<Date of Letter> Tax Advocate Services 4041 N.

Central Ave MS 1005 PHX Phoenix Arizona 85012 Attention: Barbara Richardson Case Number: xxxxxxxxx ID # used in your system: xxx-xx-xxxx Dear xxxxxxxx, This letter is in response to your letter dated April 21, 2010, which you sent to me regarding my client, xxxxxxxx, for the years 1994 thru 2009. In your letter you made a statement, which I believe goes to the heart of the issue before us both now. IRS will not accept the original filed returns unless all the income is included on the tax returns submitted to IRS. I believe if we can resolve this issue, we will be on the way to clearing up any misunderstanding between xxxxxxxxx and the IRS. I would propose that we follow the statutes, regulations and IRM provisions along with the U.S. Supreme Court who are the final word on what the statutes mean or say. Since you have taken an Oath of Office to uphold the U.S. Constitution and the laws I would not see this as being an objection by you. I have reviewed the tax returns filed by xxxxxxxxxx for the years in question. It appears that she and her husband submitted corrected Information Returns declaring that what was previously reported was incorrect. Although I was not personally involved with the preparation of these returns nor did I advise them to file the returns this way, representing my client before the IRS, I must use and apply the law to understand if what they did is correct and if what the IRS did is correct. I am sure you would agree with this.

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So the first thing I looked at are they authorized by law to correct Information Returns or other documents submitted to the IRS, which they believe are not correct? The answer is yes according to the statutes, IRS and the US Supreme Court. The IRS has trained its employees to believe that a taxpayer may not rebut and/or correct erroneous information submitted by third parties, PAYERS. This appears to be false and fraudulent training, since no statute exists to support the IRSs claim. While the truth is, that the US Supreme Court does authorize this and the statutes demand that what ever is submitted to the IRS be true and accurate. 1. The IRS also authorizes this action, as evident by the fact the IRS has created a Form 4852 to correct a W-2. It states on the form in the instructions Purpose of form. Form 4852 serves as a substitute for Forms W-2, W-2c, and 1099-R and is completed by taxpayers or their representatives when (a) their employer or payer does not give them a Form W-2 or Form 1099-R, or (b) when an employer or payer has issued an incorrect Form W-2 or Form 1099-R. Attach this form to your income tax return. 2. The statute 26 U.S.C. 6065 requires that Except as otherwise provided by the Secretary, any return, declaration, statement, or other document required to be made under any provision of the internal revenue laws or regulations shall contain or be verified by a written declaration that it is made under the penalties of perjury. This statute applies to everyone including the IRS, and their documents that they are required to make. In 8 years I have not seen one document signed under penalty of perjury by an IRS employee as required by 6065. It is not done, because they know that they could go to jail for perjury. 3. The US Supreme Court has provided the authority to everyone to rebut any presumption or assumption. United States v. Hover, 268 F.2d 657(1959) Presumption of correctness which attends determination of Commissioner of Internal Revenue may be rebutted by showing that such determination is arbitrary or erroneous.

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Portillo v. C.I.R., 932 F.2d 1128 (5th Cir. 1991) The tax collectors presumption of correctness has a Herculean mascularity of Goliath like reach, but we strike an Achilles heel when we find no muscles, no tendons, no ligaments of fact.

Vlandis v. Kline, 412 U.S. 441 (1973) "...irrebuttable presumptions have long been disfavored under the Due Process Clauses of the Fifth and Fourteenth Amendments." United States Supreme Court.

4. xxxxxxxxxx is not only authorized and entitled to rebut incorrect information, but she is required by law to correct any known false information or presumption, which may have been made as to the nature, amount and source of such payments that were made to her by these third parties. Any erroneous Information Returns, submitted by PAYERS, were in violation of 6721(a)(2)(B), which states; any failure to include all of the information required to be shown on the return or the inclusion of incorrect information; Therefore, by statute they needed to be corrected either by PAYERS, or by xxxxxxxxxx herself since the PAYERS have refused. 5. A PAYER may include incorrect information by reporting non-taxable income as taxable income to the IRS. This error of reporting non-taxable income as taxable income is known as BAD PAYER DATA and is defined in Internal Revenue Manual (IRM) at 4.2.2.4. (4) Examples of bad payer data include but are not limited to: (E) Nontaxable income reported as taxable. 6. The law allows anyone with first hand knowledge to file an affidavit or statement sworn under penalty of perjury. Since xxxxxxxxx has first hand knowledge that the information submitted by PAYERS to the IRS was not correct, this right or obligation to correct the incorrect information by affidavit has been exercised. If the IRS has any facts, evidence or sworn testimony, which rebuts her claim, or the US Supreme Court decisions, then they certainly can rebut her testimony under penalty of perjury if they wish.

