Denouement Of L'Affaire Kent Hovind - The Sentencing Of Paul John Hansen

Abigal Meggisnson, with support from Interlock Media was on the scene last Friday when Kent Hovind's co-defendant Paul Hansen was sentenced for contempt of court.  In Abigal's report we get a rich picture of the scene that day that I have designated the end point of L'affaire Kent Hovind.

Friday, August 21 Paul John Hansen, former Creation Science Evangelism Trustee and Kent Hovind’s co-conspirator, was sentenced to 18 months in prison, with 10 months served time as credit, to be followed by supervised release of 3 years.


Hansen was convicted in March of contempt of court -  intending to cloud the sale of former Dinosaur Adventure Land property and failing to appear for fingerprint and case prints when subpoenaed.

The sentencing began at 2 p.m. at the Winston E Arnow Federal Building in Pensacola, FL with a calm presence outside the courthouse, without a protestor in sight.

Inside, supporters and reporters filled in to witness the sentencing. Kent Hovind entered the courtroom accompanied by his friends and advisors Ernie Land and Josh Jocelyn.

Kent, Ernie and Josh would provide a video report of the event not long after its close.

.

Rhonda Herrington entered clutching a Bible and sat in the pew directly behind the defense. She came to report the sentencing for her pastor James David Manning’s internet radio show. After Hansen was brought out in chains and an orange jumpsuit, she knelt on her knees in prayer with her head bowed.


A court official interrupted her to let her know she would have to rise for the judge, to which Herrington asked, “Is it against the law [to pray in court]?” The court official was kind and simply asked for her cooperation and to be included in the woman’s prayers too. Despite the minute resistance, she did rise once the judge entered and sat in her seat once again clutching her Bible for the rest of the sentencing.

At the hearings in May, when Hovind's conviction for contempt had been dismissed, Rhonda had been a presence on the street in front of the courthouse.

Judge Casey Rodgers entered the courtroom. She allowed Hansen to address his objections, comments and concerns regarding the pre-sentence report and sentencing guidelines. Hansen's primarily put on  sovereign citizen arguments which he spouted with his hands twitching nervously behind his back.

Hansen first objected that the term in the pre-sentence report, residence, was inaccurate when referring to his home in Nebraska.

Hansen further claimed that he had been misinformed of the consequences of mailing the letter to the title attorney’s office. He said he had received a notice that stated he would be in civil contempt if he mailed the letter, but it did not warn him of criminal contempt of court. He said he would have taken the matter more seriously if he had known. Hansen asserted that he was planning on suing whoever had misinformed him, but Judge Rodgers was quick to steer him back towards the subject of the day, his sentencing.

Later, Prosecuting attorney, Mr. Ryan J. Love,that Hansen had sufficient notice of the consequences of his actions. Judge Rodgers informed Hansen that the jury had already ruled that he had proper notice.

A face not in the courtroom that was missed by Hansen was IRS agent Schneider. When he addressed his issue, he looked around the courtroom hoping to see Schneider. Hansen noted that he had made efforts to request that Schneider be subpoenaed for the sentencing but was not advised by Klotz to do so and had not filed the request himself in due time. The Judge made the statement that based on the fact that he would not have brought any new information to the sentencing, it would have been denied anyway.

Repeatedly, Hansen stated that he only mailed a letter and did not file it to the county clerk’s office for the extra one dollar. This would have been filing a lien on the property, a much more obvious and serious attempt to cloud the title. He wanted the court to know that what he didn’t do was just as important as what he did do.

Judge Rodgers went over the sentencing guidelines early on. The official sentencing guidelines determine months in prison by cross referencing points for offense and level of criminal history. Hansen originally had a score of 14 points but was given 3 more points (a total of 17) for substantial interference. With a criminal history of 5, the guidelines dictate a sentence of 47-56 months.

During the two and a half hours of sentencing, Hansen continued to claim that it didn’t matter what the intended harm was, as long as no harm came about. It was okay since the properties were selling well and the family would be in a comfortable position.

Judge Rodgers stated several times that Hansne had already been convicted of intending to cloud the sale, and intent was all that mattered.

Although Judge Rodgers has allowed Hansen to continually challenge the U.S. authority, she said she flat out disagrees with them. “It’s nothing personal… it’s my view of the law”

Hansen brought two character witnesses up to the stand: Kent Hovind and Ernie Land. Both testified to Hansen’s faith and his intent to do the right thing for his country.

Kent Hovind said he had known Hansen for over 10 years and spent significant time with him including three months in a jail cell. He testified to his godly character and good intentions. Hovind also gave his perspective on what Hansen’s sentence should be, “In my opinion, you should go home today.”

Ernie Land was also called to the stand. He denounced his own American citizenship while wearing a patriotic button up shirt boasting an American flag and We the People followed by the rest of the constitution. He stated that today’s U.S. citizen is not what was originally intended by the founding fathers. Mr. Love questioned him on the community courts of today. Land answered him saying there are many coming up across the nation, including some in South Florida and even one in Pensacola.

