A.L.E.R.T.
(America Law Education Rights & Taxation)

11-02-2001
We The People - Tax Tigers, Scapegoat or Trojan Horse?

Please pay attention, gang -- because today's A.L.E.R.T. may have more impact on your finances in the decades to come than anything you've ever read. Strong words? Certainly. So please read this carefully, in its entirety, and tell me you don't agree. Then get busy and do something about it. Or your children will be taxed internally for the first time. And they'll remember you.

*** NOTICE **** Tomorrow's A.L.E.R.T. titled 'THE NATIONAL SALES TAX HOAX' will provide the lawful basis and historical background for today's introductory piece.

Sadly, the time has come for me to broadcast the following. I do so cheerlessly. Yet I feel it must be done. I've placed sand bags around my office in preparation for the expected hailstorm of protesting e-mail from the numerous well-known gurus and figureheads in the 'tax movement' and their many followers. 

So be it. I've attempted to reason with many of them, on numerous occasions over several years, to no avail. Here are just a few examples. You, Dear Reader, can choose sides. If you disagree with me, I'll take my lumps.

FAILED REASONING CASE STUDY #1 -- One well known tax luminary has made his career on the issue of whether you can file a 1040 under penalty of perjury without waiving your 5th Amendment rights. Great argument. The only problem is, the 1040 form is a supplemental worksheet, not a primary return, and is not required to be filed on domestic source income as the tax regulations make clear. Real Americans don't use forms. Forms are for foreigners. The 1040 implements foreign source income only, rendering the entire constitutionality of filing a 1040 moot and of no consequence for a true American. Point these facts out to this particular luminary and you are stonewalled as if you had written to the IRS.

FAILED REASONING CASE STUDY #2 -- Another luminary -- a prolific writer, tax warrior, consummate patriot, and a man for whom I hold the highest respect -- continues to recommend the filing of so-called 'zero' returns and 'exempt' W-4's. He apparently believes that if you throw enough sand into the federal tax works, its gears will grind to a halt. True enough. But why would this be necessary when all the 'tax relief' one could possibly want is already provided within the taxing statutes, regulations and forms themselves, as they already exist? 

In other words, why knowingly misapply the law? Why not instead teach the public the truth about how the law protects them AS ALREADY WRITTEN, but is being willfully misapplied by the government in the name of revenue? 

The W-4 'exempt' provision pertains to students and clergy ONLY, and then only under limited conditions. Presumably, the luminary -- an educated man -- knows this. So why knowingly fight wrong with wrong? And yet he continues to urge Americans to file 'exempt' W-4's under penalty of perjury, a very ill-considered strategy in my humble opinion. 

Aside from which, one can ONLY be exempted from a law to which one is first made subject (liable). Yet there is no lawful requirement for an American to submit a W-4 in order to work within the 50 States of the Union, thereby rendering the entire 'exempt' argument moot and of no consequence for a true American. 

By way of a little history, John Kotmair, Founder and Fiduciary of the Save-A-Patriot Fellowship, served two years in a federal prison camp back in 1982 after being convicted for having filed a 'zero' return in 1976 when that strategy was then state-of-the-art. That was a quarter century ago. But the luminary remains impervious to arguments demonstrating the dangers inherent in his recommendations. He has his plan, adapted in the mid-1980's, and he's stickin' to it. Write to him about these things and he gets pretty testy (and that's an understatement).

FAILED REASONING CASE STUDY #3 -- For the most recent example of my frustrated attempts to reason with a number of my tax education peers, take the case of Joe Bannister. Joe is a great guy. He's sincere and highly patriotic. No one doubts that. 

When it was announced that he was about to appear on '60 Minutes' last year, I wrote immediately to warn him NEVER to grant a television interview; that he would NEVER be allowed to get anything resembling the truth to the American people; that he would be USED; that you ONLY grant live talk radio interview; that you NEVER grant mainstream print media or TV interviews, 'lest the truth be left on the editorial department floor. Been there, done that, bought a T-shirt. 

I wrote to tell him about the video '60 Minutes Deception' (the video sleeve says to call 800-828-2290 to order) which makes Mike Wallace out to be a bald-faced, manipulating liar during an interview with Chris Ruddy over the murder (yeah, murder) of Vincent Foster. I sent my e-mail to Joe 'return receipt requested'. It was read, but not answered.

Andy Warhol once stated that we would 'all be famous for 15 minutes.' I guess Joe wanted his moment in the national spotlight. A few weeks later, I watched that '60 Minutes' segment and saw Joe tricked into stating that he cuts checks to the IRS, at which point he was cut off in mid-sentence. And this shameful confession from the movement's most notorious and feted Constitutional Poster Boy of the year. So much for Joe's credibility now.

