Is U.S. income tax invalid?

Writing on the form can alter it depending on what is written.

Sending in a form with nothing on it?

I know a person who was penalized $500 from the IRS because she did not send in a 1065 with $0 on it. She forgot to send it in one year.
This taxpayer sent the form in every year and put $0.

Technically, she and her partners are a partnership. She would send in the 1065 with $0 and then the partners split the income on their separate Sch. C's. Go figure The IRS knew this and over looked it.

It was not me either, to those who know my personal situation.

"It takes two to speak the truth: one to speak, and another to hear."
-Henry David Thoreau


We unearth the stories withheld and suppressed - Now, for the first time the truth so long denied to the people:


NY TIMES: Saying Income Tax Is Illegal

November 19, 2000

Saying Income Tax Is Illegal:
Business Owners Quit Paying

By DAVID CAY JOHNSTON

LAKE SHASTA, Calif. Al Thompson squeezed most of his manufacturing
company's 28 employees into a conference room here in October to say he had good news: Income taxes must be paid by only a few Americans, mostly those working for foreign-owned companies. So, he told the workers, they would not have to pay income taxes ever again. His business is exempt, too, he said.

No Social Security or Medicare taxes, either. The company was no longer
withholding taxes from their paychecks, he said, or telling the Internal
Revenue Service how much they made.

Mr. Thompson is part of a tiny but increasingly flamboyant fringe of
American business. Arguing that the federal tax laws do not apply to them, these small companies are thumbing their noses at the I.R.S. in a very public way: they have not only stopped withholding taxes and turning them over to the government, they are also bragging about it on Web sites and radio talk shows, and organizing seminars to promote the gospel of defiance.

And they are boasting that they must be right because the I.R.S. has not
come after them, even though it knows what they are doing. Mr. Thompson noted that he had not sent a weekly tax payment to the I.R.S. since July, yet "I have not been drug off to jail."

Indeed, the I.R.S. has not only failed to pursue these businesses, it has
in some cases given refunds after they claimed they did not owe taxes paid earlier. In at least two cases, the businesses say they even received
apologetic letters from the I.R.S. for not rescinding penalties and issuing
the refunds sooner.

Many tax experts express astonishment at the idea that the I.R.S. is aware that legitimate businesses are cheating yet has not even written to ask why their tax payments stopped, let alone begun action to make them pay. This undermines the principle on which the American tax system is based, they say: people who do not pay their taxes will pay the consequences.

How many businesses are taunting the I.R.S. this way is impossible to know. At least 23, including Mr. Thompson's aviation products company, a Florida marketing firm and a Texas plastics company, have made their decisions public. Sixty business owners and their advisers met on the weekend of Nov. 11 in California to plan how to persuade thousands of others to join them.

Over the years, a number of individuals have claimed to be out of reach of the tax laws, but experts, including four former I.R.S. commissioners, said this case was different. "This is tremendously significant because we have never before had responsible parties employers refuse to withhold," said Sheldon Cohen, a former I.R.S. commissioner. "The system simply cannot work if they get away with this."

The I.R.S. declined to comment on whether it was pursuing enforcement
actions against the 23 employers, citing a law that protects taxpayer
privacy. But there is no public record showing litigation or enforcement
actions like liens against the companies' assets.
The failure of the I.R.S. to act even against those who openly defy the tax laws raises questions about the agency's ability to stop tax cheating.
Asked whether the I.R.S. was moving against any such tax resisters, the
senior I.R.S. spokesman, Frank Keith, would say only that "with limited
resources the I.R.S. must often choose which cases to pursue" and that it
focuses on those that will generate the most revenue.

But Jerome Kurtz, another former commissioner, disagreed. "That's a nice pat line," he said, "but they don't go after only the people with the
highest income. They audit hundreds of thousands of returns under $25,000 that produce little or no revenue and they can take resources from those."Michael Graetz, a tax policy adviser under President George Bush and now a professor at Yale, added that he thought it was a big mistake that the I.R.S. had not moved immediately against these employers. "They have to act," he said, "or this will get out of hand very, very quickly."

