Has Kent Hovind Broken Any Laws?

This post is mainly about four letters.  Here is a link to them.  The first letter is one that was sent to three different tax professionals by Kent Hovind and the other three are their answers.  If you already know who Kent Hovind is and what is going on with him, I'd suggest that you read them for yourself, before you go any further.  This is a long post and it is probably a waste of time but I feel kind of obligated to follow through with this analysis.  If you are someone who is going to spread the word that Kent Hovind is an innocent man being persecuted by an evil government, you should at least read the letters and then maybe read my commentary, just so you know there might be another way to look at it.

What Is Up With Kent Hovind?

I have been following the travails of Kent Hovind for over two years,  Kent Hovind is one of the leading lights in Young Earth Creationism, the notion that there is scientific, not just scriptural evidence that the physical universe is roughly 6,000 years old. Kent is nearing the end of a long prison sentence on tax related charges and is facing new criminal charges (trial scheduled March 2)  related to the filing of a lis pendens.  He also faces large civil liability for unpaid income taxes.

Hovindication 

In response to his upcoming trial Kent has been giving interviews.  For the most part, they have been to people who uncritically accept his version of events.  He has asked them to make noise and shine light to create public pressure not only to have the current charges dropped, but also to have his previous convictions overturned, all seized property returned and a Congressional investigation into the various abuses that have taken place in his case.  One of his supporters calls that desired result Hovindication.  I have taken to calling Kent's supporters Hovindicators.  They are running a pretty effective social media campaign, which you can read about here.

Peter J Reilly CPA ???SJ???

In a small way, I have become part of the story.  Hovindicators,express outrage about the coverage that they receive form Robert Baty on Kent Hovind and Jo Hovind v USA - IRS and Dee Holmes on Hovindology, but they are not quite sure what to make of the coverage that they have been getting from me on forbes.com.  I have been somewhat ambivalent about Kent Hovind.  I think he has done more time than many, but not all, who have been convicted of similar crimes and have some sense that the government may be piling on with its latest prosecution.  When I see what might have gone on with someone who bought some of the property seized from his ministry , I'm leaning a little more to the government side, although I could probably attribute most of what went on there to Kent's co-defendant Paul John Hansen, who was the trustee of Creation Science Evangelism.

The most vocal Hovindicator is Rudy Davis of LoneStar1776.  Kent seems to call Rudy at least daily and Rudy hosts a weekly conference call in which the Hovindicators, unlike Jesuits or Masons, lay out their plans.  The Jesuit theme is kind of amusing.  I gave Ernie Land a hard time about Rudy speaking ill of the Society of Jesus, which is responsible for eight years of my education.  Somehow that got translated into my being a Jesuit.  I think they still think I may be a Jesuit.

Rudy even identified US Attorney Pamela C. Marsh as a Jesuit, because she is a Georgetown graduate.  Rudy, Pamela there is about the cutest Jesuit I have even seen


The Fundamentals Of Hovindication

At any rate three of the bedrock principles of Hovindication are that Kent Hovind is not a tax protester, he has paid all the taxes that he owes and that he has not broken any laws.  In one of his more recent phone calls with Rudy, Kent challenged me by name, to show him that he has broken a law.  Sorry I lost track of that link.

So that is what this post is about. I have some common ground with Kent Hovind on prison issues and I think that he is totally sincere and probably an all round mensch, but I think that the Hovindication narrative is harmful, dangerous and false.  Kent Hovind's defiance of and disdain for the IRS may be religiously based from his point of view, but the government's prosecution of Kent has nothing to do with his religious views or effectiveness in teaching creation science.  It really is about the taxes and not the dinosaurs.

The Letters

The argument that Kent has not broken any laws and has paid all the taxes that he owes gets somewhat complicated as Kent will discuss his ministry being exempt under a section that is actually a special rule not an exemption section, the CSE staff being missionaries and the IRS being a Puerto Rican collection company.  It is something like the Gish Gallop that his opponents accuse him of using in creation debates. What he focuses on most though is that he solicited letters from a CPA, an attorney and an enrolled agent.  When I interviewed Kent he indicated that he didn't know where the letters were and could not remember the names of the professionals who sent them.



As it turned out the letters were preserved somewhere on the internet and forwarded to me by Bob Baty.  I sent them to Rudy Davis who printed them out and sent them to Kent Hovind who authenticated them.   Here is a link to them.

Hovindicators maintain that the letters prove that Kent is an innocent man who tried to follow the law.  Anything more than cursory examination will not support that view.

What Kent Asked About?

The part of the Hovindication narrative that insists that Kent Hovind told tax professionals everything that was going on and they told him everything he was doing was OK is patently false.  Kent asked only questions  about the supposed entirely voluntary nature of paying income tax and filing Form 1040 (Nothing about ministry or vow of poverty).  Clearly Kent was not asking an opened ended question.  The answer that he was looking for is clear.  Not only that it is likely as you can see from this link that he knew what the answer was going to be.  The Reliance Defense people found a lawyer who would write the kind of letter Kent wanted and a tax consultant, not a CPA.  That accounts for two out of three of Kent letters.  All three of them show up in enough subsequent tax litigation to make a reasonable person question their reliability, but I will focus on the letters themselves

He also asked about the voluntary nature of Social Security, which is a little bizarre since as an ordained minister he could have elected out.  Anyway we'll just stick with the income tax.  A bit more background first.