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7. Also under 5 U.S.C. 552(d)(2)(B)(i) & (ii) permits an individual to request an agency to correct the records and the Agency must respond with either correcting the record or their written refusal within 30 days. The IRS has failed to respond or correct the record. Under 5 U.S.C. 552(d)(3) The individual is then allowed to have a hearing on the written refusal, however this right is being denied since the IRS has failed to provide a written refusal. (d) Access to Records. Each agency that maintains a system of records shall (2) permit the individual to request amendment of a record pertaining to him and (A) not later than 10 days (excluding Saturdays, Sundays, and legal public holidays) after the date of receipt of such request, acknowledge in writing such receipt; and (B) promptly, either (i) make any correction of any portion thereof which the individual believes is not accurate, relevant, timely, or complete; or (ii) inform the individual of its refusal to amend the record in accordance with his request, the reason for the refusal, the procedures established by the agency for the individual to request a review of that refusal by the head of the agency or an officer designated by the head of the agency, and the name and business address of that official; (3) permit the individual who disagrees with the refusal of the agency to amend his record to request a review of such refusal, and not later than 30 days (excluding Saturdays, Sundays, and legal public holidays) from the date on which the individual requests such review, complete such review and make a final determination unless, for good cause shown, the head of the agency extends such 30-day period; and if, after his review, the reviewing official also refuses to amend the record in accordance with the request, permit the individual to file with the agency a concise statement setting forth the reasons for his disagreement with the refusal of the agency, and notify the individual of the provisions for judicial review of the reviewing officials determination under subsection (g)(1) (A) of this section; 8. xxxxxxxxx could not truthfully sign the tax return (1040) under penalty of perjury as required by law, knowing that all of the information or data provided on the return was not true and accurate to the best of her knowledge, and understanding. Since she has gained additional knowledge and understanding regarding what is taxable income under the law, her moral character and the law forces her to correct

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any and all information, to make it true and accurate, before submitting the tax return. Realize, that this tax return is an affidavit. 9. The corrected Information Returns were signed under penalty of perjury, making them evidence and testimony of a witness under the law. There are many statutes, which deal with the proper handling of evidence and testimony. I can assure you, to conceal, remove or ignore evidence is a crime. The US Supreme Court ruled that income taxes constitute the compelled testimony of a witness: Garner v. United States, 424 U.S. 648 (1975): "The information revealed in the preparation and filing of an income tax return is, for the purposes of Fifth Amendment analysis, the testimony of a witness." "Government compels the filing of a return much as it compels, for example, the appearance of a `witness' before a grand jury." REGARDING CIVIL PENALTIES In talking with xxxxxxxxx I understand that the IRS has issued a civil penalty of $5,000 for each of these years to xxxxxxxxxx for filing the tax returns as she did. So first of all lets see what the law states about the issuance of civil penalties and if the IRS followed the law and were justified in their actions. So does the IRS have the legal authority to issue Civil Penalties under the authority of 26 U.S.C. 6702 against my client? Well the answer will certainly shock you since the answer is NO! 1. The IRS claims that 26 U.S.C. 6702 authorized them to issue civil penalties against my client. However if you read this statute it says in part; (a) Civil penalty for frivolous tax returns A person shall pay a penalty of $5,000 if (1) such person files what purports to be a return of a tax imposed by this title but which Notice two things;

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a) It does not state the type of tax return. In other words it did not state Income Tax Return. This is important since there are no regulations written for this statute, which apply to income tax. b) I have bolded and underlined the word person in this statute. This word is very important because it identifies to whom this statute applies, and to whom the penalty may be issued. 2. The word person as it is used in this statute has been defined by Congress and may be found at 26 U.S.C. 6671(b) in the code. A reading of this definition makes it clear that it does not apply to my client xxxxxxxxx or her husband. In fact it does not mean you or I, either. Note: Congress has written a very restrictive definition of person as it is used in this section of code. In fact the word person is defined three times in the Internal Revenue Code. Person (26 USC 6671(b)) Chapter 68 (Sections 6671 - 6725) Person (26 USC 7343) Chapter 75 (Sections 7201 -7344) Person (26 USC 7701(a)(1)) Every place but Chapter 68 and 75

Under the law the IRS is mandated by Congress to use the definition of a person which is codified at 26 U.S.C. 6671(b) to issue a penalty under 6702. This is because this definition applies to all the statutes from 6671 through 6725 in which 6702 is in this section. Now lets read this definition:

6671. Rules for application of assessable penalties (b) Person defined The term person, as used in this subchapter, includes an officer or employee of a corporation, or a member or employee of a partnership, who as such officer, employee, or member is under a duty to perform the act in respect of which the violation occurs.

