|INSTRUCTIONS: 4.12. Request Income Tax Refunds for the Current Year and the Past Two Years|
TABLE OF CONTENTS:
"The legal right of an individual to decrease or
ALTOGETHER AVOID his/her taxes by means which the law permits cannot
This step describes how to use IRS form 1040NR to obtain a refund of all payroll withholding that was wrongfully withheld because of any one of the following circumstances. If you had no wrongful tax withholding, you should not file any return at all. If you don't meet any of the criteria below, then it's probably not a good idea to ask for a refund using the procedure described:
Whichever of the above three conditions you fall under, all three cases will require that you correct the erroneous reports of "wages" (W-2 form) or "trade or business" income (form 1099) being wrongfully produced by misinformed private employers, financial institutions, and businesses and to attach the corrections to the 1040NR form itself. For articles on how to do this, see:
Per 26 U.S.C. Section 6511(a), the statute of limitations for applying for refunds is 3 years, as follows:
Claim for credit or refund of an overpayment of any tax imposed by this title in respect of which tax the taxpayer is required to file a return shall be filed by the taxpayer within 3 years from the time the return was filed or 2 years from the time the tax was paid, whichever of such periods expires the later, or if no return was filed by the taxpayer, within 2 years from the time the tax was paid. Claim for credit or refund of an overpayment of any tax imposed by this title which is required to be paid by means of a stamp shall be filed by the taxpayer within 3 years from the time the tax was paid.
Likewise, if the IRS overpays you one of the refunds, then they can go back no further than two years if there was no fraud on the tax form and five years if fraud was involved as per the 26 U.S.C. Section 6532(b).
Our research reveals that statutory refunds by the IRS, which are refunds authorized by the Internal Revenue Code under 26 U.S.C. §6511, are only available to “taxpayers”, and not to “nontaxpayers”. For details on the distinction between these two terms, please go back and reread section 5.6.3 entitled “Taxpayers v. Nontaxpayers”. Therefore, if you mistakenly or under duress paid or had deducted taxes that you were technically not liable for because you were a “nontaxpayer”, you may need to pursue a remedy other than a refund request to the IRS and may want instead to initiate a lawsuit in federal district court. We talked about this earlier in section 8.4.1 entitled “Defeating the Anti-Injunction Act”. You should go and read that section now if you haven’t already. Below is a cite from that section that explains what we mean:
"In support of the foregoing conclusions, we wish to point out and emphasize that Congress has established a well-defined and comprehensive administrative system for the recovery of overpaid taxes by taxpayers. All taxpayers who have overpaid their taxes are within this system and must follow the appropriate procedures and regulations, including the timely filing of claims for refunds for overpayment of taxes, if they are to have the benefits of the system. On the other hand, persons who are not taxpayers are not within the system and can obtain no benefit by following the procedures prescribed for taxpayers, such as filing of claims for refunds. For example, there have been many cases where parties have sued to enjoin the assessment or collection of their moneys to pay the taxes of another, notwithstanding Section 263 of the Internal Revenue Code of 1939 (26 U.S.C. §3653 (1952 ed.) that provided that "no suit for the purpose of restraining the assessment or collection of any tax shall be maintained in any court". The courts have allowed these suits because the parties filing the suits were not taxpayers and were outside the revenue system of which the above statute is part. See Long v. Rasmussen, 281 F. 236 (D.Mont. 1922); Rothensies v. Ullman, 110 F.2d 590 (3rd Cir. 1940); Raffaele v. Granger, 196 F.2d 620 (3rt Cir. 1952); and Bullock v. Latham, 306 F.2d 45 (2d Cir. 1962). In Long v. Rasmussen, the court said:
"* * *They [the revenue laws] relate to taxpayers, and not to nontaxpayers. The latter are without their scope. No procedure is prescribed for nontaxpayers, and no attempt is made to annul any of their rights and remedies in due course of law. * * * [Id. 281 F. at 238]
"In other cases suits have been filed by nontaxpayers whose property has already been taken to pay the taxes of others, without filing claims for refund, and such suits have been allowed against the Collector or District Director of Internal Revenue in actions similar to the old action in assumpsit for money had and received, even though lacking in statutory authority."
