Taxation & Estate Planning

IRS Sues Tax Protester

By Darrin Mish

You may not be aware of it, but there is a nationwide movement of people who believe that the federal government has a secret fund that should be accessed by taxpayers using dubious means. These people feel they have a right to redeem this money according to a concept espoused by its adherents that defies paying taxes.

One such adherent is Karen Liane Miller. She was once the proprietor of the Cubby Holes Self Storage facility located on Westcap Road in Whites Creek, Tennessee. In 2005, the property was foreclosed by a bank that resold it for $1.2 million.

Recently, Miller made an official document of self declaration that was recorded by the Davidson County Register of Deeds and filed it with the Tennessee Secretary of State. In her self-declaration, Miller states that she is an American citizen of the American Republic and NOT a citizen of the United States. In fact, she proclaims that she is not even a â??person' as defined in Title 26 of the United States Code, Section 7701 or elsewhere and as such should not have to pay taxes to the US government.

What was worse is that Miller actively advocated her tax-defying doctrine to others and assisted them in preparing false declarations in their tax returns with the clear intention of fraudulently obtaining tax refunds and illegal deductions. And this is no small movement either, for Miller is not its only advocate. It is estimated that the believers of this warped doctrine have successfully received about $3.3 trillion in tax refunds over the past few years. Karen Miller herself has assisted her clients in claiming more than $8 million in illegal tax deductions since January, out of which $1.17 million was paid by the IRS in the form of refunds.

What did the IRS do? It took legal action against Ms. Miller in Nashville's District Court.

In the suit, the IRS seeks the court's order to impose an injunction to restrain Miller from continuing to file tax returns for anyone or advocating her â??redemption' concept on her own personal filings. Monetary fines are also to be imposed on anyone preparing these frivolous returns. In 2007, the IRS made a ruling to the effect that â??any argument that a taxpayer's income is excluded from taxation becauseâ?¦.the taxpayer is not a â??person' as defined by the Inland Revenue Code and is therefore not subject to federal tax, has no merit and is frivolous'.

In tandem with the IRS' legal action against Karen Miller, the Department of Justice (DoJ) is also filing similar legal proceedings in Los Angeles, Panama City, Salt Lake City and Pocatello, Idaho. In the suit, the DoJ alleges that the defendants conduct a fraudulent tax scheme, known as the â??Redemption' or â??OID Redemption' scheme where a series of false IRS forms including tax returns, amended returns, Forms 1099, Forms 1099-OID or Forms W-2 are filed to request tax refunds based on false claims of large income tax withholding.

Darrin T. Mish is a veteran, nationally recognized tax attorney who has focused on providing IRS help to taxpayers for over a decade. He regularly travels the country training other attorneys, CPAs and enrolled agents on how to handle their toughest cases with the IRS. He is highly ranked among the top attorneys in the country, with an AV rating from Martindale-Hubbell and a perfect 10 on Avvo.com. Martindale-Hubbell has also honored him with a listing in their Bar Register of Preeminent Lawyers. He is a member of the American Society of IRS Problem Solvers and the Tax Freedom Institute. With clients on every continent but Antarctica, he has what it takes to solve your IRS problems no matter where you live in the world. If you would like more information about his practice and how he can help you, please call his office at (813) 229-7100 or toll free at 1-888-GET-MISH.

IRS Sues Tax Protester is a post from: IRS Tax Problem Solver Blog - IRS Help

Full post as published by IRS Problem Solver Blog on December 20, 2009 (boomark / email).