready to argue the motions.” When we got into court, he still didn’t argue that I owed anything. The judge did not grant. I mean, it was my suit. I brought the suit. I filed a refund lawsuit. I said listen, I want my money back. If you can’t tell me exactly how much I owe and the Code sections you’re using, give it back. I have an IRS supervisor on tape telling me that I was not required to file a return. His name is Tony Burton and if you go to my web site, you’ll be able to hear the sound bytes. You can pull it up right now and listen to it. He said, “It’s voluntary to file.” And you’ll hear me say, “Could you repeat that please?” And he said, “It’s a voluntary file.” And I said, “Well doesn’t voluntary imply choice?” He said, “Yeah. You exercised your choice not to file a return.” SH: Again, you have to take it. I’m not saying you are. But, you could be taking it out of context. We’d have to hear that entire conversation. KE: And I’d be happy to play it for you at some point. I’d be happy to, off the record, buy you guys a drink. SH: Is the entire conversation on the…? KE: On the internet? No, just. It’s two hours long. SH: Just parts of it? KE: Yes. It’s two hours long. SH: Well, see. We can’t go by part of the conversation. KE: [interrupting] But when an IRS supervisor says … SH: [interrupting] Did they tape it as well? KE: Yes, of course. You know they are required to. SH: Right. KE: The supervisor. When I was talking about my refund lawsuit, the agent, John Vastardis said “Oh you have to file a return saying zero income.” He told me that on tape. Now, like I said, I’m happy to buy you guys a drink off the record some time just to talk about it, because, like I said you’re being lied to. SH: Well, we do appreciate you coming in here today. Anything you want to give to us. KE: I’ll give you all these copies of this. The Supreme Court decisions that say the law has to be specific. It has to identify. Please check sections 61 & 63, you’ll see in the statute itself it’s a general definition and that’s not enough to determine liability. That the cross references say, to determine income as you said, you believe I have income from sources within the United States. Well, there is a section of law that specifically identifies that and you’ll see under the regulations it only shows income to be taxable from certain types of international commerce. I want to be clear what my argument is not. I am not saying that any section of law exempts the money that I earn. My money, the money that I earn is exempted under the limitations of the Constitution. If you read [END OF SIDE] KE: If you take a look at and read the previous regulations you’ll find that it says, “neither income exempted by statute or fundamental law, enters into the computation of net income,” which is now taxable income. It made very clear in the regulations that there is statute exemption and there’s fundamental law exemption. The fundamental law exemption is the type of earnings that most Americans receive. Those. That specific wording, when the rearrangement went in 1954, were removed from the Code sections. You have to wonder why they did that. When the regulations used to be very clear. They said, that in the case of non-resident aliens and foreign corporations doing business within the United States, the following items shall be included in their taxable income. That section, saying who it applied to, when the revisions were made in 1954, were removed from language. But, they were moved into the regulations under, deep in 861. You’re being lied to. SH: Ok. Like I said, anything that you’d like to give to us. KE: Do you believe that I am being sincere when I tell you that I believe I’m not required to file a return? SH: I think at this point, we’re just going to end this conversation. We keep on going on and on and on and we’re getting no where. KE: Do you find anything lacking in sincerity that I’m saying? SH: I don’t know you, so, I, I mean you seem to be that you’re being very honest with us. I don’t know you though. So, I can’t make a judgment on that. KE: Well, again, I would please ask you, it take a little over an hour, just watch the disk. SH: I probably would. I’d like to hear your interview on the disk. So, I can’t promise you that I will. KE: I talk about my lawsuit. SH: But, I probably will take a look when I get a chance. KE: If you get a chance, go to my web site, and read the documents. Read the court decision that was on the case. You’ll see that the judge…..you talk about court cases. This was the perfect opportunity for a federal judge to address this issue, which I specifically raised, and the judge didn’t mention it. Why do you think that is? SH: Again, thanks for coming in today. Anything that you like to for us to take a copy of. I figure it would just be easier, if you’d like us to take a copy. KE: Yes, this a nice summary of the disk. These are the. OH. These are the cross references that I mentioned. In 1998 {actually it was 2001 and I make that correction in a minute}, these cross references were