Hendrickson Rebuttle to a tax rat.

On May 19th, 2010, Pete Hendrickson sent this message to Bob Hurt, of the Florida Lawman group.

"You asked for a response to this ill-informed nonsense from "Pablo" (which you might have asked for before broadcasting his "analysis"...). Here are a few quick words:

"Pablo" (I'll dispense with the quote marks around the pseudonym behind which this fellow conceals his identity-- the reader will just have to imagine them through the rest of these comments) begins with the idiotic rhetorical question of "How was the DOJ able to declare that Mr. Hendrickson did in fact earn wages contrary to his first-hand knowledge and sworn testimony?"

It's a prosecution, Pablo! They can declare any damn thing they want. Frankly, if they BELIEVED what they "declared" here, they would have long since made an effort to assess taxes for these years. See http://losthorizons.com/PostCertsOfAssess.pdf. This rhetorical question should alert the reader from the very beginning that Pablo's screed is in service to a theory or argument engaged in a desperate search for convenient facts, and he is not unwilling to creatively "misunderstand" things in order to find some...

It would be nice if Pablo would actually read the material about which he presumes to comment. At the very least, he should have gotten right what the IRS did in response to my 2002 and 2003 filings, which was NOT "didn't believe for a second" or "go to court". The actual response to those filings was complete refunds-- the first in history, followed by four efforts to get my book out of circulation with "promotion of an abusive tax shelter" charges, all ultimately dismissed on the DoJ's own motions-- four more historic firsts.

Only after that failed was the hokey, evidence-free "civil complaint" launched in which, as Pablo conveniently forgets to mention, the government is trying to force me to replace my filings with others saying what the government needs for me to say in order to have a pretext for claiming I owe a tax. This recognition of the primacy of what is said on a form, rather than the mere use of any particular form, completely contradicts the misunderstanding that Pablo is trying to sell here, which is likely why he overlooks these facts when spinning out his fiction...

Pablo also should understand that my filings said nothing whatever about "employee" or "employer"-- these things are secondary. It is enough to respond to allegations of the payment of XX of "wages" with a rebuttal of XX of "wages". I don't have to explain myself, and didn't. Frankly, since nothing on my filings says anything about "employer" or "employee", Pablo's reference to this is inexplicable, unless it is just a cheap effort to twist (or invent) facts in order to serve his thesis.


Frankly, as I have pointed out ad nauseum, even those who ARE "employees" can be paid remuneration which doesn't qualify as "wages". Again, Pablo should actually read the things filed. He would see this prominently in my filings in the criminal case. Even the DoJ was forced to admit this point in its own briefs, and this point alone completely and dispositively eviscerates Pablo's entire arguments on the subject of the use of forms, the fact that withholding has taken place, and so on.

Indeed, he should take note of the fact that while Kim Halbrook was never called as a witness in the civil case (nor was anyone else, of course, as no testimony or other evidence was ever introduced in that pretense of a litigation) she WAS called as a witness in the criminal trial, but no examination such as he imagines took place. Instead, the government didn't ask her, or any other witness from the company I worked for, ANY such questions, neither in support of anything on any W-2, nor even about whether I was paid anything. It simply couldn't risk allowing the subject to face cross-examination.


Pablo goes on to make another idiotic assertion and conclusion about the civil case. Referring to Kim Halbrook, Pablo says: "She basically stated that her company paid Mr. Hendrickson wages." No, she didn't. She signed a DoJ-written affidavit attesting to the fact that the W-2 put into the record by the government was a true copy of the one in the file cabinet of the company at which she didn't even begin working until after some of the period in question had passed, and she gave no testimony subject to cross-examination at all. Her "affidavit" was nothing but hearsay about hearsay.

Pablo goes on to say: "The IRS moved for summary judgment shortly after this because, in their view, there were no justiciable facts in contest." This is either breath-taking naiveté, or deliberate disingenuousness (to put it in the kindest possible way). The IRS (actually the DoJ) moved for summary judgment because it felt it had a cooperative court that had been sitting on my immediate motions to dismiss and for other relief-- including jurisdictional challenges-- for months without a ruling at that point, and figured it might as well take its shot. Six more months would then go by before the court would grant the bogus MSJ on the same day that it finally ruled against my motions, and would do so by explicitly reversing the "burden of proof" rules for MSJs. As I pointed out in my petition to the SC:

A. The courts below have abused their discretion in the award of summary judgment to the government, and have thereby also committed an assault on the Seventh Article of Amendment to the United States Constitution.

