Bill Conklin and Irwin Schiff  debated the issue of the "Zero Income Tax Return"  on radio in 1997.  This article is reprinted here ten years later for historical purposes. Conklin and Schiff  had a very obvious and precise disagreement.  Mr. Schiff takes the position that wages are not income and that the IRS will back down to his argument.  He is advising individuals to file "zero" returns and he has a letter that he attaches to the tax return.  Schiff claims that the IRS has refunded tax payments for many people who have used his method.  He cites several court cases that stand for the proposition that a "Zero" tax return is a return, however, he does not have any current case law that backs up his position that wages are not income.  Many of you may know or have heard of Irwin.  He has been famous in the Tax Freedom Movement for many years.  During the early 80s he wrote a book entitled:  Why No One is Required to Pay Income Taxes.  The government later prosecuted him and he spent about five years in a Federal Penitentiary.  Now he is back on the campaign road again with his new argument which he claims is the new technology that stops the IRS dead in its tracks.  Schiff claims that Bill Conklin does not understand the new technology.

            Bill Conklin takes the opposite viewpoint.  He argued that filing returns is voluntary, so why would anyone volunteer?  If an individual wants to challenge the government and argue that wages are not income. He should do it with an informal claim for a refund; then there is no chance that the government can prosecute him for filing a fradulent 1040 return.  Conklin believes that the IRS is deliberately refunding money to a selected number of individuals who file 1040 Zero Returns with the Schiff attachments.  After three years of refunding the money,  Conklin believes that the IRS will prosecute Schiff and a selected number of his followers.  Conklin also argued that the IRS may also have sent refunds to people in error or simply because they believed the figures on the return and did not examine the theories. Conklin made it very clear that he does not believe that the IRS is refunding money to individuals because the IRS thinks that Irwin Schiff is correct.

            Only time will tell, but if Bill Conklin is right,  and there is a good chance that he is, the IRS will soon be indicting at least several of Irwin's followers for filing fraudulent returns.  Others will end up owing back taxes plus interest and penalties and the IRS will probably assert the fraud penalty which will prevent the discharge of their taxes in bankruptcy court. 

            Why are people so quick to believe in Irwin's approach?  Probably because Irwin is telling them exactly what they want to hear.  People are sick of the Federal Tax System.  They are sick of paying and they are sick of the paperwork.  Irwin has a simple approach that gets back all their money.  They really want to believe and so it is easy for them to follow Irwin's approach.  Also, people do not use effective thinking and adequate logic. They think that since they got their  money back, then they must be right.  They don't realize that the IRS can prosecute them for evasion and send back their money at the same time.  Oh well, some people just have to learn the hard way!

            Someday future historians will look back in dismay at the incredible lack of privacy that has developed in the United States since the 1950s.   Our tax system is enforced through the most extensive system of surveillance ever designed by humankind.

            George Orwell said many years ago that government doublespeak would control the future.  He was quite a prophet because he predicted the government would use words to mean their opposites. Our records are NOW totally available to the IRS or any other government agency through the Bank Secrecy Act.  This act, which controls bank information does exactly the opposite of protecting secrecy.  It allows the government to get whatever they want.  No other country outside of totalitarian systems allows such a situation.  Thanks to Judge Rehnquist, the financial privacy of Americans has been destroyed for anyone who uses a banking institution. As you all know, that is why John Grandbouche, in developing the warehouse exchange concept, realized that we must get out of the banks to protect our financial privacy.

            Justice William O. Douglas attacked Rehnquist's logic:

            It would be highly useful to governmental espionage to have like reports from all our bookstores, all our hardware and retail stores, all our drugstores.  These records too might be 'useful' in criminal investigations. ...A mandatory recording of all telephone conversations would be better than the recording of checks under the Bank Secrecy Act, if Big Brother is to have his way.  (See California Banker's Association, 416 U.S. 21, 845 (1974).

            Before, Rehnquist could destroy our Fourth Amendment Rights, he had to deal with the language of the Boyd v. United States case, 116 U.S. 616, which stated the following:

            And any compulsory discovery by extorting the party's oath, or compelling the production of his private books and papers, to convict him of a crime, or to forget his property, is contrary to the principles of a free government.  It is abhorrent to the instincts of an Englishman; it is abhorrent to the instincts of an American.  It may suit the purposes of despotic power; but it cannot abide the pure atmosphere of political liberty and personal freedom.

            In the case of US. v. Doe, 465 U.S. 606; the Supreme Court finally killed Boyd.  The Supreme Court ruled that if a person admits that he has records, then he waives right to claim the Fifth Amendment because the Fifth Amendment does not protect records, it protects testimony.  So, the courts have gone full circle.  They have destroyed the Fourth Amendment and they have also come close to destroying the Fifth Amendment, all in their desperate need to protect the Federal Income Tax System.  These continuing erosions of our Constitutional Rights coming from laws with names like: Bank Secrecy Act, were predicted by George Orwell and are an example of the cynical means to which our modern politicians and judges will go to protect the power structure in this country.