Commissioner Charles O. Rossotti of the I.R.S. has warned Congress that the agency's enforcement resources have so shriveled that a growing number of people will think they can get away with not paying taxes, and the tax collection system will be threatened."



When asked for a comment on this sensational disclosure T.R. Yagain said, "This proves there is a God, and there is still time for all Democrats to repent."

Is that the Al Thompson that was convicted for 13 counts of tax evasion?

http://www.rothcpa.com/archives/000779.php

I would have posted a more authoritative story of his conviction by I liked the story told in this telling about another tax protester.

parados, That's a good un. LOL

Parados writes with some satisfaction, "Is that the Al Thompson that was convicted for 13 counts of tax evasion?"

The White Pages list some 300 Al Thompson's, do you expect me to know them all? However, I do know CI will be in Chicago for eight days beginning May 29. Furthermore:

There is no law that Americans must have a social security number. An employer who is participating in the social security program is required to give a W-4 to each worker, but is not required to get it back, and the worker is not required to fill it out and give it back, unless the worker wants to participate in social security. Absent a W-4, an employer is not authorized by law to take money out of a worker's pay for employment taxes.

An increasing number of employers have, in accordance with the law, stopped withholding income and employment taxes from the money they pay their workers.

According to Sections 1.1441-5 of the Code of Federal Regulations and IRS instructions (Publication #515), if a worker submits, in duplicate, a statement of U.S. citizenship (a simple letter will do) the employer/withholding agent is relieved of duty to withhold taxes from money paid to that worker. The withholding agent, no matter where located, then is to send one copy of the statement to the IRS Philadelphia Service Center (not to their own regional center); Philadelphia is the International Service Center, and withholding only applies to aliens or foreign income.

IRS officials typically cannot swear that income tax is due in order to get a court warrant, as per the 4th amendment of the Constitution.

As an indication of how much confusion there is about legal aspects of the income tax, the highest courts in the land cannot make up their collective mind on a point as basic as whether it is a direct tax or an indirect tax (those being the two classes of taxes established by the Constitution).

The U.S. Supreme Court ruled early on that the income tax was in the nature of an excise tax, which would make it indirect. However, six of the 11 federal circuit appeals courts have ruled it to be a direct tax, in open defiance or rebellion against the Supreme Court, and those rulings have never been overturned.


Still to come: The murky secret origins of the Federal Reserve System!

Tryagain, I'm not sure which companies in the US allows employees to work without filling out a W4, but all employers, are by law, required to withhold taxes and pay taxes. If the employee fails to file their W4, the employer is still required to withhold taxes, and the employee is liable to pay taxes through payroll withholding no less than 90 percent of their tax liability. If they don't, they are charged penalty and interest charges.

Mr Mackey: "Um, the Federal Reserve is. baaaaaadddddd,"

Of those fools that signed the 2001 letter to the USA Today like Al Thompson did, most of them have since been convicted of tax fraud.

You keep posting OLD stuff Tryagain as if you think it has never been challenged in court.

Parados wrote, "You keep posting OLD stuff"

Will someone tell this guy that this is the History forum. Sheesh, am I the only one who has noticed that a lot of history based on old stuff?



My dear CI, I hope it is not your intention to join the vocal chorus to confuse and perplex the situation by bringing to the fore an undue reliance on fact, because fact is nothing without matter, and can anything exist in the universe unless it is made of nothing but matter. Is it to be taken so lightly that…


"The freedoms won by Americans in 1776 were lost in the revolution of 1913," wrote Frank Chodorov. Indeed, a man's home used to be his castle. The income tax, however, gave the government the keys to every door and the sole right to change the locks.