"Our plaintiffs are not taxpayers and could not sue for a tax refund as a taxpayer could. All they could do was to sue to recover their property, which was the funds due them as an equitable adjustment under the contract, and this is exactly what they have done.
"The above cases are illustrative of the proposition
that a nontaxpayer is outside the administrative system set up for the
collection of a refund of overpaid taxes, and is not required to file
a claim for refund to recover money taken from him to pay the taxes
Selecting the correct approach in filing your refund claim as a "nontaxpayer" is absolutely crucial, because it could mean the difference between getting a refund and being penalized as frivolous. We can't and won't tell you which approach works best or is best for you, because this is your responsibility and we can't give legal advice on this website. However, we can share information we have learned so far about the various alternatives available. There are three approaches you can take:
1. Claim zero (“0”) for "wages, salaries, tips, etc" on a signed return and ask for all of your money back. In this case, the IRS will regard you as a “nontaxpayer” and “not liable”. This is the approach advanced by several popular freedom fighters, such as Pete Hendrickson on his Lost Horizons website and this approach has proved effective.
2. Fill in an arbitrary but very small amount for "wages, salaries, tips, etc" , 1 ¢ for instance, on a signed return and then ask for all your money back. In this case, the IRS has to regard you as a “taxpayer” for the portion of your income which you designate essentially as a "donation" (the 1¢), which then forces them to respond to your refund and give you your money back for the rest, which is wrongfully withheld payments for earnings that are not taxable. This technique is more complicated than the zero return method above because you have to add several caveats to your letter so the IRS can’t exceed their authority by adjusting your income upward or by making absurd claims to undermine it. We have not seen this approach used by anyone but us, but we think it is the only approach which will work. We’ll explain shortly.
3. Submit a unsigned return with 1 ¢ for "wages, salaries, tips, etc" , attach a letter and a copy of our book, and tell them that they have your authority to sign the return IF they provide the following. You must clearly state the conditions under which you are submitting the return, including that you are submitting it under protest and that you want them to demonstrate their authority as required under the Administrative Procedures Act, 5 U.S.C. §556(d):
3.1. A certified photocopy of their delegation order showing their full legal name and their authority to make assessments for Subtitle A income taxes and using any variety of 1040 form.
3.2. The statute under Subtitle A that makes you liable for the tax.
3.3. A certified photocopy of their pocket commission showing the serial number and their full legal name, and identifying them as an “enforcement” rather than “administrative” officer (the serial number on the commission begins with either “A” for administrative of “E” for enforcement).
3.4. A certified photocopy of the 23C assessment certificate making you liable for the tax and authorizing collection, which is the only approved method for creating a tax liability under the Internal Revenue Code.
3.5. Their Social Security Number and the business and home address where they may be served with legal process in the event you choose to sue them.
3.6. A statement signed by them under penalty of perjury attesting to the accuracy and validity of the information provided, not unlike what you have to provide with your return.
3.7. The section in the Internal Revenue Manual that authorizes them to make an assessment absent the consent of you, a “nontaxpayer”, using either a 1040 form or a Substitute For Return (SFR). The only section in the IRM that addresses this is IRM section 22.214.171.124 is the only section that addresses 6020(b) authority and it does not list the 1040 form, because Subtitle A income “taxes” are voluntary and therefore “donations” rather than taxes!
3.8. A list of the implementing regulations required to do enforcement actions. See section 126.96.36.199 for the table showing the missing regulations.
3.9. The provision of the Constitution authorizing direct taxes outside of the federal zone. Explain that the Supreme Court has repeatedly held that it can’t be the Sixteenth Amendment, because it provided no new powers of taxation, and before the Sixteenth Amendment, the Supreme Court held in Pollack that direct taxes were not authorized, so where does the authority come from in the Constitution?