The Correct Answer To Kent Hovind's Stupid Question

Most ordinary Americans think that they have to file Form 1040 every year if their income is more than insubstantial.  Of course, most of them, even most of those who make their living preparing tax returns, cannot reel off the statutory basis for that requirement.  Well here is a handy mnemonic.  26-1-61-6012.  Title 26 of the United States Code is the Internal Revenue Code .  My language as I discuss this might get a little harsh, as I get a little emotional about this part of the argument

Section 1 imposes a tax on the taxable income of individuals (with different rates depending on family status).  If you go to Webster's II New Riverside University Dictionary, which appears to be the dictionary most favored by the Tax Court, you will see individual defined as a noun as "A human being regarded separately from a group or from society".  So Section 1 imposes the income tax on human being, all of them, in the whole fucking world, which is ridiculous since that would violate a whole bunch of treaties.  It's OK though.  Section 2(d) has a special rule that indicates that in the case of a nonresident alien individual the tax will only be imposed in accordance with Sections 870 and Section 871 which pretty much limit it to what the nonresident alien extracts from the United States.

Section 61  defines gross income which is the starting point for determining taxable income.  The definition is very broad.  Pertinent to Kent' letter included by way of example is- "Compensation for services, including fees, commissions, fringe benefits, and similar items.

Section 6012  requires filing if gross income is over a specified threshold. which works out to be not all that high.

Chapter 75  backs this all up with a variety of criminal penalties.

Now of course, the income tax is very complicated as you make your way from gross income to taxable income, but that basic part - You have income. You have to file. - really  is not all that complicated, which is why out of the nearly 2,000,000 attorneys, CPAs and enrolled agents in the United States, there are very few that will write you letters that say otherwise. The interesting question is how there can be any at all, which will divert us for a moment

Some Reasons Not To File

Although I believe that there is a clear legal duty to file and pay individual income taxes and that it is really the right thing to do, since it is how many government services, which are important, are financed, there are arguments for not filing that I find make sense even if I don't agree with them.

The first and most common is that you would rather keep the money for yourself and think you can get away with it.  As the enforcement resources of the IRS dwindle, this argument becomes more and more sensible.  The chance of criminal prosecution is remote.  If the IRS catches up with you you can use the collection due process system to work out a payment plan that you find affordable.  There is a decent chance that your old liability will be classified not currently collectible.  After 10 years it will expire.

The second argument that comes to mind is that you are some sort of anarchist and believe that government has no moral authority.

The third is that you are engaging in principled civil disobedience/  The war tax resistance movement works on this principle.  Practice varies, but some war tax resisters will compute their correct tax liability and give it to charity.  There has been legislation introduced to allow war tax resisters to pay taxes restricted from military use, but that has not gotten very far.

Kent Hovind is not maintaining that his refusal to file is based on any of the above arguments.  Rather it is based on a theories like those in the letters, which fairly or not are referred by many as "tax protester" theories. I should note that Kent Hovind indicates that, much as he admires them, he is not himself a tax protester,  Regardless, when he gets into it, he is spouting "tax protester' theories.

Legal commentator Daniel B. Evans has defined tax protesters as people who "refuse to pay taxes or file tax returns out of a mistaken belief that the federal income tax is unconstitutional, invalid, voluntary, or otherwise does not apply to them under one of a number of bizarre arguments."[1] Law Professor Allen D. Madison has described tax protesters as "those who refuse to pay income tax on the basis of some nonsensical legal argument that he or she does not owe tax.

Here is Kent having a conversation with John D'Arcy on some of those theories.

A famous Christian evangelist who shall remain anonymous travels all around the country to churches teaching about Creation Science publishes a newsletter.  He has a series of excellent videos on Creationism and runs a famous ministry we can't name.  We bought is excellent video series which is very enlightening.  Below is the standard form letter that he sends out to any of the people in his church audience who ask him about his position on taxes, and 100% of it agrees with what we say in our Great IRS Hoax book.  His letter is commended for the simple and clear way that he explains the income tax fraud.

I don't think it would be shocking to find out that the "famous creation evangelist" cited on this website is Kent Hovind,  At any rate, the current Hovindication narrative is that Kent was relying on the three letters so that is what we are going to tackle.  Like I said this is a longish post.  In the next part, we will look at the letters that Kent received.

The Framework

 As noted above, the reasoning that supports why you are required to file is fairly simple.  The various theories that say you don't are multifarious and somewhat complicated.  Dan Evans has taken the trouble to catalog many of the arguments and why they fail in The Tax Protester FAQ.  I asked Dan if he would be willing to correlate Kent's letters with his FAQ, but he turned me down.

Seriously?  Guy Curtis, John Schlabach, and Fred Ortiz?  Hovind is relying on them?
They are what I would call the "usual suspects" of what is sometimes called the "reliance defense."  You send them some money, and they send you an opinion that you can supposedly rely on to avoid civil or criminal penalties.  (See http://www.mind-trek.com/practicl/tl16g.htm) 

Except it doesn't work.  Hovind is in Florida, where there are lots of lawyers and accountants, and instead he solicits opinions from a lawyer in Nebraska, and bookkeepers in Hawaii and Washington.  But the only reason he would solicit those opinions is that he KNEW that he was facing civil and criminal penalties for what he was doing.  So, rather than protecting him, the opinions just prove that he was willfully violating the law. 

I don't really have time to get into the whys of the wrongness of their opinions, sorry.

So here are the arguments in Hovind's letters and commentary on why they don't work.