Today the American people are no longer the master and the government has ceased to be the servant. How could this be? The Revolution fought in the name of the inherent natural rights to life, liberty and the pursuit of happiness promised to enthrone the gains of individualism. Instead, federal taxation bribes the States and individuals to serve the interests of ever-greater submission to the centralized will.

How did tax slavery come to the land of the free?
(A short journey down the yellow brick road: New old stuff)

1812

The first proposal to impose an income tax on America occurred during the War of 1812. After two years of war, the federal government had accumulated a then-staggering $100 million of debt. To fund the war against Britain, the government doubled the rates of its major source of revenue, customs duties on imports, which obstructed trade and ended up yielding less revenue than the previous lower rates. At the height of the war, excise taxes were imposed on goods and commodities, and housing, slaves and land were taxed. After the war ended in 1816, these taxes were repealed and instead a high tariff was passed to retire the accumulated war debt. Thankfully, the notion of an income tax was defeated.

However, the malevolent spirit of the income tax reappeared as a measure to fund the Union armies in the war to prevent the secession of the Confederacy. The war was expensive, costing on average $1,750,000 a day. Struggling to meet this expenditure, the Republican Congress borrowed heavily, doubled tariff rates (the Morrill Tariff initially provoked the Deep South to secede), sold off public lands, imposed a maze of licensing fees, increased old excise tax rates and created new excise taxes. But none of this was enough.

1861

In July 1861, the Congress passed a 3% tax on all net income above $600 a year (about $10,000 today). However, no revenue was ever raised because a second tax passed before the first was due (on June 30, 1862). The war's demand on resources made the earlier tax ineffective, and the sale of bonds could not keep up with the expenditures of the administration and the armies. In March, the Congress passed an income tax of 3% on annual incomes of $600 to $10,000 and 5% on incomes from $10,000 to $50,000 and threw in a small inheritance tax too. Lincoln signed the bill on July 1, 1862 to take effect a month later. The Union debt then stood at $505 million. This tax also included the first appearance of withholding and was applied to federal salaries and on interest and dividends.

In 1863, Congress then passed a special 5% tax on incomes above $600 to pay for an army recruitment program that would pay men $2 per recruit and pay recruit's their first month's pay in advance.

In mid-1864, the rates were raised again. The 3% tax on incomes above $600 was increased to 5%, a new 7.5% rate was introduced on incomes over $5,000, and the old rate of 5% on incomes above $10,000 was raised to 10%. The tax on interest and dividends was also raised from 3% to 5%.

And for the first time, with the changes, Americans now had to swear to the veracity of their tax returns, and government assessors could now challenge a return. The penalty for not filing a tax return was likewise doubled to 10%.

At first, the income tax raised comparatively little revenue in relation to the war's demand for it. Harvesting only $2.7 million in 1862-1863, by the next year, the tax pulled in $20.2 million. And believing that many large-income earners were eluding the taxman, Congress raised the rate on incomes over $5,000 to 10% and gave the assessors the power to estimate income and increased the penalties for noncompliance, from fines of 25% to double that for filing fraudulent returns. By 1866, 30% of federal revenues derived from the income tax totaling $73 million, and derived primarily from just three states, New York, Pennsylvania and Massachusetts.

In a move to increase compliance and the veracity of returns, the government even made tax returns available to the press. This practice was outlawed in 1870.

The Confederacy also experimented with a progressive income tax, eventually imposing a tax in kind that further destroyed the already ruptured and blockaded economy of the South.

1865

After the war ended, the income tax continued on to pay the government's gigantic debt, but resistance was building. In 1867, progressing rates were replaced with a flat tax of 5% on all incomes above $1000 a year. However, the penalty for failure to file was raised to 50% and the payment date was moved from June 30 to April 30.

This income tax expired in 1870 and was replaced with a 2.5% tax on incomes above $2,000. Finally, when that law expired in 1872, the United States was again without an income tax.