Of the two options above, the most likely one to work which we have not found any IRS defensive tactic for is approach #2. Approach #3 is a good for the case when you stopped paying and want to put them on notice that you are a “nontaxpayer” and want to be left alone until they can demonstrate their authority. Why do we we personally use #2? An internal IRS memo at the following address on our website reveals why, and you should read this now before proceeding further with this section:
The following very enlightening cite from the above memo explains why we recommend approach 2 above:
A service center receives complete Forms 1040 with additions in which taxpayers protest the payment of taxes. Taxpayers usually call attention to the addition by (1) writing an asterisk on the return, either next to line 53 (total tax amount) or line 64 (the tax amount owed) and (2) inserting on the second page of the return by lines 61-64 or on the bottom of the second page the following text: "The admitted liability is zero. See Attached Disclaimer Statement."
In the examples you provided, all the additions state that the taxpayer denies liability for the tax shown on the Form 1040. In some cases, the taxpayer also includes $1,000 with the Form 1040 and states in the addition the following: "payment in the amount of $1,000 as a voluntary contribution."
The service center has experienced some uncertainty in its disposition of these sorts of forms. Because of this and the potential for inconsistent treatment and processing of these forms, you requested this significant service center advice.
Section 6001 of the Internal Revenue Code requires every person liable for tax to make a return and comply with the rules and regulations issued by the Internal Revenue Service.
Section 6011 of the Code requires every person liable for tax imposed by title 26 to make a return according to the forms and regulations prescribed by the Service.
Section 6065 of the Code and §1.6065-1(a) of the Income Tax Regulations require any return made under any provision of the internal revenue laws or regulations to contain or be verified by a written declaration that it is made under penalties of perjury.
If a taxpayer fails to comply with section 6065 by submitting a return without the executed penalties of perjury statement, that return is a nullity. Lucas v. Pilliod Lumber Co., 281 U.S. 245 (1930). For example, in Hettig v. U.S., 845 F.2d 794 (8th Cir. 1988), the court found that the taxpayer's return was a nullity because striking the words "under penalties of perjury" negated the penalties of perjury statement.
A taxpayer can also negate the penalties of perjury statement with an addition. In Schmitt v. U.S., 140 B.R. 571 (Bank W.D. Okl. 1992), the taxpayers filed a return with the following statement at the end of the penalties of perjury statement, "SIGNED UNDER DURESS, SEE STATEMENT ATTACHED." In the addition, the taxpayers denied liability for tax on wages. The Service argued that the statement, added to the "return", qualified the penalties of perjury statement, thus making the penalties of perjury statement ineffective and the return a nullity. Id. at 572.
In agreeing with the Service, the court pointed out that the voluntary nature of our tax system requires the Service to rely on a taxpayer’s self-assessment and on a taxpayer’s assurance that the figures supplied are true to the best of his or her knowledge. Id. Accordingly, the penalties of perjury statement has important significance in our tax system. The statement connects the taxpayer’s attestation of tax liability (by the signing of the statement) with the Service’s statutory ability to summarily assess the tax.
Similarly, in Sloan v. Comm’r, 53 F.3d 799 (7th Cir. 1995), cert. denied, 516 U.S. 897 (1995), the taxpayers submitted a return containing the words "Denial & Disclaimer attached as part of this form" above their signatures. In the addition, the taxpayers denied liability for any individual income tax. In determining the effect of the addition on the penalties of perjury statement, the court reasoned that it is a close question whether the addition negates the penalties of perjury statement or not. The addition, according to the court, could be read just to mean that the taxpayers reserve their right to renew their constitutional challenge to the federal income tax law. However, the court concluded that the addition negated the penalties of perjury statement. Id. at 800.
