Hart: A taxing adventure - Coeur d'Alene Press: Local News

Hart: A taxing adventure

Legislator's ordeal has left him confident that income tax is unconstitutional

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Posted: Saturday, September 4, 2010 12:00 am

POST FALLS - Rep. Phil Hart has had a tough year.

Well, a tough decade, really.

"I feel like an actor in a B Hollywood movie," the Athol legislator said on Friday, speaking to the Panhandle Pachyderm Club. "I know it's a lousy movie, but I have to get through it."

Speaking to the crowd of fellow Republicans in the Garden Plaza senior living facility in Post Falls, Hart discussed the birth of his income tax suspicions and the long road to his current litigation with the IRS and the recent House Ethics Committee investigation.

If anything, he has only come out more confident that income tax is unconstitutional, he said.

"Of all the research I've done, 100 percent backs up my interpretation of income tax," Hart said. "There isn't anything that backs up the government interpretation."

It all started with a little light reading, he said.

He discovered a book in 1995 about the flaws of the income tax system, which led him to read others.

"I believe what I read," the third-term legislator said. "So I thought I would dive in."

He really did.

In 1996 when he filed his tax returns, he filed for a refund of all the taxes he had already paid.

He would also sue the IRS for that refund, he added.

"That started years of legal battles with the IRS," he said.

Defending his cause led him to delve deeper into research, he said. And once he started digging, he couldn't stop.

"I thought, 'I'm going to study what the intent of the American people was in adding the income tax amendment, and that should shed light on what the Internal Revenue code does say,'" he said.

He sought an answer across the country, by looking up records of congressional debates from the early 20th century. His rampant photocopying branched out to legal and accounting journals from the same years, and news articles, too.

His research took him from the University of Idaho at Moscow to the Gonzaga Law library, to the U.S. Supreme Court Library in Washington, D.C.

"I was coming up with so much information I hadn't seen in income tax literature," Hart said. "I thought, 'Well, it's on me to write a book.'"

That's "Constitutional Income: Do You Have Any?" It spans the breadth of all his research of income tax history, and how Hart believes the current income tax was never the nation's plan.

The justice system didn't buy it, though.

After 17 months, the tax court ruled against him, dubbing his argument frivolous.

"In law textbooks, frivolous is defined as obviously wrong at first blush," he said. "If it was frivolous, why did it take 17 months?"

He lost an appeal at the 9th Circuit Court, and the U.S. Supreme Court didn't hear the case, he said.

"My choice was, 'Do I revisit this? Or did I give it my best shot and move on?'" he said.

Moving on, it was.

Unfortunately, that meant filing several years worth of returns.

He has paid $120,000 in income taxes over the past few years, he said.

He was also audited on eight returns at once, which concluded in him being denied $300,000 in deductions over about 8 years.

He's still in litigation over that, he said. He is confident that once he has access to his IRS report he can set things right.

"I'm still revisiting that. I'm on Plan C right now," said Hart, who owns Alpine Engineering.

He's glad the media frenzy is calming down on the matter so he can get back to work, he said, adding, "Sometimes I get burned out on this stuff."

He still has to face one more investigation from a House Ethics Committee, which cleared him of a conflict-of-interest charge this year.

There is still a charge of exploiting his legislative position to postpone litigation with the IRS, he said, but he isn't worried.

"There isn't a legal authority, a court case or anything else, that would conflict with what I've done," he said.

He doesn't think he will be victorious over income tax in his current legal battle, he admitted.

"Sometimes it takes a really long time to make change," he said, pointing to the abolition of slavery. "I think it will be solved politically, not judicially."

Hart, who is up for re-election in November, added that he would like to see income tax done away with and a national sales tax instated.

He's writing another book, he said.

"I'm going to stick with it," he said.

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  • RadRevD posted at 12:21 pm on Fri, Sep 10, 2010.

    RadRevD Posts: 3333

    Yes Golden...

    The IRS and Federal Reserve need your money to further tighten the noose that will ultimately drop America to her knees into the One World Government. Taxation is a vital part of their plan.

    ( http://oll.libertyfund.org/?option=com_staticxt&staticfile=show.php%3Ftitle=875&chapter=63897&layout=html&Itemid=27 )

    VI. But the grand nostrum will be a public debt, provided enough of it can be got, and it be medicated with the proper ingredients. If by good fortune a debt be ready at hand, the most is to be made of it. Stretch it and swell it to the utmost the items will bear. Allow as many extra claims as decency will permit. Assume all the debts of your neighbours: In a word, get as much debt as can be raked and scraped together, and when you have got all you can, “advertise” for more, and have the debt made as big as possible. This object being accomplished, the next will be to make it as perpetual as possible, and the next to that, to get it into as few hands as possible. The more effectually to bring this about, modify the debt, complicate it, divide it, subdivide it, subtract it, postpone it, let there be one third of two thirds: let there be three per cents, and four per cents, and six per cents, and present six per cents, and future six per cents. To be brief, let the whole be such a mystery that a few only can understand it; and let all possible opportunities and informations fall in the way of these few, to clinch their advantage over the many.