Instances of this type have recurred over and over again in my experiences and communications with so many of those who should be leaders in the tax education movement. 

So it is with advance regrets and a heavy heart that I broadcast this message today about Bob Schulz and his 'We The People' organization. But I must. I have two children who will grow up in the America that is rapidly becoming the very vision of Karl Marx' Amerika and I must state my mind. All I can say, fellow educators and others, is that you don't like what I have to say, unsubscribe. That's the First Amendment in action.

Many Americans don't know this, but Citizens For Alternative Taxation is the organization that launched the now decade-long push for a National Sales Tax. Even fewer know that CATS is a subsidiary of, and directly financed by, the Church of Scientology (COS). This is the same church whose charismatic director, David Miscavage, sauntered into the IRS' Washington, D.C. offices a few years ago (so the fable goes) and was granted sudden(!) dispensation -- er, that is -- declaration of tax-exempt status. This after a multi-year, no-holds-barred, teeth-hair-and-eyeballs battle for IRS recognition, one that saw deep intelligence operations on both sides, with offices bugged, files stolen, numerous court actions, the whole ugly nine yards. Then, all of a sudden(!) ... (sure) .... a truce is declared ... (right) ... and everyone lives happily ever after (uh, huh).

Problem is, members of the COS who do not file a 1040 form are now routinely refused permission to climb 'the Bridge', which is the ladder of progressively higher COS accreditation. No form, no salvation.

Letters written by members to COS high officials explaining the limited application of the law are flatly and summarily denied, indeed given IRS-like treatment. I know, because I've helped draft several of those letters and read the responses. The bottom line: the COS -- a huge, multi-billion dollar international organization, one that spent millions battling the IRS for decades -- is now providing major-league, private-sector filing compliance services for the government. Of course. I understand perfectly. After all, what's a little 'quid pro quo' among former foes? If it quacks like a goose ...

Now, I am not a Scientologist, but I know some good folks who are. And they understand the written tax laws, perfectly. Of course, this does them absolutely no good. And this is a church that prides itself on producing sane, certified 'clear' members. 

Question: if the top officials of the COS are THE most 'clear' and therefore THE most sane of the entire membership (a reasonable presumption by their published standards), why do they absolutely reject, refuse and stonewall all rational thought and discussion on the tax issue? Can they not read English? Could collusion be the cause? Inquiring minds want to know.

One more tidbit. When John Kotmair, Founder and Fiduciary of the Save-A-Patriot Fellowship, attended a constitutional monetary conference in Denver, Colorado in 1991, he was introduced to two then-current officials of CATS. Both of them admitted to being 'ex-IRS'. And the wheel goes 'round and 'round. It doesn't take a Shakespeare to know that something stinks in Denmark.

I wrote to CATS on several occasions. It did no good. I assisted in writing to the Church of Scientology. Ditto. I have written to the IRS (as millions have) on numerous occasions. Ditto to the nth power. I've written to my congressmen and Senators. They refer me to the IRS. The IRS refuses to respond. The logo on the Ministry of Truth is a Smiley Face. 

And now, fast forward to 2001, and let's consider the topic of today's discussion: Bob Schulz and his 'We The People 501(c)(3) Tax Exempt Organization Even Though 501 Has No Lawful Connection Whatsoever To Domestic Source Income (my personal extended name for Bob's group). 

Thanks to the notorious efforts of this group, Americans are virtually GUARANTEED to be taxed internally VERY SOON on their domestic source income for the FIRST TIME IN AMERICAN HISTORY, lawfully speaking.

The truth about the manifest dangers, pitfalls and usurpations inherent in the imposition of a National Sales Tax has been explained to Bob on numerous occasions. All such entreaties appear to have fallen on deaf ears, leading thoughtful people everywhere to ask "Whassup with Bob?". 

The following is the exact e-mail I wrote to Bob Schulz on Friday, October 19, 2001. He has yet to reply. And now the time has come to publish this, as I notified Bob I would. Here it is:

* * *

Subject: From Gordon Phillips to Bob Schulz: An Appeal to Reason
From: Gordon Phillips <gordon@informamerica.com>
Organization: INFORM AMERICA!
To: 'Bob Schulz and the 'We The People' IRS Hearings Team' <gordon@informamerica.com>

From the Desk of Gordon Phillips --

Friday, October 19, 2001

To: Bob Schulz
Cc: To participants known to me who are involved in the planning of the impending 
IRS/DOJ hearings. Please forward to any whose addresses do not appear. This communication 
is not being send 'BCC:' to any other parties.