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Do not be deceived by the terms includes and including when used in statutory construction. These are placed in the statute to LIMIT the definition to those other things WITHIN the genus of the words being defied NOT to expand outside of the defined terms. This is because there is an important principle of statutory construction, which states that anything not mentioned in a law, statute, code, or regulation is excluded by implication. Expressio unius est exclusio alterius. A maxim of statutory interpretation meaning that the expression of one thing is the exclusion of another. Burgin v. Forbes, 293 Ky. 456, 169 S.W.2d 321, 325; Newblock v. Bowles, 170 Okl. 487, 40 P.2d 1097, 1100. Mention of one thing implies exclusion of another. When certain persons or things are specified in a law, contract, or will, an intention to exclude all others from its operation may be inferred. Under this maxim, if a statute specifies one exception to a general rule or assumes to specify the effects of a certain provision, other exceptions or effects are excluded. [Blacks Law Dictionary, Sixth Edition, page 581] The determining word is, of course, the word including. It may have the sense of addition, as we have seen, and of also; but, we have also seen, may merely specify particularly that which belongs to the genus. Hiller v. United States, 45 C.C.A. 229, 106 Fed. 73, 74. It is the participle of the word 'include,' which means, according to the definition of the Century Dictionary, (1) 'to confine within something; hold as in an inclosure; inclose; contain.' (2) 'To comprise as a part, or as something incident or pertinent; comprehend; take in; as the greater includes the less; . . . the Roman Empire included many nations.' 'Including,' being a participle, is in the nature of an adjective and is a modifier. Id., at 465. One last thing, the Supreme Court instructs you and I to disregard the dictionary definition of a term being statutorily defined, when construing the term:

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 When a statute includes an explicit definition, we must follow that definition, even if it varies from that term's ordinary meaning. Stenberg v. Carhart, 530 U.S. 914 (2000), It is axiomatic that the statutory definition of the term excludes unstated meanings of that term. Meese v. Keene, 481 U.S. 465 (1987); see also Western Union Telegraph Co. v. Lenroot, 323 U.S. 490 (1945)). 3. FACT: It should be clear by now that the only person a civil penalty may be issued to is a person as defined by 6671(b). The application of this statute to other persons is via operation under color of law and is a crime under 26 USC 7214 (a) (1) Willful extortion and oppression under color of law. 4. As mentioned above, there is no regulation written for 6702 for income tax. You may search the book of federal regulations and you will not find a 26 CFR 1.6702. In fact you will not find any regulation written for this statute. Lets review what the courts have said: California Bankers Association v. Shultz, 416 U.S. 255 (1974) "...the Act's civil and criminal penalties attach only upon violation of the regulation promulgated by the Secretary; if the Secretary were to do nothing, the Act itself would impose no penalties on anyone...The Government urges that since only those who violate these regulations [not the Code] may incur civil or criminal penalties, it is the actual regulations issued by the Secretary of the Treasury, and not the broad authorizing language of the statute, which are to be tested against the standards of the Fourth Amendment; and that when so tested they are valid." [California Bankers Assoc. v. Shultz, 416 U.S. 25, 39 L. Ed 2nd 812 (1974)] This case is significant because it reveals that without implementing regulations that enforce penalties for a particular tax, no civil or criminal penalties for noncompliance can be imposed. U.S. v. Mersky, 361 U.S. 431 (1960) "An administrative regulation, of course, is not a "statute." While in practical effect regulations may be called "little laws," they are at most but offspring of statutes. Congress alone may pass a statute, and the Criminal Appeals Act calls for direct appeals if the District Court's dismissal is based upon the invalidity or construction of a statute. See United States v. Jones, 345 U.S. 377 (1953). This Court has always construed the Criminal Appeals Act narrowly, limiting it strictly "to the instances specified." United States v. Borden Co., 308 U.S. 188, 192 (1939). See also United States v. Swift & Co., 318 U.S. 442 (1943). Here the statute is not complete by itself, since it merely declares the range of its operation and leaves to its progeny the means to be utilized in the effectuation of its command. But it is the statute, which creates the offense of the willful removal of the labels of origin and provides the punishment for violations. The regulations, on the other hand, prescribe the Page 8 of 22

