2011-08-03 ASFR NOD Response Letter Template
2011-08-03 ASFR NOD Response Letter Template
Month dd, yyyy Name Address City, State nnnnn-nnnn SSN: nnn-nn-nnnn Internal Revenue Service Ogden, UT 84201-0040 ATTN: Ms. Green, 29-12033, and Henry Slaughter Re: Reconsideration for the Automated Substitute for Return / Notice of Deficiency for yyyy NOTICE This is a timely response to your proposed Automated Substitute for Return (ASFR) / Notice of Deficiency (NOD), Letter Number 3219(SC/SG) dated Month dd, yyyy, which was signed with a computer-generated signature. My protest is based on the Internal Revenue Manual (IRM) 8.2.1.2. I formally protest the NOD in writing under penalties of perjury. In addition, I am trying to accurately ascertain that he who purports to act for the Government stays within the bounds of his authority. Federal Crop Insurance Corporation v. Merrill, 332 U.S. 380 at 384 (1947). Grounds for Protesting the ASFR / NOD Fraudulently Filed 3rd Party Return. The amounts of income summarized on Form 4549 and explained on Form 886-A are based on 3rd party information returns that were fraudulently filed with the Secretary. Formal Claim for Refund. I filed a formal claim for refund which the Commissioner has acknowledged receiving and which he has failed to process. Individual Master File. The Individual Master File (IMF) contains significant false, inaccurate, and possibly fraudulent information about me, creating false presumptions that the Commissioner is acting upon. Denial of Administrative Due Process. The Commissioner has failed to give me any due process to contest the underlying purported frivolous return penalty. Limits of Examination Authority. The Commissioner is attempting to exercise his examination authority outside the seat of government. No Basis for the ASFR or NOD. The Commissioner has not identified any statute or regulation, if any such statute or regulation exists, under which I have purportedly failed to file. Unsupported Naked Assessment. Because the information returns are fraudulently filed, and the Commissioner hasnt provided any underlying support, he has created an unsupported naked assessment.
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FRAUDULENTLY FILED 3RD PARTY RETURNS Fraudulently Filed 3rd Party Information Returns The amount of the proposed assessment is erroneous because it is based on 3 rd party information returns that have been fraudulently filed with the Secretary. I wrote to the Commissioner providing proof that these 3rd party information reports were fraudulently filed which makes the payer information inaccurate and unreliable. Failure to Follow I.R.M. Procedures Pursuant to the Internal Revenue Manual, 4.19.17.6.1, my letters and claims for refund provided the other circumstances that suggest the IRP payer information is inaccurate and unreliable. According to the I.R.M., the Commissioner must remove the income from his non-filer proposal and reevaluate my requirement to file. If the amount falls below the threshold requirement to file, he is required to close my case but he has failed to do so. NO BASIS IN FACT OR LAW AND NO REASONABLE BELIEF Based on this NOTICE, my prior letters, and claims for refund, the Commissioner knew or had reason to know that he has been relying on fraudulently issued 3rd party returns. Nevertheless, he has continued to proceed with inaccurate and unreliable information. Thus the Commissioner has no basis in fact or law to reasonably believe he can continue with his proposed assessment or procedures.
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FORMAL CLAIM FOR REFUND Background of the ASFR and NOD Month dd, yyyy the Commissioner sent a Letter CP59 claiming that I had not filed for yyyy. Month dd, yyyy I responded with proof that I had filed for yyyy.
Month dd, yyyy the Commissioner issued a proposed SFR claiming I had not
filed for yyyy. Month dd, yyyy I responded with proof that I had filed for yyyy! Month dd, yyyy the Commissioner issued a NOD claiming I had not filed for yyyy. My Testimony about Filing for yyyy I formally declare that I have filed for yyyy, and further, that my claims for refund are based on established case law as outlined in the Pennoni1 and Patridge2 cases. NO BASIS IN FACT OR LAW AND NO REASONABLE BELIEF Based on my testimony, the Commissioner is deprived of any basis in fact or law to reasonably believe that I did not file for yyyy. Thus, his ASFR and the resulting NOD are defective and completely contrary to the established facts.