Hansen began his final statement by speaking of the hardships he has experienced in prison already and how he wished to go back home to his family. He said there was no evidence of a cloud on the property and no upset of the sale of it either. Hansen said that if he had known that he would’ve spent even one day in jail, that he would have never sent the letter.

Hansen expectedly, asked the judge for time served. “I don’t want to go to prison for 6 years for mailing a letter,” Hansen said.

He then humbly apologized for his ignorance. The Judge was confused by his apology and asked what exactly he was apologizing for. He ended up saying it was for "accidentally" committing a criminal act and his overall ignorance.

The closing statement from prosecution featured Mr. Love detailing the benefits that come with being an American citizen, yet Hansen still has claimed these benefits after repeatedly denouncing his citizenship. Love additionally noted that this case was not nor has ever been about faith. If he and his associates were to sit down with Hansen and Hovind, he said they would be shocked to see how similar their faith really is. He asked the judge to adhere to the guidelines and give Hansen 47-56 months in prison and “no greater than what is necessary.”

udge Rodger’s decision was a swing in Hansen’s direction to promote a respect for the law, she sentenced Hansen to 18 months in prison, giving him credit for the 10 months he has already served and 3 years supervised release.

She disagreed with the guidelines due to Hansen’s criminal history category. He had scored a 5 out of 6 which Judge Rodgers felt “over represents the seriousness of his crimes”

Mr. Love’s argument regarding Hansen’s beliefs became irrelevant, as the judge said, “We do not punish people for their beliefs. We do when those beliefs turn into harmful actions”

Judge Rodgers addressed Hansen and explained that the most dangerous thing to our society is when one individual takes action against the laws that apply to everyone. “You’re not special, you have to follow the same rules everyone else does,” she said to Hansen.

Hansen asked to finish his time in the Federal Prison Camp of Pensacola. The Judge agreed to recommend that facility, though she said she could not promise that he would end up there.

After court was dismissed, an unsettled Kent Hovind stood outside and said, “That should’ve never happened. The court should be apologizing to him [Hansen].”

________________________________________________________________-

I really appreciate Abigails sharp observation of the proceedings.  Hansen is unlikely to be released while he appeals, which actually may be to his benefit, since under current conditions he is sure to be free in the Spring. Hovind continues to call for reversal of his 2006 conviction, but it seem unlikely he will get any traction.  Hovind has not preached tax protester theories in a long time. He is now focused on "end times".  I suspect that he will be conventionally tax compliant.  The second prosecution of Kent Hovind turns out to have been a waste of government resources and not to have been in the interest of promoting tax compliance as it seems to have emboldened his supporters in their alternative views.  Regardless, I'm glad that Kent Hovind is out and that he seems to be mainly focusing on his Gospel message.

Kent Hovind Associate Paul Hansen Sentenced To 18 Months In Prison - Gets Credit For 10 Months Awaiting Trial

Ben Shefler  of Intelock Media was on the scene in Pensacola as Paul Hansen was sentenced for contempt of court. I supplemented his report with some background on Hansen and the federal sentencing guidelines.

An 18-month prison sentence and three years supervised release. That’s what Kent Hovind's co-defendant in their March trial, Paul Hansen, faced as he left the courtroom today in his orange, Santa Rosa County (Florida) Jail jumpsuit.  With credit for time already served his incarceration should go to late winter or early spring of next year.

The sentencing hearing began at 2 p.m. in the Winston E. Arnow Federal Building across the street from the courthouse where Hansen was found guilty of violating a court order and failure to appear before a grand jury in Pensacola, Fla., to provide handwriting samples and fingerprints.

Hansen Speaks

Hansen explained as best he could, with the attorney who represented him at trial, Christopher Klotz, acting as stand-by counsel, the objections he had previously made.

First on the agenda was Hansen's request that IRS agent Scott Schneider be present so he could be asked about the valuation of the Creation Science Evangelism property that had been forfeited. Part of the problem, along with not providing U.S. Chief Judge M. Casey Rodgers with a reason for subpoenaing Schneider before the hearing, is that he wasn't the IRS agent investigating Hovind's case. It was Chuck Evans.

U.S. Assistant Attorney J. Ryan Love said Hansen had the opportunity to ask Schneider about the valuation of CSE property during the trial in March.

The valuation was important to Hansen because he believes there was no actual loss since the properties have been sold.

"[Hansen's] intent was to see to it that the government not sell those properties," Love said.

Klotz tried to make the argument that all the property was collateral, and that there would be a "substantially better" valuation if the losses were recalculated.

Guidelines

The problem for Hansen, even though this was the route he wanted to take, is that it opened him up to many more months of prison time if the U.S. Sentencing Commission's guidelines were followed.

