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The
Tax Trap: How a Florida Couple Declined Participation in a Government
Ponzi Scheme and Ended Up in Prison
by
Bill Sardi
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by Bill Sardi: Stocks,
Bonds, Real Estate, Paper Money, Gold
"Anyone
may arrange his affairs so that his taxes shall be as low as possible;
he is not bound to choose that pattern which best pays the treasury.
There is not even a patriotic duty to increase one's taxes. Over
and over again the Courts have said that there is nothing sinister
in so arranging affairs as to keep taxes as low as possible. Everyone
does it, rich and poor alike and all do right, for nobody owes any
public duty to pay more than the law demands."
~ Learned
Hand, Judge, U.S. Court of Appeals 2nd Circuit (1872-1961)
Gregory v. Helvering 69 F.2d 809, 810 (2d Cir. 1934), aff'd, 293
U.S. 465, 55 S.Ct. 266, 79 L.Ed. 596 (1935)
To write an
article that casts the Internal Revenue Service in a bad light may
have its obvious consequences – retaliation by the IRS. So this
report is written anonymously.
Sadly, America
is fast becoming a fascist country without recognition by its citizens.
Public anger is misdirected and divides the nation, which insulates
the government from public pressure. Division is how government
keeps the pressure off of itself – rich vs. poor, black vs. white,
immigrant vs. non-immigrant, union vs. non-union worker. In the
following report, it’s tax-payer vs. tax evader.
Furthermore,
government can even violate the Constitution with impunity because
it picks off dissenters one by one, breaching the rights of one,
not all. It was Martin Niemoller (1892-1984), born in Lippstadt,
Germany, who wrote the following:
"In Germany,
they came first for the Communists, And I didn’t speak up because
I wasn’t a Communist;
And then
they came for the trade unionists, And I didn’t speak up because
I wasn’t a trade unionist;
And then
they came for the Jews, And I didn’t speak up because I wasn’t
a Jew;
And then
. . . they came for me . . . And by that time there was no one
left to speak up."
The story of
a tax evader versus the IRS is generally not sufficient to attract
the attention of most Americans. Most Americans don’t side with
tax evaders, feeling they are cheating others. Furthermore, most
Americans cannot distinguish tax evasion from tax avoidance. Pay
your fair share of taxes, just like all the rest of us! That is
the common sentiment.
Even when Americans
are asked if they know of any specific law which requires citizens
to pay income taxes, most Americans look perplexed as to why a law
would be needed in the first place. What is often heard is that
every good American citizen should pay their taxes regardless of
whether there is a law or not.
America has
drastically changed from its earliest beginnings. America actually
started out as a tax protest, the Boston Tea Party being the best
specific example. Today, protest taxes and you are considered unpatriotic!
Onerous
tax code
The IRS’ Taxpayer
Ombudsman says the U.S. tax code has become so onerous, so complex,
it costs Americans about $193 billion a year to fill out tax forms,
and if improperly filed, the consequences could be forfeiture of
property or garnishment of wages. As recently as the year 2000 almost
half of U.S. wage earners filled out their own tax forms. Today
80% of tax filers must rely upon assistance in the form of software
or a tax consultant. This means the tax code is beyond the comprehension
of most citizens.
An estimated
7.6 billion hours a year are spent filling out tax forms for the
IRS; and that figure does not even include millions of additional
hours that taxpayers must spend when they are required to respond
to an IRS notice or an audit (7.6 billion hours consume the equivalent
of 3.8 million full-time workers).
The U.S. tax
code is so complex that almost any tax filer could be found in violation
of some rule and be subject to fines and penalties. Furthermore,
the IRS can extend its reach beyond the Tax Code and employ laws
intended to track down illicit drug dealers. In the case presented
below, laws which require banks to report transactions of $10,000
or more.
Case in
point
In the case
presented below, laws require banks to report transactions of $10,000
or more to the IRS. The IRS claims the alleged offenders attempted
to skirt around this law by writing checks just under $10,000 so
as to avoid detection by authorities and to evade taxation on income.
In legal terms, this violation is called "structuring."
It was initially defined in the context of drug dealers who would
use many small bank transactions to evade detection. The IRS has
elected to use this structuring law to prosecute anyone whom they
can make it appear has attempted to evade government detection and
therefore, taxation.