identifying language of the label itself, and assign the resulting tags to their respective geographical areas. Once promulgated, [361 U.S. 431, 438] these regulations, called for by the statute itself, have the force of law, and violations thereof incur criminal prosecutions, just as if all the details had been incorporated into the congressional language. The result is that neither the statute nor the regulations are complete without the other, and only together do they have any force. In effect, therefore, the construction of one necessarily involves the construction of the other." [U.S. v. Mersky, 361 U.S. 431 (1960)] This case is very important, because it reveals that a statute has no force and effect unless there is an implementing and enforcing regulation behind it. Statutes without implementing regulations are unenforceable and create no obligation on the part of the Citizen. All of the enforcement provisions of the Internal Revenue Code found In Subtitle F, Procedures and Administration, therefore, must have implementing regulations applying the enforcement provision to the particular tax in question. There is no regulations al all written for 26 U.S.C. 6702 5. In addition, there are many be other statutes, regulations and IRM provisions with which the IRS fails to comply when they issue a civil penalty. 26 U.S.C. 6751(b)(1)(b) Approval of assessment (1) In general No penalty under this title shall be assessed unless the initial determination of such assessment is personally approved (in writing) by the immediate supervisor of the individual making such determination or such higher level official as the Secretary may designate. A search of my clients records will show that no document exists which meet this requirement, i.e., has the approval of the supervisor in writing. So this is a second violation of a statute by the IRS. In addition you will find that the IRS has also failed to follow IRM 4.10.6.3.4 (05-141999) Managerial Involvement which states; 1. The group manager must be actively involved with the development of penalty issues if: A. The examination of income reveals a understatement of income in a given year, the case should be discussed with the group manager. This discussion is mandatory for any examination with an

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understatement greater than $10,000. The purpose of the discussion is to consider possible expansion of the examination scope/depth and the potential of fraudulent activity by the taxpayer. B. Coordination with Criminal Investigation, the Director of Practice in Headquarters Office, and/or area specialists such as the Return Preparer Coordinator or the Penalty Screening Committee, is required. 2. Managerial involvement should be documented on Form 9984, Examining Officers Activity Record. Once again if you search the records you will not find a Form 9984 completed as required by this provision. So, either the IRS failed to comply with this provision, or it does not apply, since my client did not under report her income. 6. In addition a Penalty Screening Committee Case Approval Record, Form 13130 must be signed by Group Manager, Penalty Screening Committee and Quality Review Section Chief to be valid. Again a search of my client records will show that there are also none of these. 7. In addition, right on this Form 13130 it states; Approval must be secured from the Group Manager, the Penalty Screening Committee and the Quality Review Section Chief prior to assessment of the penalty(ies).

REGARDING YOUR STATEMENT & INCOME Going back to your statement, IRS will not accept the original filed returns unless all the income is included on the tax returns submitted to IRS. Believe it or not, I agree with your statement in general. The issue here appears to be that the IRS feels that my client, xxxxxxxx, did not included all of her income on the tax returns that she filed. So the only question, which needs to be answered, is: did my client, xxxxxxxx, include all income on her tax returns? Well the statutes and the U.S. Supreme Court said that she did!

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1. Certainly Title 26 U.S.C. 1 Imposed a tax on taxable income. But to understand what is taxable income you must understand the definition. Congress has codified this at 26 U.S.C. 63. Taxable Income Defined. (a) In general Except as provided in subsection (b), for purposes of this subtitle, the term "taxable income" means gross income minus the deductions allowed by this chapter (other than the standard deduction). 2. Now a taxpayer must understand what Gross Income means. Congress once again defined this in statute and it is codified at 26 U.S.C. 61. Gross Income Defined. "General Definition Except as otherwise provided in this subtitle, gross 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; . . ." (emphasis added) 3. A careful review of this statute reveals that Congress lists 15 types of income to be included in Gross Income subject to taxation but does not mention wages or salary. (1) Compensation for services, including fees, commissions, fringe benefits, and similar items; (2) Gross income derived from business; (3) Gains derived from dealings in property; (4) Interest; (5) Rents; (6) Royalties; (7) Dividends; (8) Alimony and separate maintenance payments; (9) Annuities; (10) Income from life insurance and endowment contracts; (11) Pensions; (12) Income from discharge of indebtedness; (13) Distributive share of partnership gross income; (14) Income in respect of a decedent; and (15) Income from an interest in an estate or trust. 4. So, to understand Gross Income we must understand what income is. A search of the Internal Revenue Code for the definition of income only turned up the