The guidelines consider offense level and criminal history. With Hansen's criminal history at a level five out of six and a revaluation of CSE property, Hansen's offense level could jump from 17, where guidelines recommend 46-57 months in prison, to 23, where it recommends 84-105 months. Love seemed sympathetic toward Hansen and didn't want him to press for a revaluation because he said the government is only concerned with the intended loss. He genuinely seemed like he was trying to help Hansen.

"We want to do the right thing here," Love said.

Judge Rodgers was also skeptical about Hansen and Klotz's argument, and she overruled the objection.

Substantial Interference

Next was Hansen's objection that he caused "substantial interference" with the government's attempts at selling the forfeited CSE property. Hansen repeatedly said throughout the two-and-a-half hour hearing that he only mailed a letter to the title company’s attorney to build litigation to challenge the authority of U.S. federal court in the people's common law court. Hansen pointed out that he did not mail the letter to the Escambia County (Florida) Clerk of Court to file a lien. Judge Rodgers said, "Unfortunately, the jury disagreed."

Love said that substantial government resources were used, Judge Rodgers added that substantial court resources were used, and she overruled the objection.

Criminal History 

Hansen's final objection concerned his criminal history, and he went into detail on some of it. He said he had issues with permits and housing codes for the homes he used to remodel. Another time he was closing the front door that had been kicked in at his home, and he was approached and threatened with six months in jail. In another instance, he was asked for his name and he replied, "Paul John, and my father's name is Hansen." He said he was accused of giving false information.

All of the charges were misdemeanors, and some of them were dismissed.

Jurisdiction

Then there was the issue of jurisdiction. Hansen said he's not saying the U.S. court doesn't have authority over him, but he's asked for the court to show him the evidence that it does.

"I've allowed you to present those challenges and I disagree with you," Judge Rodgers said. "It's nothing personal."

Hansen replied, "I didn’t intend to antagonize the court," to which Judge Rodgers said, "I didn't perceive it that way."

Judge Rodgers asked Hansen about the claim that he hasn't paid income taxes since 2000 or 2001. Hansen said that he has filed an IRS 6203 assessment, which according to Hansen is asking the government to assess an individual to see if anything is owed.

"I haven't neglected the IRS," he said.

Hansen ended his remarks about the objections by saying, "I don’t think my actions have ever clouded the title." Judge Rodgers pointed out that it was the intent of his actions that the jury considered.

Character Witnesses

Hansen then called two character witnesses to the stand—Kent Hovind and Ernie Land.

Hovind said he's known Hansen for about 10 to 12 years, including having shared a jail cell for three months last year.

Hovind testified that Hansen mentioned pursuing a common law court for their case "many times," that Hansen had no intention to deprive money from anyone, that the mailed letter was associated with future litigation and that Hansen is a Godly man whom he trusts completely.

Land, who's only interacted with Hansen for the past 10 months but knew about him years before, testified that Hansen had no intent to violate the law, Hansen wants to bring the country back to what the founding fathers intended it to be and that Hansen stands with the Constitution. Land said Hansen has trouble with codes and lower court regulations, so he goes directly to the common language of the Constitution instead.Land also testified that he, like Hansen, is not a U.S. citizen by the definition of the 14th Amendment and other statutes, he said.

Common Law Courts

Love, who didn’t ask Hovind any questions, asked Land where the common law courts are convening. Land said it's happening in south Florida and even in Pensacola.

In a subsequent interview with Rudy Davis, Paul Hansen indicated that in his view all that it takes to set up a common law court is twelve godly men to make up a jury.  In a 2011 story for KVNO news, Anti-government groups raise flag for law enforcement, Bill Kelly characterized Hansen as part of a "small group of anti-government activists who believe all federal and local laws are invalid"

 He doesn’t have a driver’s license. He lives in Omaha and owns his vehicle. Paul Hansen doesn’t register it with Douglas County. If stopped for a traffic violation he’ll explain to the police officer that he “doesn’t use one.” His next step is to ask if the officer has “any evidence this land is owned by the United States of America. Do you understand that if you issue me a ticket you will be on the witness stand and you will have to produce that evidence?”

In his interview with Davis, Hansen regretted that Love had not asked him abut common law courts. "Common law courts", as Hansen conceives them were a cause of significant concern to law enforcement in the nineties

The Sentence

A long fight for Hansen was coming to an end. Sentencing was near. Judge Rodgers asked Hansen if he had any mitigating statements. Maybe he was tired or maybe he was confused, but he asked Judge Rodgers for the definition of mitigating. She explained the term and said, "You're so well trained and educated, I'm surprised you don’t know those terms."

Hansen said he's spent 7,000 hours in jail. He talked about Biblical punishment, and he thinks he's served his time and that the time has served its purpose. He said if he had known he'd spend one day in jail, he wouldn't have mailed the letter.

"It was dumb what I did," he said.

What Hansen said next left Judge Rodgers puzzled.

