IRS recognizes Redeeming Lawful Money - Yes!!!

[ManOntheLand]

I ended up Moving to Dismiss just before trial when I realized I had unknowingly entered a jurisdiction where incorrect presumptions were being made by virtue of my mere presence in the forum. Since I was the Petitioner, it seems I would have every right to voice this mistake of law and withdraw my Petition. I was all ready to litigate the case but in pre-trial conference, the IRS attorney made it clear she would not be required to meet the burden of proof that I was a "person" as defined in IRC 6671(b) which is the operative definition for a 6702 penalty and a factual predicate to the offense (that I was under a duty to file the returns in question). I was under the impression when I petitioned the Court (based upon federal case law) that IRC 6703 required the Secretary to meet the burden of proof for all factual predicates as to whether I was liable for a frivolous penalty. This was clearly not going to be the case--and the IRS attorney in her arrogance could not help but tip her hand to me that the fix was in, in every way. For some reason the judge thought it was very important to keep my Motion out of the record so he could pretend to have jurisdiction without meeting any of my challenges to that jurisdiction. He then denied my Motion previously filed for judgment on the pleadings, as IRS never alleged sufficient facts to support a finding that I was liable for a 6702 penalty. It was the form of a legal process with none of the substance. Total kangaroo court.

[Brian]

I ended up Moving to Dismiss just before trial when I realized I had unknowingly entered a jurisdiction where incorrect presumptions were being made by virtue of my mere presence in the forum. Since I was the Petitioner, it seems I would have every right to voice this mistake of law and withdraw my Petition. I was all ready to litigate the case but in pre-trial conference, the IRS attorney made it clear she would not be required to meet the burden of proof that I was a "person" as defined in IRC 6671(b) which is the operative definition for a 6702 penalty and a factual predicate to the offense (that I was under a duty to file the returns in question). I was under the impression when I petitioned the Court (based upon federal case law) that IRC 6703 required the Secretary to meet the burden of proof for all factual predicates as to whether I was liable for a frivolous penalty. This was clearly not going to be the case--and the IRS attorney in her arrogance could not help but tip her hand to me that the fix was in, in every way. For some reason the judge thought it was very important to keep my Motion out of the record so he could pretend to have jurisdiction without meeting any of my challenges to that jurisdiction. He then denied my Motion previously filed for judgment on the pleadings, as IRS never alleged sufficient facts to support a finding that I was liable for a 6702 penalty. It was the form of a legal process with none of the substance. Total kangaroo court.

Ok, I get that. The problem with lawful money of the U.S. is it is fire! They may find ways to intimidate and coerce as always but this remedy is correct in my view. I don't think they will want to discuss this topic in court. Oh and as far as attacking folks attempting remedy, it is bound to happen as most agents only know what the IRM says. Your material probably has to be pitched to someone (a lawyer) who has a clue. Most people are just flat ignorant of this distinction between different types of "money".

[ManOntheLand]

Ok, I get that. The problem with lawful money of the U.S. is it is fire! They may find ways to intimidate and coerce as always but this remedy is correct in my view. I don't think they will want to discuss this topic in court. Oh and as far as attacking folks attempting remedy, it is bound to happen as most agents only know what the IRM says. Your material probably has to be pitched to someone (a lawyer) who has a clue. Most people are just flat ignorant of this distinction between different types of "money".

I think the LMR remedy is correct as well, Brian. Some people on this forum seem to have gotten me all wrong on that point. The extent of how rigged and corrupt the system is should not be underestimated, however. I have seen it up close. I think I see a way to handle IRS that might make everybody happy.

Granted if IRS seems to be okay with what you are doing, you would seem to be in good shape. But we know the possibility for unlawful harassment will always be there. So get them to tell you if they are going to have a problem with your LMR remedy BEFORE you file anything.

Let's assume for the sake of argument that LMR is ALL you need to do to exempt yourself from income tax and that disputing information returns sent to IRS a la CTC is therefore unnecessary. I would love it if this turns out to be the case, BTW! I am just not convinced yet.

There is a good way to find out if IRS will honor your LMR remedy WITHOUT filing a return and risking frivolous return penalties or "false document" felony charges:

Let IRS know in a statement (not a tax return) that you redeemed all deposits for LM, include your copies etc. and that it is your understanding that this exempts you from income tax. Invite them to rebut this position if they disagree. Then ASK for a determination of whether you are required to file!! Tell them if they do not respond within 30 days or whatever, you will assume they agree you are exempt from all tax and are NOT required to file. Perhaps they will even send you a letter stating you are not required to file!!! A refund of withholding should then be issued automatically!! If not, you can make a claim for refund and attach their letter stating you are not required to file. You may separately request a refund of FICA withholding on Form 843 if you believe you are entitled to that.

If they do not reply within 30 days to your inquiry about exemption/filing requirement, you can default them and make an informal claim for a refund of all withholding, attaching a copy of your previous correspondence to show you are relying on their tacit agreement with your position.

Even better, you can now safely claim exempt on W-4, and you won't have to wait for a refund next year (except FICA).

Why is this way better than just filing a 1040 and taking a LMR deduction? Because you are not submitting anything that "purports to be a return" under IRC 6702 frivolous penalty provisions. If they still end up trying to hang a frivolous penalty on you later (or if you insist on filing a return to claim your refund and they claim it is frivolous) you will have a reasonable cause for abatement of the penalty on Form 843, since all you did was rely on their agreement/tacit agreement that this was okay for you to do!!