In the post-war years, a booming economy produced tariff surpluses for decades, but this didn't deter many attempts to reintroduce an income tax, with members of Congress introducing sixty-eight bills to do so between 1874 and 1894.

1894

Amid the panic of 1893, an amendment was passed establishing a 2% tax on all incomes above $4,000 a year (about $50,000 today), but exempted the salaries of state and local officials, federal judges, and the president.



Democratic Senator David Hill of New York lamented, "It may be impracticable that our distinctively American experiment of individual freedom should go on."

President Cleveland opposed the income tax, but let it become law without his signature, believing it to be unconstitutional. In 1895, the Supreme Court ruled 5-4 against the income tax, saying that its provisions amounted to a direct tax, which was prohibited by the U.S. Constitution.

Article I, Section 8 and 9 declares that direct taxes must be apportioned amongst the states according to the census. The Sixteenth Amendment was designed to get around this problem.

1895-1909

Aside from an attempt to float an income tax to pay for the Spanish-American war, the income tax largely disappeared as a major issue. Nonetheless, the Democratic Party, turning its back on its Jeffersonian heritage, endorsed a constitutional income tax amendment in their party platforms of 1896 and 1908.

In 1908 Theodore Roosevelt endorsed both an income tax and an inheritance tax, becoming the first President of the United States to openly propose that the political power of government be used to redistribute wealth.

Meanwhile, factions within the Congress cobbled together a compromise amendment and in 1909, President Taft, known to be favorable to an income tax, if not necessarily an amendment, stated that although ratification may be difficult, he had "become convinced that a great majority of the people of this country are in favor of vesting the National Government with power to levy an income tax."

That same year, the income tax amendment passed overwhelmingly in the Congress and was sent off to the states. The last state ratified the amendment on February 13, 1913. The Springfield Republican reported "The Sixteenth Amendment owes its existence mainly to the West and South, where individual incomes of $5,000 or over are comparatively few."

1913

Richard E. Byrd, speaker of the Virginia House of Delegates, predicted, "a hand from Washington will be stretched out and placed upon every man's business. . . . Heavy fines imposed by distant and unfamiliar tribunals will constantly menace the taxpayer. An army of Federal officials, spies and detectives will descend upon the state. . . ." Pandora had opened the box.

The presidential election of 1912 was contested between three advocates of an income tax. The winner, Woodrow Wilson, after the ratification of the Sixteenth Amendment, called a special session of Congress in April 1913, which proceeded to pass an income tax of 1% on incomes above $3,000 and applied surcharges between 2% and 7% on income from $20,000 to $500,000. A few years later the Supreme Court kissed and blessed progressivity.

The income tax returned as the product of an unholy combine between statist intellectuals with visions of state-sponsored utopias, envious demagogues and the desire by established, wealthy interests to prevent any competition to their place and to offload business costs to an expanding regulatory welfare state.

At first the revenue raised by the new income tax was disappointing: only $28 million in 1914. But then it accelerated. $41 million the next year, when the top rate was 7%, and nearly $68 million in 1916, when it was raised to 15%. Eventually more than $1 billion would be pulled in by the income tax during the whole of World War I, when the rates were raised to 67% in 1917 and 77% in 1918, and make the hated tax the permanent feature it has become today.

After the war, the top rate would fall to 73%. In the 1920's it fell to a low of 24% in 1929 but never again got as low as the pre-war rate of 7%. What would Americans do for a 7% rate today, one wonders? Hoover and the Republicans raised the rates to 25% in 1930, then to 63% in 1932. Under the corporate statism of the New Deal, rates leaped to 79% in 1936, 81% in 1940, finally exhausting itself at 94% in 1944-1945.