removed. Why do you think that is? Because they don’t want people to start looking at section 861. SH: Ok. KE: All of these cross references were just, no, it was 2001, three years ago, Congress specifically removed these cross references. Don’t you find that strange? SH: Again, we’re not going to go back and forth. KE: And I don’t to argue with you. Like I said, my position is that the income that I earn, the money that I earn, (I hate even using the term income because that’s somewhat vague). I do earn money. I do work for a living. There's no doubt about that. But, the law specifically does not identify the type of commerce in which I engage as being taxable. SH: Ok. Anything else? KE: Let me think. Hey, you know what? Can I take a look at? I think I may have had my notes in there that I wanted to keep. SH: I was just...[unintelligible] cut off too much. KE: Do you have my notes? Can I see that pile as well? I'm going to run through these real quick to see if I'm forgetting anything. I gave you the list of eleven questions I'd like submitted for technical advice. MT: Yes. KE: I can bet that you won't get a response from the IRS attorneys because they don't want to address it either. Let's see. What else? I did request a copy of the referral report. I did ask you to identify the operative section and you didn't answer. SH: We had mentioned, IRC 1, 61... KE: And 63 which are general definitions. SH: Ok. KE: You realize that don't you? It says right in there, "general definition." The Supreme Court said the laws have to be specific. SH: Ok. KE: I just wanted to make that clear. I just want you to understand that. Oh, it was a previous section. I'm sure you have access to the statutory history. The regulation was 26, please write this down, 26 CFR 39.21-1, it reads, "the tax imposed by Chapter 1 is upon income, neither income exempted by statute or fundamental law enter into the computation of net income." What does fundamental law mean? Please look into it. SH: All right. How do you feel? (speaking to Mike Taibi) KE: I'm just running through. Oh, I also understand the procedures through which the IRS generally works and that if it is believed that I am required to file, there is no return that is filed for me. It is a substitute for a return where the name is put on, the social security number, no signature, no income information. Yet, if you look at the statutes that assessments are made under. Assessments must be made on the basis of a return. Substitutes for returns are not returns. SH: Ok. On another point, one of the letters, I believe to Mike, you mentioned that you wanted a conference with his supervisor. At this point.. KE: That's you. SH: Right. Ok KE: I assumed that you would be here. That's the next step and I wanted to make sure it was covered. SH: I don't see any reason for us to meet again. KE: All right. Before, I had mentioned you believe that I have US source income effectively connected with a business There is a section that specifically deals with that and you'll see it says, "This section applies only to non-resident alien individuals and foreign corporations. SH: That's 864. I don't know that we told you that 864 applies to you. KE: No. What I asked was do you believe I have US source income effectively connected with a US business and there is a section that deals specifically with that and guess what, it doesn't show most Americans to be taxable. SH: Ah, if you notice it says, "this section only applies to a non resident alien individual." KE: That's my point. That's my point. SH: We're not saying that section applies to you. Remember I said at one point, not every section applies to you. KE: Yes, I understand. SH: We're not saying that section applies to you. KE: And what I am trying to make clear is that there are specific sections of law that identify people and their business as taxable under one. The example that I gave is section 871. That is what is known as an operative section. SH: Ok, we keep going back and forth. KE: No, not really. I'm just trying to.... SH: That's all right. KE: Trust me, when I started looking into this ten years ago, I was under the impression that I owed it. And as I looked into the statutes and regulations more closely I found discrepancies. I heard some crazy arguments. I began researching it myself. As I looked more deeply into it, I found that there were serious problems. I used to call the IRS 800 help number and say can you please answer these questions for me. When they hang up the phone you that makes you that much more suspicious. MT: Are there other cases similar to yours? KE: No. MT: So you're the first venturer. {Venturer??? That's what he said...