Curtis Page 2, Ortiz Page 8, Schlabach Page 5 - The income tax is voluntary

Evans-  This is a corruption of statements made by the IRS, the courts, and Congress to encourage taxpayer compliance with the tax laws, without the need for legal action against taxpayers. The claims that “(1) Compliance with the internal revenue laws is voluntary or optional and not required by law, including arguments that: a. Filing a Federal tax or information return or paying tax is purely voluntary under the law,” or similar arguments described as frivolous in Rev. Rul. 2007-20, 2007-14 I.R.B. 863, has been identified by the IRS as a “frivolous position” that can result in a penalty of $5,000 when asserted in a tax return or included in certain collection-related submissions. Notice 2007-30, 2007-14 I.R.B. 883.

Curtis Page 2, Ortiz Pages 3 and 4, Schlabach Page 9  - Nothing in the Internal Revenue Code makes an ordinary citizen liable for the income tax

Evans -More semantic games from people desperate to evade taxes.
Tax protesters claim that, before anyone can be liable for a tax, there must be a statute that specifically says that the person is liable for the tax (and must use the word “liable”). However, that is not what the law requires.
In its various subsections, section 1 of the Internal Revenue Code says that

“There is hereby imposed on the taxable income of every [married individual, surviving spouse, head of a household, unmarried individual, or married individual filing a separate return] a tax determined in accordance with the following table.. ..”

As explained in the regulations:

“Section 1 of the Code imposes an income tax on the income of every individual who is a citizen or resident of the United States ....”

Treas. Reg. § 1.1-1(a)(1).
The word “impose” means “to establish or apply as compulsory; levy.” So how can a tax be “imposed” if no one is compelled to pay it? The answer is that it can’t. If a tax is imposed on a person’s income, then that person is liable for the tax as a matter of law.

Curtis Page 3 - Filing is voluntary

Evans - Section 6012 therefore provides a very clear and very mechanical rule that requires people to file returns if they have more than a certain amount of income. If the return shows that tax is due, then section 6151 directs the person filing the return to pay the tax. (This is explained above in more detail.)
And so the courts have held that individuals are required to file tax returns.

“As the cited cases, as well as many others, have made abundantly clear, the following arguments alluded to by the Lonsdales are completely lacking in legal merit and patently frivolous: ... (9) individuals are not required to file tax returns fully reporting their income....”

Lonsdale v. United States, 919 F.2d 1440, 1448 (10th Cir. 1990).

“The statutes themselves require the payment of the tax and the filing of a return. 26 U.S.C. § 6012. ... [The] duty to pay those taxes is manifest on the face of the statutes, without any resort to IRS rules, forms or regulations.”

United States v. Bowers, 920 F.2d 220, 222 (4th Cir. 1990).

“Upon review of May’s amended peition, we find no allegations of fact which could give rise to a valid claim; rather, the complaint merely contains conclusory assertions attacking the constitutionality of the Internal Revenue Code and its application to the taxpayer.[Footnote omitted.] Tax protest cases like this one raise no genuine controversy; the underlying legal issues have long been settled. See, e.g., Abrams, 82 T.C. at 406-07 (citing cases rejecting similar arguments). Because May’s petition raised no justiciable claims, the Tax Court properly dismissed the petition for failure to state a claim.”

Curtis Page 3 - Wages Are Not Taxable Income

Evans: As unbelievable as it might sound, some tax protesters simply think that the income tax doesn’t apply to wages

Section 61(a) of the Internal Revenue Code says that “gross income” (which is the starting point for determining “taxable income”) means “all income from whatever source derived, including (but not limited to) the following items: (1) Compensation for services, including fees, commissions, fringe benefits, and similar items....”

Sometimes the claim is that “compensation for services” is not the same as “wages.” Sometimes the claim is that “wages” are not the same as “gain” or “profit.” (See the discussion below on the claim that wages represent an equal, nontaxable exchange of labor for money.) Sometimes the claim is something else. Regardless of the rationale, the result is always the same: Wages are income.

Consider these statements by the United States Supreme Court:

“[T]he earnings of the human brain and hand when unaided by capital ... are commonly dealt with as income in legislation.”

Stratton’s Independence, Ltd. v. Howbert, 231 U.S. 399, 415 (1913).

“There is no doubt that the statute could tax salaries to those who earned them....”

Lucas v. Earl, 281 U.S. 111, 114 (1930).

“[The tax code] is broad enough to include in taxable income any economic or financial benefit conferred on the employee as compensation, whatever the form or mode by which it is effected.”

C.I.R. v. Smith, 324 U.S. 177 (1945).

“Wages usually are income ....”

Central Illinois Public Serv. Co. v. United States, 435 U.S. 21, 25 (1978).

“[T]he premise that personal injury awards cannot involve gain is obviously false, since they often are intended in significant part to compensate for the loss of gain, e. g., lost wages. (Citation omitted.) Since the gain would have been income, surely at least that part of a personal injury award that replaces it must also be income.”

Lukhard v. Reed, 481 U.S. 368, 375 (1987), (plurality opinion of Justice Scalia, joined by Rehnquist, White, and Stevens, Blackmun concurring in the result; footnote omitted).

“The definition of gross income under the Internal Revenue Code sweeps broadly. Section 61(a), 26 U.S.C. 61(a), provides that ‘gross income means all income from whatever source derived,’ subject only to the exclusions specifically enumerated elsewhere in the Code. As this Court has recognized, Congress intended, through 61(a) and its statutory precursors, to exert ‘the full measure of its taxing power,’ [citation omitted] and to bring within the definition of income any ‘accessio[n] to wealth.’ [citation omitted] There is no dispute that the settlement awards in this case [for ‘back wages’ to compensate for sex discrimination] would constitute gross income within the reach of 61(a).”

United States v. Burke, 504 U.S. 229, 233 (1992).