            It is my opinion that the Bank Secrecy Act and the litigation destroying the privacy of Americans is a badge of the impending fascism developing in the United States, and if the people do not wake up soon, the Constitution will be gone and we will have developed into full-blown fascism like Germany was before the Second World War.

            There is one little light that is shining in the midst of the previous analysis.  It is quite possible that in making the determination that the Fifth Amendment does not apply to personal records but to testimony, the Supreme Court, unwittingly put the biggest nail in the coffin of the Federal Income Tax.

            The IRS has consistently taken the position that an individual cannot use the Fifth Amendment as a defense for not filing tax returns.  Many brave Freedom Fighters have lost their criminal cases when they relied on the Fifth Amendment.  The IRS has taken the position historically and the Courts have supported them, in the assertion that an individual must put down his amount of income and then he can take the Fifth Amendment on other specific parts of the return.  Of course, under the Boyd, analysis of Fifth Amendment privilege, since records are privileged, the IRS might have a justifiable argument, since admitting an amount of income would not automatically waive one's Fifth Amendment Rights.  Also, those of you who have been in the Freedom Movement for many years know that Irwin Schiff and Marvin Cooley and others were prosecuted for taking the Fifth Amendment on tax returns anyway, in spite of the IRS' support of the validity of the position in their rhetoric.  The IRS bounces around with all sorts of double speak in order to deal with their Fifth Amendment Problem.  They say that filing income tax returns is voluntary and then they prosecute those who do not volunteer.

            When Boyd was the law, it was possible for the IRS to argue that individuals had to file returns but could take the Fifth Amendment on returns.  However, when Doe became the law, it became obvious that an individual's  mere assertion of an amount of income on the return would immediately waive all Fifth Amendment Rights associated with the income amount because an individual must have records to substantiate the income amount.  Writing down an income amount on the return admits to the existence of records; and hence any individual who files a return and lists an amount of income, under Doe, waives his Fifth Amendment Rights.

            It is now pretty obvious that under Doe, individuals waive their Fifth Amendment Rights when they file returns. If the IR Code Section 6012, requires individuals to file returns, then does it require them to waive their Fifth Amendment Rights?  If it does require individuals to waive their Fifth Amendment Rights, is it Constitutional?

            So as you can see, every time the Supreme Court attempts to push the Constitution out of the way to protect the income tax, they create new issues.  Just think of this basic idea:  Do individuals who file tax returns, waive their Fifth Amendment Rights?  If so, what statute requires them to waive their Fifth Amendment Rights?  Could it be possible that Doe made it even more obvious that the IRS has a Fifth Amendment Problem that won't go away?  Will the Supreme Court have to finally finish off the Fifth Amendment in order to protect the Income Tax?  Only time will tell, but one thing is certain:  The American Public must wake up if they expect to see anything left of the Bill of Rights in the Twenty First Century.  I hope you are listening!

      It appears that the Freedom Movement is continuing at a high pace. I started in this movement in 1976 and in those days, I was considered to be a "kook" by the majority of the population.  In the early 80s, the IRS came down hard and heavy on the freedom groups and their leaders and toward the end of the 80s and the beginning of the 90s, the steam in the Anti-IRS Engine slowed down.  But things have started to change back to the way they were in the late 70s and this time, the engine is a lot more powerful. 

            As dissent has increased, the IRS Fascist power machine has increased. However, in the long run, the IRS will lose, because in order to continue to enforce the tax system, they will have to throw the baby out with the bath water. As Congress increases the penalties in order to scare the public, the anger against the tax system will increase. Sooner or later the piper will get paid.  Recently Congress saw it appropriate to raise the age for social security eligibility to 68 years old for those under 35 years of age.  The younger people will find increased social security taxes throughout their lives to pay for the aging baby-boomer generation.  Surely, they will start to wake up and rebel more and more as the oppression from the tax system increases and the benefits they receive from the government become less and less. As things look right now the anger toward the system does appear to be increasing.

            One manifestation of that anger is the increase in sales of ideas that have never worked.  There are several quite popular individuals traveling the country right now offering books and advice to individuals on eliminating income tax. Unfortunately, the majority of these individuals are either outright con men or they are simply misinformed.  For example, the use of an exempt or inflated  W-4 in the case of an employee is a no-win situation. Not only have the courts and juries ruled consistently that an exempt W-4 is an element in tax evasion, but any individual who has wages is not judgment proof.  The IRS can garnish wages down to about $100.00 a week.  The IRS can garnish without a court order and the courts will consistently uphold their right to do so.  Employers who do not pay up to an IRS garnishment will be held responsible for the funds and the IRS will garnish their bank account. 