"I apologize for my behavior due to ignorance, but I didn't mean to be ignorant," he said.

Judge Rodgers was curious exactly what Hansen was apologizing for, so she asked him. At first he said it was for if he "accidentally" did something criminal and that he didn't mean to do any harm. Finally, he clarified and said, "I apologize for not knowing I shouldn't have mailed the letter."

When Hansen was done, Love got up and talked about the rights of all Americans. He mentioned the naturalization ceremonies and how immigrants come to America to have rights not offered elsewhere. He pointed out to Hansen that he has been given all his rights even though he doesn’t want them.

Love continued by saying that Hansen, Hovind and their supporters might be "shocked" at the beliefs of he and others on the prosecution, implying that their views, most likely referring to religious views, are actually in line with each other.

Love ended his remarks by saying he's not asking for the maximum sentence, he just wants Hansen to be held accountable. He asked for the guideline sentence of 46-57 months.

Judge Rodgers, however, disagreed with the guideline sentence. She said it wasn't a just and fair sentence; it was greater. She thought his criminal history level was measured too high, since he had no significant time in jail and all charges were misdemeanor. But time served, as Hansen asked for, wasn't sufficient either.

Judge Rodgers wants Hansen to "promote a respect for the law as it exists today." To get to that point, she sentenced Hansen to 18 months in prison, with credit given to him for the last 10 months he's been in jail.

Judge Rodgers made clear that the sentence has nothing to do with any of Hansen's religious or sovereign citizen views.

"We don’t punish people in this country for their beliefs or opinions," she said.

The sentence was a response to what Judge Rodgers described as a threatening action.

"There is little that is more threatening to the fabric of society than someone taking action to thwart or ignore the law," she said. "You're subject to the same laws as everyone else in this courtroom."

About The Guidelines

The sentencing guidelines work by a table that cross references offense level with criminal history. There is no specified offense level for contempt, but the guidelines indicate that it is often similar to obstruction of justice which has an offense level of 14.  There can be a three level enhancement for the interference with administration of justice being substantial, which is what the prosecutors claimed.

Hansen's very high criminal history level is apparently he result of his long battle with local authorities on issues like permits and traffic violations.

Judges have to justify deviations from the guidelines.  Were Judge Rodgers not a lady judge we might say she has given herself a belt and suspenders if the sentence is appealed.  She has put it in terms of  downward variance from the guidelines, but if the offense level were set at 14 rather than 17 and Hansen were allowed a criminal history of zero, the sentence is right in the middle of the 15 to 21 months called for by the guidelines.

Release Not Likely

Hansen requested that he be released because it's been hard to build a defense in jail, and he plans on appealing. Judge Rodgers indicated that it would be highly unlikely she'd agree to that because one of the reasons for being at the sentencing hearing was that Hansen was found guilty of failure to appear in court. The courtroom, including Judge Rodgers, had to hold back a chuckle.

Hansen requested, at Judge Rodgers' inquiry, to be sent to the Federal Prison Camp of Pensacola since he intends on living in Florida when he's released, but the final decision is left up to the Federal Bureau of Prisons. He has 14 days to file an appeal after the sentence is formally written sometime next week.

A handful of supporters were inside the courtroom for sentencing, while no protesters, who were so prevalent during the trial, were outside.

No protesters at courthouse as Hansen is sentenced

Rhonda Herrington, a correspondent for Pastor James David Manning's internet radio show "The Manning Report," traveled from Georgia to Hansen's sentencing. She first learned about Hovind and Hansen during the March trial, and she believes what's happened to them is an injustice.

"I was relieved (by the sentence)," she said. "I thought that she showed mercy. I didn't expect any mercy at all."

Julian Block On Deducting Worthless Loan To Spouses

These being the times they are, you may be tapped for loans by relatives or friends who are unable to come up with the down payment for a home or who wants to start a business or keep it afloat.  What if a loan goes sour, as so often happens? The tax rules on deductions for bad debts can be more bad news for you.

Although you can deduct a worthless loan if there’s no likelihood of recovery in the future, you can’t take a deduction for an outright gift. That's why the IRS looks closely at bad debt deductions where the lender and borrower are related and why it may insist on proof that the "loan" wasn’t really a gift.

Unpaid  loans and marriage. The law presumes that loans from one spouse to another don’t create valid debts. To get around that snag, Carolyn Marlett claimed that her marriage to husband Charles was a "relationship maintained for financial convenience only." Hence, her co-signing of a joint income tax refund was a loan to Charles, as were her other "advances" to him.

However, Carolyn couldn’t convince the U.S. Tax Court that the advances were valid debts. In a 1976 decision, the court noted that she never asked Charles to sign notes or bothered to set an interest rate or repayment schedule.

But the court isn’t completely inflexible on this issue. It ruled that June M. Rogers could deduct loans made to her husband, who declared bankruptcy after their divorce. The loans weren’t gifts; he used the money in an unsuccessful business venture and signed promissory notes for repayment.