Now it is used
against a Christian ministry that had no intent to defraud, and
individual checks for $9500 and $9600 were cherry-picked over a
2-year period from among weekly checks written to make payroll.
The employees were paid in cash and the checks were sometimes written
for amounts as low as $2000 or as high as $12,000. Checks written
for $6200 and $7800 were not considered "egregious enough."
Any citizen
who writes checks for amounts just under $10,000 could be sent to
jail. In some instances, even when all taxes are paid, the IRS has
deemed transactions under $10,000 to be structured.
How would those
accused of structuring have prevented the problem? They would have
had to demand that their bank report these less-than-$10,000 transactions
to the government so as to avoid potential prosecution. There is
no law that would force banks to report transactions below $10,000.
What about
privacy? Must the government know everything its citizens do? But
citizens serving on a jury panel are likely to ask, what have you
got to hide?
Assume for
a moment there is no argument that the "tax evader"
was actually "evading" taxes. Does that give the
Federal government the right to over-prosecute a citizen, tax him
for every dime he ever made, use laws intended to deal with drug
dealers, and invoke penalties and fines that even convicted drug
dealers don’t face?
Who cares,
he’s a tax evader, right? That’s just what must have been going
through a jury’s mind two years ago in Pensacola, Florida.
The ordeal
Without warning,
in the early morning on a day in 1996, Internal Revenue Service
agents, sporting seizure papers and accompanied by police officers,
towed away cars parked on Cummings Road in Pensacola, Florida. So
began a long ordeal between a Christian ministry and the Internal
Revenue Service (IRS) that continues today.
IRS agents
seized the property in a claim for $10,000 of unpaid taxes. The
alleged tax violators had mailed written responses to the IRS, but
IRS agents chose to seize property without notice rather than write
a reply to the accused. What would become years of intimidation
had begun.
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Kent
Hovind |
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The vehicles
were later returned. But the accused had to take advantage of Florida
law and file for personal bankruptcy to regain their vehicles.
Today the accused,
a man and his wife, convicted of tax fraud, are spending their time
in separate federal prisons. He won’t get out of jail till 2015.
His wife has just now entered federal prison and will spend a year
in jail.
Just how this
couple was found guilty of tax fraud extends beyond a family dispute
with a local branch of the IRS to public privacy and punitive issues
as well as the right to a fair trial that deserve attention in a
country that is fast losing its Constitutional freedoms.
Setting
the stage
This story
is not just that of a crank tax protestor, but that of a retired
public school teacher who started a ministry for children to learn
about dinosaurs.
In 1989 Kent
Hovind and his wife Jo had begun a ministry to educate Christians
that they did not evolve from monkeys but rather were made in the
image of God, in a six-day creation as spelled out in the Bible.
The Hovind’s
called their ministry Creation Science Evangelism (CSE), and they
produced videotapes that have been played worldwide. The tapes were
not copyrighted and anyone was invited to duplicate them free of
charge. Hundreds of thousands of these tapes were copied and distributed
throughout the world.
Kent Hovind
fondly became known as "Dr. Dinosaur" for his popular
presentations to young children that the dinosaurs did not live
millions and millions years ago but rather were created thousands
of years ago as the Bible describes.
Kent became
known for his public presentations where he demonstrated for children
how to launch a paper airplane that would fly over a building, and
how to shoot rubber bands to hit an object the size of a light bulb
from 30 feet away. This wowed children.
Kent was frequently
late for appointments because he stopped to help someone stranded
on a roadside with a flat tire or a dead battery.
Hovind went
so far as to challenge biology professors and teachers of evolution
to open debates. Videotapes of these debates made for interesting
viewing as time after time Hovind tore into the holes in evolutionary
thinking. Hovind even offered a $250,000 reward for anyone who could
provide empirical evidence for evolution.
Vow of poverty
Back in 1989,
Kent Hovind officially took a vow of poverty, as Roman Catholic
priests who belong to an "order" do today. Catholic
priests who take a vow of poverty, which is recognized by the IRS,
are exempt from paying Federal income tax. For those who have taken
such a vow, earnings are considered the income of the religious
order, or in Hovind’s case, part of his ministry. In essence, Hovind
owned nothing, had no salary, and all of his needs, housing, food,
transportation, were met by the ministry. He had no personal wealth,
and he was not an owner of any real estate or other property, the
ministry was. All of CSE’s real estate was put into a trust. Years
later, newspaper reports nebulously reported Hovind failed to pay
his taxes. It was a moot point. Hovind, like ordered Catholic priests,
officially had no income.