INFORMATION MASTER FILE (IMF) Since the Restructuring and Reform Act of 1998, the IRS business records and processes have been given a presumption of correctness and accuracy. I have a copy of my IMF for yyyy, Obtained through a Freedom of Information Act request. My testimony below demonstrates that the Commissioners business records about me contain a large number of false, inaccurate, and possibly fraudulent details in my IMF, only some of which are listed below:
1 A plaintiff may satisfy the timeliness component of the claim requirement by filing a formal claim, in accordance with Treasury Regulation (Treas. Reg.) 301.6402-2 (2000), or by filing an informal claim of which the formal defects are later remedied by amendment of the claim. See Kales v. United States, 314 U.S. 186, 194 (1942). Pennoni v. US 06-861T (USCFC 2009) 2 One reason for this is that 7203 requires a return but does not define that word or require that anyone use Form 1040, or any official form at all. All that is required is a complete and candid report of income. United States v. Patridge, 507 F.3d 1092 (7th Cir. 11/14/2007) Page 3 of 17
1.1.
False or fraudulent SSN: If I were using a false or fraudulent SSN, I could be charged with a felony, punishable by a large fine and time in jail. I am confident the Commissioner knows or has reason to know that this is a complete fabrication that this is an entry the IRS creates to allow it to pursue me under color of law. CID Investigation: A false or fraudulent SSN should have initiated an investigation by CID requiring that the IRS freeze my IMF while the investigation was on-going, and preventing any changes to the contents of my IMF until the investigation was complete, the results known, and the VAL code verified or removed. However, since the VAL code existed at the moment of creating the IMF for yyyy, all entries made after that point without an investigation have tainted my IMF, preventing the CID from performing an accurate investigation and closing my case. Since the IRS continued to make entries into my IMF after the VAL code was issued and before CID completed its investigation, my IMF contains tainted information that cannot be relied upon for accuracy or completeness and has actually inhibited the CID in the performance of its duties.
1.2.
Q. Under what authority did the Commissioner allow entries to be made to my IMF and collection activities begin against me when the IRS business records concerning me should have been frozen pending the outcome of a CID investigation? Q. What was the outcome of the CID investigation?
3 Internal Revenue Manual, Exhibit 2.32-7 IMF Entity Data, INVALID SSN FREEZE INDICATOR, 1Invalid SSN Freeze has been released by TC 290 or 300 or Scrambled SSN Indicator of "2" . This release is effective during the current calendar year only. 4 Law Enforcement Manual, pg. 3(27)(68)0-7 (1-1-90), LEMT III-386, SSN Validity Digit, 1 The SSN is not valid for the taxpayer using it. Page 4 of 17
DENIAL OF ADMINISTRATIVE DUE PROCESS The Commissioner claimed my original return was frivolous pursuant to 26 U.S.C. 6702. My FOIA request for the penalty paperwork revealed that he failed to make any determination that I was a person pursuant to 26 U.S.C. 6671(b) who could, in fact, be charged with a frivolous penalty. Rather, he skipped that legal requirement and focused on the secondary issues presuming I was the 6671(b) person. Thus, he gave himself an administrative basis to claim that I was a nonfiler under color of law. He then proceeded with an ASFR and the resulting NOD. The Commissioner failed to provide me any venue where I could contest the underlying liability. Not only that, there has been no judicial decision supporting the Commissioners determination. Person Pursuant to 26 U.S.C. 6671(b) The predicate element is in the opening words of 26 U.S.C. 6702(a) when it states that, A person shall pay a penalty of $5,000 if (a) such person (emphasis added). The term person is defined at 26 U.S.C. 6671(b). The Courts have consistently determined that the person defined at 6671(b) is anyone with a duty attached to his position as an employee within an organized enterprise11 or a duty connected
11 "Duty" under 6671(b) has a much more focused meaning than the generalized duty of all taxpayers to pay taxes and is expressly limited to the duty that attaches to the position an employee holds within the corporation. US v. Burger, 717 F.Supp. 245 (SD New York, 1989) Page 6 of 17
