A short foundational course on Taxes:
Though virtually everyone responsible for income and/or purchases has to deal with taxes, most people simply do what they think they are told. Respectively people often have a rather fatalistic and sardonic opinion of the topic; as was expressed by Benjamin Franklin:
In 1789, in a letter to Jean-Baptiste Leroy, Benjamin Franklin wrote:In this world nothing can be said to be certain, except death and taxes.
That quote has since become proverbial, drawing on the actual inevitability of death to highlight the difficulty in avoiding the burden of taxes. Yet, in law, that is the very essence of the people’s responsibility.
Chief Judge Learned Hand wrote:Any one may so arrange his affairs that his taxes shall be as low as possible; he is not bound to choose that pattern which will best pay the Treasury; there is not even a patriotic duty to increase one's taxes. Helvering vs. Gregory, 60 F.2d 809, 851
Over and over again courts have said that there is nothing sinister in so arranging one's affairs as to keep taxes as low as possible. Everybody does so, rich or poor; and all do right, for nobody owes any public duty to pay more than the law demands: taxes are enforced exactions, not voluntary contributions. To demand more in the name of morals is mere cant. Commissioner v. Newman, 159 F.2d 848
So, it is reasonable to ask: “How is it that anyone can discover how to pay as little as they may owe in taxes?” Of course, the answer is: “You must first know the law.” And, to know the law, you must start with the Standard for Review (see: Contracts, Trusts and the Corporation Sole 101).
In every case, taxes must be law based.
“Obedience” has been called the first law of Heaven; because its necessity is elemental to the power of any law. Thus, obedience is an elemental principle, upon which both the greatest religions and governments base their core beliefs. Even so, it remains an obviously self-evident fact that: “It is impossible to obey, honor, sustain or comply with the Law if you don’t know what the law is.”
Still, people go blindly forth merely doing what they believe they are told without first knowing the laws respective to their circumstances. They do so because they have been properly taught from their youths to obey their parents, subsequently their school teachers and finally the government; each successive source of authority building upon the foundation of the former. Through that chained foundation for compliance with authority they are all too often consistently taught the false concept that: “the law is too complex to learn”; which concept becomes the foundation for blind obedience to authority figures.
Though blind obedience can be an honorable quality for a child learning from their loving parents as the child moves from infancy towards adulthood, there comes a time as the child develops when they must become self-reliant. That time coincides with the “age of accountability”. Thus, though it is becoming for children going to school to follow a teacher’s classroom instructions to learn both their scholastic lessons and proper classroom behavior, they must also carry over what they learned about right from wrong throughout their lives to determine, for themselves, how to properly behave. For, once they reach that age of accountability they will increasingly bear new responsibilities derived from their own authority.
Thus, regardless of the authoritative sources we may have properly relied upon in our youth, once we bear the burden of self-accountability, we cannot turn to those authoritative figures for responsibility to our accountability. Thus, again, to proceed safely forward in life, we must learn, know and apply the law.
Though that is the logical progression that should have kept us from learning the habit of blindly doing what we are told, even absent any actual authority for such compliance, there are more compelling reasons for learning the law. The primary two elemental causes for people learning the law are:
- On creation, man was given: dominion, agency and possession; the three elements that define sovereignty. Thus, from birth, each of us is granted the right of self-government; and, as we expand our respective domains that right becomes intermingled with other people and their respective rights. Inevitably, that intermingling results either in disputes or in the formation of agreements/treaties; which spawns the formation of governments. Thus, all authority in government comes from the people. Certainly, that is an element of law in our Constitutional Republic. Thus, where the source of all law in our nation is the people, the people retain the responsibility of making sure that the authority sources from them is properly used, and not abused, in accord with the limited authority we granted government in the first instance. We cannot maintain that responsibility unless we know the law.
- We primarily apply the precept: “Ignorance of the law is no excuse from any obligation to comply with that law”, because of the point expressed in the previous paragraph. Thus, as a matter of law, if a law applies to us, we must remain honor bound to comply with the same. And, where compliance with law is impossible absent knowing what the law is, we must know the law in order to comply with the same.
However, because some people imagine our focus on learning and applying the law is somehow connected with some kind of protest, let us set the record straight. Acknowledging the necessity for learning, understanding and applying the law can never negate any obligation for compliance. We expect that is the very reason so many people blindly comply with what they imagine the law to be, due to their past experiences of doing what they are told. In most cases, if that blind compliance has worked effectively in the past, it may be wise to continue with that pattern at least until the lawfulness of that practice can be either confirmed or rightfully proven incorrect and a remedy found to resolve the error.
A case in point as it relates to taxes. Though many people have studied the tax code and could not find the law that imposes “the tax”, that alone would not constitute a viable reason for a taxpayer to discontinue paying what they had always believed was their fair share of taxes by complying with what they were told was a tax required by law. The many court cases that have been ruled in favor of the mandatory requirements of tax collection proceedings should be sufficient an incentive to continue participating in such a practice.