Dear Bob,

Please read the following carefully. If I receive no substantive answer from you within a reasonable period, I will presume that you have no rebuttal or objection. I will then publish this widely.

I recently received an e-mail message from your office stating in excerpted part: 

'We the People Foundation for Constitutional Education will have a major Press Release next week ... to let those who have been with us through the delays know first ... [that] Congressman Roscoe Bartlett ... has signed a powerfully worded letter on official letterhead to Bob Schulz reiterating his full support for the tax hearing, reconfirming his commitment to chair the hearing and setting firm rescheduled dates for the Capitol Hill hearing ... Mr. Schulz is greatly pleased with the growing support from Congress. There are now 284 House and Senate members who now directly support legislation abolishing the IRS and the income tax. Next week, Mr. Schultz will also make public additional steps being personally taken by Congressman Bartlett and others to enhance the historic nature of this event. Mr. Schulz wants to thank all of you who have stayed by us patiently waiting for things to be worked out.'

I wish to go on record as withdrawing from association in any way with the efforts being put forth by your organization to interrogate the IRS at the above referenced hearing.

I have come to view this course of action as not just ill-advised, but outright dangerous to the interests and liberties of the American people. 

This certainly will be an 'historic' event -- one that will ring the death knell for the constitutional tax movement, hand victory to the bankers, and thrust internal taxation upon the American people on their own soil for the first time, all at once. 

I write this, not as a spoiler, but as a gravely concerned fellow American. So many individuals, including myself during a private telephone call held with you this past September, have attempted to explain to you the danger inherent in the course of action that you are presently pursuing that I can only conclude that you are either blindly infatuated with your own mission, or immune to further education.

I explained to you, and you agreed with me, that the inevitable conclusion of your efforts, beginning with the articles run in USA TODAY, would result in the government stepping in to 'rescue' the American people -- who have never been taxed on domestic sources of income since the day Washington took office -- from this non-existent 'burden'.

I also explained that the government would manipulate (shades of Hegel) and capitalize upon your widely publicized efforts as justification to 'rip the income tax out by its roots' and replace provisions within subtitle A with some variation of an across-the-board tax on retail purchases, a/k/a a 'national sales tax' (NST).

I stated to you during that conversation that such a tax -- one that would be both inescapable and unable to be shifted -- would be the diametric opposite of what James Madison and his colleagues intended in that it would NOT be laid upon 'certain commodities only' as a regulatory mechanism to constrain the revenues of government and force it to stay within its constitutionally prescribed boundaries, but would be a pervasive and epidemic excise levied upon virtually all purchases and transactions conducted within the Union States. 

You agreed with this statement, adding 'Well, then, we'll fight that too.'

I went on to point out that the government will, in my opinion, never give up (misapplying) the provisions for the withholding of employment (social security) tax, and that the unlawful imposition of a NST would give the Treasury Department a NEW means -- a bi-level means, through two variably adjustable rates of taxation -- of further fine-tuning (as explained by Beardsley Ruml, former Chairman of the Federal Reserve, in his 1942 speech) the rate of inherently fraudulent debt/credit expansion that has become the basis of our fiat economy. 

I also commented that a NST would move the all-electronic, 'cashless' society lusted for by the oligarchs and their shills in the monopoly banking industry a giant step forward in that America's small businesses would almost certainly be mandated to collect and pay the tax to the IRS electronically. 

I also pointed out that a NST would concentrate the often KGB-like investigative apparatus of the IRS onto the heads of a vastly smaller number of individuals, namely the proprietors of America's small businesses -- the blood and backbone of our way of life.

Anyone with even a modicum of common sense, a familiarity with history and the type of seasoned political understanding I have come to appreciate from my betters at the Save-A-Patriot Fellowship can readily see that, within a few years after its passage, the constitutionality of a NST will be challenged in the courts, will work its way up to the supreme Court, and will be held constitutional as an excise. 

On that sad day in the history that is sure to come unless present events reverse themselves, all of the efforts, suffering and sacrifice of our finest Patriots over the past 50 years, starting with the likes of Vivian Kellems, will have been wiped out -- obliterated. 

To make my point further, I reproduce here, with permission, a letter just recently sent you by e-mail from Bill Huff, proprietor of www.lexrex.com and former editor of 'Reasonable Action', the member newsletter of the Save-A-Patriot Fellowship of which, as you know, I am our National Representative. Bill wrote:

'Dear Bob,

'I mean no offence and if I offended you I apologize. I have believed that you were an honorable man who was misinformed about the technical aspects of the tax laws.

'I am frustrated with the line of 'reasoning' that says, in essence, 'throw the baby out with the bath water.'