LIMITS OF EXAMINATION AUTHORITY Based on all the foregoing, its manifestly clear that the Commissioner is using unreliable, inaccurate, and possibly fraudulently manufactured information to sustain his belief that I had a source of income sufficient to trigger a requirement to file. However, none of the paperwork I received indicates that the Commissioner has the authority to perform an examination (26 U.S.C. 7601) outside the seat of government (4 U.S.C. 72, 31 U.S.C. 301, and 26 U.S.C. 7802, 7802) within an internal revenue district (26 U.S.C. 7621 and 26 CFR 301.7621-1, and 601.101). Further, the implementing regulation for 26 U.S.C. 7601 is 27 CFR 75, a regulation pertaining to the sale of alcohol, tobacco, and firearms. Moreover, the U.S. government admitted in a criminal trial that the Secretary of the Treasury abolished internal revenue districts on October 1, 200013. Thus, there are no internal revenue districts where the internal revenue laws can be administered by district directors of
12 In support of the district court Graham here contends that he was not a "person," as defined in 6671(b), since he was simply a member of the corporation's board of directors, was not employed by the corporation and did not serve as an executive officer.[2] This is too narrow a reading of the section. The term "person" does include officer and employee, but certainly does not exclude all others. Its scope is illustrated rather than qualified by the specified examples. In our judgment the section must be construed to include all those so connected with a corporation as to be responsible for the performance of the act in respect of which the violation occurred. United States v. Graham, 309 F.2d 210 (9th Cir. 1962) 13 The IRS Restructuring and Reform Act of 1998 abolished internal revenue districts as of October l, 2000 U.S. v. Springer and Stilley, 09-CR-00043-SPF, Document 71, Filed in USDC ND/OK, on May 29, 2009. Page 7 of 17
NO BASIS FOR THE ASFR OR NOD The Commissioner is proceeding on an erroneous assumption or presumption that I am subject to (liable for) a tax. The Commissioner relied on 26 U.S.C. 6020(b), for his ASFR and the resulting NOD, which states, (b) Execution of return by Secretary (1) Authority of Secretary to execute return If any person fails to make any return required by any internal revenue law or regulation made thereunder at the time prescribed therefor, or makes, willfully or otherwise, a false or fraudulent return, the Secretary shall make such return from his own knowledge and from such information as he can obtain through testimony or otherwise. Law, Regulations, Determinations, Decisions, or Authority The Commissioner purports to have made a determination by exercising his authority to file an ASFR pursuant to 26 U.S.C. 6020(b) but none of his letters, collection notices, ASFRs, or NODs state any underlying law, regulation, determination, decision, or authority, if any such exists, that levy a tax against any activity in which I was engaged making me subject to or liable for any revenue tax imposed by the national government of the United States of America. The Commissioner failed to provide any opportunity for a hearing by an impartial person who is competent to address issues of law and where all Constitutional due process of law requirements will be met. Finally, he didnt show any law, regulation, determination, decision, or authority, if any such exists, of any of the following legal requirements to support his ASFR or the resulting NOD, including, but not limited to:
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UNSUPPORTED NAKED ASSESSMENT The Commissioners Proposed Assessment Is Unsupported. According to the law, an assessment must have a foundation. The Commissioners proposed assessment states that it is relying on purported information returns, but I have already provided proof that the 3rd party information returns were fraudulently filed, are inaccurate, and unreliable. The Commissioner has the burden to supporting his belief that I engaged in a taxable activity. His failure to do so created a presumption that he doesnt have any information in his possession or worse, that the information doesnt exist. Lacking any supporting documentation or information, he has proposed a naked assessment, as the Supreme Court discussed in the Janis case, What we have is a naked assessment without any foundation whatsoever United States v. Janis, 428 US 433 (1976) at 441. The Commissioner Has the Burden of Proof. When there is a naked assessment, the burden of proof lies with the Commissioner, as the Supreme Court noted in the Helvering case, where it stated, The determination of tax due then may be one without rational foundation and excessive, and not properly subject to the usual rule with respect to the burden of proof in tax cases. Helvering v. Taylor, 293 U.S. 507, 514-515 (1935). The court provided further case law supporting this decision. [T]he debate does not extend to the situation where the assessment is shown to be naked and without any foundation. The courts then appear to apply the rule of the Taylor case. See United States v. Rexach, 482 F. 2d 10, 16-17, n. 3 (CA1), cert. denied, 414 U. S. 1039 (1973); Pizzarello v. United States, 408 F. 2d 579 (CA2), cert. denied, 396 U. S. 986 (1969); Suarez v. Commisioner, 58 T. C. 792, 814-815 (1972). But cf. Compton v. United States, 334 F. 2d 212, 216 (CA4 1964). United States v. Janis, supra.