IRS Not Complying With Privacy Act And Paperwork Reduction Act - Ortiz Page 6

Evans: 

At one time, the instructions to Form 1040 referred to section 6001 (the general requirement for a return for different kinds of taxes) but not section 6012 (which requires the filing of income tax returns by those with more than certain amounts of income). The instructions have been changed since then, and the “Disclosure, Privacy Act, and Paperwork Reduction Act Notice” now clearly refers to section 6012 as well as to sections 6001 and 6011.

But even when the instructions referred only to section 6001, courts had no difficulty in concluding that the liability for income tax, and the requirement to file a return, is imposed by the Internal Revenue Code and is not negated by the words used by the IRS on the tax forms. For example:

“[Billman] contends that, as a ‘private individual defined in the Privacy Act,’ he is not required to pay tax because the ‘IRS has admitted that the * * * [Internal Revenue Code] does not apply’ to such individuals. He notes that the Privacy Act requires the Internal Revenue Service to (5 U.S.C. sec. 552a(e)(3)): ‘inform each individual whom it asks to supply information * * * the authority * * * which authorizes the solicitation of the information.’ He then concludes that, because the Form 1040 ‘Privacy Act Notice’ fails to mention section 6012, I.R.C. 1954, he is not required to provide any tax related information and, indeed, is freed from paying any tax at all. In our judgment, petitioner’s position is based on sheer sophistry. We hold that the Form 1040 ‘Privacy Act Notice’ does satisfy the requirements of the Privacy Act, and that, in any event, even if there were a failure to comply with the Privacy Act, such failure would not nullify petitioner’s liability for Federal income taxes.”


Billman v. Commissioner, 83 T.C. 534 (1984), aff’d 847 F.2d 887 (D.C. Cir. 1988).

To Sum Up

Even though, they always lose in court, people like Kent Hovind continue to insist that they are the ones who are right about the law.  Here is what Dan Evans has to say about that which is well worth considering.

I am often asked, “Why do you always assume that the courts are right and the tax protesters are wrong?” Or, “Couldn’t the courts be wrong about what the Constitution means?” Those questions demonstrate that the questioner doesn’t really understand what is meant by “law” or the “rule of law.” 

Law is not some kind of abstraction that floats in the air, free from any connection to people or events. “The law” is what legislatures, courts, and governments do, and the real test of what the law “is” shows in how the law is applied in actual cases. 

So when lawyers talk about what “the law” is, they are talking about how a judge will rule. Not how the judge should rule, or might rule, but will rule. As Justice Oliver Wendell Holmes once explained, “the only definition of law for a lawyer’s purposes is something which the Court will enforce.” Letter to Sir Frederick Pollock, 7/3/1874. Or, more famously: “The prophecies of what the courts will do in fact and nothing more pretentious are what I mean by the law.” The Paths of the Law (1897). 

The process of law is also a process of consensus. We have a variety of procedures, some political, some judicial, and some bureaucratic, for determining what the law should be and how it should be applied. If we don’t like the results, we have ways of changing the results and, when there are conflicts, we have ways of resolving conflicts. However, when the courts, the legislatures, and the voters all agree on what the law is, then that is what the law is. The fact that some people believe that the law should be different that what courts have said it is doesn’t mean that the law is different from what the courts have said, but only that they should argue their positions within the political system and attempt to change the results. 

In the case of the income tax, there is no conflict. The judicial, executive, and legislative branches of our government, and a majority of the voters, have all agreed for more than 90 years that (1) an income tax is constitutional, (2) it applies to wages, and (3) every citizen and resident of every state is required to file a tax return and pay the tax. That is what the law is. There is no question about it,

Has Kent Hovind Broken Any Laws?

So to sum it up, the people who I call conventionally tax compliant, which is most people for whom the whole topic is relevant, it is clear that Kent Hovind has broken the law.  He managed to find a couple of professionals who said he was right but you would think that losing as many times in the courts would convince otherwise.  He is still holding firm with them even though their letters don't address any of the issues which he is in trouble for.

Religious Persecution?

Much as we might admire Hovind's tenacity, it is probably also the source of his harsher treatment.  His supporters will note that he got a longer sentence than others convicted of tax related crime.  Commonly, though, celebrities charge with tax crimes will blame bad advice, plead guilty and say they are sorry.  Treatment is more lenient if you do that. We can point to at least one person, who is similar to Kent who got an even longer sentence.  That would be Irwin Schiff, whom I discuss here.

Schiff may well have created some of the arguments that Kent's advisers rely on.  Schiff of course devoted a much larger portion of his time to preaching his views on income tax, but Kent is clearly using the same playbook and being about as successful.

Hovindicators see Kent's prosecution as being religious persecution.  Kent has relied on the same arguments as Irwin Schiff and has not been sentenced to as much time, yet.  Schiff does not talk about religions much.  As best I can tell he is a non-observant Jew

Kent Hovind's Reliance On Tax Pro Letters Was Not Reasonable

As Kent Hovind, a leading light of Young Earth Creationism, nears the end of a long prison sentence for tax related crimes, he finds himself facing a new charge related to the filing of a lis pendens on property that the Government had seized.  Kent has been giving telephone interviews from the Santa Rosa County jail in Pensacola where he is awaiting a trial currently scheduled March 2.

Hovindication

His supporters are calling for Hovindication.  They don't want just the current prosecution to be dismissed on the theory that Hovind has done enough time, a view that I am quite sympathetic with. The Hovindicators, as I have dubbed them, maintain Kent's previous conviction should be reversed.