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definition for Ordinary Income in statute codified at 26 U.S.C. 64. Ordinary Income Defined. "For purposes of this subtitle, the term "ordinary income" includes any gain from the sale or exchange of property which is neither a capital asset nor property described in section 1231(b). Any gain from the sale or exchange of property which is treated or considered, under other provisions of this subtitle, as "ordinary income" shall be treated as gain from the sale or exchange of property which is neither a capital asset nor property described in section 1231(b)." 5. I think you would agree that ordinary income" is not the same as income under the law. So how can any taxpayer apply the definition of income under the law in order to calculate the gross income to report taxable income. Taxable Income = (Gross Income Deductions allowed) Gross Income = (All Income from whatever source derived) Income = (Still Unknown) 6. An exhaustive search was conducted and the term income is not defined in the Internal Revenue Code. Additional research found that the word income is not specifically defined in the IRM, either. A continual search for what income is I discovered this court case: U.S. v. Ballard, 400 F2d 404 (1976): "The general term 'income' is not defined in the Internal Revenue Code."

7. After additional searching I discovered that Congress may not define income because the Constitution does. This is confirmed by the following US Supreme Court cases; Eisner v. Macomber, 252 U.S. 189 (1920), 40 S. Ct. at 193: "It becomes essential to distinguish between what is and what is not 'income' . . . Congress may not, by any definition it may adopt, conclude the matter, since it cannot by legislation alter the Constitution, from which alone it derives its power to legislate, and within whose limitations alone, that power can be lawfully exercised." (Bold and Underline emphasis) Goodrich v. Edwards, 255 U.S. 527, 535 (1921): ... the definition of 'income' approved by this Court is: "The gain derived from capital, from

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labor, or from both combined,' provided it be understood to include profits gained through sale or conversion of capital assets.' ... It is thus very plain that the statute imposes the income tax on the proceeds of the sale of personal property to the extent only that gains are derived there from by the vendor ... (Bold and Underline emphasis) Helvering v. Edison Brothers' Stores, 8 Cir. 133 F2d 575 17 (1943) "The Treasury cannot by interpretive regulations, make income of that which is not income within the meaning of the revenue acts of Congress, nor can Congress, without apportionment, tax as income that which is not income within the meaning of the 16th Amendment." (Bold emphasis) Regal Drug Co v. Wardell, 260 US 386 (1922): "Congress may not, under the taxing power, assert a power not delegated to it by the Constitution." (Bold emphasis)

The cases above clearly state why income is not defined in the Internal Revenue Code. Therefore we must use the definition of income as the U.S. Supreme Court had defined it. Although the U.S. Supreme Court has defined income as a profit or gain I have found the following cases, which clearly define what profit or gain is NOT! The Supreme Court has ruled that Income or Profit does not include compensation for our labor. The exchange of labor for pay of equal value has never been income. Commercial League Assoc. v. The People, 90 Ill. 166 (1878). "The object of the statute, no doubt, was to prevent the corporation from making dividends of profits among the members, as do corporations organized for pecuniary profit; and while the statute might subserve a useful purpose if construed in this manner, we fail to perceive any benefit which would result if a member of the association, who happened to fill an office, should be deprived of receiving compensation for his labor as an officer. . Compensation for labor cannot be regarded as profit within the meaning of the law. The word 'profit' as ordinarily used, means the gain made upon business or investment - a different thing altogether from mere compensation for labor." (Bold and underline emphasis). Still controlling and NEVER OVERTURNED. Stratton's Independence v. Howbert, 231 US 309 (1913): "Income ... may be defined as the gain derived from capital or from labor or from both combined." (Bold emphasis) Edwards v. Keith, 231 F 110, 113 (1916) "... one does not derive income by rendering services and charging for them." (Bold emphasis)