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PROCEDURAL VIOLATIONS The IRS has failed to follow its own internal procedures outlined in the Internal Revenue Manual, the law, the regulations, and delegations orders. Examination Changes on Form 4549 The regulations require that the ASFR be signed in practically any manner but that it relate to an individual (See 26 CFR 6330-1(b)(2)) so long as that name or title was
14 31 CFR 0.208 Falsification of official records. Employees shall not intentionally make false, misleading or ambiguous statements, orally or in writing, in connection with any matter of official interest. Matters of official interest include among other things: Transactions with the public... Page 11 of 17
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NO BASIS IN FACT OR LAW AND NO REASONABLE BELIEF The Commissioner is proceeding on false and possibly fraudulent information in my IMF and appears to be treating it as a BMF for the purposes of the procedures outlined in the IRM, which are supported by the PIA. As a result, the Commissioner is without a basis in fact, law, or internal procedures to reasonably believe he can continue proceeding with his ASFR or NOD.
NO AUTHORITY TO IMPUTE AN INCOME TAX LIABILITY The Commissioner is relying on terms, definitions, and purported authorities to collect taxes pursuant to 26 U.S.C. Subtitle C, Employment Taxes. Some of the terms include, but are not limited to, wages, employer, and employee, all found, defined, and limited in scope to a subchapter or chapter located within Subtitle C. Yet the Commissioner appears to rely on these terms, definitions, and purported authorities to impute an income tax liability pursuant to 26 U.S.C. Subtitle A, Income Tax. Questions about the Commissioners Legal Authority Please answer the following questions. What law or laws, and/or regulation or regulations, if any such exist, authorizes the Commissioner to 1. Assess a Subtitle A tax against me pursuant to the provisions of Subtitle C? 2. Utilize the monies collected under the purported authority of Subtitle C to satisfy a purported income tax liability pursuant to Subtitle A? 3. What law or laws, and/or 4. Use the terms and definitions specific to Subtitle C and apply them to Subtitle A income tax laws and regulations? NO BASIS IN FACT OR LAW AND NO REASONABLE BELIEF The Commissioner is proceeding on a false presumption, namely, that the monies purportedly collected under the authority of Subtitle C along with the terms and definitions defined therein, impute an income tax liability pursuant to Subtitle A. He has never shown any law or regulation granting him that authority yet he proposes an income tax liability contrary to the laws, regulations, and established facts. Thus, he clearly clearly exceeds his authority and operates under the color of law to establish a liability where he has no authority to do so.
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If the Commissioner continues on his current path, he will deprive me of my property and/or rights to property, deny me my Constitutional right to due process, deny me my Constitutional right to be heard, and do all this under color of law.
I declare under penalty of perjury of the laws of the United States of America that I have read the foregoing letter and know its contents, and to the best of my knowledge the statements therein are true and correct,.
Executed on: Month dd, yyyy _______________________________________ Name - All rights reserved
Enclosures Revocation of Signature Notice of Fraudulently Filed 3rd Party Information Returns for yyyy-yyyy
cc. Director, Ogden Service Center/Campus Internal Revenue Service 1160 West 1200 South Street Ogden, UT 84201 Director, Ogden Service Center/Campus Internal Revenue Service 1160 West 1200 South Street Ogden, UT 84201 ATTN: Compliance Technical Support Manager Internal Revenue Service
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