            Furthermore, high-wage earning professionals who receive 1099s are at a high risk for criminal prosecution.  There are individuals all over the country who have purchased a currently popular book and who have taken actions that will result in either criminal prosecution or severe civil devastation.  If you are one of these individuals who has purchased a too-good-to-be-true package or book, please be careful. If you are using any of these too-good-to-be-true theories, you are taking a severe risk, especially if you are a high wage earner earning more than $100,000 on 1099s or if you have filed an exempt or inflated W-4, because the IRS really likes to prosecute high wage earners to get good jury appeal.

            Some of these ideas that simply do not work are the following: (1) The IRS does not have delegation of authority to contact me. (2)  The IRS does not have jurisdiction over me. (3)  I am not a taxpayer because of various arguments related to the UCC. (4) I am not a taxpayer because I do not live in Washington, D. C. or a federal enclave or territory.  (5)  I am not a taxpayer because I do not use my Zip Code!

            Also, remember that although you do not become liable to pay the income tax through the Internal Revenue Code, itself and you must voluntarily file a return and self-assess yourself; the IRS may file a return for you under Section 6020(b) of the Internal Revenue Code and then the IRS can proceed to collect the deficiency that they have assessed backed up by their incredible draconian power. Unfortunately, most of the gurus selling their de-tax packets are not telling the people that the IRS can assess and proceed to collection. 

            Another very dangerous myth that is currently popular among these gurus is the doctrine that individuals do not have to show up for an IRS summons, because if an individual shows up to a summons, he gives the IRS jurisdiction.  This bad advice is especially dangerous because individuals who ignore IRS summons, voluntarily waive their Fifth Amendment Rights and if the IRS chooses to enforce the summons, the Federal District Court will never take the position that the IRS does not have jurisdiction.  Individuals who tell judges that they or the IRS don't have jurisdiction in a summons will end up behind bars for civil and possibly even criminal contempt.  Individuals who appear to a summons meeting and properly raise the Fifth Amendment will have an excellent chance of defeating the IRS in Federal Court if the IRS should be so foolish as to try to enforce the summons.  (See: Why No One is Required to File Tax Returns, by Bill Conklin).

            Most of the de-tax gurus traveling the country right now advocate the use of extensive letter writing to the IRS and they give sample letters in their books.  Now, think for a minute!  The IRS wasn't born yesterday.  The people at the IRS have copies of the books these gurus write and they know which letters are advocated by a particular guru.  Many people think they have achieved success in an IRS confrontation because they haven't heard from the IRS for a period of time.  They think that their "magic, silver-bullet" letter has stymied the IRS and left it a loss in knowing how to proceed.  However, there are many reasons that the IRS may not pursue a particular individual for a period of time that have nothing to do with the effectiveness of the correspondence.  For example, the IRS may not pursue a case because the file was misplaced.  They may not pursue a case because the caseload of the IRS employees is too large. They may not pursue a case civilly because they are proceeding criminally and the IRS proceeds criminally before they proceed civilly.  The IRS also will allow followers of gurus to get away with certain things for a while so they can build a criminal case against the guru.  It will look real good for the IRS' case if they can show how a bunch of people lied to and cheated the IRS using the guru's methods.

            So, the moral of the story is that you must look before you leap and you must be very careful about putting yourself in a front-line position without a very good understanding of the consequences of your actions.   If you think that someone's advice is too good to be true, then it probably is.

            Why are so many people buying into ideas that simply do not work?  The fact is that whenever a significant percentage of the population is upset about a situation, the field is ripe for con men to come onto the scene and sell relief.  Millions of people hate the income tax system.  Millions of people want change.  However, the system is extremely complex.  People want to believe there is an easy solution. Someone who comes along with an easy solution stands the chance of making a lot of money especially if he is telling people what they want to hear.  People like the idea of purchasing a book or a program and writing a few letters to the IRS to save thousands of dollars a year in income tax. It is very easy to sell people on the idea that they do not have to legally pay taxes and that is why there is currently such a huge increase in the Freedom Movement of individuals selling absurd ideas and concepts.  People are fed up and they will try anything because they want an easy solution.  The problem is that many of these middle class people will end up losing all their possessions to the IRS. They will lose their homes, their wages will be garnished and some of them will end up in a Federal Prison Camp for an extended vacation.  It is too bad that the gurus that sell them their de-tax programs do not tell them of the risks involved.  So, in effect, you must be extremely careful if you decide to challenge commonly accepted beliefs about the Federal Income Tax System.  Look before you leap!