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Thread: Company beats IRS penalties with Lawful Money

  1. #1

    Company beats IRS penalties with Lawful Money

    Here's a traditional corporation, with EIN, bank account & W4/W2 employees - your typical small business ensnared in the system. The company was a weekly depositor of federal withholding & employment taxes. For example, If payday was Tuesday then company was required by statute to pay US Treasury the following Tuesday. In 2011 company was late with payments (some weeks over a month late) and racked up penalties over $4800. Here's the timeline, attachments are below...

    April 2012- IRS sends CP161 notice (Company ignores that one)
    June 2012 - IRS sends CP504B letter, Notice of Intent to Levy (yeah whatever)
    July 2012 - IRS sends FNOITL, Final Notice Of Intent To Levy

    Are you thinking this should be an easy win for the IRS? that they'll steamroll right over the company? No so fast, the company was experimenting with redeeming Lawful Money. Company calls the IRS to negotiate a deal, rep says cannot do it, suggests the Form 843. So in July 2012 company files that Request for Abatement. They attach several reasons (Line 7), most were pretty lame in my estimation, one cites the weak economy and one only asks for 1-day subtraction & recalculation of penalties. Except one argument was, I'm paraphrasing, "our bank account contains lawful money pursuant to 12 USC 411 and you shouldn't assume it's yours to take. Legal issues may result ...". Company also attached copy of a stamped lawful money bank deposit.



    Last edited by JohnnyCash; 09-12-12 at 03:38 AM.

  2. #2
    August 2012 - IRS sends LTR2645 "we need more time" 45-day letter signed by a "Mary Hannah."

    Sept. 2012 - IRS folds. IRS decides to comply with the law and sends CP210 letter from Odgen. Company owes zero:

    Last edited by JohnnyCash; 09-12-12 at 12:43 PM.

  3. #3
    Thank you for sharing that. It seems incomplete. Where is the Demand?

    As I understand the supplements there is a Deposit Slip with the Demand and a Memorandum/Attachment to the IRS Form with this quote:

    III. We should not presume the IRS has the right to seize our property, as proposed. If the IRS were to levy our bank account property interesting legal and jurisdictional issues would result considering that a portion of said account contains redeemed lawful money pursuant to 12 USC Section 411.
    Please sanitize and show us those Demand related items too.
    Last edited by David Merrill; 09-12-12 at 10:19 AM.

  4. #4
    Ah yes. Here are the Form 843 attachments. (Bear with me as I get it uploaded. NOTE to other posters: "attachments" taller than 600 pixels are reduced to that size by forum software. But if your image is external, sitting on the internet, you can use the IMAGE tag and get it full size.)

    And to head off the questions, this is not my company (no ownership), nor am I an employee.

  5. #5
    I am glad the IRS backed down. But as far as the science goes - the Attachment is loaded with great arguments to forgive. Too bad about that.

    I call it shotgunning. There are a lot of good results but...

    The downside to shotgunning is that a trained attorney opposing will grab on to the weakest argument like a pit bull and the good arguments seem to fade off somewhere.

  6. #6
    You haven't heard? The IRS now grants abatements for funniest Line 7 arguments yet. It's called the Golden Egg Abatement Lemme tell ya, tough economy and arguments about geese mean nothing to the IRS. That company violated the statutes by paying late and should've been penalized or levied. That third reason was the winner; of course you are right though, the company left the IRS multiple reasons to grant abatement and we can't say that conclusively. Line III also seems like a veiled threat at litigation - the govt hates to litigate!

    It's reminiscent of my early days discovering Planet Merrill. I fought a traffic ticket using some common law strategy and documents I barely knew. But it seemed to cause the court to schedule me into a special hearing day where no accusing law enforcement showed and all appealers were let off with "Not responsible, lack of prosecution". My take is they didn't want to entertain, link, or give any credit to, my use of the LEGAL NAME/Common Law defense.
    Last edited by stoneFree; 09-12-12 at 09:32 PM.

  7. #7
    I am quite certain that the lawful money redemption is the winner.

    I am hopeful that soon we will have somebody confident enough to let the one argument ride solo.

  8. #8
    Senior Member
    Join Date
    Mar 2011
    On the land known as Kansas
    I spent the last few days going over income tax cases. I was specifically looking for cases which were 'wins' against the IRS, or income taxes dating back to the civil war era.

    I honestly could find no common thread/defense/reason for the 'wins'. I have personally spoken to people who have won in such cases, again, nothing that would be a 'general rule' for winning. I use the word "win" but they still spent months if not years tied in a battle with the machine, not good.

    In fact, it is the lack of serious opposition, discussion (other than loud thunderings from at-turners on internet sites) or anything from the IRS on the matter of redemption per 12-USC 411.

    It would seem it is the ONE subject they have ignored or attempted to discredit off the record. That is very, very telling to me. Thank you to Johnny Cash for this information and for all of those willing to demand their lawful right to redemption from the Federal peonage system.

  9. #9
    A new suitor filed a LoR in California on Monday. It took three hours!

    The case has yet to show up on PACER.

  10. #10
    You're welcome. I see on that final notice the Ogden campus has fired-up their time machine again; traveling forward to Sept. 17th to print the letter and then back again to mail it so company could receive it on Sept 10th. HELLO! If they're fudging the record on that, what else are they making up, huh?

    And 10 to 1 there's no Mary Hannah working at the IRS. Next time you call the IRS and the representative answers, ask if that's their real name.

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