'I have written you before asking you to point out which sections of the Code would have to be removed if the Sixteenth Amendment were repealed and you made no response. Conversely, can you point out even one section of the Code that depends on the Sixteenth Amendment for its existence?

'I am thoroughly aware that John Kotmair and others have tried to point this out to you. The Code can be enforced as written and it does not impose an income tax on my domestic U.S. income. I have no Social Security Number and have not volunteered to have wage taxes taken out of my pay therefore I pay no Social Security tax.

'I am already lawfully FREE.

'There are no Subtitle 'A' income tax withholding provisions for the domestic income of either a domestic U.S. citizen or a domestic U.S. corporation.

'The only way wage taxes can be lawfully withheld from a domestic U.S. citizen under Subtitle 'C' is for him to volunteer by giving a W4.

'These facts all substantiated in the Code, the Regs, the IR Manual and the Forms consistent with OMB Control Numbers.

'Bob, if you know the above to be true, I see no reason for you to try to get rid of the Amendment. The people in Washington are corrupt beyond anything you can imagine. They would love to get rid of the Sixteenth Amendment issue and install a National Sales Tax.

'If you thought the income tax was nasty wait until you see the National Sales Tax. It will make every business exchange in the nation a potentially taxable event for the first time in history. It would be an easy win for them to be able to say 'the income tax and the Sixteenth Amendment were corrupt and all those dead and gone people were corrupt, but since we still need lots and lots of money to 'pay for the roads' we'll just start out clean with a National Sales Tax.'

'You obviously have the ability to raise funds. Perhaps that is a gift. I saw a movie recently that promoted false legal theories about the tax situation and gave no lawful solution. I have to say I felt the same way about your national ad campaign. That man spent over $500,000 to teach a false solution based on a false premise. I have no idea how much money you raised or spent, but your effort seems to counter all of the hard work that many have done for years trying to teach citizens and force government agents and judges to apply and obey the law as written.

'This also has the effect of discounting the efforts of all the citizens who have gone to jail for asserting their rights according to the laws as written. There have been juries that have been duly convinced that these people were innocent. The IRS lost the longest tax trial in history.

'There would be no IRS seizures if the County Sheriffs would just stand up and demand the lawfully required court orders.

'I agree with John Kotmair in that a quick fix will most likely result in chaos. We would rather see the American Revolution repeated than the French Revolution.

'The term 'useful idiot' may apply to a genius who has only one logical flaw - especially when the stakes are this high.

''They' cannot give up some means of raising revenues to pay interest to the banking cartel that makes or breaks every one of them. A return to the law could only be done over a long period of time, and then, only if it were accompanied by revolution that had a spiritual dimension like that of the original.

''Ignorant and free can never be!' If we trade the present de facto income tax for a de jure national sales tax, we will have written tax laws that are totally repugnant to the intent of the Founders and Framers.

'I implore you Bob! Don't become the Scapegoat that they use to usher in the National Sales Tax. Use your talents and resources to teach all American citizens to assert their rights according to the law and bring to bear the political pressure necessary to force the judges to rule according to the law.

Yours for Liberty Under Law!

William H. Huff'

### END OF BILL HUFF LETTER

Gordon's letter to Bob Schulz continues: 

There is no alternative to education. There are no short cuts. There is no 'quick fix'. It has taken approximately eleven generations for our people to sink (or rise, depending upon your viewpoint) to their present abysmal level of ignorance. 

The clear and deliberate usurpations of law perpetrated over the previous century will not be reversed with a single 'grand slam' or 'hallelujah' event, in the manner of a Rocky Balboa pulling victory out of a hat.

A so-called 'win' over the IRS, if obtained at the proposed hearings, will be Pyrrhic indeed. The American people, never having learned the truth, will be duped into instant satisfaction from a 'problem' that never existed to begin with, lawfully speaking.

Patriots who have not filed for years, many for decades, and lived a lawfully tax-free life -- including those who lost their freedom while incarcerated, their property and some their families -- will be tossed onto the ash heap of history.

I suggest that you sit back and take a long, hard look at what the consequences of your acts will most certainly be. As Bill Huff warns, you might not want to go into the history books as the ultimate Scapegoat.

Bob, I have never had reason to question either your sincerity or your patriotism, however if you ignore these entreaties and continue upon your present path, I and others will be forced, necessarily, to questions your intentions. I look forward to your reply.

Yours For Liberty In Our Lifetime,

Gordon Phillips
Founder & CIO: INFORM AMERICA!
National Representative: The Save-A-Patriot Fellowship
National Spokesperson: American Contractor Services