Three of the fundamental tenets of Hovindication are that Kent Hovind has not broken any laws, that he has paid all the taxes that he owes and that he is not a tax protester.  The main evidence cited for these propositions are Hovind's statements to that effect.

Letters From Three Tax Pros 

Kent has also made much of three letters that he solicited one each from a CPA, an attorney and an enrolled agent.  When I interviewed Kent, he did not know what had happened to the letters or whether they were still extant.  He also could not recall who the three tax pros were what with the passage of time and all.

Well, the letters must have been loose on the internet at some point, because somehow or other copies were preserved by what the Hovinidcators refer to as the "enemy camp".  Robert Baty forwarded them to me and I made them available here.  But that's not all.  I sent them to Ernie Land and Rudy Davis.  Rudy printed them and mailed them to Kent.  And Kent has confirmed their authenticity.

#FreeKent, the Hovinidcators flagship website is exuberant about the letters provided by their greatest adversary headlining its post PROOF Letters Absolving Kent Hovind | IRS Illegally Imprisonment (I think they should have used an adjective rather than an adverb there, but I should not be critical given the number of typos I make.  Just want you to know I am paying attention)

We have proof letters by professionals in finance and taxes show that Kent Hovind did nothing wrong. These letters further show that Kent Hovind has been illegally persecuted and imprisoned in America, by the IRS. It is no coincidence the IRS has to come out a few days ago to apologize for abusing IRS structuring laws – admitting the law was created to catch drug dealers. It’s time for Christians across America to rise up and demand freedom for Kent Hovind.

I think the letters illustrate better than anything the difference in world view between Kent Hovind and, well, most people, but particularly people that I would call conventionally tax compliant.  Hovindicators tend to gloss over this difference in world view, but you don't have to scratch the surface much before it becomes apparent as when Kent refers to the IRS as a Puerto Rican collection company.

What Do Those Letters Prove?

This is going to be a longish discussion of what goes into the making of those letters and their significance.  It amounts to there being two radically different world views.

To the Hovindicators it is pretty simple.  The letters prove that Kent was telling the truth.  I have to wonder how many Hovindicators will actually read them and how many of those that do will understand much of them and how many of those will do any independent research confirming them.  I think that they will mostly be satisfied that Kent said that the letters vindicate him and that the letters are available.

 In the world view of the conventionally tax compliant those letters prove that Kent Hovind actually was a tax protester as the term was used in the nineties and around the turn of the millennium.  Congress forbade the IRS from designating people "illegal tax protesters".  I think IRS insiders started referring to them as "constitutionally challenged".  There has not since been a label for what the movement should call itself proposed that I have found satisfactory.  So I am going to coin one - NCTC - not conventionally tax compliant.

Before I get into that, I would like to put forth a common sense argument as to why it was not reasonable for Kent to rely on those letters for as long as he did.

The Commonsense Argument

I'm going to put this a little crudely, because Kent's reliance on the letters aggravates me quite a bit.  Here goes.

Kent you got those letters from a lawyer, a tax consultant (not a CPA, but let's not quibble) and an enrolled agent in 1996.  Nearly a decade later the IRS is up your ass much of it about stuff that is not even addressed in the letters.  There are something like 1.2 million attorneys, 600,000 CPAs and 50,000 enrolled agents in the United States.  Did it not ever cross your mind that you might not have taken the sharpest knives out of the drawer?  I just googled Pensacola CPAs and five firms popped up.  Would it have killed you to take your letters and some of the notices that you had gotten from the IRS and sit down and talk with a couple of working CPAs in your community?

OK. I've got that out of my system.  I will now explain to you in some detail why the letters show that Kent was a tax protester as the term was understood when the letters were sent. We'll start with a definition.

Conventionally Tax Compliant

A conventionally tax compliant American believes that if he or she has income, as ordinary people understand the word, exceeding a pretty low threshold, an individual income tax return is required.  Someone who is CTC can tell whether they need to file a tax return by going to the instructions and looking at the "Who should file?" section, which is usually right at the beginning of the instructions.

Of course instructions to forms are not actually law. They are not even authority.  Nonetheless, the people who put those forms together tend to do a really good job and if you are CTC you can pretty much rely on them.  There might be a bit of a pro-government bias here and there but that will generally be about very subtle issues.

One downside to a reliance on secondary sources by tax professionals is that a tax skeptic of some sort who asks the typical tax pro what the law is that requires a tax return will probably get a blank look.  It is not because the law is not there.  I have a relatively easy mnemonic you can use the next time a tax skeptic or patriot or tax truther or whatever they call themselves ask you to "show him the law"/  26-1-61-6012.  Title 26 of the United States Code.  Section 1 imposes an income tax on individuals.  Section 61 defines income very, very broadly including, by way of example, "compensation for services" and Section 6012 requires the filing of a return if your income is over very modest thresholds.

Kent Hovind and others will note that the Internal Revenue Code is big and complicated and nobody knows the whole thing, but frankly that part is real simple.  And you don't have to know the whole thing because there is nobody who has to worry about every part of it, unless you are running one of those fucking hedge funds whose K-1s make our lives so miserable as we prepare returns for high net worth individuals in the fall.  You probably don't maintain inventories, or run a bank or an insurance company or a mutual fund.  I could go on and on.  If you are a regular person with a job, there is very little in that complicated code that is relevant to you.