The District Court granted the “U.S.’s” motion for a summary judgment in this case by making “findings of fact” which elevate all of the (hear-say) allegations presented by the “U.S.” to gospel and disregard entirely our sworn testimony to the contrary-- despite having no independent knowledge of these matters whatsoever, and alluding to none. The court then declares that, lo and behold! no genuine issue of fact exists and (based on the same “found facts”) summary judgment for the “U.S.” is appropriate! This is highly convenient to the “U.S.”, of course, but flatly violates the well-established doctrine regarding such motions:

“Credibility determinations, the weighing of the evidence, and the drawing of legitimate inferences from the facts are jury functions, not those of a judge, whether he is ruling on a motion for summary judgment or for a directed verdict. The evidence of the nonmovant is to be believed, and all justifiable inferences are to be drawn in his favor. Adickes, 398 U.S., at 158 -159”

Anderson v. Liberty Lobby, Inc., 477 U.S. 242 (1986).

“[I]n ruling on a motion for summary judgment, the nonmoving party's evidence "is to be believed, and all justifiable inferences are to be drawn in [that party's] favor." Anderson , supra, at 255”

Hunt v. Cromartie, 526 U.S. 541 (1999)

It also flatly violates the admirable and accurate position well-expressed in Beaty v. United States, 937 F.2d 288 (6th Cir. 1991):

“A central tenet of our republic--a characteristic that separates us from totalitarian regimes throughout the world--is that the government and private citizens resolve disputes on an equal playing field in the courts. When citizens face the government in the federal courts, the job of the judge is to apply the law, not to bolster the government’s case.”

Frankly, it is just this sort of contrivance that the rules concerning summary judgment are designed to prevent, and that the 7th Amendment to the U.S. Constitution makes illegal by providing that the right of trial by jury shall be preserved. If permitted to favor one side in this fashion, any court could keep any case-- the outcome of which it wished to control-- from reaching a jury by making convenient “findings of fact” favoring one side, just as has been done by the District Court in this case. Nonetheless, when allegedly considering the matter de novo on appeal, the panel of the Circuit Court simply repeats the District Court’s bad behavior.

Perhaps the Appellate Court’s error results from confusion as to both who was the moving party in this case and as to the rules regarding summary judgment. Discussing those rules in its opinion, it says, "Thereafter, the nonmoving party must present significant probative evidence in support of the complaint to defeat the motion. The nonmoving party is required to show more than a metaphysical doubt as to the existence of a genuine issue of material fact.” (Citations omitted.) However, the “non-moving party” in this case were the defendants, who obviously do NOT need to “present significant probative evidence in support of the complaint to defeat the motion”; more significantly, the “non-moving party” is NEVER “required to show more than a metaphysical doubt as to the existence of a genuine issue of material fact” On the precise contrary, it is the MOVANT that must attempt to raise doubts as to the existence of an issue of material fact; the non-movant need merely show that there IS an issue of material fact in controversy.

In this case, a third party has alleged that “Event A” occurred, on the basis of which alleged event the “U.S.” argues that we are indebted to it. We have testified-- both long before this case began and directly in response to the motion for summary judgment-- that “Event A” did not occur. There can be no plainer “issue of material fact.”

Neither the District Court nor the Circuit Court have any first-hand knowledge whatever as to the occurrence of “Event A”, and thus have no basis upon which to make “findings of fact”, even if such findings were not the proper province of a jury in any case. Yet both courts presume to make such findings.

The courts below thus abuse their discretion and, without regard to the fact that the only proper disposition of this case is dismissal, do violence to the spirit of the 7th Amendment as well. The appellate Court compounds the abuse and that violence by punishing us with sanctions for invoking its supervisory authority over the District Court! This Honorable Court has plainly declared, “The evidence of the nonmovant is to be believed.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242 (1986). We appealed a District Court ruling based on the straightforward meaning of this declaration, among other things, and the Appellate Court declares our appeal to be “frivolous” and punishes us with sanctions! We appeal to this Honorable Court for its protection from this abuse.

We feel obliged to observe that in addition to sharing the Circuit Court’s “confusion” about the rules concerning summary judgment, the District Court exhibited considerable “confusion” about matters of concrete fact throughout its Final Rulings. For example, in those rulings the court deliberately quotes one line of Peter Hendrickson’s book, ‘Cracking the Code- The Fascinating Truth About Taxation In America’ out of context so as to suggest that the book argues that income tax-related withholding only applies to federal workers. The book does contain that one line, but makes no such argument. Income tax-related withholding in other cases is discussed in depth in the book.

Similarly, the District Court refers to “the false and frivolous claims set forth in 'Cracking the Code' that only federal, state or local government workers are liable for the payment of federal income tax”; and “the assertion that wages do not constitute income for federal tax purposes”. No such claims are made in the book; in fact, the book specifically says otherwise in great detail.

Most egregiously, perhaps, the District Court makes the following declaration in its final ruling:

“The only new argument is that “the statutes invoked or relied upon by Plaintiff and the Court . . . are unconstitutional, being plainly violative of at least the ‘necessary and proper’ clause of the eighth section of Article One, and the First, Fifth, Seventh, Ninth, and Tenth Articles of Amendment to the U.S. Constitution.” (Defs.’ Mot. for Reconsideration at 9.)”