The raid
The Hovind’s
faced a squadron of IRS agents and police officers, who with guns
drawn, raided Creation Science Evangelism in the morning hours on
April 14, 2004. Some $40,000 was stolen from the ministry safe that
day.
CSE was hardly
a dangerous crowd of workers, but 20 armed government agents stormed
onto the ministry property without warning in the early morning
hours. One of Hovind’s son, who is physically handicapped, was thrown
to the floor and handcuffed. Four armed agents entered Jo Hovind’s
bedroom and handcuffed her. She was not even allowed to get dressed
or go to the bathroom. She was taken to jail despite pleas for simple
courtesies. She was indicted at the Federal Courthouse in her nightgown.
Such is the experience today of those who, while innocent until
proven guilty, are subjected to humiliation and public ridicule.
The local Pensacola newspaper found the Hovind’s ordeal with the
IRS increased their readership. Not a whimper of protest has ever
been issued from the newspaper. It was as if Hovind was guilty from
the start.
The Withholding
Tax trap
Kent Hovind
was arrested and charged with twelve counts of willfully failing
to withhold, deposit, report, and pay federal income and FICA (social
security) taxes for employees from March 31, 2001 until December
31, 2003. The only law he was informed that he violated was 26 U.S.C.
§ 7202. (26 U.S.C. § 7202 has a 5-year penalty and he is in jail
for 10.)
When their
day in court arrived, 5 of 6 former and current employees testified
they had paid their own taxes, so the IRS’ argument that the Hovind’s
(or the ministry) owed the government hundreds of thousands of dollars
was specious.
It appears
that the IRS could not easily invoke fines and penalties upon Kent
Hovind because of his vow of poverty. In fact, a 2005 Grand Jury
declined to investigate Hovind any further after submission of his
affidavit which explained his dedication to ministry work and how
he began his ministry with a vow of poverty, which he adhered to
religiously.
To the IRS,
this was not a ministry but rather Kent Hovind doing business as
Creation Science Evangelism. So let’s pretend, for a moment, Hovind
really was a business like the IRS tries to make it appear. But
the IRS didn’t follow their own rules here. Churches and ministries
do not have to apply to the government to be tax exempt.
According to
IRS Publication 526:
Organizations
That Qualify To Receive Deductible Contributions
You can deduct
your contributions only if you make them to a qualified organization.
To become a qualified organization, most organizations other
than churches and governments, as described below, must apply
to the IRS.
In the IRS’
own words a church "is automatically tax-deductible."
Unable to pursue
Hovind on the ministry income or personal income taxes because of
his vow of poverty, the IRS targeted the Withholding Tax for his
employees.
The IRS tells
employers and employees that according to Internal Revenue Code
(IRC) section 3402(a)(1) of their code: "...every employer making
payment of wages shall deduct and withhold upon such wages a tax
determined in accordance with tables or computational procedures
prescribed by the Secretary." This language is widely cited
in copies of the IRC.
However, this
is what the law really says: "no (federal, state,
city or county) municipal corporation shall levy or collect or cause
to be levied or collected any tax upon the income, or any part thereof,
of any person, resident or nonresident (also known as the "Full
Paycheck Law")."
How did the
IRC regarding withholding tax get changed? According to a September
15, 2003 letter from GAO (General Accounting Office) to Congressman
Elton Gallegly regarding W-4 forms and reporting, this was revealed:
"Under current
law, IRS does not have statutory authority to impose a penalty
to enforce employer compliance with the reporting requirement.
The reporting requirement was promulgated in Treasury regulations."
So the U.S.
Treasury Department altered the Internal Revenue Code regarding
Employee Withholding taxes. But even then, there is nothing that
an employer can do to force employees to sign the W-4 form
The Code of
Federal Regulations clearly advises the employers at 26 CFR §31.3402(p)-1(a)
"An employee who desires to enter into an agreement for withholding...shall
furnish his employer with Form W-4 (or its equivalent) for withholding.
The furnishing of such Form W-4 shall constitute a request for withholding."