The lowest rates showed the same appetite, advancing from a 1% rate on incomes below $20,000 in 1915. In 1917, it became 2% up to $2,000, then 6% up to $4,000. By 1941, the lowest rate was 10% on incomes below $2,000. In 1945, this had jumped to 23%. Today it is 10% on annual income up to $7,000; 15% on income below $28,000. The top 10% of all income earners pay 60% of all tax revenue. And the top half pay over 95% of all revenue raised by the federal income tax. The average American now works twenty years for the government simply to pay his taxes.

In 1943, the government began withholding taxes on the advice of Milton Friedman. After the war ended, this method of stealth taxation (and tax increases) continued.

Not until 1964 were the top rates lowered, down to 77%. In 1982, the top rate was lowered to 50% and by the late eighties the rate had been lowered to 28%. But rates were raised again to 31% under George H.W. Bush, and again in 1993 to 39.6% under Clinton. George W. Bush apparently holds as an unshakeable principle that no American should be taxed more than a third of his income by the federal government. John Kerry, should he become president, appears likely to suggest the rates be raised back to the Clinton level.

The income tax lived up to its nature during World War II, devouring American wealth and liberties like a swarm of locusts, where it became the nearly universal tax we know today. In 1940, fewer than fifteen million tax returns were filed. Just ten years later in 1950, the number would be fifty-three million. In 1939 the income tax raised $1 billion. 16 years later it would raise $19 billion. The state had found its most fertile harvests?-middle class and working-class taxpayers. As Chief Justice John Marshall remarked, truly "the power to tax involves the power to destroy."

Adjusting for inflation, in the 81 years between the enactment of the income tax in 1913 to 1994, government spending increased 13,592%!

The great critic of the income tax, Frank Chodorov wrote "Whichever way you turn this amendment, you come up with the fact that it gives the government a prior lien on all the property produced by its subjects." The United States government "unashamedly proclaims the doctrine of collectivized wealth. . . . That which it does not take is a concession."

It was with great honesty that Frank lamented, "America is no longer the America of the Declaration of Independence."



All letters of complaint to: T.Rash-Cann

All envelopes stuffed with cash to: Usual address (No Canadian notes; thank you)

Cite which rulings you think did this. Let's examine them and see if your statement is true.

I'll put up $100 that you can't cite 7 cases. One by USSC that calls income tax indirect and 6 cases after that by the appeals courts in 6 districts that clearly rule the US income tax is an "direct tax." and were not overturned. You willing to put up any money Tryagain?

I am just curious as to how deceptive you are trying to be here Try. Are you ignorant or willfully misleading people. So, lets find out. Cite the 7 cases and lets examine them. I'll check back every few months and remind you how you have failed.

You left off the rest of my sentence Tryagain.



You aren't arguing that the stuff you are posting is historical Try. You are arguing that it is valid today.

Your arguments are about as valid to history as arguing that Germany still occupies France because they invaded in 1940. You can't ignore the history that has happened after the things you keep brining up.

Parados, I have never met a Canadian I didn't like; you are Canadian right?

Keep your money - or better still ?'Donate' click on the link; bottom right.

I have an idea! Why don't you start a thread: Tax scams exposed.
Or some such title, as I feel readers may benefit from your wisdom.



Today we'll look at the murky, secret origins of the Federal Reserve System and its establishment as a banking cartel in 1913 after the income tax amendment was certified. It was billed as a banking reform measure, but was written by the very interests it was supposedly intended to reform.

We'll discuss its ostensible objectives for public consumption, its actual true objectives, and how well each set of objectives has been achieved. We'll review some reasons why a growing number of people feel the Fed should be abolished. We'll look at how the Framers envisioned our monetary system, how that has been changed into a system of infinite debt, and how the dollar has been debased by the creation of fiat money.


But first: Who "owns" the Federal Reserve?

Now, for the first time after years of research the shocking truth can at last be told of the connection between the Rothschilds and the Bank of England, the London banking houses which ultimately control the Federal Reserve Banks through their stockholdings of bank stock and their subsidiary firms in New York.