In both Schmitt and Sloan the court questioned the purpose of the addition. Both courts found that the addition of qualifying language was intended to deny tax liability. Accordingly, this effect rendered the purported returns invalid. 
On the other hand, courts have acknowledged that taxpayers may make additions to the return to exercise their first amendment rights without negating the penalties of perjury statement. For example, in McCormick v. Comm’r, 94-1 U.S.T.C. ¶ 50,026 (E.D.N.Y. 1993), the taxpayer timely filed a complete return and signed it under penalties of perjury. Immediately below the penalties of perjury statement, the taxpayer added the statement "under protest." The Service did not treat the return as a valid return. The court found in favor of the taxpayer finding that the taxpayer was lodging a protest rather than denying tax liability. See also, Todd v. U.S., 849 F.2d 365 (9th Cir. 1988).
These cases highlight the tension [HOW ABOUT OUTRIGHT CONFLICT, DUHHHH!] between a taxpayer's exercise of first amendment constitutional rights and a taxpayer's statutory obligation to file a tax return under penalties of perjury. If by making the addition the taxpayer both exercises a constitutionally protected right (to protest) and negates the penalties of perjury statement, courts have held that the statutory duty to file a tax return outweighs the small infringement, if any, on a taxpayer's first amendment right to protest. See Sloan, 53 F.3d at 800; Hettig, 845 F.2d at 795-96.
You submitted several redacted Forms 1040 with additions for our consideration. To determine whether an addition to a Form 1040 denies tax liability, the courts analyze the purpose of the addition. In each of the Forms 1040 you submitted for our review, the addition explicitly denies the tax liability set forth on the related return. These additions, therefore, negate the penalties of perjury statements and the Forms 1040 fail to constitute valid returns for federal tax purposes. When the service center receives a Form 1040 with an addition, we suggest the service center process the form as follows: Upon receipt of the form, the Code and Editing Function at the service center should promptly send the form to the Examination Function. If the Examination Function determines that a taxpayer’s addition denies tax liability (and, therefore, negates an otherwise effective penalties of perjury statement), the form is not a valid return, and penalties, such as the failure to file penalty, and interest would apply. The Examination Function should contact District Counsel regarding the disposition of forms containing ambiguous or doubtful additions.
Moreover, if the return is not a valid return, the Service should issue a statutory notice of deficiency for any taxes due (including any amount determined by the taxpayer). This practice will protect the statute of limitations on assessment if a court subsequently decides that the form is a valid return.
We trust this advice addresses your concerns satisfactorily. If you have any questions, please contact Ms. Renay France, an attorney of my staff, on 202-622-4940.
From the above TOP SECRET internal IRS memo which analyzes the instant problem, it’s clear that if you deny liability, the IRS will disregard your return and kick it back to the Examination function with penalties. Therefore, if you want to force them to honor it and give you the refund that you seek, then there must be at least some kind of liability appearing on the return. However, if you are going to document a liability, then you must do it VERY CAREFULLY! Below are some pointers on how to do that which will hopefully keep you out of trouble:
1. Emphasize as the above memo and the court cited in it both did that our tax system is based on “voluntary self (only) assessment and payment, and not on distraint or force”.
2. Emphasize the definition of “income” according the Supreme Court as we explain it in section 5.6.6 of our Great IRS Hoax book. “Income” means corporate profit from foreign commerce under Article 1, Section 8, Clause 3 of the Constitution.
3. Emphasize that you did not have a “residence” or “domicile” anywhere in the “United States” defined in 26 U.S.C. §7701(a)(9) and (a)(10) during any part of the year and do not meet the “Physical Presence Test” identified anywhere in IRS Publication 54.
4. Emphasize that the voluntary aspect of the Subtitle A income tax process consists of your “election” to:
4.1. Be treated as a resident of the federal United States (federal zone) under 26 U.S.C. §6013(g) even though you are not.
4.4. Be treated as a “U.S. citizen” born in the federal United States (federal zone) even though you are technically not.