Then, 31 CFR
§215.2(n)(1) clearly tells the employers they cannot take amounts
from the workers' pay for any form of State tax UNLESS the employee
VOLUNTARILY elects to have such sums withheld.
The IRS threatens
employers with huge fines if they don't withhold payroll taxes.
Yet there is nothing an employer can do till employees consent to
withholding by signing the W-4 form.
Devvy Kidd,
Executive Director of We the People Congress, Inc., says: "The
withholding issue was sold under the guise of patriotism because
the American people did not want this new taxing scheme back in
1942."
Structuring
and penalties
The IRS claimed
the Hovinds "structured" 45 checks for $9500 or
$9600, totaling $430,000, to skirt around government reporting laws.
First, it is
difficult to imagine how one check can be deemed to be structured.
The combination of two or more checks that represent $10,000 or
more to the same payee, intended to avoid the IRS reporting requirement,
has been interpreted as structuring in the past.
But transactions
under $10,000 have been cited as a violation of reporting laws.
The 11th Circuit Court of Appeals ruling states "by
its plain language, the statute [Section 5324(a)(3)] prohibits transactions
of less than $10,000 that are intended to evade reporting requirements."
… "Knowledge of, and the intent to avoid, reporting
of those transactions by bank" represents evidence of structuring.
(31 CFR § 103.11(gg)
But the fact
that one check for $9500, written by anyone who has knowledge of
the $10,000 reporting law (which shows intent in the government’s
mind), can be deemed to be evidence of structuring means anyone
could be found guilty of this practice by happenstance.
Avoiding and
evading are mixed here. Citizens apparently have no right to make
efforts to maintain privacy in financial dealings. Were the Hovind’s
negligent in informing their bank to report those checks under the
$10,000 requirement? The IRS needs to make it clear, since the public
has become generally knowledgeable of the $10,000 reporting requirement
for banks (not businesses, citizens, or ministries), that transactions
intentionally engineered so as to remain under this reporting requirement
for the sole purpose of maintaining privacy may be deemed to be
a violation of the law. Therefore, in self-protection, parties should
instruct their bank to report all transactions to the IRS regardless
of amount to the IRS. The current practice is a reporting trap.
Here
is the IRS’ logic:
You
should not drive through a red
light or you will be sent to jail.
You
can drive through a green
light, and you will not go to jail.
However,
if you drive through a green
light in an effort to knowingly avoid driving
through a red light,
you go to jail.
Or….
It is illegal
to drive 45 in a 45 zone because you’re avoiding breaking the
law at 46.
Second, the
IRS arbitrarily claims the Hovind’s owe the government $430,000,
the total amount of the structured checks. But the 45 checks totaling
$430,000 were written to pay the salaries of employees and were
essentially a deductible expense of the business. How can the government
demand payment for what amounts to the entire weekly payroll of
CSR’s employees?
The total withholding
tax for workers designated as independent contractors, who would
pay both the workers and employer’s share of the tax, would be 15.3%.
The Hovind’s would be obligated to pay, at most, 15.3% of $430,000,
or $65,790 in Withholding tax. The employees, who were paid cash,
were obligated to pay their own taxes on their income. The remaining
total of the payroll checks, minus Withholding taxes, would represent
a tax deduction to the dba (Kent Hovind) for cost of labor.
How did a jury
buy into this false argument that the penalty should be based upon
the total payroll, not the total of Withholding taxes? The IRS picked
the highest amount, the total amount of the payroll checks, not
the lower amount, Withholding taxes. Why did the local news reporters
in Pensacola never question this figure? Why did the judge allow
this higher figure to be the penalty the Hovind’s owed?
Withholding
tax supports a Ponzi scheme
In their defense,
the Hovind’s declared the Social Security payroll deduction a Ponzi
scheme and branded it as illegal. After his conviction and sentencing,
the judge in the case stated she found the Hovind’s defense as based
upon "bizarre arguments." Few Americans paid attention.
The General
Accounting Office says that Social Security is under-funded by $12
trillion, and there is no money in the Social Security trust fund
under each citizen’s name, and it relies upon a larger population
of younger tax payers to pay for retirees, and it cannot in any
way deliver on its promise to deliver retirement checks to future
retirees.