The two principal Rothschild representatives in New York, J. P. Morgan Co., and Kuhn,Loeb & Co. were the firms which set up the Jekyll Island Conference at which the Federal Reserve Act was drafted, who directed the subsequent successful campaign to have the plan enacted into law by Congress, and who purchased the controlling amounts of stock in the Federal Reserve Bank of New York in 1914.

These firms had their principal officers appointed to the Federal Reserve Board of Governors and the Federal Advisory Council in 1914. In 1914 a few families (blood or business related) owning controlling stock in existing banks (such as in New York City) caused those banks to purchase controlling shares in the Federal Reserve regional banks.

Examination of the charts and text in the House Banking Committee Staff Report of August, 1976 and the current stockholders list of the 12 regional Federal Reserve Banks show this same family control.






"(Tryagain) Your arguments are about as valid to history as arguing that Germany still occupies France because they invaded in 1940. You can't ignore the history that has happened after the things you keep brining up."


Next time we expose; who provisioned Germany from 1915-1918 and dissuaded Germany from seeking peace in 1916; financing Hitler in 1933 so as to make a Second World War possible.

I'm not Canadian. I don't know where you got that idea. I have been doing my own taxes in the US for decades now.

As I thought. You claimed this is here because it is history but then you can't provide anything more than the lies told about history by the tax protest movement. If you really wanted this to be history why don't you do research and see what is true and what isn't?

" Snip, cut hack…If you really wanted this to be history why don't you do research and see what is true and what isn't?"

What do you call the ?'Who "owns" the Federal Reserve?' information?
The Fed is owned by a dude in London England! Sheesh, it should be on CNN!



Extract from my forthcoming book; ?'Did he Jump or was he Pushed?'
by Helping Hands

There are many methods by which taxpayers shelter their losses, but these three characteristics are usually found in tax shelters, either separately or in combination:

• Taxes are deferred to later years;

• Ordinary gains (100 percent taxable) are converted to capital gains (only 40 percent taxable), or capital losses (only 50 percent deductible), are converted to ordinary losses (100 percent deductible); in both cases producing a lower tax liability;

• Leverage is obtained through various financing arrangements.
Deferral also occurs when excessive deductions are taken in the early years of a tax shelter, a practice the IRS calls "front end loading." Examples of illegal front end loading practices are:

• Deducting capital items by classifying them as advisory fees, management fees, or interest;

• Deducting prepaid interest;
• Not including prepaid income;
• Deducting excessive depreciation, amortization, or depletion by using the wrong method, too short a useful life; and/or too large a basis.

The administration's attempted legislation in 2000 included an extensive package of revenue raisers targeting perceived corporate tax shelters, corporate transactions, financial products, international transactions, and insurance. New proposals included the following:

• Tax shelter penalties. The substantial understatement penalty imposed on corporate tax shelter items (as redefined) generally was to be increased to 40% (from 20%), with no reasonable cause exception, effective for transactions entered into on or after the date of "first committee action;'

• Treasury authority to deny tax benefits. The Treasury Department would disallow deductions, credits, exclusions, or other allowances obtained in a corporate tax shelter, effective for transactions entered into on or after the date of first committee action;

• No deduction for corporate tax shelters. The proposal would deny deductions for fees and tax advice expenses related to corporate tax shelters and would impose a 25% excise tax on fees received in connection with promoting or rendering tax advice related to corporate tax shelters. The proposal would be effective for payments made and fees received on or after the date of first committee action;

• Excise tax on tax shelter "recission" provisions. The proposal would impose on the corporate purchaser of a corporate tax shelter an excise tax of 25% of the maximum payment to be made under a tax benefit "protection arrangement." These arrangements include certain recission clauses, guarantees of tax benefits, or other arrangements (e.g., insurance) protecting the purchaser. The proposal would be effective for arrangements entered into on or after the date of first committee action;