What we actually said in the referenced motion is:

4. Regarding Plaintiff’s requests for an injunction and coerced testimony and the Court’s related decisions, it is self-evident that to dictate what cannot be said is to dictate what must be said, or to impose silence. It is not necessary to discuss Plaintiff’s calculated mischaracterizations of what is said in Defendant Peter Hendrickson’s book or Plaintiff’s pretensions in suggesting that it possesses some mystic knowledge about the underlying meaning of our tax return testimony in order to observe that neither Plaintiff, nor anyone else on Earth, has the lawful authority to dictate the content of our testimony, or to impose silence, in the face of allegations concerning us, such as those on the “information returns” made so much of by Plaintiff in this case.

To whatever degree the statutes invoked or relied upon by Plaintiff and the Court can be construed to provide for such an injunction and coercion of testimony, those statutes are unconstitutional, being plainly violative of at least the “necessary and proper” clause of the eighth section of Article One, and the First, Fifth, Seventh, Ninth, and Tenth Articles of Amendment to the U.S. Constitution. Such efforts to dictate or control testimony also violate various federal criminal statutes regarding witness tampering and intimidation, as well as the fundamental principles of due process.

The very fact that Plaintiff has sought such an injunction, and a coerced change in testimony we have already made, is a plain acknowledgment that Plaintiff has no legal basis for disputing the freely-made testimony on our returns. The same plain truth is revealed by Plaintiff’s inability to carry its burden of proof throughout this contest, and its failure to even try to do so. Plaintiff CANNOT substantiate the allegations made on the “information returns” upon which it relies, and therefore seeks to prevent those allegations from being rebutted.

It is not for us to say whether these mis-statements and contrivances are calculated to plant false notions about our arguments and positions in the minds of those who read only the rulings by the court and not the actual materials we filed in the proceedings below, and to suggest that we are “tax protestors”. However, if left unaddressed, these mis-statements will leave such false notions. Therefore, we bring them to this Honorable Court’s attention here.

Returning to Pablo's errant thesis: he should have read my posts in the last few newsletters of the following:

THOSE IN THE "TAX HONESTY" COMMUNITY who persist with nonsense about the use of 1040s or 4852s as amounting to inherent, adverse "admissions" (and those confronted with this nonsense) should take careful note of the fact that no effort was made by the DoJ to argue such a thing in its "response", even while it DID argue that my having not explicitly rebutted my receipt of "wages" on my pre-CtC-research filings amounted to such admissions...

Its arguments in this regard were futile, as my reply makes clear. But the point here is that the DoJ evinces a definite interest in trying to make a case that I made admissions supporting its allegations but only tries to do so by making the one argument, and not the other.

It is thus clear that even the DoJ won't go so far as to venture the absurd proposition that the use of forms specified by its own laws as those with which allegations of the conduct of taxable activities are rebutted somehow constitutes evidence that taxable activities WERE conducted, or makes the user into some kind of entity whose every economic act or gain is subject to the tax. Had that kind of twisted notion been viable, the DoJ would have simply pointed out that I used such forms in, and concerning, the years of the charged offenses, and that would be that.

The agency does not, and in fact, does the virtual opposite. It argues that because I FAILED to deploy 4852s in my earlier filings to explicitly rebut the characterization of my earnings as "wages", I should be deemed to have admitted them to be (just as is pointed out in CtC...).

Similarly, where it makes a reference to my completion of W-4s, the DoJ does so not with the assertion that my completion and submission of such forms made me into an "employee", but rather by suggesting that my doing so indicated that I "accepted the characterization" of myself as an "employee" (and thus the jury could conclude that I was an employee and my remuneration was "wages"). Unfortunately for this argument, it was the government's burden to actually try and prove that I really DID receive "wages", if it could-- not just paint a picture from which something theoretically COULD be concluded (but hey, when it's all you got...). Further, the last W-4 I submitted prior to the period involved in these charges was accompanied by documents making clear that I DID NOT "accept the characterization" of myself as an "employee" and my earnings as "wages".

But the larger point is that this riff is just another example of the principles and legal realities pointed out in CtC, and is NOT an argument that the filling out and/or submission of the forms itself made anything into a reality, or even just into an unrebuttable presumption.

PRECISELY THE SAME POINT APPLIES to the "citizenship/residency" (c/r) nonsense persistently flogged throughout the community by those seeking to distract Americans away from the liberating truth revealed in CtC and keep them from lending their strength to the one effort that will win this war against the lies about the tax-- standing up and standing firm on behalf of that truth, while spreading the word...