Unreturned engagement ring. The Tax Court ruled in favor of the government in 1982 in a case involving Jack Wolfson. Jack was a Dallas salesman whose territory included Houston, where he met and ultimately became engaged to Yvonne Gibbs.

To seal their engagement, he gave her a diamond ring. But just a week later, she broke things off and sold the ring, a decision triggered by Jack's refusal to honor his promise to reimburse her for the cost of housing her poodle in a kennel during her visits with him in Dallas. Jack sued Yvonne for the ring's cost and won a default judgment of $1,000, which he made no attempt to collect. Instead, the spurned lover took a bad debt deduction for $1,000.

The IRS invoked two arguments to justify its disallowance of the deduction. First, Jack didn’t offer any proof he tried to collect. Therefore, the debt wasn’t worthless at the end of the year in issue, a requisite for the write-off of a bad debt. Second, simply giving an engagement ring doesn’t create a debt. Approving a bad debt deduction for that act alone "would, in essence, open the doors of litigation to allow every rejected lover to come into the Tax Court and ask it to allow him a deduction" for an unreturned ring.

The IRS urged the court not to assume "part of the cost of the romance" of Jack with Yvonne. The judge deemed it unnecessary to rule on the second argument, as he agreed with the first one. Jack offered no evidence of Yvonne's insolvency or other inability to pay during the year in question. Hence, he failed to prove the debt's worthlessness during that year.

The bottom line? If it’s a loan, especially to a close friend or relative, make sure the paperwork and process show it’s a bona fide loan and not a thinly disguised gift.

_______________________________________________________________________________

Julian Block writes and practices law in Larchmont, N.Y. and was formerly with the IRS as a special agent (criminal investigator) and an attorney. He is frequently quoted in the New York Times, the Wall Street Journal, and the Washington Post, and has been cited as: “a leading tax professional” (New York Times); "an accomplished writer on taxes" (Wall Street Journal); and "an authority on tax planning" (Financial Planning Magazine). This article is excerpted from “Julian Block’s Tax Tips for Marriage and Divorce,” available as a Kindle at Amazon.com and as a print copy at julianblocktaxexpert.com. Law professor James E. Maule of Villanova University praised the book as “An easy-to-read and well-organized explanation of the tax rules.”  The National Association of Personal Financial Advisers says it is “A terrific reference.” 

Guest Post From Bob Baty - Rudy Davis v. Robert Baty - "Worse than rape!"

One of the side issues of the Kent Hovind drama that I had stayed away from is the "worse than rape" controversy.  Several people signed affidavits that they had heard Judge Rodgers say, during sentencing, that Kent's crimes were worse than rape .  The statement was not in the trial transcript.  I did not get into it, because I did not see how it could ever be sorted out and I also had trouble discerning its significance.  The alleged statement was made during sentencing not trial and the resulting sentence was within the guidelines and upheld on appeal.

Nonetheless when Jonathan Schwartz did an interview with Jen Fishburne, the "worse than rape" statement was central and Jen denied that it had ever been made.

That video prompted a vigorous response from Rudy Davis.

Jen has since posted on the controversy.  

Then I heard from Bob Baty who wanted to know when I was going to be doing more on "worse than rape".  I told Bob that I was done, but he could give me a guest post if he wanted to. Here it is:

For months now, beginning about the time that the 2006 trial and sentencing transcripts in the case of Kent Hovind became popularly/publicly available (no thanks to Kent Hovind who could have had them published years ago), Kent Hovind and his supporters, led primarily by Rudy Davis, have been attempting to impeach the judge and the official record of the proceedings by accusing the judge of being involved in tampering with the official record to the extent of having an alleged comment from the judge whereby she explicitly accused Kent Hovind of being "worse than a rapist" and/or his crimes "worse than rape" removed from the official record.

Rudy Davis and I, among others that might be chosen for a public exchange of ideas on the merits of the claim against Judge Rodgers, are an excellent choice to match up and produce the proposed event.

We have 4 eyewitnesses, at least; 2 claim to have heard the judge make the statement and 2 claim the statement was not made.

Kent Hovind and Jo Hovind claim the statement was made by the judge.

Eric Hovind and Jen Fishburne claim the statement was not made by the judge.

Rudy wasn't there.

I wasn't there.

Why does Rudy make the claim?

Why don't I believe the claim?

That's what we might explore if Rudy accepts the outstanding challenge and operates in good faith to produce the desired event wherein the following proposition is proposed for discussion:

At the sentencing of Kent Hovind in 2007, Judge
Margaret Casey Rodgers explicitly stated that
Kent was "worse than a rapist" and/or his crimes 
were "worse than rape" and the statement is not 
recorded in the official court transcript of that 
proceeding.

- Rudy Davis: Affirm

- Robert Baty: Deny

Rudy and I had an earlier encounter via the Dan Dibondi Truth Radio Show regarding Kent Hovind's legal problems.  Neither Dan or Rudy ever got back with me to ask for a "rematch".