• Positions inconsistent with transaction form. The proposal generally would preclude corporate taxpayers from taking any position (on a tax return or refund claim) that the Federal income tax treatment of a transaction is different from that dictated by its form if a "tax indifferent" person has a direct or indirect interest in the transaction. Tax indifferent persons would be defined as foreign persons, tax-exempt organizations, Native American tribal organizations, and domestic corporations with expiring loss or credit carryforwards. The proposal would not apply where the taxpayer discloses the inconsistent position on its tax return. The proposal would be effective for transactions entered into on or after the date of first committee action;

• Tax-indifferent parties. Income allocable to a tax-indifferent party with respect to a corporate tax shelter would be taxable; other participants in the tax shelter would be jointly liable for the tax. The proposal would be effective for transactions entered into on or after the date of first committee action;

• Forward stock sales. A corporate issuer of stock sold through a forward sale contract would be required to recognize as interest the time-value element of the forward contract. The proposal would be effective for forward contracts entered into on or after the date of first committee action;

• Built-in losses. The proposal targets the "importation" of foreign losses and other tax attributes incurred outside the U.S. taxing jurisdiction that are used to offset income or gain otherwise subject to U.S. tax. The proposal would eliminate such attributes and require that tax basis be marked to market in certain circumstances, effective for transactions in which assets or entities become "relevant" for U.S. tax purposes on or after the date of enactment;

• S corporation ESOPs. The proposal would 1) require an ESOP to pay tax on S corporation income (including capital gains) as the income is earned and 2) allow the ESOP a deduction for distributions of such income to plan beneficiaries. The proposal would be effective for taxable years beginning, acquisitions of S corporation stock, and S corporation elections made on or after the date of first committee action;

• Serial liquidations. The proposal would impose withholding tax on any distribution made to a foreign corporation in complete liquidation of a U.S. holding company if the holding company was in existence for less than five years; the proposal also would apply with respect to serial terminations of U.S. branches. The proposal would be effective for liquidations and terminations occurring on or after the date of enactment;

• Basis shifting transactions. To prevent taxpayers from attempting to offset capital gains by generating artificial capital losses through basis-shift transactions involving foreign shareholders, the proposal would treat the portion of a dividend that is not subject to current U.S. tax as a nontaxed portion. The proposal would be effective for distributions made on or after the date of first committee action;

• Lessors of tax-exempt property. The proposal would deny a lessor the ability to recognize a net loss from a leasing transaction involving tax-exempt use property during the lease term, effective for leasing transactions entered into on or after the date of enactment. For this purpose, tax-exempt use property would include property leased to governments, tax-exempt organizations, and foreign persons;

• Mismatching of deductions and income. Deductions for amounts accrued but unpaid to related controlled foreign corporations, passive foreign investment companies, or foreign personal holding companies generally would be allowable only to the extent the amounts accrued by the payor are, for U.S. purposes, reflected in the income of the direct or indirect U.S. owners of the related foreign person. An exception would be provided for certain short-term transactions entered into in the ordinary course of business. The proposal would be effective for amounts accrued on or after the date of first committee action;
This is a useful list of tax shelters, from the taxpayers' perspective, especially since the Congress refused to pass the administration's Bill. There were further proposals:

• Control test. The proposal would conform the control requirement for tax-free incorporations, distributions, and reorganizations with the ownership test used for determining affiliation, effective for transactions on or after the date of enactment;

• Tracking stock. The proposal would give Treasury authority to treat "tracking stock" as nonstock (e.g., debt or a notional principal contract) or as stock of another entity as appropriate to prevent tax avoidance, effective for stock issued on or after the date of enactment;

• Transfers of intangibles. The transfer of an interest in intangible property constituting less than all of the substantial rights of the transferor in the property would be treated as a tax-free transfer, but the transferor would be required to allocate the basis of the intangible between the retained rights and the transferred rights based on their respective fair market values. Consistent reporting would be required. The proposal would be effective for transfers on or after the date of enactment;