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Evans V. Gore, 253 U.S. 245 (1920) "The 16th Amendment does not justify the taxation of persons or things previously immune. It was intended only to remove all occasions for any apportionment of income taxes among the states. It does not authorize a tax on a salary" (Bold emphasis) Staples v. United States, 21 F.Supp 737 at 739 (1937) "Income means gains/profit from property severed from capitol, however invested or employed. Income is not a wage or compensation for any type of labor" (Bold emphasis) Lauderdale Cemetery Assoc. v. Mathews, 345 PA 239, 47 A. 2d 277, 280 (1946) "... reasonable compensation for labor or services rendered is not profit." (Bold emphasis) McCutchin v. Commissioner of IRS, 159 F2d 472 5th Cir. (1947) "The 16th Amendment does not authorize laying of an income tax upon one person for the income derived solely from another." (Bold emphasis) So. Pacific v. Lowe, 238 F. Supp. 736, 247 US 330 (1918) "'income' as used in the statute should be given a meaning so as not to include everything that comes in. The true function of the words 'gains' and 'profits' is to limit the meaning of the word 'income'. (Bold emphasis) Oliver v. Halstead, 86 S.E. Rep 2nd 85e9 (1955) "There is a clear distinction between `profit' and 'wages', or a compensation for labor. Compensation for labor (wages) cannot be regarded as profit within the meaning of the law. The word `profit', as ordinarily used, means the gain made upon any business or investment- - - a different thing altogether from the mere compensation for labor." Penn Mutual Indemnity Co. v. Commissioner, 32 Tax Court page 681 (1959) "The rule of Eisner v. Macomber has been reaffirmed on so many occasions that citation of the cases to this effect would be unnecessarily burdensome. To depart from the rule at this late date would ignore the sound principles upon which that case was decided and would throw into confusion the fundamental income tax structure and law as it has developed in the almost half century which has elapsed since adoption of the 16th amendment. That there cannot be 'income' without a 'gain' accords with the common understanding of the term, a test of construction which is particularly appropriate in our system of self-assessed Federal income tax ... Moreover, that which is not income in fact manifestly cannot be made such by the legislative expedient of calling it income ...." Commissioner of IRS v. Duberstein, 80 S. Ct. 1190 (1960) "Property acquired by gift is excluded from gross income." (Bold emphasis)

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Tennessee Supreme Court in Jack Cole v. Commissioner MacFarland, 337 SW2d 453 (1960) "The right to receive income or earnings is a right belonging to every person, and realization and receipt of income is therefore not a "privilege that can be taxed." Conner v. U.S., 303 F.Supp. 1187 (1969) "... whatever may constitute income, therefore, must have the essential feature of gain to the recipient. This was true when the 16th Amendment became effective, it was true at the time of Eisner v. Macomber supra, it was true under Section 22(a) of the Internal Revenue Code of 1938, and it is likewise true under Section 61(a) of the I.R.S. Code of 1954. If there is not gain, there is not income ... Congress has taxed income not compensation." (Bold emphasis)

8. Everyone is required to follow the US Supreme Court decisions, including the IRS. This fact is stated in the IRM [Internal Revenue Manual] 4.10.7.2.9.8 (01-012006) Importance of Court Decisions Part 2: Certain court cases lend more weight to a position than others. A case decided by the U.S. Supreme Court becomes the law of the land and takes precedence over decisions of lower courts. The Internal Revenue Service must follow Supreme Court decisions. So the facts are the U.S. Supreme Court has defined income as it is used in the Revenue Act (Internal Revenue Code) and it does not include what was paid in exchange for most peoples labor unless they are an employee as defined by 3401(c) in which case by statute what they earned are wages as defined by 3401(a) and wages are taxable. 9. I am very aware that the IRS has taught its employees Income is everything that comes in. This of course is false information, as is evident by the following US Supreme Court cases that clearly say: United States Supreme Court, So. Pacific v. Lowe, 247 U.S. 330, (1918) We must reject... the broad contention submitted in behalf of the government that all receipts - everything that comes in - are income Lucas v. Earl, 281 U.S. 111 (1930) "The claim that salaries, wages, and compensation for personal services are to be taxed as an entirety and therefore must be returned by the individual who has performed the services which produce the gain is without support, either in the language of the Act or in the Page 15 of 22

decisions of the courts construing it... It is to be noted that, by the language of the Act, it is not salaries, wages, or compensation for personal services that are to be included in gains, profits, and income derived from salaries, wages, or compensation for personal services." (Bold emphasis) 10. There really is not much else to say other than the IRS is in violation of the law, operating under the color of law, and not following the law as written by Congress. So are you going to follow the law as required by 26 U.S.C. 7214(a)(8)? Offenses by officers and employees of the United States (a) Unlawful acts of revenue officers or agents Any officer or employee of the United States acting in connection with any revenue law of the United States (8) who, having knowledge or information of the violation of any revenue law by any person, or of fraud committed by any person against the United States under any revenue law, fails to report, in writing, such knowledge or information to the Secretary; or OUR RIGHT TO YOUR ANSWERS So, as a matter of law, I must demand that you and the IRS respond correctly and completely to these requests and questions. Failure on your part to answer these demands and questions, is an admission that you are willfully participating in the FRAUD and are conspiring to violate my clients rights and due process. Understanding that the only way to prove that you are not part of this is for you to uphold the law and file a written complaint as required by 26 U.S.C. 7214(a)(8) who, having knowledge or information of the violation of any revenue law by any person . fails to report, in writing, such knowledge or information to the Secretary; 1. Please provide the statute written by Congress, which doesnt allow a taxpayer to correct any record or information submitted as the IRS falsely claims. 2. Please provide the statute written by Congress, which allows the IRS to not accept the returns filed by my client after she corrected erroneous information and sworn to the correctness. Or as you stated in your letter the IRS will not accept the original filed returns unless all the income is included on the tax returns submitted to IRS.