In fact, many tax protestors wrongfully quit paying taxes they had formerly paid because they studied the tax code and the Constitution and believed they discovered the income tax system was not in compliance with the laws of the land. Accordingly, they untimely quit filing and/or paying taxes. We say “untimely quit” because, until the provisions for enforcing the presupposition of the existent tax law still prevail; thus, the proper way for handling such a situation, where a law/statute is on the books as law but is flawed in some way, is:
- Learn the law;
- Use whatever administrative, legislative and/or executive means as may be necessary to lawfully remove the offensive statute/law;
- Then, only after the errant statute/law is so removed from any effect in law, stop following the then defunct tax code.
However, what if the President of the United States acknowledges that the taxes are incomprehensible:
In a certified transcript of Pres. Obama’s April 15, 2009 speech titled: “REMARKS BY THE PRESIDENT ON TAXES”, the White House wrote:Finally, we need to simplify a monstrous tax code that is far too complicated for most Americans to understand, but just complicated enough for the insiders who know how to game the system.
We will soon insert other authoritative quotes regarding the incomprehensibility of the tax code.
Again, though the President acknowledged that the “tax code is far too complicated for most Americans to understand”, he also implied that the code is understood by some. Thus, the applicability of the tax code remains because some people (including at least those people the president called “insiders”) have understood it in spite of its complexity.
Respectively, because the tax code can allegedly be understood, so long as it remains law, the taxpayers have to comply with it.
Most people recognize: “Ignorance of the law is no excuse” for failure to honor and comply with the law. However, is it possible to obey, honor, sustain or comply with the Law if you don’t know what the law is?
Answer: “No, it is not.”
Thus, again, we run into that necessity (as expressed above) for learning and complying with the law.
However, if Pres. Obama’s was accurate with his remarks on taxes, all of those Americans (for whom the tax code is “far too complicated”) that annually file tax returns must be filing those returns in ignorance; believing and/or expecting that there must be a law that so requires that level of compliance from them.
Of course, when they so file such returns, they must sign them under the penalty of perjury attesting that everything on those tax return forms is true and correct. Thus, if they are filing said forms in ignorance, how can they know everything on those forms is correct? We expect many of them follow the IRS Commissioner’s example and merely rely on tax preparation professionals (attorneys and accountants).
Transcribed from a live interview of the IRS Commissioner, the transcriber wrote:Press Correspondent: How do you personally handle the complexity of the tax code?
IRS Commissioner: It is far too complex for me to bother with. I just hire professionals and let them deal with it.
Accordingly, though it is impossible to obey, honor, sustain or comply with the Law if you don’t know what the law is, it is possible to be in compliance with the requirements of the law in spite of your ignorance. All that need be done to accomplish such compliance is avoid breaking the law.
Thus, to most people it seems safe enough to follow what other taxpayers do; that is to say, if most taxpayers appear to be filing a particular form (like the IRS Form 1040), and when they do they don’t get into too much trouble (if they use TurboTax (software) or model such filings after the pattern of what professionals do when they prepare tax returns), then it must be OK to sign such forms under the penalty of perjury and hope for the best—even though they all know that they remain ignorant of the law itself; justifying that ignorance because they believe tax law is too complex to learn.
Still as Judge Hand acknowledged, we are each honor bound to pay only what we owe and no more. Can we honorably do that in ignorance?
It would certainly be unrealistic, even foolish, to stop filing conventional tax returns and paying any respective taxes that might be owed while so remaining ignorant of the respective tax laws that may lawfully impose a tax. It also seems unrealistic and foolish for taxpayers to continue paying more taxes than they owe simply because they are ignorant of the law—which they remain required to know. Thus, the only practical remedy seems to be, we have to start learning the law; so, we can lawfully comply with it; and in that compliance, be certain that we are not either paying too much or too little in taxes.
That is where Team Law comes in. We help people learn how to learn the law; so they can learn how to apply the law. Though it does take personal firsthand study of the law itself from its source, the process is actually quite simple.
Also, the rewards of learning the law can are great!
What if the actual study of the law provided a lawful means for relief from alleged tax obligations; and what if that relief could be applied by simply and honorably applying the law? Would that be worth the time and effort of studying the law? Even Pres. Obama recognized that the tax law is: “…just complicated enough for the insiders who know how to game the system.” We have to expect that what he meant by “insiders” was those that have learned the tax law; so, they can lawfully apply it to: “game the system”; which we expect was his reference to lawfully participating in the so called “system” so as to, eliminate all excess taxes and or tax liabilities.
Thus, we wonder: “Is it possible for anyone willing to actually study and learn the law to become such an “insider” as Obama suggested?
This answer should be quite obvious; and, all it takes to accomplish this insider transition is: “Learn the law.” Of course, given that we are all already required to know the law (as shown above), beginning the process of learning the law seems to be a “no brainer”.
The process that must be followed to learn how to learn the law is actually quite simple and it begins with learning how to use the Standard for Review and continues through actually reading and learning the law from its source (as described in Tax Time — What should we do?). From there Team Law’s beneficiary support can further help our beneficiaries learn how to learn the law with the additional support of live reviews, etc. Accordingly, access to the Beneficiary’s Private Forum is necessary to take full advantage of that service. Thus, this is the end of Taxes 101; and this introductory article continues on the Beneficiary’s Private Forum with Taxes 201.
We hope this information is helpful to you.
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