4.5. Treat any “income” you might have or a portion thereof as “corporate profit” from foreign commerce even though it technically is not.
4.6. Be identified as a “public officer" or federal "employee" of the United States government as defined in 26 U.S.C. §3401(c ) and 26 CFR §31.3401(c )-1 in the case of I.R.C. Subtitle C employment taxes, which you definitely are not.
5. Emphasize that because the income tax is voluntary, then you have a right to define the terms under which you choose to volunteer or consent.
6. Claim 1 ¢ of “wages, salaries, tips, and other compensation” and say this is the only amount of monies you have received that you consent or volunteer or “elect” to make into Constitutionally defined income. Do not identify which private employer or 1099 this income of 1 ¢ derived from, so they can’t claim that all the rest of that source of revenue is also taxable.
7. State that the IRS does not have your authority or consent to modify the amount of “income” appearing on your return, and that if they do this against your will and involuntarily, this makes the return into a return which is:
7.1. Submitted under duress and is inadmissible as evidence, according the Supreme Court in Weeks v. United States, 232 U.S. 383 (1914).
7.2. Modified without lawful authority and constitutes a violation of due process of law under the Fifth Amendment and 26 CFR 601.106(f)(1).
7.3. An illegal collection action under 26 U.S.C. §7433.
7.4. An injury to your property rights under the Fifth Amendment and grand theft.
7.5. Fraud under 18 U.S.C. §1341.
7.6. Illegal extortion in violation of 18 U.S.C. §872.
7.7. Financial and economic slavery in violation of the Thirteenth Amendment prohibition against involuntary servitude, including financial servitude. This also violates 18 U.S.C. §1581 and 42 U.S.C. §1994.
8. Make sure that none of the identified earnings you receive as reported to them on W-2’s and 1099’s is identified as either “income” or “gross income” on any form you give them, and explicitly deny that any of these qualify as income as Constitutionally defined.
9. State that any W-2 or 1099 forms received from any other sources are in error because they incorrectly identify the private employer or payor as being present inside the federal zone/United States as defined in 26 U.S.C. §7701(a)(9) and (a)(10). Also state that these are not adequate sources of evidence or good faith belief since they are nto authenticated or signed or in affidavit form, and therefore are hearsay evidence not admissible in court.
10. Demand that the agent processing the return provide evidence to refute anything you say, but ONLY via an affidavit containing his real, legal name. Otherwise, he admits to every fact not refuted via affidavit with evidence he provided to you demonstrating a first hand knowledge of the alleged facts he claims.
11. Emphasize that you are a “taxpayer” for the 1¢ of your monies you received and whose source you refuse to identify, but for all other sources, you are a “nontaxpayer”. Therefore, because you are a taxpayer and a person liable for tax ONLY on the 1¢ of income, you desire a refund of all monies paid in beyond the tax on that 1¢, which is essentially everything you paid in.
Very sneaky, huh? You have to be a fox to outsmart or catch thieves in the act. You cannot win a war unless and until you thoroughly understand your enemy and have anticipated his every move. It’s like a chess game.
The 1040NR attachment we provide in this book in section 10.9.1 of the Tax Freedom Solutions Manual currently relies on approach one above. We are currently working on two more attachments that implement approaches two and three above. Stay tuned, folks.
If you are a “nontaxpayer”, which most of us are, you can try filling out a 1040NR return requesting all monies paid be returned to you, but in some cases, your request may be denied or penalized by the IRS with a frivolous return penalty of $500. We know from reading section 5.4.5 that they can’t legally assess penalties for Subtitle A income taxes, so this amounts to a bluff on their part that may require you to file a lawsuit to remove the penalty. That is a risk you take if you go through the IRS for a refund instead of litigating directly. Keep in mind, however, that you will be wasting your time asking for a refund unless you allege some sort of duress (illegal coercion) in the collecting of the taxes. Here is what Bouvier’s Law Dictionary, Vol. II, Third Revision, Eighth Edition, 1914, pp. 3230-3238 says about this subject:
"Income tax: In order to invoke the powers of a court of equity to restrain the collection of illegal taxes, the case must be brought within the well recognized foundations of equitable jurisdiction [* * *] and it must clearly appear not only that the tax is illegal, but that the property owner has no adequate remedy at law, and that there are special circumstances bringing the case under some recognized head of equity jurisdiction…” [Cites omitted.]