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3. Please provide the name of the IRS employee who has first hand knowledge, and made the determination that the corrected information returns submitted by my client are not legally correct or accurate? 4. Please provide the statute written by Congress, which allows anyone within the IRS to ignore sworn testimony presented by a taxpayer. 5. Please provide any evidence held by the IRS that what was paid to my client was indeed income as legally defined by the U.S. Supreme Court. Ms. Barbara Richardson, is it your intention to violate IRM 21.3.3.1.1 (10-01-2007) Policy Statement P-6-12 items 2 & 3 and not respond to this letter and address or resolve the taxpayers issues, as required by the IRM? 6. Ms. Barbara Richardson, is it your intention to violate IRM 21.3.3.3.4 (11-09-2006) Quality and Timely Responses, and not respond to this letter and answer these questions as required by the IRM? 7. Ms. Barbara Richardson, now that you are aware of what the statutes says, is it your intention to ignore the violations of other IRS Employee who operate under color of law, by using statues such as 6702, which do not apply to Subtitle A Income Tax or use statutes, which do not have any enforcement regulations written authorizing their use for Subtitle A Income Tax? 8. Ms. Barbara Richardson is it your intention, not to report these violations to the Secretary as required per 26 U.S.C. 7214(a)(8). 9. Ms. Barbara Richardson, now that you are aware of the facts, is it your intention to ignore the unlawful behavior of other IRS employees who have chosen to ignore corrected information returns, along with tax returns, which were submitted under penalty of perjury, and notarized, which by legal definition is sworn testimony,

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submitted by a person with first hand knowledge as defined by IRM 4.10.7.3.3 (0101-2006) in favor of hearsay evidence as defined by IRM 4.10.7.3.5. (01-01-2006)? 10. Ms. Barbara Richardson, now that you are aware of the facts and the law, is it still your intention to claim that my client failed to report income on her tax returns as you have claimed? 11. Ms. Barbara Richardson, now that you are aware of the facts, is it your intention to claim that my Client earned wages as defined by 3401(a) even though she is not an employee as defined by 3401(c), and that you have first hand knowledge that she has earned wages as defined by 3401(a)? 26 USC 3401 Definitions (c) Employee. For purposes of this chapter, the term "employee" includes an officer, employee or elected official of the United States, a State, or any political subdivision thereof, or the District of Columbia, or any agency or instrumentality of any one or more of the foregoing. The term "employee" also includes an officer of a corporation. 12. Ms. Barbara Richardson, is it your intention to force my client to change her tax return to state something that is not true and accurate in violation of 26 C.F.R 601.201(e)(1), and 26 U.S.C. 6065, which requires her to submit and attest to the truth and accuracy of matters set forth in any given instrument submitted for Internal Revenue Service consideration? 13. Ms. Barbara Richardson, is it your intention to ignore the US Supreme Court deceisions which support the taxpayers postion, even though this would be a violation of IRM 4.10.7.3 (01-01-2006) Evaluating Evidence? 14. Ms. Barbara Richardson, is it your intention to violate your Oath of Office that you took, to support and defend the Constitution of the United States against both foreign and domestic threats?

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15. Ms. Barbara Richardson, is it your intention to ignore U.S. Supreme Court Decisions which clearly define income as a gain or profit, and state that payment for my clients labor is NOT income under the law? 16. Ms. Barbara Richardson, is it your intention to violate IRM 4.10.7.1 (01-01-2006), which requires examiners to identify the applicable law, correctly interpret its meaning in light of congressional intent, and, in a fair and impartial manner when you cannot identify the applicable law that makes my client, xxxxxxxxxx, liable for Income Tax? 17. Ms. Barbara Richardson, is it your intention to ignore published, never overturned U.S. Supreme Court cases, which define income knowing that in doing so, they are in violation of IRM 4.10.7.2.9.8 (01-01-2006) Importance of Court Decisions? 18. Ms. Barbara Richardson, is it your intention to ignore the law which states that a Civil Penality may only be issued against a person as defined by 6671(b), knowing that my client, xxxxxxxxx does not meet this defination? 19. Ms. Barbara Richardson, now that you know what the law says, is it your intention to allow (not speak up) about other IRS employees who violated IRM 20.1.5.1.6 (07-012008) Managerial Approval of Penalties, and the statute 6751(b)(1), which requires the written approval of the immediate supervisor before any assessment of a penalty, knowing that in doing this you would be violating 26 U.S.C. 7214(a)(8)? 20. Ms. Barbara Richardson, is it your intention to accept as evidence that the IRS met the conditions set forth by IRM 20.1.5.1.6 (07-01-2008) Managerial Approval of Penalties, and the statute 6751(b)(1), a Form 8278 Commutation and Assessment of Miscellaneous Penalties which is being fraudulently presented to met these requirements, knowing for a fact that this Form 8278 does not have the signature of

