Death and Taxes!

The famous words of Benjamin Franklin, from a letter written in 1789: "In this world nothing can be said to be certain, except death and taxes." More popularly phrased: "There's nothing certain but death and taxes!"

Well, guess what, folks, someone's wrong. Is it the "tax honesty" community, also called "tax protestors," who remain firm in the belief that income tax is unlawful, and that there is in fact NO LAW that says we have to pay income tax? Aaron Russo created quite a bang with this concept in his much-circulated film "America: From Freedom to Fascism," as did Ed and Elaine Brown in their famous 2007 IRS standdown. "Show me the law," Ed Brown told the court as he and his wife were charged with hundreds of thousands of dollars owed in back taxes. The story of the Browns ended in tragedy, with both convicted for tax evasion. Yet it might have ended differently ... and perhaps it still can.

Enter a few very simple concepts, all securely rooted in statutory law. The issue is not one of income tax being unlawful, but of who must pay income tax and what exactly is "income." Each year, millions of Americans report their earnings to the IRS, yielding a significant portion of this money to the government. An entire industry of paid professionals has sprung up to help in the calculations of these contributions. The onset of April 15th brings with it headaches, resentment and fear. Some defy the tradition altogether by refusing to file the notorious 1040 U.S. Individual Return.

In fact, the 1040 form is considered your own legal testimony about whether or not you were involved in taxable activities for a particular year. Here's what happens: Millions of people believe they are obligated to file INFORMATION RETURNS (W-2s, 1099s and K-1s) on each other every January and February. These government forms are intended for federal entities making federally connected payments. Why do non-government "employers" use them? Out of ignorance. The moment your name appears on such a form, you become the recipient of "federal" money. Oops! "Employers" and issuers of these forms don't realize that they are also making themselves out to be "federal" payers. Thus the net is cast, trapping innocent fish of all kinds.