Despite this,
most Americans would view the Hovind’s defense, while true, to be
a cover to evade taxes and such failure to pay taxes would only
make matters worse. It is very difficult to get through to the citizenry
on these matters.
Christians
appear to be paralyzed to oppose a wrong, their complicity with
what appears to be a Biblical exhortation not to "cheat
your neighbor, nor rob him. The wages of him who is hired shall
not remain with you all night until morning." (Book of
Leviticus 19:13) The current Social Security system is going to
cheat future generations out of trillions of dollars.
The Securities
and Exchange Commission describes a Ponzi scheme as a system
where one continues to put money into a system on the "rob-Peter-to-pay-Paul"
principle, as money from new investors is used to pay off earlier
investors until the whole scheme collapses.
The Withholding
Tax may be the law by prevailing practice, but that doesn’t make
it moral or right. In fact, it may be unconstitutional because it
interferes with the life, liberty and pursuit of happiness guaranteed
in the Declaration of Independence.
If somebody
doesn’t begin to stand up to a government system that by all definitions
is a Ponzi scheme, American society will crumble in economic insolvency,
as we read in the daily newspapers now.
Until the laws
and regulations regarding taxation are changed, the citizenry is
obligated to pay taxes and employers are obligated to withdraw funds
from employees’ payroll checks. But this makes citizens complicit
in the crime.
News headlines
Within a week
of the April 14, 2004 raid on CSE the Associated Press had taken
the story national. Why the Associated Press elected to cover a
local news story should be noted. It could prejudice a future jury.
Newspaper headlines
made it sound like the Hovind’s were millionaires. CSE had taken
in $5 million, but that was over a period of 5 years and pertained
to the gross receipts of the ministry, not the net profits. The
seeming largesse of the money was beyond what any jurist would ever
make in their lifetime. They couldn’t imagine the Hovind’s did not
personally profit from many donations and tape and book sales.
Playing
to the jury
The jury of
twelve was sworn in on October 18, 2006 in United States District
Court for the Northern District of Florida.
Jurors could
only be those who embrace Darwinism or even atheism, or Christians
who espouse to the Biblical teaching to pay taxes, or maybe a mixture
of both.
It is in just
this sort of courtroom vise that the Hovind’s found themselves in
a Southern courtroom where it would have been expected that Southern
jurors in the heart of the Bible Belt should have exonerated them.
But oddly, the godly and the apostate would align together to convict
the Hovind’s of contrived charges
The Southern
jury was anticipated to largely reflect a Bible Belt population.
The prosecution knew this and they had to overcome it. The strategy
was to confront the jury with Bible verses that would condemn the
Hovind’s right from the beginning of the trial.
On the second
day of the trial the prosecution brought Rebekah Horton, vice president
of Pensacola Christian College, to the witness stand. Horton’s testimony
was irrelevant to the case, but she was allowed to testify anyway.
Horton herself
had a history of run-ins with the IRS. The non-profit Pensacola
Christian College derived a great deal of its income from A Beka
books (named after Rebekah Horton), which publishes Christian books
and curriculums for grade school children. In the mid-1990s, A Beka
paid nearly $50-million in back taxes after the Internal Revenue
Service ruled that it should have been classified as a for-profit
entity.
The reformed
Horton took the stand. She had subsequently taken an "anti-tax
rebel" stand and informed students that the school would
report anyone who they feel is breaking the laws of the country.
Pensacola Christian College has strict rules of conduct, and they
informed students the school would prohibit any student from associating
with others who took an anti-taxation stance.
Whether Horton’s
penance was to take the witness stand on that day is unknown, but
why the judge would allow the prosecution to question Rebekah Horton
goes unexplained. Horton had no direct connection with the case.
Horton was an avowed enemy of Hovind and had forbidden her school’s
students to work for Creation Science Evangelism.
Horton testified:
"We know the Scriptures do not promote (tax evasion). It's
against Scripture teaching." The scripture she was referring
to is Matthew 22:21: "Render unto Caesar the things which
are Caesar’s, and unto God the things that are God’s."
Those words
were uttered by Jesus when questioners tried to trap Jesus into
taking a stand that they could report to the Roman authorities on
whether Jews should or should not pay taxes to their Roman occupiers.
The more accurate translation is: "Creatures of the State
should pay taxes to the State, and Creatures of God should pay to
God." This scripture is one of the most often misinterpreted.