Here is what happens with people who think like Kent Hovind, though.  When I explained that to Sam and Dan who run God's Property Radio, I heard from one of them (frankly I can't tell them apart) that he is not an individual and started going on about Blackstone's fifth edition or something like that.  Here is the thing.  The favorite dictionary of the United States Tax Court is Webster's II New Riverside University Dictionary (1984).  The definition of individual as a noun is "A human being regarded separately from a group or from society",

Anyway the proposition that regular Americans who have more than insignificant earnings have an obligation to file individual income tax returns is not all that complicated and does have the force of clear laws behind it.  Frankly all the shit you find on irs.gov is well supported.  They are not making shit up.  Really.  That does not mean that they are always right.  Taxpayers do win in court fairly frequently.  The government wins more often, but that's because the government abandons losing cases.  Individuals can be and are more stubborn.

There is a small but significant portion of the population that does not accept this view.  We're not talking about people who disobey the law because they would rather keep the money for themselves and think they will probably get away with it.  Nor are we talking about people who engage in civil disobedience and refuse to pay on moral principles following in the footsteps of Henry David Thoreau.

No we are talking about people who believe that the law does not actually require most ordinary Americans to file Form 1040 and pay income taxes/  It was people like that that wrote the letters to Kent.  I have a pretty good notion of how Kent found them, but, as I said, this is a long post, so there will be some more background.  I have to tell you about Mr. Cheek.

The Cheek Defense

Title 26 imposes a duty to file individual income tax returns.  If you don't file, you can be hit with penalties.  If you don't pay, the IRS can ultimately come take your stuff or tell other people who owe you money to pay them instead of you - or else.  There is more though.  Title 26 has criminal provisions.  They are covered in Chapter 75.

By the way, this is an example of a portion of the Internal Revenue Code that is complicated, but that regular people who are sensible don't need to know jackshit about.  Section 7203 concerns failure to file a return.  Here's the thing.  There is a general principle of law that ignorance of the law is not an excuse.  That principle is relaxed for some of the criminal provisions under Title 26, because people know that the income tax is complicated so you should not be prosecuted for innocent mistakes.  Some of the crimes under Title 26 include the element of willfulness.

John Cheek was a pilot for American Airlines.  Beginning in 1980 he stopped filing income tax returns and claimed withholding allowances (He got up to 60) that pretty well eliminated his withholding. He was prosecuted for both evasion (Section 7201) and not filing (Section 7203)

At his trial Cheek had argued that he was sincere.

Cheek represented himself at trial and testified in his defense. He admitted that he had not filed personal income tax returns during the years in question. He testified that as early as 1978, he had begun attending seminars sponsored by, and following the advice of, a group that believes, among other things, that the federal tax system is unconstitutional. Some of the speakers at these meetings were lawyers who purported to give professional opinions about the invalidity of the federal income tax laws. Cheek produced a letter from an attorney stating that the Sixteenth Amendment did not authorize a tax on wages and salaries but only on gain or profit. Petitioner's defense was that, based on the indoctrination he received from this group and from his own study, he sincerely believed that the tax laws were being unconstitutionally enforced and that his actions during the 1980-1986 period were lawful. He therefore argued that he had acted without the willfulness required for conviction of the various offenses with which he was charged.

The jury had trouble reaching a verdict and asked for guidance.

When the jury resumed its deliberations, the District Judge gave the jury an additional instruction. This instruction stated in part that "[a]n honest but unreasonable belief is not a defense and does not negate willfulness,"  and that "[a]dvice or research resulting in the conclusion that wages of a privately employed person are not income or that the tax laws are unconstitutional is not objectively reasonable and cannot serve as the basis for a good faith misunderstanding of the law defense." Ibid. The court also instructed the jury that "[p]ersistent refusal to acknowledge the law does not constitute a good faith misunderstanding of the law."  Approximately two hours later, the jury returned a verdict finding petitioner guilty on all counts.

Cheek appealed his conviction to the Supreme Court.  The Supremes reversed his conviction.

We thus disagree with the Court of Appeals' requirement that a claimed good-faith belief must be objectively reasonable if it is to be considered as possibly negating the Government's evidence purporting to show a defendant's awareness of the legal duty at issue. Knowledge and belief are characteristically questions for the factfinder, in this case the jury. Characterizing a particular belief as not objectively reasonable transforms the inquiry into a legal one and would prevent the jury from considering it. It would of course be proper to exclude evidence having no relevance or probative value with respect to willfulness; but it is not contrary to common sense, let alone impossible, for a defendant to be ignorant of his duty based on an irrational belief that he has no duty, and forbidding the jury to consider evidence that might negate willfulness would raise a serious question under the Sixth Amendment's jury trial provision.

Thus was born the "Cheek defense", which the tax protester community hailed as a major victory.

In a somewhat ironic turn the Cheek defense did not end up helping Mr. Cheek.

 the case was remanded for a re-trial. In the re-trial, the jury rejected Mr. Cheek's argument that he actually "believed" that wages were not taxable. He was again convicted. On March 13, 1992, Cheek was sentenced to one year and one day imprisonment, and he was placed on five years probation. The conditions of probation were that he would cooperate with the Internal Revenue Service and pay his back taxes, and pay a fine of $62,000. The second conviction was upheld by the United States Court of Appeals for the Seventh Circuit, and the United States Supreme Court let that decision stand by denying review.[25] John L. Cheek was released from prison in December 1992

American Airlines refused to reinstate him after his sentence and he apparently lost his lawsuit against the airline. 

Nonetheless, the decision was embraced by tax protesters or the NCTC, as I call them, who's court victories are few and far between.  Somebody came up with an organized approach to preparing a Cheek defense, which I believe accounts for Kent's three letters.