} KE: The refund lawsuit, as far as I know, I'm the first person... MT: Well, not the refund lawsuit. But, with your argument here. Are there any other court cases that you're following the same pattern? Or is yours the first? KE: I know that the Supreme Court has never addressed this issue. In relation to, I know you said you use 61 and 63. Section 61, the definition of gross income says that, "all income from whatever source derived." MT: So you're not basing your arugment on any particular court case that says that what you're saying is true and correct and legal and is to be followed etc etc etc. KE: I am basing this on my study of Supreme Court decisions that deal with the issue of taxation.... MT: So, as far as you know you're the first, to venture into this trail. KE: I'm not sure exactly....your question is kind of vague. MT: Well, the argument that you are using, that you're not require to file a tax return because you don't have whatever it is.... KE: Taxable income. MT: Taxable income. There is no court case that broaches that same argument. KE: I tried to bring the court case and the judge wouldn't address the issue. MT: Ok. KE: I wanted to point out to you, because I know that you cited section 61, 63 and 1. 61 is the definition of gross income. It defines it as "all income from whatever source derived." And you're led to believe that that means all income. Well, this a Supreme Court decision and you'll notice that Justice..... that language, Justice Stone, "the language "all income from whatever source derived" is taken right out of the 16th Amendment, which says, "Congress shall have the power to lay and collect taxes on income from whatever source.." This is the United States Supreme Court. SH: Ok, we'll take a copy of that. KE: It reads, "..from whatever source derived, as read in the 16th Amendment, does not mean from whatever source derived." You can see it right there. SH: Ok. Earlier I asked you the question about bartering income and you said you weren't sure exactly what bartering income was. KE: I'm not sure. SH: Ok. What, you are, what will it take to get to.... KE: If you can show me a statute that defines what that is? SH: No, I'm just telling you what bartering income is, is an exchange of services and what I'm asking you is do you have anything similar to that? KE: As far as I'm concerned, when I'm working for the company I work for, I'm exchanging my service. SH: Ok. Other than that? KE: That I can think of, no. SH: Ok. KE: And that answer is....that can't be taken out of context, because I don't know what that means. And for you defined it by just saying what you believe it is not a legally binding definition. So, I'm not going. Let me change that to, I don't know. I'd have to see more information. SH: Ok. All right. Anything else? We keep saying that. But, anything else? KE: I'd love to hear your opinion of that statement right there. "From whatever source derived does not mean from whatever source derived." MT: Well, we would need to look at the whole thing. And I think taking that one particular section out of context.... SH: Yeah. You have to read an entire court case, rather than just saying it with a taped conversation such as this. KE: I understand. I understand. SH: When you pull bits and pieces out it can make it sound very one sided. You have to include the entire conversation. KE: Yes, I understand that. I understand that completely. But, that's pretty clear. "From whatever source derived does not mean from whatever source derived." SH: Ok. I think you'll find that when you look into the court cases that it actually rules in the government's favor. And all these, but.... KE: Well, just like my judge did without addressing .... not only didn't he address it, but like I said, I submitted questions very similiar to those. The federal judge ordered the Department of Justice to answer them. They didn't answer them. Why do you think that is? Don't you find that disturbing? MT: I have no idea. SH: Like I said, we're not going to. I haven't read your court case. I don't know the specifics of it, but we'll get a copy of it. All right, anything else? KE: I'd really like to know a little bit more about the third party letters, something being sent to the company for which I work. Can you give me more information on that? MT: Well, the third party letters are just as stated in the letter I sent to you. We might contact third party individuals to determine what taxable income you might have according to how we understand taxable income. If you would request copies .....[unintelligible] KE: [interrupting] I am requesting copies ..... MT: Then send me something in writing to that effect. KE: I can write something right now. MT: Ok. And if we make those contacts, our third party contact coordinator will have that information sent to you. SH: Sometimes they can't. One of the reasons being, is if that third party feels that he would be in jeopardy in some way. KE: I would also let you know. Of course you already know that I've stopped the company for which I work from withholding about three years ago. I wrote the IRS ahead of time announcing my intentions and said, if there's any reason you believe I shouldn't do this, please provide a written response within thirty days. Of course, I never received a response. MT: That we're not.... KE: I understand but just so you know the lengths to which I am going to try to let the IRS know what I'm