Jesus Himself
rebuked the Apostle Peter for paying taxes not due. (Matthew 17:
24-27) "Jesus asked: of whom do the kings of the earth take
custom or tribute? Of their own children, or of strangers?"
(Interpretation: governments raise money from foreigners {aliens}
rather than from sons {residents}.)
The Bible offers
no mandates for employers to pay their employees taxes, only for
workers to pay their taxes. At issue in the Hovind case was Federal
withholding for Social Security. Federal withholding taxes actually
stake first claim on an employee’s paycheck, essentially replacing
the "first fruits" that were to be given to God.
(Deuteronomy 26:2) The Federal government now receives the "first
fruits." The Hovind’s were objecting, as Christians, to
participation in a fraudulent scheme called Social Security. Imagine,
in this case, had the jury elected to exonerate the Hovind’s of
all charges based upon a requirement to withhold money for a fraudulent
public retirement scheme, history would have been made. The jury
seized no such opportunity.
The Social
Security scheme is not much different than the Bernard Madoff $50
billion Ponzi scheme that has outraged so many Americans. Yet no
fury is expressed when the government robs the people.
The Hovind’s
claimed no benefits for Social Security. Social Security is still
a voluntary system for its participants. Recognize, according to
the General Accounting Office, Social Security invests money in
securities on Wall Street. Withholding Taxes produce handsome rewards
for traders on Wall Street who pay lobbyists and make circuitous
political contributions to Congressional representatives. Others
line their pockets with the Withholding tax money the IRS collects,
under force of law.
The judge
The judge assigned
to the case, US District judge Casey Rodgers, a G.W. Bush appointee,
was the youngest woman appointed to serve in the federal court system.
She was appointed at age 39, a couple of years prior to the Hovind
case. She had a career to make and now an important case to cut
her teeth on.
Of considerable
side interest, Judge Rodgers was later to rule, in a case involving
the Santa Rosa County School District in Pensacola, against school
prayer. Her ruling prohibits employees from promoting prayer at
school-sponsored events. This is despite the 1st Amendment
to the U.S. Constitution which states "Congress shall make no
law respecting an establishment of religion, or prohibiting the
free exercise thereof." Essentially, Judge Rodgers ruling violates
the 1st Amendment.
During closing
arguments Kent Hovind’s attorney read the jury instructions to the
jury about the amount structured must be more than $10,000.
The U.S. Attorney objected to her own jury instruction! The judge
held a side bar and called for a recess. Forty-five minutes later
she came back in with new jury instructions that said if they found
that the Hovind’s withdrew less than $10,000 they must find them
guilty! The stunned Hovind attorneys each moved for a mistrial since
jury instructions cannot be changed after closing arguments are
presented. The judge denied their motions. The Hovind’s were never
allowed to present a defense for structuring transactions under
$10,000. The Hovind’s were found guilty of forty-five counts of
structuring.
After the trial,
Judge Rodgers was quoted by the Pensacola News Journal to say that
"Kent Hovind had failed his fellow citizens and the men
and women of the military – who fight to defend his freedoms – by
refusing to pay taxes." This is a very strange statement
for a judge who is supposed to be impartial. Juries find the accused
guilty or innocent, not judges. The definition of a patriot has
changed, from one who resisted an onerous tea tax by the British,
to Americans today who view any tax protest as a lack of patriotism.
After Kent
and Jo Hovind had been convicted and sentenced, an appeal was filed
with the 11th Circuit Court. Judge Rodgers refused to
produce transcripts of the Hovind case that were required for an
appeal to be submitted. In fact, Judge Rodgers even incurred fines
and delayed the appeal by many months. Why was Judge Rodgers dragging
her feet in delivering transcripts of the case in preparation for
an appeal?
After-court
comments
In the Pensacola
News Journal IRS spokesman Norman Meadows said Hovind's case
was not run of the mill and "tax protesters like this are a threat
to the nation."
The government
alleged that Mr. Hovind threatened harm to those investigating him
and those cooperating with the investigation, yet when pressed about
these claims, the government said this claim was based upon Mr.
Hovind’s prayer on the radio program he hosted when he discussed
David praying that God would smite his enemies.
On January
20, 2007 the Pensacola News Journal said: "Jo Hovind
will be sentenced March 1 on charges of evading bank-reporting requirements."