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the immediate supervisors as required by law, and the form says Reviewer not Approval. 21. Ms. Barbara Richardson, is it your intention to allow others to violate 26 C.F.R 601.105 (2) (ii), by failing to hold them accountable, to conduct the required examination by the only two authorized methods, and failing to ask for supporting evidence from my Client, xxxxxxxxxx, as required, or ignoring the amount my client has declared on her returns as non-taxable? 22. Ms. Barbara Richardson, now that you are aware of the IRM provisions is it your intention to ignore the fact that the IRS employees have violated IRM 4.10.6.3.4 (0514-1999), by failing to get the group manager actively involved with the development of penalty(ies)? 23. Ms. Barbara Richardson, now that you are aware of the IRM provisions pointed out in this letter, is it your intention to ignore the fact that the IRS has failed to comply with IRM 4.10.6.3.4 (05-14-1999), by failing to complete a Form 13130 Screening Committee Case Approval Record, which states right on the front of this form Approval must be secured from the Group Manager, the Penalty Screening Committee and the Quality Review Section Chief prior to assessment of the penalty(ies)? 24. Ms. Barbara Richardson, now that you are aware of the IRM provisions pointed out in this letter, is it your intention to ignore the fact that my clients records have no Form 9984 Examining Officers Activity Record as required to be completed by IRM 4.10.6.3.4 (05-14-1999), Managerial Involvement, thus showing that they fail to comply with the requirement set forth by the IRM? 25. Ms. Barbara Richardson, is it your intention to ignore the wrong doings and violations of the statutes, regulations and IRM provisions by other employees in the handling of my clients tax return?

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26. Ms. Barbara Richardson, was it your intention not to copy my client on your letter when the IRM requires that both taxpayer and the representative be notifed? Ms. Barbara Richardson, my client, xxxxxxxxx, and her husband are entitled to a Collection Due Process Hearing (CDPH) prior to seizure of their property to prove the IRS has a right to take it in lieu of payment of income tax owed. My client and her husband have requested, but were never afforded, a CDPH in 2008, 2009, and even Feb. 12, 2010, when Appeals Officer, Patricia D. Blancarte wrote to them to say a that a hearing was being set up; yet, it is now May 1, 2010 and my client and her husband have had no hearing while IRS employee, Debra Vahe # 86-18008 has admitted via telephone on April 27, 2010 that she is in process of securing a Court Order through the Dept. of Justice in Washington, D.C., to force the sale of clients and her husbands home. Ms. Barbara Richardson, is it your intention to allow and condone this type of behavior By rogue employees who so obviously overstep the bounds of their authority? Even when a previous CDPH had been set up for my client, the hearing was stopped only moments after it began when Appeals Officer, David Villaverde, stated that the hearing could not proceed because all of the points my client wanted to be reviewed regarded Constitutional issues and these proceedings are outside the Constitution. My clients property was seized, anyway, without their being heard and without Due Process as provided by the 5th Amendment. This says to me that my client, xxxxxxxxxxxx, and her husband are outside the jurisdiction of the IRS, until proven otherwise, dont you agree? It is very serious, indeed, when my clients, such as xxxxxxxxx and her husband, make every honest and forthright attempt to live within and follow the law as closely as written by Congress as possible, and then have to contact a person, such as myself, to assist in

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defense against government employees, such as yourself, for the protection of their rights. Government employees who have sworn an oath to protect and defend the Constitution, such as yourself, are to be held strictly accountable to following the law exactly as the intent of Congress has been entered into the Statutes at Large, not what some supervisor or fellow employee may have said the law was. It is the duty of the government employees who are afforded the privilege of serving the public to protect the rights of the Citizens so served. Please send all of your responses and evidentiary documentation to me (with copies of same to my client, xxxxxxx) attending to this correspondence in its entirety to me at the address noted above within 10 days, as my client, xxxxxxx, has been notified that her home is being threatened by rogue agents of the IRS who have been shown to be operating under color of law in violation of many, if not most, of the subjects addressed herein and time is of the essence for the resolution sought. Sincerely, Michael A. Bigley

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