The Reliance Defense

Although over 20 years old, The Reliance Defense - A Legal Method For Declining To File Income Tax Returns; and Avoidance Of The Paying Of Income Taxes can still be found on the web.  The Reliance Defense was inspired by the Cheek decision.

The basic idea of the RDM is that you acquire a set of legal opinion letters from licensed, bar-member attorneys, licensed PAs and CPAs, and other professionals who hold that there is no law requiring you to file an income tax return and/or pay income taxes. Such letters are written on their letterheads, showing their legal and professional credentials, and personally addressed to you. Each legal or professional opinion affirms that you are not required to file an income tax return (1040) and/or are not liable for payment of income taxes.

In the unlikely event that you are charged with "Willful Failure To File," and subpoenaed to appear in court, your attorney will have the evidence to prove that you had no "willful intent" to violate the law. It is your honest understanding that there is no law requiring you to file, and the proof is in your collection of letters of opinion from licensed professionals. The more legal opinions you have, the easier it will be for your attorney to convince a judge or jury that you had no intent to break the law. You relied prudently and judiciously upon the expert advice of recognized professionals.

There are some difficulties in setting this up.

The challenge for the RDM practitioner is to find additional attorneys and CPAs who are sufficiently informed and in agreement with the premise of the RDM to write such opinion letters. There are a growing number of such professionals, and more can be found through your own efforts. I have listed a few for your convenience later in this report.

Be aware that if you call an ordinary attorney and ask his or her advice about the reliance defense, you will probably be advised not to use it. That's because most attorneys make their money cooperating with the system and risk getting disbarred if they don't. Did you know that in order to meet Bar exam requirements, attorneys have to profess loyalty to the government and the courts, not to the client?

Most attorneys aren't knowledgeable in the matter of requirements to file tax returns and, conversely, believe, as most Americans do, that they must file because they have not done the research. Also, they generally take the position of protecting their immediate interest and won't oppose the government and forsake their loyalty pledge. I suggest that if any attorney or CPA you contact denies the validity of the information in this report, you challenge them by showing them the legal opinions you have acquired. Challenge them to find the law that requires you to do so. They won't be able to find such a law

Of course now that my convenient 26-1-61-6102 mnemonic is available, they might find easier.

"If the defendant had a subjective good faith belief, no matter how unreasonable, that he was not required to file a tax return, the government cannot establish that the defendant acted willfully." - Cheek v. U.S., 111 S.C. 604 (1991)

With your legal opinion letters you have more than a subjective good-faith belief. You've relied on the professional advice of licensed counselors who have provided a solid good faith defense.  Anyway, moving along.

The first step in the RDM is to contact attorneys, PAs and CPAs to obtain their legal opinion on whether the law requires you to file. When you find professionals who hold that there is no law requiring you to file, you can then request their professional opinion and advice in writing. You may, of course, use the list of professionals listed at the end of this report, but you are encouraged to find others who can be added to our list. We offer a reward of $100 for each such professional you find. 

Most professionals, including those on our list, charge $50 for their legal opinion letter, a very reasonable fee for the value received. Send payment along with your letter requesting their legal opinion. The legal opinion letters you receive will be on the advisor's letterhead and personally addressed to you.

 As it happens the RDM promoter listed six people you could write to to get these marvelous opinions.  Two of the people Hovind used Fred Ortiz and Guy Curtis were on the RDM list.  With respect to Ortiz, it was noted:

Fred Ortiz, another professional on our list, is not an attorney or a CPA, but like Conklin, his letters are strong and his reputation is established in the courts and the legal community. Having his letter will enhance and add strength to your attorney and CPA letters.

Hovind's third letter was from enrolled agent John J Schlabach.  So as it turns out Hovind never did get a letter from a CPA, which makes me feel good anyway.

Some Problems With The Letters

The letters do not really support Hovind's story that he contacted three tax professionals explained what he was doing and asked their opinion and they said everything he was doing was OK.  The only issue addressed in the letters is the voluntary nature of filing Form 1040.  There is nothing about the CES staff being independent contractors or structuring, which is what he was convicted of.  It may be that he got his money's worth from the letters as he was not indicted for failure to file or evasion.  Of course, the reliance method does nothing for civil liability.

More to the point, Hovind was not really inquiring.  He sought out people who were going to give him the predetermined answer that he wanted.  It was probably not all that reasonable to rely on those letters in 1996, but their value was utterly shredded in 1999.  Ronald McDougle in TCM 1999-264 tried to use similar letters to get out of penalties.  Two of McDougle's letters were from Ortiz and Curtis.

The main theme of the letters, and petitioner's argument, is that he is not required to file a Federal income tax return because it is a voluntary practice. Paying taxes is not voluntary. See Wilcox v. Commissioner, 848 F.2d 1007, 1008 [61 AFTR 2d 88-1299] (9th Cir. 1988), affg. T.C. Memo. 1987-225 [¶87,225 PH Memo TC]; Carter v. Commissioner, 784 F.2d 1006, 1009 [57 AFTR 2d 86-1009] (9th Cir. 1986); Malone v. Commissioner, T.C. Memo. 1998- 372 [1998 RIA TC Memo ¶98,372]; Liddane v. Commissioner, T.C. Memo. 1998- 259 [1998 RIA TC Memo ¶98,259]; Stonerock v. Commissioner, T.C. Memo. 1986-264 [¶86,264 PH Memo TC]; see also United States v. Bressler, 772 F.2d 287, 292 [56 AFTR 2d 85-5884] (7th Cir. 1985); May v. Commissioner, 752 F.2d 1301, 1304 & n.3 [55 AFTR 2d 85-747] (8th Cir. 1985); United States v. Wilber,  696 F.2d 79, 80 [51 AFTR 2d 83-619] (8th Cir. 1982).