That ridiculous "c/r" argument holds that merely by being (or allowing or encouraging oneself to be deemed) a "United States citizen" or "resident" (sometimes viewed as "citizenship or residency" in the "federal zone"), one's earnings are all transformed into profits from the exercise of some federal function or prerogative. The underlying "reasoning" here is that "United States citizenship or residency" is a privilege granted by the United States, and subsequent economic activity while enjoying this "privilege" is therefore taxable.

Writing about this just gave me a great idea! I'll just grant my neighbors the privilege of citizenship of "Hendricksonland", and start collecting taxes from them. If any of them refuse to pay, I'll sue, and just quietly explain to the judge that the protestor is my citizen, that being so is a privilege, and that I've laid a tax on all the economic activity of anyone to whom I've extended a privilege, based on the reasoning that the "privilege" is a sort that simply hangs on them 24/7, and that therefore anything they do at any time is facilitated by that "privilege" and I can claim a piece of its outcome by right.

Or maybe I'll be subtle.

I'll send my neighbors notes indicating that unless they tell me not to, by returning the form I provide for that purpose, I will cut their lawns this summer and bill them accordingly. Then, if they don't reply, I'll presume them to have agreed, and enforce the charges accordingly (and who knows, perhaps I'll even actually cut some of their lawn). If they DO reply--even just to say "No!"-- I'll deem them to have admitted to being my citizens, or residents on my property, by virtue of their use of my reply form to decline the "service agreement" (and in either case because they never deny being my citizens or residents, for which no means for doing so will be provided or explained, in any case), and I'll take the charge from them as a "tax" of a portion of all their economic activity, based on the reasoning outlined above...

TO RETURN TO SERIOUSNESS, the proponents/injectors of this nonsense hope that their marks will forget that unapportioned capitations remain prohibited, and that as the Supreme Court clearly points out and/or upholds in many cases over a century-and-a-half of relevant jurisprudence, the government can't evade this prohibition by crafting a tax scheme that effectively amounts to an unapportioned capitation, while pretending that it isn't one, and is just an application of its excise authority on the "privilege" of earning money as a "citizen" or "resident" of the "United States (however that latter term is defined). (In fact, the court has flatly said that all Constitutional prohibitions apply even to those who really are citizens and/or residents of its territories and possessions. See http://losthorizons.com/comment/CitizenshipJuriesVoting14th.pdf for an extended discussion and case-law.)

The DoJ isn't so bold as to make this ridiculous argument, even while it finds itself compelled to try the equally lame argument that, "He didn't [explicitly] deny that his earnings were "wages" back in the '90s, your honor, so he must have been lying when he began [explicitly] saying said he didn't believe that they were starting in 2002!" As in the case of the "use of government forms" issue, if the government actually operated on the basis of the "c/r" concept, the DoJ would never have bothered with the argument it DID attempt, and would have simply said, "Hendrickson hasn't argued that he isn't a citizen or resident of the United States, your honor, and therefore, since the law imposes a tax on all income of any citizen or resident..."

THAT THE DoJ DOES NOT MAKE THIS ARGUMENT (or anything like it, such as arguments involving Social Security numbers, or whatever other distracting notions not found in CtC, WGRaM or on non-forum pages at losthorizons.com clutter up the landscape) must be accorded its proper significance. By the same token, what the DoJ DOES argue, and the conformity of that argument with what is pointed out in CtC, must also be accorded its proper significance.

Finally (because I can't take the time to parse out all the errors in this well-meant but disturbingly ill-informed "analysis"), Pablo should read my motions on the "person" issue, rather than imagine himself to know what this issue is about by osmosis (or whatever he did rely upon in lieu of study). All of those motions are posted, and none of them are very long.

An evening of studious attention would make a world of difference in the quality of future analysis. The "person definition at 7343 is NOT one met by merely being an "employee"-- it hinges on being an "employee under a duty (as a fiduciary) to complete and subscribe a form on behalf of a corporation or partnership (or other entity of like kind or class)-- a definition that was completely and tellingly evaded by the government and court, both of which lamely tried to argue that the "person" definition just meant "a person" as defined in the dictionary.

Were Pablo correct in his various notions about this subject, these actors would just have said, "Hey, you're an "employee", so you're covered". Nothing of the sort was attempted.

Pablo needs to dig deep and come to grips with the fact that this trial, like the bogus civil case in which the court was reduced to actually reversing the "motion for summary judgment" rules-- and actually say them backwards, on paper-- in the refused for publication appellate ruling-- are just corrupt efforts to overcome the complete and correct truth about the tax revealed in CtC.

In short, Pablo needs to stop his speculations and "analyses" and spend his time reading what I present to be read by those who want to know and understand what's going on, and why. I really wish he would, because I still believe he's a good and valuable man, but he is actually doing much more harm than good right now.

-Pete


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