doing. To try to make clear. And I again I know you're convinced that 861 is not applicable. But, look at the regulations. They say, the taxable income shall be determined. And if you look at the court decisions. If you read those court decisions, you'll see that.... MT: [interrupting] What court decisions? KE: You have some Tax Court decisions. MT: You're telling us that the Supreme Court is what we're obligated to file. KE: That's true. MT: And not the others. So, can you show us the ones you're talking about now? KE: No. I assumed you had them. Because I believe they are irrelevant. MT: Oh, ok. KE: But if you look at them... MT: Do they, do they foster your argument? KE: No. Absolutely not. MT: So you're citing something that isn't in your behalf? KE: Correct. Well, not in my behalf. The few attempts by Tax Court judges to try to address this issue, you'll see that either the argument was incorrectly presenting by someone by saying, "Well, section 861 exempts my income." No it doesn't. Section 861 is the section that specifically says what types of income are taxable. MT: Now, what is the section or regulation that specifically exempts your income? KE: There is none. MT: Ok. KE: That's my point. MT: Ok. KE: There is no... MT: [interrupting] There is no law that says that it is? KE: Yes. MT: Ok. All right. KE: And the Supreme Court said, the law... MT: [interrupting] Your argument is kind of a nebulous grey area. It doesn't say yes and it doesn't say no. Basically is what you're saying? KE: No. What I'm saying is that as the Supreme Court made clear, the tax laws need to be specific. MT: Ok. KE: The Supreme Court said that. And the tax laws are specific. They're very specific. MT: It just doesn't specifically say that your particular situation... KE: [interrupting] No it doesn't identify most Americans. It doesn't say 'an American citizen.engaged in a trade or business within the United States' the same as it does for non resident aliens. SH: But, it also doesn't specifically say that you are exempt from income tax. KE: The tax laws do not say that. Correct. That is absolutely correct. I am not saying 861 exempts me. I'm saying that 861 is the section that you need to use to determine what is taxable and it doesn't show what I earn to be taxable. SH: Ok. All right. Anything else? KE: As I said, if you look at those tax court decisions that's not what they say. If you look at the publication. It states that section 861 does not give the authority that you're exempt. I agree with that. I agree with that publication. It's deliberately worded that way to make you believe section 861 doesn't apply. SH: Ok. KE: I know. I can see you getting frustrated. Let me just make sure. The one question that I would really like you to answer, which I doubt you will, is if you are saying 861 does not apply, show me where the law says it doesn't. MT: There are court cases that say that. And I will cite that. KE: The court cases say that it doesn't exempt what I earn. That's not what... SH: [interrupting] We're not saying that 861 applies to you. What we are saying is that there other code sections that apply to you and I know that you say they are general but they do apply to you. KE: They apply to people who earn money within the United States. {Watch Sue get confused.} SH: And you're saying that you do not earn money within the United States? KE: No. No. You're not listening to me. {Notice, I correctly responded "NO" to her query, meaning that I DO earn money within the United States} SH: I am listening. KE: I do earn money within the United States. SH: What is your definition of [unintelligible]? Now you're saying you do earn money. KE: I've always said I earn money within the United States. SH: But, you just said you didn't. KE: No I did not. SH: Sure you did. {No I didn't. Cheese and crackers, you have to wonder if they purposefully say the opposite of what was just said to try to confuse you} KE: Check the tape. SH: Because I just said, "you earn money within the United States" and you said "no, I do not earn money." {No she didn't. She said the opposite} KE: I do earn money within the United States and in order to determine whether or not the money that I earn is taxable, I need, and anyone who earns money within the United States, needs to reference 1, 61, 63, 861 and for those people that are identified in the regulations, the operative sections. For instance, non resident aliens have section 871 which says they're taxable under section one. There is no operative section that says that an American earning money within the United States is taxable. SH: And again, we say unintelligible KE: That's why I want to make sure that you understand my argument. SH: We have a difference of opinion because we believe that the Code sections, although you may say they are general, they do apply to you. KE: They apply to anybody earning money within the United States, but there are other sections that need to be referenced to determine specifically. And you're saying 861... SH: If it applies to anyone earning money from within the United States, why would that exempt you? {She CAN'T be this dense, can she?