But just exactly how would a citizen force a bank to report transactions
to Federal authorities that were below the $10,000 notification
point? That point went unexplained. The local newspaper bought the
government’s story all the way.
Fearing more
charges would be filed against her, after the trial was completed
Mrs. Hovind, who had never taken a salary at Creation Science Evangelism
and had never filed a tax return, filed a late tax return for the
past 10 years showing she owed $25,000 in back taxes (including
fines and penalties), which she couldn’t pay. Surprisingly, after
belatedly filing her tax returns, Jo Hovind actually received tax
refund checks from the IRS for a few hundred dollars!
The ordeal
continues. The IRS has delivered tax bills to the Hovind’s for $528,000
and $700,000 and now $10 million dollars (Spring 2008). The IRS
is over-prosecuting, declaring every dollar of income made by CRE
to be ill-gotten. The IRS must be tabulating the huge cost of filing
charges against the Hovind’s and figuring out how to justify what
must be millions of dollars spent in their prosecution for more
than a decade. This must be the reason for the attempt to confiscate
property belonging to Creation Science Evangelism. A judge is now
considering which if any properties on Cummings Road in Pensacola,
properties worth close to $2 million. Just how the IRS is going
to justify the taking of all the property in this ministry is going
to be worth watching since churches and church groups, regardless
of their filing for 501c3 status, are exempt from paying taxes.
The IRS maintains, and the courts supports, the false notion that
the IRS is a "victim of tax evasion." (11th
Circuit Court of Appeals decision, Dec. 30, 2008, No. 07-10502)
Even if true, to what extent? The penalty for not paying Withholding
tax appears to be beyond reason since most of the employees paid
their own taxes.
Many followers
of Darwinian evolution followed the court case involving Kent Hovind
every step of the way. Many ridicule Kent Hovind, arrogantly claiming
scientific high ground for Darwinian evolution, and gloat that a
proponent of Biblical creation has finally been "caged,"
that his science and his business practices were a fraud all
along.
Another note
to this saga: Assistant U.S. Attorney John D.R. Atchison, a prosecutor
in the Hovind case, was arrested in September of 2008 for flying
to Detroit in an attempt to molest a 5-year old boy. Atchison committed
suicide in federal prison a month later.
Is there
any privacy left in America?
Donald McAlvany,
editor of the McAlvany Intelligence Advisor, lashes
at the war on cash and privacy. Mr. McIlvany’s words speak loud:
Most Americans
suppose "money laundering" refers primarily to the hidden, laundered,
movement of cash profits from drug deals. Wrong! It refers today
to almost any "financial crime," broken financial regulation,
use of cash, avoidance of government cash-reporting laws, unreported
foreign bank accounts, unreported transfer of funds, or virtually
anything the government bureaucrats want it to mean. The definition
is vague and ever expanding.
IRS agents
are greatly accelerating money-laundering cases in situations
where there is obviously no criminal intent, and certainly no
involvement whatsoever with drugs or drug money. Remember, the
IRS considers money laundering to be any effort you make to disguise
your assets or avoid completing a federal currency transaction
or border-crossing form.
If a tax
case can be called "money laundering," it is no longer civil,
but criminal, with large potential criminal sentences and fines….
The first
thing the Nazis did in the 1930s to establish control over their
population was to establish "money crimes" that were punishable
by forfeiture and imprisonment. Half a century later, the same
thing is happening here. The war on drugs is a classic government
power grab.
McIlvany goes
on to address "structuring:"
"Structuring"
is defined by the IRS as any effort to avoid reporting cash or
other monetary transactions over $10,000 by breaking them down
into smaller "related" transactions over any 12-month period (defined
by USC 31, Sec. 5322-5324-Money Laundering Control Act of 1986,
as amended).
"Structuring"
is now defined as money laundering, and is a criminal offense.
You can now go to jail for dealing in cash to protect your financial
privacy, if the IRS thinks you're trying to hide or structure
your transactions or monetary instruments. Furthermore, it's against
the law for a bank or merchant to tell you that you might be violating
the law. This can get him prosecuted as part of your structuring
"conspiracy." If they think your behavior is suspicious, they
may fill out a form on you without telling you and file it with
the IRS, which will promptly audit you, or begin a criminal investigation.
. . .