“Taxes become a lien on property only by statute…”
“Taxes illegally assessed and paid may always be recovered back, if the collector understands from the payor that the taxes are regarded as illegal and that suit will be instituted to compel the refunding of them; Erskine v. Van Arsdale, 15 Wall. (U.S.) 75, 21 L.Ed. 63, a case of internal revenue taxes.”
“Where a state official receives money for a tax paid under duress with notice of its illegality, he has no right to it and the name of the state does not protect him from suit; Atchison, T. & S. F. R. Co. v. O'Connor, 223 U.S. 280, 32 Sup.Ct. 216, 56 L.Ed. 436, Ann.Cas. 1913C, 1050."
"The rule is firmly established that taxes voluntarily paid cannot be recovered back, and payments with knowledge and without compulsion are voluntary; when paid under protest or with notice of suit, a recovery may, on occasion, be had, although, generally speaking, even protest or notice will not avail if the payment be made voluntarily, with full knowledge, and without any coercion by the actual or threatened exercise of power possessed, or supposed to be possessed, over person or property, from which there is no means of immediate relief than payment; Chesebrough v. United States, 192 U.S. 253, 24 Sup.Ct. 262, 48 L.Ed. 432 (purchase of war revenue stamps for deed without protest or notice)."
Therefore, whenever you file any kind of income tax return or form, including withholding forms, you should do so “under protest” and “under duress” so you will have a legal recourse to get your money back. If you want to pursue the legal remedy instead of filing a request for refund with the IRS, you should seek a "writ of mandamus" from federal district court, which is just a fancy legal term for an order from the judge ordering the agent at the IRS to give you back money that was taken in violation of your constitutional rights. We also state in section 3.4.1 that there is a body of case law leading to the conclusion that if you are a “nontaxpayer”, the waiver of sovereign immunity under 28 U.S.C. 1346(a)(1) does not apply in the recovery of taxes paid, which is a fancy way of saying that the government isn’t liable to pay you back the money it stole or acquired wrongfully if you try to sue them directly. Here is the cite from the Internal Revenue Manual section 188.8.131.52:
1. It has been uniformly held that the waiver of sovereign immunity in section 1346(a)(1) of the Judiciary Code (28 U.S.C. §1346(a)(1)) only applies to taxpayers, and not nontaxpayers or interested parties. Busse v. United States, 542 F.2d 421 (7th Cir. 1076); Hofheinz v. United States, 511 F.2d 661 (5th Cir. 1975); Eighth Street Baptist Church v. United States, 431 F.2d 1193 (10th Cir. 1970); Phillips v. United States, 346 F.2d 999 (2d Cir. 1965); First Nat'l Bank of Emlenton v. United States, 165 F.2d 297 (3rd Cir. 1959). Accordingly, where a party not liable for the tax has brought a refund suit, a motion to dismiss should be recommended.