Now Rudy has another opportunity to come out to me (I went to him on the Dibondi show) and produce a more appropriate event involving the "worse than rape" claim that Rudy has indicated God has called him to promote throughout the world as part of a deliberate effort to "destroy" Judge Margaret Casey Rodgers.

Hopefully, the event will allow the public to be more fully informed on the secrets behind the "worse than rape" campaign which started in the long ago and remain hidden until recent months.

I would propose that the future of the Hovind family businesses, Kent's and Eric's, hinge on the outcome of the "worse than rape" matter and how they deal with it, but that will be for the public to decide in response to this and other substantive, fundamental issues involving Kent Hovind, his character, and his criminal activities.

Rudy, I am waiting.

Let the negotiations begin.

References:

Forbes Article

http://www.forbes.com/sites/peterjreilly/2015/07/31/evidence-that-judge-did-not-call-kent-hovinds-crimes-worse-than-rape/

Jen Fishburne Interview

https://www.youtube.com/watch?v=Z0tG-YArBh0

Rudy Davis Attempted Rebuttal #1

https://www.youtube.com/watch?v=W80kDPWM2W0

Rudy Davis Promotion of His Attempted Rebuttal #1

https://www.youtube.com/watch?v=ju-IH0XJbhM

Rudy Davis Attempted Rebuttal #2

https://www.youtube.com/watch?v=OLbgQiPh_u8

Rudy Davis and Robert on Truth Radio Show with Dan Bidondi

https://www.youtube.com/watch?v=AyhyVZeyI5s

Jen Fishburne's Blog Post in response to continuing controversy:

http://jensgems.blogspot.com/2015/08/did-judge-casey-rodgers-say-that-kent.html

(End.)

___________________________________________________________________

Personally I'm not so much into this debate thing.  I guess that is something that Bob Baty has in common with Kent Hovind.  

I think it might be worth mentioning here exactly what my connection to Bob Baty is, since Rudy Davis believes that we are big time on the payroll of the New World Order.  Bob commented a lot on Forbes blog and we became on-line friends.  We share an interest in the parsonage exclusion and the Kent Hovind case.

Rudy seems to think that we tap into vast resources. I mean really Bob Baty runs a (excuse me Kent) fucking Facebook page.  I really think people with vast resources could do a little better than that.

As far as the filthy lucre goes, I do hope to make money on my blogs, and I was making a bit until I decided to spend money on covering the Kent Hovind case.  On the other hand just a couple of extremely high traffic posts on Forbes will put me in the black.  No luck so far.  People find the Kent Hovind case more interesting than most of what I write about, but not enough more interesting.  So it goes.  If you look at my blogs you will find that there are a number of story arcs in there, but the Kent Hovind case is the one that seems to have lasted the longest. It would be great if Judge Rodgers sentences Paul Hansen to time served and Kent Hovind stays conventionally tax compliant and the story just fades away, but something tells me that is not going to happen.

One other note that Hovindicators might found amusing is this comment I noticed on FOGBOW, which has a great Kent Hovind section if you like snark.

My opinion, FWIW, is that Reilly is a not very closeted Hovindicator who just doesn't have the honesty or integrity to come right out and admit it. Journalistically he is a fraud pretending to lack of bias, when he is in fact anything but.

As a writer that puts me in great company as Montaigne had the same problem.

“I underwent,” he said, “the inconveniences that moderation brings along with it in such a disease. I was pitied on all hands; to the Ghibelline I was a Guelph, and to the Guelph a Ghibelline.”

Julian Block Tells You to Forget About Deducting Your Business Suits

Generally, clothing costs aren’t allowable as “ordinary and necessary” business expenses. They’re nondeductible personal expenses.

The IRS prohibits write-offs for clothing that’s adaptable to general wear off the job. It makes no difference that your work requires you to be fashionably or expensively dressed. What the IRS does permit are deductions for the cost and upkeep of special work clothes or equipment. To qualify for deductions, you must pass both parts of a two-step test.

·         The clothing and equipment must be required by your employer.

·         The clothes aren’t suitable for wear off the job.

Note that it isn’t enough that wearing special clothing is a condition of employment.

Some examples of distinctive work clothing that easily qualify: uniforms worn by fire fighters, police officers, letter carriers, health-care workers, professional athletes and delivery workers. Also passing muster are the kinds of clothing that protect workers from injuries. This category includes safety shoes and glasses, hardhats and work gloves.

Usually, the IRS prevails in disputes over deductions for business suits and dresses, because they are obviously appropriate away from work.

In a 1986 case, nationally ranked Chicago tennis pro Cecil Mella lost a match with the IRS over business write-offs for tennis clothes. Cecil worked for two private tennis clubs, both of whom barred players, including instructors, from playing on the courts unless they wore proper attire. He  deducted such items as warm-up jackets and pants; shirts with a collar; shorts that were brief to give maximum freedom of movement and had pockets for tennis balls; and shoes, each pair of which lasted only two or three weeks and were designed, according to Cecil, to decrease the chances of injuries.