} KE: You're either not getting it, or not listening. SH: No. Answer my question. Why would that exempt you? KE: It doesn't exempt me. SH: Ok. KE: The statutes..... SH: So what does exempt you? KE: The United States Constitution. Fundamental law. SH: Ok, so you're saying the Constitution exempts you, not the Internal Revenue Code. KE: Absolutely. The limitations placed on the federal government's taxing authority. SH: So, you're agreeing that the Internal Revenue Code does say that taxable income for United States citizens is taxable? Earned income? KE: No. No. Taxable income for United States Citizens..... SH: [interrupting] You're saying the Constitution is what exempts you? KE: The limitations placed on the .... SH: That the IRC says that that that is taxable. {Ok, maybe she can be that dense} KE: No it doesn't. SH: I think that's what you just said. {No, that's what you WISH I said, or maybe what you HEARD in your head} KE: No, the IRC does specifically identify certain people as being taxable. SH: You said everyone? KE: No. What I said is 61 and 63 apply to everyone who earns money within the United States. So, if you earn money within the United States, you definitely need to reference those sections to determine what you owe. But, those are general definitions. If, if, if everyone... SH: But then you.... KE: [interrupting] If everyone who earned money in the United States was taxable, there would be no need to have section 861. It wouldn't need to exist, because everyone's taxable. Right? SH: No. KE: Think about that for a second. SH: We're getting into arguments again and .... KE: It's a discussion. It's an intellectual discussion. SH: I keep saying argument. KE: As someone whose job is to enforce the law, I want you to understand the law. SH: Ok. KE: I really do. SH: So, basically, you're saying the Constitution exempts you? KE: Fundamental law. Absolutely. SH: Not 861. But, the Constitution. KE: Correct. SH: So, 861 does not apply to you? KE: No, it does. SH: How does it apply to you? KE: Because anyone who earns income from sources within the United States needs to check that section to see whether or not their... {This is a bit off the mark on my part. Everyone who earns anything within the United States need to check that section to determine IF it is 'Income From Sources Within the United States.} SH: [interrupting] But, specifically, how does that apply to you? {I believe that IRS agents' training on this area of law (if they receive any) is designed to confuse them. They believe that if a section of law DOES apply, it MUST show something to be taxable. Otherwise, to them, it doesn't make sense. Therefore, they incorrectly conclude that section 861 does NOT "apply" to most Americans.} KE: Because that section and its regulations specifically identifies those types of commerce within the United States as what is taxable. You'll see that the operative sections, as well as, there is a section under the regulations of 861 that deals with "non-exempt income." It says the following types of income are "non-exempt," meaning they are taxable. It lists non-resident aliens earning money here, foreign corporations earning money here, it lists Americans who earn money overseas and certain things about domestic and international sales corporations. SH: But how does that apply to you? KE: Because that specific section, that is required to be used to determine whether or not income... SH: [interrupting] 861 is not required to be used. KE: Yes it is. SH: Not to every taxpayer. {That's funny, the regulations say THE EXACT OPPOSITE as I correctly point out} KE: Ah. Ok. As you'll see in the regulations, what it says and what I was starting to say when you cut me off, it says, "the taxpayers taxable income from sources within the United States will be determined under the rules of section 861." The regulations say that two or three times very clearly. A taxpayer is any person, according to the law, any person who owes any internal revenue tax. So, anyone is required to use that section. SH: Isn't that kind of general? Aren't you taking a generality there? Anyone? KE: Anyone who earns money within the United States needs to reference that law that to determine whether or not... SH: [interrupting] But, they also need to reference 61. KE: Right. SH: Ok. KE: 61 is the general definition. SH: There's no sense us going back and forth. {Maybe that's because she refuses to read what the law says} KE: You know, but the thing is... I saw a light... that you were starting to get what I'm saying. SH: laughs KE: And I don't want you to be confused about what my argument is, because that's what a lot of the Tax Courts do, is misstate the argument. What I'm saying is that the laws that apply to determine for anybody what they earn, if they earn money within the United States are, 1, 61, 63, 861 and for those that it lists under the regulations one more operative section, like 871, which says non-resident aliens, or 