What the above reference and the cases cited say basically, is that the government doesn’t have to give you your money back if you are a "nontaxpayer" and you are asking for a refund based on the provisions of the Internal Revenue Code, and that it can steal your money through levy and seizure with total immunity from any liability for wrongdoing whatsoever as far as the corrupt courts are concerned. This is indeed scandalous and unconstitutional and morally wrong, but that is what we have allowed our corrupt government to get away with. This kind of scandal also violates Article 1, Section 9, Clause 8 of the Constitution by creating in effect a “Title of Nobility”:
“No Title of Nobility shall be granted by the United States: And no Person holding any Office of Profit or Trust under them, shall, without the Consent of the Congress, accept of any present, Emolument, Office, or Title, of any kind whatever, from any King, Prince or foreign State. “
We can’t be a free society unless justice is equal to all and unless the government has the same rights and obligations as its citizens. Any other approach leads to hypocrisy, mistrust of our government, and lawlessness by the government and its agents. Because of this restriction on sovereign immunity, you may need to sue the agent personally who processed your request for refund claim instead of the federal government generally, to get your money back, because he doesn’t have the benefit of sovereign immunity. Suing him in a state court works best. That way he can be held personally liable for reimbursing you, and sovereign immunity won’t apply in that case, unless the government decides to substitute itself for the agent you are suing, which it sometimes does, even though it technically has no delegated authority to do so. The agent cannot get off the hook for exceeding his delegated authority either, for the following reasons elucidated by the Supreme Court:
"But immunity from suit is a high attribute of sovereignty--a
prerogative of the State itself--which cannot be availed of by public
agents when sued for their own torts. The 11th Amendment was not
intended to afford them freedom from liability in any case where, under
color of their office, they have injured one of the State's citizens.
To grant them such immunity would be to create a privileged class free
from liability from wrongs inflicted or injuries threatened. Public
agents must be liable to the law, unless they are to be put above the
If you want to research the subject of official immunity further, read section 6.4.3 entitled “Official/Qualified Immunity”..
If you are claiming to be a “taxpayer” (a person “liable” for tax), which we say throughout this document is a bad idea, or you just want to give a refund request to the IRS a try anyway as a “nontaxpayer”, then you will need to file 1040X forms for previous tax years and a 1040NR for the current tax year showing no income and a refund in full. You will also need to attach IRS Form 4852 for the each tax year you want refunds. The 4852 is an amended W-2 form showing your corrected true "gross income" of zero and which refutes your private employer’s claim that you received taxable income, rather than the incorrect amount your private employer has been erroneously reporting to the IRS all these years. You will also need IRS Form 8275 to avoid penalties for making claims that are contrary to the usual position of the IRS. A sample letter is provided in Section 15.6 that needs to go with the 4852 and 1040X. Recall from section 5.8 (“Determining Taxable Income”) of our Great IRS Hoax book that wages received as a "U.S. Citizen" from domestic sources within the United States is NOT considered "gross income" or "taxable income" and therefore the amounts in block 10 of your W-2 should be "Zero", and not the amount of wages you received.
Simply file one 1040X form for each calendar year you want a refund for. On each form, fill in Zero into the amount for "Wages, tips, and other compensation" so that your income isn't erroneously reported as "gross income" by your private employer. You may need to contact the IRS in the process of executing this, and the proper phone number is:
It is extremely important that at the top of each 1040X, 1040NR, 4852, 8275 form, or other enclosure you put the following note in pen:
“Not valid without the attached letter and ALL enclosures”
Put your initials next to the above statement and the date and put in in an area that the photocopier can catch so it isn't cut off during duplication. The IRS likes to try to claim that they lost your refund letter or attachments that might incriminate them or strengthen your legal position, and therefore they may claim that they either don’t have or conveniently lost the other attachments you sent, which makes it look like all you submitted was zero returns with no justification. Submitting zero returns with no justification or explanation clearly would be frivolous, so they will try to make it look like that is what you did so they can try to assess a $500 frivolous return penalty. Likewise, its very important to explicitly list all of your enclosures in your attached letter, the number of pages, and the title so that they can't separate or destroy any of them. Be sure to send a copy to the IRS and not the original, because copies are hard to get admitted into evidence if you have to go to court.