The average
person might say, "Well, the government would never come after
anyone who was totally innocent." But that's not true – he misses
the point. The IRS admits that 85% of the people accused of "structuring"
committed no other crime than seeking to protect their privacy.
Interpretation
Americans look
to their TV sets for interpretation of current events. It is easy
to see that the public sorts out a case like the Hovind’s as just
another crank tax protestor who is depriving the public of its money.
Yet some people ask why child molesters roam the streets on parole
while a teacher like Kent Hovind gets 10-years in the slammer?
The American
people largely appear to be oblivious to a government that has slid
past socialism to fascism. Americans might admit to the socialist
claim, but they wouldn’t recognize fascism if they saw it. It is
not in their vocabulary.
In Nazi Germany,
Christians were confronted with the Bible scripture to "render
unto Caesar" to compel their cooperation. As the nation
slides further into debt (another $12 trillion of public debt is
planned by 2013) government will legislate more and more ways to
raise taxes, pay fines, etc.
The Hovind
case was not about law, it was about a country that cannot distinguish
the over-reaching arm of government, beyond what the 10th
Amendment to the Constitution allows, from an all-authoritarian,
totalitarian government, that often, but not always, operates under
a dictator. The State has replaced God.
The Hovind
case was about a citizenry that cannot fathom that their country
does any wrong.
The U.S. Constitution
serves as a perfect cover for American fascism. Constitutional limited
government is gone. The fear of imagined terrorists produces a need
for the public to rely upon an all-authoritative protector.
America is
a Constitutional republic in name only. Efforts to remove guns from
potential criminals are a cover for negating the 2nd
Amendment to the Constitution. The principle of "no taxation
without representation" is negated by gerrymandering of
Congressional districts. Government must strike down tax dissenters
lest the populace rise up against unfair taxation.
The public
is encouraged to save rather than go into debt, but the savings
only capitalize the bankrupt bankers. The public, via inflation
created by the Federal Reserve, is fleecing the citizenry of its
money. The public remains in a coma.
The greatness
of America, its pioneer spirit and its standard of living, is about
to come to an end. The Federal government hides the fact it spends
over a trillion dollars a year on war making, or more than half
of the U.S. annual budget, essentially robbing money from its future.
Medicare and Social Security are aggregately under-funded by $75
trillion. There is no way Americans today are going to be provided
the healthcare and pension checks they were promised.
When the citizenry
finally does wake up, the only way the State can maintain control
is to quell all opposition, threaten imprisonment, keep the people
financially impoverished and in bread lines, so they cannot mount
up meaningful resistance. Searching for food on the table, they
become more dependent upon a monster that the nation’s forefathers
warned about.
Threatened
with exposure, the government is not beyond a "false flag"
operation where a "dirty bomb" or two will cause
the people to give up their freedoms for greater security. Plans
for such covert operations have been discovered in archives of the
federal government.
Oppressive
countries imprison dissenters. America has more people locked up
in jail than any other country. Prisons have become a growth industry.
Kent and Jo Hovind look out from behind bars, wondering when or
if America will ever wake up. They now serve God in a prison ministry.
Americans will
hear of the Hovind case. They will say, "Ya, that’s that
creation guy, got himself into trouble with the IRS. He should have
paid his taxes like everyone else."
Yes, we should
all be good citizens and pay into the government Ponzi scheme, and
relinquish our privacy rights and not hide anything from the government,
and make no effort to avoid (not evade) taxes. Americans aren’t
likely to pay attention till the IRS is prosecuting them.
At the current
writing of this report, the Federal government is covertly auditing
small business bank accounts for any appearance of tax evasion.
The Federal government assumes it has the right to audit every bank
account in America because it is now an insolvent government that
must look for new sources of income. It is possible the IRS will
estimate taxes owed and withdraw funds directly from small business
bank accounts rather than audit every small business.
January
8, 2010
Bill
Sardi [send
him mail] is a frequent writer on health and political
topics. His health writings can be found at www.naturalhealthlibrarian.com.
He is the author of You
Don’t Have To Be Afraid Of Cancer Anymore.
Copyright
© 2010 Bill Sardi Word of Knowledge Agency, San Dimas, California.
This article has been written exclusively for www.LewRockwell.com
and other parties who wish to refer to it should link rather than
post at other URLs.
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