Fraud or Free Speech?

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The Justice Department is seeking a court order to prevent Michigan tax resisters Peter and Doreen Hendrickson from promoting the idea that you don't owe any federal income tax unless you choose to declare taxable income. The government says their theory has been uniformly rejected by the courts. Even so, barring them from selling books and other literature explaining the theory seems an awful lot like a prior restraint on speech. The case of Federal Mafia author Irwin Schiff, who this year received a 13-year prison sentence for various tax-related offenses, raised similar issues.

Brian Doherty took a look at the state of the tax resistance movement in Reason a couple of years ago.

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  1. Is it illegal to deny the validity of any established legal opinion, or only on tax matters? Could you go around telling people, for example, that farmers have a right to grow wheat and it isn’t anybody’s business?

    Seems to me the simpler way to fight these guys would be to audit every penny they make. If they don’t pay all their taxes, nail them. That pretty much clinches your case. (Whoops! Guess you do have to pay them taxes!) And if they do pay their taxes, they’ve sold out their own argument by proving they don’t really believe it.

  2. And if they do pay their taxes, they’ve sold out their own argument by proving they don’t really believe it.

    Being forced to capitulate at the point of a gun is hardly an admission of guilt or a betrayal of a principle.

  3. I’m talking PR, not right and wrong. I assume the feds want to shut these people up because they’re afraid otherwise they’ll convince people to join them, and in that sort of campaign the willingness to stand up and fight will convince a lot of people. I know I wouldn’t be convinced by “yeah, I pay my taxes, but you shouldn’t, because you don’t really have to”!

  4. Fraud.

    Next question.

    Yours truly,
    Mr. X

    …on a roll…

  5. Can we get that dude Andrew Lesko and his obnoxious suits to shut the hell up, too, now?

  6. Can we get that dude Andrew Lesko and his obnoxious suits to shut the hell up, too, now?

    I would have gone with Kevin Trudeau mysekf, but if I remember correctly the gov’t has banned him from seeling products on TV

  7. Being forced to capitulate at the point of a gun

    …indicates that, yes, you do have to pay the tax.

    The real question is, does any court impose this sort of restriction on the great steaming piles of purportedly non-fiction books that make other untrue, but not particularly libelous, claims?

  8. I’ve been on Hendrickson’s mailing list since my early story on tax rebels. The most fascinating detail of the Times story, which you’d know (or at least have been told–it might have seemed unbelievable) from his emails, is that people using his techniques were REALLY GETTING REFUNDS…which the govt now wants back. Now, how did that happen?

  9. were REALLY GETTING REFUNDS…which the govt now wants back. Now, how did that happen?

    You’re being sarcastic about being surprised, right? Because you can’t possibly think it’s surprising that’s what happens.

    It’s pretty much common knowledge that the IRS at first takes returns at face value as filed and issues refunds accordingly. This is because if they issue refunds late, they have to pay interest on them. So they want to get the refunds out the door ASAP. Only later are the computers put to work actually verifying the returns, checking what’s on the returns to whats on W-2s, 1099s, etc. And that’s when the improper refunds are discovered and the requests for payback are generated.

  10. QM–I’m sure that must be true–it is the most sensible explanation, and Johnston doesn’t even address the issue so he too must assume everyone knows that’s what happens–but yes, I am a bit surprised that $69 K is shot out pretty much automatically, and had a personal experience a few years back personally with some mistakes on a tax form that were reacted to quickly and not taken at face value by the IRS that tells me it isn’t always the case.

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