The letters also contain additional hackneyed arguments that have been universally rejected by this and other courts. See Wilcox v. Commissioner, supra; see also Fujita v. Commissioner, T.C. Memo. 19 164 [1999 RIA TC Memo ¶99,164]. We shall not painstakingly address petitioner's assertions “with somber reasoning and copious citation of precedent; to do so might suggest that these arguments have some colorable merit.” See Crain v. Commissioner, 737 F.2d 1417 [54 AFTR 2d 84- 5698] (5th Cir. 1984). No useful purpose would be served by any further explanation. Suffice to say, petitioner is subject to Federal income tax during the relevant years, and we sustain respondent's deficiency determinations.

While reliance on advice as to whether a return must be filed may constitute reasonable cause, the person giving that advice must be competent to render that advice and the reliance on that advice must be reasonable.  

I'm not going to get into the subsequent problems of Kent Hovind's three stooges.  Oddly enough, any IRS problems that they might have had are actually proof that they were right in Kent Hovind's view.

The Alternative Tax Universe

The leading spirit behind the notion that the income tax is an elaborate hoax being perpetrated on the American by the IRS, which is not actually an agency of the United States government, is probably Irwin Schiff, who like Kent Hovind, is in federal prison.  The best summary I have ever seen of the problems with Schiff's arguments (which are replicated wittingly and unwittingly by the rest of NCTC community)  was stated by Schiff's own attorneys as they were trying to put on something of a Cheek defense for him

even though these cases, properly understood, do not support Mr. Schiff’s professed beliefs, they do contain language which, if honestly misconstrued and read out of context, could lead someone without legal training to believe that taxable income is limited to corporate profits

I began studying the NCTC community nearly 20 years ago when a former friend got caught up in it, creating a lot of havoc for his family.  I concluded that the material they put together was so good that the people who put it together had to know that it did not really work.  Their cites always always checked out, but were always misconstrued, whether honestly or not, and generally out of context.

Others have made a more thorough study of the movement.  Daniel Evans has put together and updated The Tax Protester FAQ cataloging many of the arguments and explaining why they don't work.  I was thinking of playing a drinking game called Frivolous Argument Bingo is which we match up arguments in the Curtis, Ortiz, Schlabach corpus to Dan's FAQ. Here is how far I got

Curtis Page 2 - The income tax is voluntary

Evans-  This is a corruption of statements made by the IRS, the courts, and Congress to encourage taxpayer compliance with the tax laws, without the need for legal action against taxpayers. The claims that “(1) Compliance with the internal revenue laws is voluntary or optional and not required by law, including arguments that: a. Filing a Federal tax or information return or paying tax is purely voluntary under the law,” or similar arguments described as frivolous in Rev. Rul. 2007-20, 2007-14 I.R.B. 863, has been identified by the IRS as a “frivolous position” that can result in a penalty of $5,000 when asserted in a tax return or included in certain collection-related submissions. Notice 2007-30, 2007-14 I.R.B. 883.

Curtis Page 2 - Nothing in the Internal Revenue Code makes an ordinary citizen liable for the income tax

Evans -More semantic games from people desperate to evade taxes.
Tax protesters claim that, before anyone can be liable for a tax, there must be a statute that specifically says that the person is liable for the tax (and must use the word “liable”). However, that is not what the law requires.
In its various subsections, section 1 of the Internal Revenue Code says that

“There is hereby imposed on the taxable income of every [married individual, surviving spouse, head of a household, unmarried individual, or married individual filing a separate return] a tax determined in accordance with the following table.. ..”

As explained in the regulations:

“Section 1 of the Code imposes an income tax on the income of every individual who is a citizen or resident of the United States ....”

Treas. Reg. § 1.1-1(a)(1).
The word “impose” means “to establish or apply as compulsory; levy.” So how can a tax be “imposed” if no one is compelled to pay it? The answer is that it can’t. If a tax is imposed on a person’s income, then that person is liable for the tax as a matter of law.

Well, the post is already too long so I'll think about continuing this later.  Maybe we can get it going in the comments section.

Just a bit more reading that you might do before joining the ranks of the NCTC is the Tax Court decision in the case of Steven Waltner.  Generally the courts have lost patience with NCTC arguments (Remember this has been go on for a long time.  Cheek learned the theories in the late seventies,)  In Waltner the Tax Court went to the trouble of addressing many of the arguments as they had been putting out in a book titled Cracking The Code.


Does This Mean Kent Hovind Is A Bad Guy?

I don't think so.  Annoying as I sometimes find him, Kent Hovind apparently has enough of the mensch about him to inspire devotion from pretty sincere people.  I'd really like to see the current charges against him go away if it can be done in a manner that does not encourage even more tax mishegas.  I think Kent's views on prison reform should be widely shared and taken seriously, although I am not going to get behind a proposal to revive flogging and increase the number of executions.

I believe that Kent Hovind and Ernie Land are sincere.  To accept their views on taxation requires the acceptance of mind boggling conspiracies.  And of course they do believe in them.

I wrote this more for the benefit of those who might sympathize with Kent Hovind so that they might recognize that they can do so without buying the whole Hovindication narrative.  The government is not persecuting Hovind for his religious beliefs.  His tax troubles are entirely of his own making and the people prosecuting him, whatever their flaws might be are doing their jobs. The jobs that we the conventionally tax compliant have hired them to do, because if there is no enforcement of the tax laws against those who defy them, compliant taxpayers end up feeling like suckers.