Cecil said he wore the items only when playing or teaching. But the Tax Court, in its unsought role as official interpreter of fashion correctness, noted: “It is relatively commonplace for Americans in all walks of life to wear warm-up clothes, shirts and shoes of the type purchased by [Cecil] while engaged in a wide variety of casual or athletic activities.” As for the shoes’ safety functions, the court characterized his statements as “uncorroborated and vague.” Decision: No deductions for expenses that weren’t ordinary and necessary.

In a 1979 decision, the court also threw out deductions for suits bought by Edward J. Kosmal, a Los Angeles deputy district attorney who planned to leave government service. Ed decided that the right way to impress his future employers and colleagues was to upgrade his wardrobe to the sartorial standards of a “big-time Beverly Hills P.I. [personal injury] attorney.” The court denied the deductions because, unquestionably, the clothes were fitting for ordinary wear.

Hairstyling and makeup. The IRS and the courts sometimes differ on deducting hairdressing costs. The IRS classifies such payments as nondeductible personal expenses, even for a big-name, New York fashion designer like Mary McFadden, who’s in the public eye and “noted professionally for her distinctive hair style.”

However, an IRS defeat occurred in 1978, when the Tax Court sided with Margot Sider. Margot wrote off the cost of 45 extra beauty-parlor visits that were made, she argued, only because her hairstyle was an integral part of her job demonstrating and selling “a high-priced line” of cosmetics in a department store to a “sophisticated clientele.” As soon as she stopped selling, she went back to a simpler style.

At her trial, Margot cited a 1963 Supreme Court decision written by Justice John Marshall Harlan: “For income-tax purposes Congress has seen fit to regard an individual as having two personalities: One is a seeker after profit who can deduct the expenses incurred in that search; the other is a creature satisfying his needs as a human and those of his family but who cannot deduct such consumption and related expenditures.”

Margot maintained she’d spent the amount in issue as a “seeker after profit,” not as “a creature satisfying her own needs.” That satisfied the judge, who ruled she was entitled to fully deduct expenditures beyond “the ordinary expenses of general personal grooming.”

However, the IRS had no trouble convincing the Tax Court that Vivian Thomas shouldn’t be allowed to deduct grooming expenses. Vivian worked as a private secretary for an attorney who required her to be perfectly coiffed at all times while in the office. So she deducted the cost of twice-weekly trips to the beauty parlor. Sorry, said the court, but a secretary’s coiffure maintenance costs are not allowable— even in her case.

Back in 1979, actress September Thorp offered an unassailable not-adaptable-for-general-wear defense—and won—when the IRS challenged her deduction for makeup: “I’m in Oh! Calcutta! and I have to appear nude onstage every night,” argued September, “so I cover myself with body makeup. I go through a tube every two weeks, and it’s very expensive.”

___________________________________________________________________________ 

Julian left out one of the funniest clothing cases ever, that of Anietra Hamper

Julian Block writes and practices law in Larchmont, N.Y. and was formerly with the IRS as a special agent (criminal investigator) and an attorney. He is frequently quoted in the New York Times, the Wall Street Journal, and the Washington Post, and has been cited as: “a leading tax professional” (New York Times); "an accomplished writer on taxes" (Wall Street Journal); and "an authority on tax planning" (Financial Planning Magazine). This article is excerpted from “Julian Block’s Easy Tax Guide for Writers, Photographers, and Other Freelancers,” available as a Kindle at Amazon.com and as a print copy at julianblocktaxexpert.com. The National Association of Personal Financial Advisers says the book is “Easy to read and well-organized and can be helpful to planners in advising clients.” http://julianblocktaxexpert.com./

Does Paper Filing Avoid Identity Theft?

Lu Gauthier of Boston Tax Institute has given me permission to reproduce his email blasts.

Two practitioners have responded to our request below: one files only PAPER returns and has had NO cases of identity theft; another files about 120 returns electronically and has had no cases of identity theft.  Our informal test results appear to be inconclusive.  We need more responses to the questions below in order to determine whether there is any correlation between filing only paper returns and the LACK of identity theft cases.  

  

Recently a tax practitioner who prepares about 100 PAPER Form 1040 returns happened to mention that she has had no cases of identity theft.  Today, when asked, another preparer who prepares only paper returns also mentioned that he has had no cases of identity theft.  BTI would be interested in receiving emails from  other preparers who prepare only paper Form 1040 returns regarding what their experience has been with respect to identify theft in order to determine if there is any correlation between paper returns and the LACK of identity theft cases.  We also would be interested in knowing if anyone who prepares all returns electronically has NOT had any cases of identity theft.  Please advise.  Thank you!       