When we tried a refund claim similar to the federal return and included FTB form 3525’s, which are the equivalent of the federal 4852’s. The California Franchise Tax Board came back admitted that we had no income, but then said that if we had no income, then we couldn’t have paid any tax, so they zeroed out our taxes paid for the affected years as well. Then they came back and said that we should reimburse them for all the refund money we had gotten for the years in question because we never paid them anything! They did so without notifying us or discussing it with us, and then all of a sudden served us with a panic levy notice at the last minute warning us that we better reimburse them for the refund checks immediately or be levied, and without an opportunity for a hearing prior to levy. This was a most inhumane and underhanded tactic which violated due process of law and did not meet any burden of proof standard. It was pure harassment and terrorism. We only mention this to make you aware of some of the devious tactics you can expect from the extortionists at the IRS and your state taxing authority.
Interestingly, if you read the case of Lovell v. United States, 755 F.2d 517 (7th Cir, 1984), a return that was not signed was counted as a valid return! You might want to use this as a justification for not signing your tax return, so it doesn’t incriminate you or cause you to have to waive your 5th Amendment rights. Below is the link to this case on our website:
28 U.S.C. Section 1746: Unsworn Declarations Under Penalty of Perjury
(1) If executed without the United States: “I declare under penalty of perjury under the laws of the united States of America that the foregoing is true and correct. Executed on (date). (Signature)
(2) If executed within the United States, its territories, possessions, or commonwealths: “I declare under penalty of Perjury that the foregoing is true and correct. Executed on (date). (Signature)
Based on the above, you may need to modify the jurat on any 1040X or 1040NR or other tax forms you file in your refund to ensure that they reflect your proper citizenship and residency status. If you don’t, you once again may inadvertently subject yourself to the corrupt and covetous jurisdiction of the United States. Watch out!
The purpose of the IRS Form 8275 is to clarify and explain the legal basis behind what you are doing on your federal tax return and why you are doing it for the benefit of the IRS agent who is processing your return. It is usually attached to your tax return and is used in cases where there isn’t a place on the tax form itself to explain the legal foundations for the figures and information on your tax return. Filling out this form can help avoid misinterpretation of your return by the agent and the assessment of financial penalties because of lack of compliance with the IRS Publications. For instance, an attempt to file an income tax return that asks for a refund in full of all taxes paid might be interpreted as a frivolous return subject to a $500 penalty. However, if you fill out your 8275 form and indicate the specific statutes and regulations upon which you base your determination that you are liable for no tax, then in most cases you can avoid penalties associated with filing a zero return.
Because the IRS' instructions for the 8275 for are ambiguous, we've included an example 8275. Click here to view it
If your private employer refuses to cooperate with you for a given tax year and submits a W-2 form to the IRS which contains a incorrect nonzero amount in block 10 for “wages, tips, and other compensation”, then you will need to use the approach described in this section.
There is no federal statute requiring you to use the form 1040 to file your federal tax “return”. You can use your own custom-made form or even a narrative letter to make your tax return if you like, and you can’t be penalized for not using the IRS forms or not filing, as long as you sign under penalty of perjury.
Some very important things to include in the narrative letter enclosed as a substitute for your 1040 return include:
1. State that your income tax liability is zero and the legal basis for that belief.
2. Sign the letter under penalty of perjury.
3. State that requests by the government for any additional records or information about yourself will NOT be granted, as this would violate my Fourth Amendment right to the security and privacy of my personal papers and information.
4. State that your First Amendment right of free speech includes your right to NOT speak or communicate in any way with my government without being penalized, fined, or sanctioned. An income tax return is a type of communication or written speech which you therefore choose NOT to have with your government and you can’t be penalized, with a Willful Failure to File or a Frivolous Return Penalty, for choosing your own method or extent of communication.
5. You are unaware of any law that requires you as a U.S. Citizen living in the 50 states that makes you liable for the payment of federal income taxes and several laws that specifically don’t (including 26 U.S.C. 861). Therefore, you insist on help from the IRS in identifying the specific law that makes you liable and the amount of liability, if any. ‘Where’s the law: Please show me the law and I will pay immediately.’”
6. Include on the letter a statement indicating the following:
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