911, which says Americans who earn foreign income. They are specifically identified as taxable. SH: Ok. Anything else? KE: I think that will do it, but you know what, I saw that you were starting understand what I'm saying. I really did. SH: Actually, I may understand what you're saying, but I disagree with you. I completely disagree with you. {It's not me that she's disagreeing with, it's THE LAW she's disagreeing with. She can't come to grips with the fact that the law does not show most Americans to be taxable so she goes into denial} KE: Whether or not you disagree is ultimately irrelevant because the statues and regulations say what you have to do. SH: Right. And we are following the statutes and regulations. And by following the statutes and regulations I absolutely disagree with you. KE: Didn't you just tell me that taxpayers shouldn't use section 861 to determine their tax within the United States? SH: I'm saying not all taxpayers. I'm saying it doesn't apply. {BUSTED!! This is the point where her "position" falls apart. The law SPECIFICALLY says that Section 861 applies to 'taxpayers' not just certain groups.} KE: What I'm asking of you is to show me exactly where the regulations say which specifically should use it and which shouldn't. That's what I'm asking. SH: Ok. And I'm kind of asking you the same thing for 61. {What?!? This must be a psychological defense mechanism. She can't answer my question so she tries the "I'm rubber you're glue routine"} KE: Everyone should. That's what I'm saying everyone needs to reference it to determine. But, that is not specific as to who actually owes it. 61 does not say, "everyone in the world who earns income owes money ." It says, "gross income is all income from whatever source derived." That phrase, "from whatever source derived" is defined under Subchapter N. SH: But, 861... KE: [interrupting] Which is "income from sources within the United States." (referring to the title of Subchapter N which reads "Tax Based on Income From Sources Within or Without the United States) SH: For certain. But, not for everybody. KE: Where does it say that? That's what I'm asking. SH: That's what I'm saying. 861 may not apply to you. KE: And I'm saying where does the law say it doesn't? That's what I'm asking you. Because I know you can't find that... SH: Every Code section does not have to say "this does not apply to John Doe." KE: Sure it does. Well, no. But, somewhere in the law it does have to say.... SH: It doesn't have say it doesn't apply, it may say it applies to, but it doesn't have to say, "it does not apply A,B,C,D,E" [unintelligible] KE: Absolutely. SH: It says who it does apply to, but it doesn't say that it does not apply. KE: If you hand me that [referring to the regulations] I'll show you two separate instances ... SH: [interrupting] No. No. There's no sense. KE: You said. You said, "it has to say who it applies to." Well. SH: That's not what I said. I said it will generally say who it applies to, I said it does not have to say who it does not apply to. KE: Correct. Correct. SH: That's what I said. KE: I agree with that. And what I tried to show you in the regulations, but it seems like you're just blocking out, is twice it says, "the taxpayer's taxable income from sources within the United States will be determined under section 861." The taxpayer. It doesn't say, just non-resident aliens. It says anybody, has to use those sections. That's what the regulations say. You'll see it two or three times in there. SH: You need to read the entire section. KE: Absolutely. SH: You're taking different points out of context. {This is called 'denial' and 'rationalization'} MT: And that's exactly what the court case will say that I'm going to cite. You're taking 861 and those sections under 861 out of context. KE: What most of the court, the Tax Court decisions that I have read have said, you're arguing that 861 exempts your income and that is incorrect. MT: I understand what you're saying. Again, you're in the nebulous area saying it doesn't specifically apply to your particular... {No, they are the one's being nebulous. The law specifically identifies certain individuals as taxable, but NOT most Americans. They want us to believe that EVEN THOUGH the law does not specifically identify most Americans as taxable that we still are....THAT'S nebulous} KE: ...type of income. MT: Right. SH: Ok. Anything else? KE: I swear if you look into this more deeply, you're going to find that what I'm saying is true. SH: Ok. KE: I kid you not. SH: All right. Anything else? KE: I don't think so. SH: Great. Thanks for coming in. KE: I would love to hear your feedback after you've seen the disk. I really really would. So, please feel free to contact me. Because, like I said, I honestly believe that, I understand what you're saying, but I honestly believe you're being used. I believe that. SH: Ok. All right. KE: I hope its been an education. I really do. Ok. I guess we're going to turn off the tape now. MT: Sure. END OF TAPE..
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