Tax Protestors - Posted by JHyre in Ohio

Posted by DavidV on January 09, 2002 at 20:11:32:

“hocus pocus” trust? Is that anything like a Land trust? :slight_smile: Why haven’t i heard of this trust before? You holdin’ out on us John? :slight_smile:

Tax Protestors - Posted by JHyre in Ohio

Posted by JHyre in Ohio on January 09, 2002 at 13:16:34:

An article by Tax Analysts

The IRS has finally taken action against several tax protesters, including a prominent employer who has been selling his success story of not paying any payroll taxes.

In line with a crackdown announced earlier this year, the government has filed district court complaints seeking permanent injunctions against three individuals: David Bosset, Thurston Bell, and Harold Hearn. All of them have
propounded similar theories that were used to obtain erroneous refunds for themselves or their clients.

In three separate complaints, dated November 15, 2001, the government has requested that Bosset, Bell, and Hearn be enjoined from, among other things,acting as tax return preparers, failing to sign returns, promoting schemes that
they knew were false or fraudulent under section 6700, and engaging in the preparation of documents that understate tax liability under section 6701.

Bosset has said that, as an employer, he refuses to pay payroll taxes. He is a member of a group of small business owners and employers who have grown
increasingly vocal over the years about their refusal to pay their own personal or corporate income taxes. In contrast to other tax protesters, these individuals also refuse to withhold taxes on the salaries paid to their

Bell is the founder and operator of a tax protester Web site, the National Institute for Taxation Education. On the site he advocates various tax protester theories, all supposedly proving that individuals and businesses are not
required to pay income or payroll taxes.

Hearn is a tax return preparer, based in Atlanta. The complaint says he has promoted tax avoidance through a variety of incorporated and unincorporated businesses. Hearn has signed and filed returns reflecting various tax protester theories for himself as well as his clients, according to the complaint. The government estimated that he had clients in 11 states.

Bosset’s ‘Success’ Story

A resident of Spring Hill, Fla., David Bosset is the president and owner of Bosset Partners Marketing Inc. (BPMI), which has billed itself as a consultant to individuals involved in multilevel marketing operations. By 1997, it employed as many as 55 people and paid more than 150 independent contractors.

In June 1999, Bosset filed an amended Form 941 (Employer’s Quarterly Federal Tax Return) for the 1996 tax year. In that return, he reduced all taxable wages and related employment taxes to zero. Also, previously filed Forms W-2 and 1099s for 1996 and 1997 were changed to reflect all zeroes. Bosset was open about his position; he sent several letters to the IRS district director
saying he was not subject to U.S. taxes. In response, the IRS sent him a refund of nearly $22,000.

Based on the refund and the uncontested arguments, Bosset believed he had support for his position that he was not required to pay income or payroll taxes. He wrote a letter to Thurston Bell that was prominently highlighted on
Bell’s Web site and that was also cited as support for Bell’s arguments that Americans were not required to pay income or payroll taxes.

Along with Bell, Bosset began marketing an Employer Abatement Program in seminars and on the Internet. He claimed to have been trained as an accountant
who had 35 years of experience. He also claimed he spent “countless hours” reading the Internal Revenue Code and the associated regulations, in addition to other publications.

Bosset says that based on his close textual reading of tax laws, American taxpayers do not need to pay income tax and, under section 861, American citizens are exempt from taxation on income earned within the United States.
Both Bell and Hearn agree. Bosset has also disseminated his views to attorneys and accountants and “educated” them about his ideas.

The phenomenon of small business owners refusing to withhold and pay employee taxes has received much attention in the news. The New York Times published several articles on it. (See, e.g. “Defying the I.R.S., Anti-Tax
Businesses Refuse to Withhold,” by David Cay Johnston, The New York Times, Nov. 19, 2000.)The news show “60 Minutes II,” along with a series of New York Times follow-up articles, added to the publicity.

The IRS Responds

In February 2001, the IRS announced in IR-2001-18 (see Doc 2001-4341 (2 original pages) or 2001 TNT 30-19) that it would conduct a crackdown on employers who had failed to withhold taxes on their employees. Some believe the
announcement was made in response to the November 2000 New York Times article.

On March 26, 2001, the Justice Department filed a civil suit against BPMI to recover the refund of nearly $22,000 in social security, Medicare, and income taxes. Further action was promised against the approximately 23 businesses that were profiled in the New York Times article, and state tax authorities raided one business owner in California in May 2001.