Lu Gauthier Issues Warning About Information Returns

Lu Gauthier has given me permission to publish his email blasts.  This one is particularly important.  Many business owners are not aware of how many vendors they need to be sendng 1099s to.  The stakes just got higher.

On 06/29/15, the President signed the Trade Preferences Extension Act of 2015 (P.L. 114-27) which contained a number of "offsets" or revenue raising provisions probably the most important of which is Section 806 entitled Penalty for Failure to File Correct Information Returns and Provide Payee Statements.  The major changes made by this provision is to increase the penalty for failure to FILE "information returns" from $100 to $250 and to increase the penalty for failure to FURNISH "information returns" from $100 to $250.  These changes apply with respect to returns and statements required to be filed after 12/31/15 which means with respect to information returns required to be filed for calendar 2015.  For many of your clients, these changes may pose an existential threat to their businesses since many clients fail to file the requisite information returns, and examining agents have been asking to see these information returns during the course of their examinations.  If I were you, I would be warning my business clients of these changes and encouraging them to clean up their acts in this regard this year!!!

Julian Block On How To Take A Tax Deduction For Protecting Your Good Name

Julian Block has agreed to help me in my effort to become the Tom Sawyer of blogging. 

Ordinarily, deductible business expenses include payments to settle disputes, whether the payments are made to satisfy judgments or as out-of-court settlements. But the IRS is clear that it will allow the deduction only if the argument arose from a business-related activity, as opposed to a personal matter.

And when it comes to your reputation, the line between business and personal is thin indeed. What controls the outcome are the particular circumstances.

For example, a federal appeals court refused to allow a write-off for the cost of settling a will contest, notwithstanding that the taxpayer settled to protect his reputation as a lawyer. Apparently because of a close friendship, attorney William McDonald was named the major beneficiary in the will of a client, an elderly widow. The New York lawyer had not prepared the original will, but did draft a later codicil that modified the will by including him among the beneficiaries. That circumstance prompted some of the widow’s relatives to contest the will on the basis that he had exerted undue influence. He agreed to an out-of-court settlement of $121,000, and the written agreement states that “it appears the litigation of the issues would engender much publicity and would endanger the reputation of McDonald as an attorney.”

The court barred a business expense for the $121,000. The proper standard for deductibility here, said the court, is the “origin-of-the-claim” test. The origin of the lawyer’s rights under the will was his personal relationship with the client, not his law practice. Consequently, it made no difference that his primary purpose in agreeing to the settlement was to protect his reputation as a lawyer. 

The origin-of-the-claim test also tripped up pro-football star Michael Hayden when he tried to deduct a payment to hush a sex scandal. While the former safety for the Los Angeles Raiders and co-captain for the Denver Broncos was negotiating a contract renewal with Denver, ex-girlfriend Michelle Moore filed a sexual-assault charge against him for what happened when he visited her home in an unsuccessful attempt to make amends after they had an argument. The Broncos found out and threatened to trade or release him if the matter became public.

To stop this, Michael paid Michelle $25,000 for dropping the complaint and keeping quiet. The Broncos then signed him to a five-year contract. He deducted the $25,000 as a “professional development expense.” His reasoning: He wouldn’t have made it if his job hadn’t been jeopardized.

The IRS tossed it out as a nondeductible personal expense and the U.S. Tax Court agreed. The 1991 decision held that the origin of the charge leading to the payment arose out of Michael’s personal relationship with Michelle, not out of his job. That the consequences of the allegations against the athlete were business-related didn’t make the payoff deductible.

J. C. McCaa, an Arkansas auto dealer who disapproved of divorce, settled a claim for personal injuries resulting from his having struck a girlfriend of his married son. A skeptical Tax Court concluded that the payment was made to shield him and his family from potential scandal, not to avoid cancellation of his dealer’s franchise

William Harper taught high-school science and owned rental property. He paid damages and legal expenses to settle an invasion-of-privacy suit brought against him by a tenant. She asserted that William installed a listening device in her apartment and connected it to his office so he could hear what was said and done in the apartment. The suit, noted the Tax Court, might make it more difficult for William to do business in his West Virginia community, but the payments weren’t deductible because they were made for his own personal protection.

_________________________________________________________________________________

Julian Block writes and practices law in Larchmont, N.Y. and was formerly with the IRS as a special agent (criminal investigator) and an attorney. He is frequently quoted in the New York Times, the Wall Street Journal, and the Washington Post, and has been cited as: “a leading tax professional” (New York Times); "an accomplished writer on taxes" (Wall Street Journal); and "an authority on tax planning" (Financial Planning Magazine). This article is excerpted from “Julian Block’s Year Round Tax Savings,” available at julianblocktaxexpert.com. The National Association of Personal Financial Advisers .” says the book is “Easy to read and well-organized and can be helpful to planners in advising clients". 

I recently reviewed Julian's Home Seller's Guide To Tax Savings.