• Downstream mergers. Where a target corporation holds less than 80% of the stock of an acquiring corporation, and the target combines with the acquiring corporation in a reorganization in which the acquiring corporation is the survivor, the target would have to recognize gain, but not loss, as if it distributed the acquiring corporation stock that it held immediately prior to the reorganization. The proposal would apply to transactions occurring on or after the date of enactment;

• Bank short-term obligations. The proposal would require banks to accrue interest and original issue discount on all short-term obligations, including loans made in the ordinary course of the bank's business, effective for obligations acquired or originated on or after the date of enactment;

• Current accrual of market discount. A taxpayer that uses an accrual method of accounting would be required to include market discount income as it accrues, effective for debt instruments acquired on or after the date of enactment;

• Partnership constructive ownership transactions. The proposal would treat long-term capital gain recognized from a "constructive ownership" derivative transaction as ordinary income to the extent the long-term capital gain recognized from the transaction exceeds the long-term capital gain that could have been recognized had the taxpayer invested in the partnership interest directly. The proposal would apply to gains recognized on or after the date of first committee action;

• Debt-financed portfolio stock. The proposal would tighten current-law rules requiring a corporation to reduce its dividends-received deduction with respect to dividends paid on debt-financed portfolio stock. The proposal would be effective for portfolio stock acquired on or after the date of enactment;

• Debt-for-debt exchanges. The proposal would spread the issuer's net reduction for bond repurchase premium in a debt-for-debt exchange over the term of the new debt instrument using constant yield principles, among other changes. The proposal would apply to debt-for-debt exchanges occurring on or after the date of enactment

• Straddle rules. The proposal would 1) clarify that net interest expense and carrying charges arising from structured financial products containing a leg of a straddle must be capitalized and 2) repeal the current-law exception for certain straddles of actively traded stock, effective for straddles entered into on or after the date of enactment;

• Effectively connected income. The proposal would expand the categories of foreign-source income that could constitute effectively connected income under IRC section 864(c)(4)(B)(ii) to include income that may be sourced by analogy to interest (interest equivalents) or dividends (dividend equivalents). Interest equivalents would include letter-of-credit fees, guarantee fees, and loan commitment fees. The proposal would be effective for taxable years beginning after the date of enactment;

• Overall foreign losses. For the purposes of IRC section 904(f), property subject to the recapture rules upon disposition under IRC section 904(f)(3) would include stock in a controlled foreign corporation, effective beginning on the date of enactment.
The tax-shelter industry on Wall Street moved into top gear after the proposals were anounced, pushing through large numbers of schemes before the doors shut; but in the event the Bill languished.

The Federal Reserve Bank is NOT owned by one guy in London..
That has to be the stupidest claim yet I have seen about the Federal Reserve.


Member banks are issued stock in the Federal Reserve.


http://www.federalreserve.gov/generalinfo/faq/faqfrs.htm

Here is an essay disputing your OLD claim that it is owned by foreigners
http://www.usagold.com/federalreserve.html

One little problem Tryagain. Every time I DO research one of your claims they turn out to be completely false. Yet, when I point out how they are false you pretend that I didn't say anything and move on to your next false claim.

Perhaps YOU need to do the research before you post your ludicrous screeds.

parados, You should have taken the hint from his moniker; Tryagain, and again, and again....

Im sure that foreigners ultimately own some percentage of the Federal Reserve just like they did the 2nd bank of the US.

Ive seen the graphic tryagain is talking about but I dont think theres anyway to validate that information.. Being a private entity, I dont think they have ever disclosed who all the owners are.. nor do they have to.

IT could be true, but we just dont know. Just like companies like Kane & co, Cede & co, etc,, huge companies you never hear about but own great chunks of out airline industry, oil industrym etc,,]

Very hard to track down the real owners in these never ending chains of ownership

Myth #5.

Foreigners can own shares in the member banks that own shares of the Federal Reserve banks.