In the November 15, 2001, complaints for permanent injunctions and other relief that were filed in district courts in Florida, Pennsylvania, and Georgia, the government says action against Bosset, Bell, and Hearn is appropriate because of their conduct. The complaints all assert that an injunction is warranted based on Bosset’s and Hearn’s conduct as tax-return preparers, tax-avoidance-plan promoters, and advisers to various taxpayers, while Bell has given erroneous tax advice in an effort to undermine the federal income tax system.

Bosset, as the most prominent individual, the government notes, is already the subject of an erroneous refund suit. The complaint says Bosset has used his
$22,000 erroneous refund to persuade his clients that he was qualified to give tax advice and prepare tax returns. The government alleges that Bosset sold false or fraudulent section 861 promotional materials and charged clients to
show them how to use those arguments to avoid paying income or payroll taxes. The government also points out that Bosset has enjoyed an apparently lucrative practice, receiving fees ranging from $25 to $5,000 from various clients.

Bosset’s complaint also includes an exhibit, a handout for a seminar advertised for June 2, 2001, in Honolulu. The handout lists Bosset and another individual as the operators, and a subheading says “Winning the Tax Game Using
the IRS’s Rules.” One of the purposes of the seminar is to “stop the government from defrauding you.”

The complaint against Bell says that an injunction is warranted based on attempts to promote and market the section 861 argument and that Bell recruited Bosset and Hearn to promote abusive tax plans. The government alleges that Bell was the disseminator of theories that Bosset and Hearn used to avoid paying income or payroll taxes. Bell “touts” success stories on his Web site, the
government says: “Bell falsely claims that these success stories establish that the IRS accepts the [section] 861 argument, but Bell fails to disclose that the United States has filed an erroneous refund suit against Bosset Partners
Marketing, Inc., which received an erroneous refund that Bell refers to as one of his most celebrated ‘victories.’”

The injunction explains that Bell’s operation of his Web site effectively functioned as a multilevel marketing scheme. It alleges that Bell charged his clients $195 per year to obtain his strategies and advice in the members-only
section of the Web site. The site is also where Bell recruits others to become “senior fellows” in exchange for $3,500. In turn, the new recruits can find clients and set up similar fee schedules for their own clients by using the same theories and arguments, the injunction said. And, the government says, Bell sells videotapes and recordings of his seminars through the Web site.

The complaint says Hearn has also taken the section 861 argument and used it for himself as well as for his clients. That has resulted, the complaint says, in Hearn and his clients receiving erroneous refunds “because [the IRS] failed to recognize that the returns were based on the [section] 861 argument.” Hearn also said, in a meeting with IRS agents, that he would not cease filing section 861-based returns unless ordered to do so by a court.

All three complaints warn that if Bosset, Bell, and Hearn are not enjoined, their activities will result in their clients incurring “frivolous-return penalties and other possible civil and criminal sanctions.” The complaints also say that IRS employees will have to incur an inordinate amount of time in locating and processing frivolous documents proffered by the three promoters and
their clients as well as in preventing or recovering erroneous tax refunds.

The government seeks to enjoin Bosset, Bell, and Hearn from acting as federal income tax return preparers; assisting in the preparation of returns; organizing, selling, and promoting “abusive tax shelters”; and understating the income tax liabilities of taxpayers’ income.

Re: Tax Protestors - Posted by J. Clifton

Posted by J. Clifton on January 13, 2002 at 24:08:59:

The government surely has stepped up its abusive harassment and caricatures of tax honesty advocates, including persons who AREN’T selling products or services. The approach of these advocates has been to continue raising reasonable questions backed by appropriate citations from the code, despite all intimidation. I was wondering what your response might be one such example of how the other side is responding to this issue:

Re: Tax Protestors - Posted by Hank

Posted by Hank on January 09, 2002 at 20:58:36:

You’ll like this site:

It’s put out by an attorney by the name of Adkisson as I recall. He keeps track of all types of fraud and goofy tax ideas. Fun. is good as well.


Really? You mean isn’t true? - Posted by Bronchick

Posted by Bronchick on January 09, 2002 at 16:21:27:

I have been telling the blind idiots who follow these people for YEARS that the whole thing is a scam!

Re: Tax Protestors - Posted by N.O.Y.Beez

Posted by N.O.Y.Beez on March 15, 2002 at 13:52:04:

REAL THINKERS should check out Thurston Bell’s site:

All others should rightfully be led to the slaughter.

Re: Really? You mean isn’t true? - Posted by JHyre in Ohio

Posted by JHyre in Ohio on January 09, 2002 at 16:51:35:

Aw, come on! You DO know that ALL you have to do is set up a hocus pocus trust and PRESTO! WHAMMO! No more taxes! And the taxes are really voluntary…this whole IRS & Leona Helmsley and jail thing is just plain unconstitutional.

Tell it to the judge!