It's The Money, Stupid.

The moral I got from watching Part 3 of "Prohibition" a movie by Ken Burns, is that when the influence of the moralists wanes and the government needs money it will scrap prohibition in favor of commerce. Especially if the bodies are piling up in America. Mexican bodies? Not Our Problem.

Where are we with drug prohibition:

Pretty far along. And that doesn't even count the 70% to 80% that support medical marijuana.

So what about the money? The direct costs run about $25 bn a year Federal. And about $45 bn a year State and local. And then there are taxes to be collected.

A San Francisco Bay area medical marijuana dispensary that promotes itself as the world's largest has been hit with a $2.4 million tax bill following an audit by the Internal Revenue Service, the dispensary founder said Tuesday.

The back taxes, penalties and interest levied against Harborside Health Center came after the IRS examined its returns for 2007 and 2008 and determined a 1982 tax code prohibiting cost deductions for businesses that traffic in illegal drugs applies to the dispensary.

Hmmmmmm. If this puts them out of business there will be no future revenue. No sales and other taxes for the locals. No more income taxes for the Fererales from the business and its workers. Are our politicians really that stupid? No need to answer that. It was a rhetorical question.

H/T Drug Policy Forum of Texas

Cross Posted at Classical Values

A Little Kamikaze Action?

Is this a case of a kamikaze pilot or just a flight gone wrong?

A low-flying small plane crashed into an office building that houses the Internal Revenue Service in Texas on Thursday, and officials said they were investigating whether it was an intentional act by the pilot.

The U.S. law enforcement officials said authorities were trying to determine if the pilot intentionally targeted the IRS. They spoke on condition of anonymity because the investigation is continuing.

Assistant Austin Fire Chief Harry Evans said at least one person was missing and two people were taken to a hospital. Their conditions and identities were not immediately known.

The crash sent workers fleeing as ceilings crumbled, windows shattered and flames shot out of the building.

I wonder if the SEIU is looking to man the anti-aircraft concession on top of IRS buildings?

As a precaution, the Colorado-based North American Aerospace Defense Command launched two F-16 aircraft from Houston's Ellington Field, and is conducting an air patrol over the crash area.

And that is going to help how? What they need is about 4 or 5 Avenger batteries on top of the building. Although debris falling on cities is not a very good idea.

I worked on one of the competing prototypes for the Avenger tracking system. Interesting work.

Cross Posted at Classical Values

The War On Business Continues

Mr. Obama is proposing some new taxes on business. This will surely improve the business climate and help get the economy out of recession. It will create almost 1,000 new jobs though. For IRS agents.

President Barack Obama plans changes to tax policy certain to be unpopular with corporations with international divisions and individuals who use tax havens.

Obama's two-part plan, which he is slated to unveil at the White House on Monday, also calls for 800 new federal tax agents to enforce the system.

The president's proposal would eliminate some tax deductions for companies that earn profits in countries with low tax rates, as well as consider U.S. citizens who use tax havens in the Bahamas or Cayman Islands guilty of violating U.S. tax laws. If Obama wins congressional approval for the changes — and he faces a challenge on Capitol Hill — it could deliver $210 billion in tax revenue over the next decade.

Treasury Secretary Timothy Geithner was to join Obama for the 11 a.m. comments.

Officials described the administration's plan ahead of the announcement on the condition of anonymity so they wouldn't upstage the president's remarks. However, they acknowledged the political challenges facing the plan. The administration won't seek a complete repeal of overseas tax benefits and, although the rule changes are narrower than some anticipated, business leaders still oppose them as a tax hike.

So let me see. Is this the Carter Plan for reviving the economy or the FDR Plan?

Only Three Years 8 months 2 weeks and 1 days to go.

Free Speech?

Larken Rose believes your income if wholly earned in the United States is not taxable. He came to this belief by studying the income tax law and its history. He produced a video now available on Google explaining some of his reasons for his belief. He dared the IRS to prosecute him. They did. He lost his case in a jury trial and is doing 15 months in Club Fed. His wife did one month. Nothing too unusual here.

Former IRS Criminal Investigative Division (CID) Special Agent and CPA Joseph Banister was tried for giving information to and engaging in a criminal conspiracy with a California buisness man to avoid Federal taxes. He was acquited. Interesingly enough, in the Banister trial the IRS could produce no evidence that Banister owed income taxes.

During the trial, Banister's former supervisor at IRS's San Jose CID office, Robert Gorini (who testified via video recording) when pointedly asked, was unable to cite any U.S. law that required Banister to pay income taxes.

Banister, who was forced to resign in 1999 after questioning IRS officials about their legal authority, gave Thompson's worker's a presentation in 2000 which reviewed his detailed investigative research of U.S. tax law which concluded that not only did the IRS lack any authority to impose income taxes on the workers, but there was no legal requirement for the business to withhold any taxes from the worker's paychecks.

OK. So what you ask does this have to do with free speech?

Larken had two www sites describing in detail his beliefs. TaxableIncome.net and Theft-By-Deception.com. If you click on those links you get a 404 error. Not found. Why is that? Because as part of the settlement of the case Larken was required to take down the www sites in question. Chilling isn't it? There is plenty of good and not so good information on the 'net. Yet in the case of tax information free speech is not allowed. Chilling isn't it?

Here is what Larken has to say on the matter of his trial.

They acknowledge that we have a right to show that we did what we believe the law requires . . . they just don't want us to be allowed to show the jury ANY section of the statutes or regulations . . . or QUOTE from any section . . . or show them my "Taxable Income" report . . . or the Theft By Deception video.

Feel free to be amazed, but don't be scared. This isn't a surprise at all, and about 80 percent of my rebuttal has been sitting here for weeks, waiting to be completed once I got their looney motion, which I knew was coming. "Sure, you can show what you believed . . . as long as you don't say anything about the law." Interesting view of "justice" they have.

Pretty chilling isn't it? You can't quote the law in your defence. Not only that they have told Larken - the American people are not allowed to evaluate your position even outside a court of law. Free speech in America? You decide.

This flash presentation 861 Evidence might also be of interest. Joseph Banister appears in the video as well as Sherry Peel Jackson CPA and former IRS agent. More details on the Joe Banister trial.

It is not just the "Campaign Finance Reform" Laws we have to fear. The IRS is in on the act too.

Interestingly the Paper Work Reduction Act says that all paperwork required by the government must be certified by the government as required by law. There is no such requirement for form 1040.

In Section 3512 of the Act, titled "Public Protection," it says that no person shall be subject to any penalty for failing to comply with an agency’s collection of information request (such as a 1040 form), if the request does not display a valid control number assigned by the Office of Management and Budget (OMB) in accordance with the requirements of the Act, or if the agency fails to inform the person who is to respond to the collection of information that he is not required to respond to the collection of information request unless it displays a valid control number.

There was a case brought up in Illinois on this very point. What happened?

On May 12, 2006 in Peoria, Illinois, the attorney for the U.S. Department of Justice (DOJ) begged the court to dismiss all charges against IRS victim Robert Lawrence in federal District Court.

The motion for dismissal came on the heels of a surprise tactic by Lawrence’s defense attorney Oscar Stilley.

The tactic threatened exposure of IRS’s on-going efforts to defraud the public. The move put DOJ attorneys in a state of panic that left them with only one alternative: beg for dismissal, with prejudice.

Stilley’s tactic paid off. Sixty days earlier, the DOJ had indicted Lawrence on three counts of willful failure to file a 1040 form, and three felony counts of income tax evasion. The federal Judge dismissed all charges with prejudice, meaning the DOJ cannot charge Lawrence with those crimes again.

Cross Posted at Classical Values