    IX. The management of a great funded debt and an extensive system of taxes will afford a plea not to be neglected for establishing a great incorporated bank. The use of such a machine is well understood. If the constitution, according to its fair meaning, should not authorize it, so much the better. Push it through by a forced meaning, and you will get in the bargain an admirable precedent for future misconstructions. In fashioning the bank remember that it is to be made particularly instrumental in enriching and aggrandizing the elect few, who are to be called in due season to the honors and felicities of the kingdom preparing for them, and who are the pillars that must support it. It will be easy to throw the benefit entirely into their hands, and to make it a solid addition of 50, or 60, or 70 per cent to their former capitals of 800 per cent or 900 per cent without costing them a shilling, whilst it will be so difficult to explain to the people that this gain of the few is at the cost of the many, that the contrary may be boldly and safely pretended. The bank will be pregnant with other important advantages. It will admit the same men to be, at the same time, members of the bank and members of the government. The two institutions will thus be soldered together, and each made the stronger. Money will be put under the direction of the government, and the government under the direction of money. To crown the whole, the bank will have a proper interest in swelling and perpetuating the public debt and public taxes, with all the blessings of both, because its agency and its profits will be extended in exact proportion.

  • The Golden Mean posted at 3:55 pm on Thu, Sep 9, 2010.

    The Golden Mean Posts: 4213

    I find it odd when a man who collects a paycheck made possible by collected tax revenues refuses to pay taxes himself.

    To be clear, I support his efforts to learn and to challenge. But to proceed as if already approved is child logic. And, as our nation is currently operating in the red, to interrupt revenues for the sake of philosophy... right now, that doesn't seem reasonable considering the wall of debt that must be addressed.

  • RadRevD posted at 12:35 pm on Mon, Sep 6, 2010.

    RadRevD Posts: 3333

    Try as hard as you wish Randy, but you will neither climb nor leap out of the hole you dug. Sensitivity must respect speaking the Truth in love. I am disgusted by sniveling liberals and progressives who fein to listen but keep their senses turned off to the Truth.

  • Randy Myers posted at 10:28 am on Mon, Sep 6, 2010.

    Randy Myers Posts: 1635

    Rad......What you see as "playing both sides of the fence" is, in reality, not being party or single issue driven I am for some things, against others. There is a huge difference between being challenging in my statements and attacking. You admit you deride. I may, by accident, but don't mean or intend to. I am sarcastic in the face of many of your posts. I believe with good reason. I am not a fan of the self-righteous. I'm sure I am, at times, just that too.

    At HREI I learned to be more sensitive to people who knowingly or unknowingly belittle others (and thus violate their human rights). In my opinion you KNOWINGLY belittle others. If by these exchanges you take a closer look at yourself then I have contributed to the cause for justice and equality and have taken a small step to fight prejudice. If you call that divisive.....oh well.

  • toughluck posted at 10:19 am on Mon, Sep 6, 2010.

    toughluck Posts: 167

    Is he setting a good or bad example? On one hand none of us want to pay federal taxes, on the other hand why should hart get off paying taxes when the rest of us do? I think Hart needs to look at idaho taxes. Even if we want the same level of services there is no need for how complicated they are. Please get rid of the grocery tax credit and all the other penny ante tax rules for the state of Idaho. The flat tax is a real joke as well. The only way to smaller government is by spending less, not by using tax deferment schemes like President bush did as he spent more and more. (To be fair Obama is worse) The national sales tax ideas I have seen make you pay sales tax on everything..including houses, health care etc. Imagine needing a transplant that costs 100,000. Pay the 25% on that and you will really enjoy the national sales tax.

  • RadRevD posted at 7:28 am on Mon, Sep 6, 2010.

    RadRevD Posts: 3333

    to Idaho Native...
    Radical – adjective, of or going to the root or origin; fundamental: a radical difference.
    Reverend - self-explanatory, have ministered bivocationally since mid 80s.
    D for Dennis
    I have gone by this handle since the early days of internet.

    While the Assemblies of God sought to mirror the Early Church, it permitted politics, nepotism, and theological error. It lost my support when it openly embraced and promoted Promise Keepers and Bill Hybel. I resigned from a senior pastorate in May of 1998 and returned to Idaho. Any more questions?

    to Randy Meyer...
    regarding Barack Hussein Obama, he merits derision.
    He has no intention of being the People's President.
    He is his party's chairman - the ONE who liberates through fundamental transformation.
    He prefers to apologize with a bow than to stand tall before our foreign and domestic enemies.

    RezBarry alone has the documents to alter my perspective.

    randy, you do as well at attacking the messenger as I do with name-calling.
    You appear to play both sides of the fence. Is that a divisive tactic you learned at HREI?
    RezBarry deserves the street names I afford him.

  • idaho native posted at 11:13 pm on Sun, Sep 5, 2010.

    idaho native Posts: 551

    what goes around comes around.

    RR: please tell us un-inlightened heathens what a RadRev is?

    i may have missed the boat here, but aren't wars started in the name of RELIGION; my God is bigger and better than your God.

    why are bars, porno or gun shops NOT located across from schools; but CHURCHES are.....

    because bars, porno or gun shops had FIRST choice.

  • Randy Myers posted at 3:34 pm on Sun, Sep 5, 2010.

    Randy Myers Posts: 1635

    Hart knowingly violated the tax laws. He should pay the taxes he owes. I wouldn't put him in jail as then he becomes a tax BURDEN. I also wouldn't vote for him for obvious reasons.

    @ Rad...I note you name call and insult once again. Another example of your "ministering?"

  • uncle fester posted at 8:01 am on Sun, Sep 5, 2010.

    uncle fester Posts: 831

    Hart is an idiot and should be in jail.

  • RadRevD posted at 3:55 pm on Sat, Sep 4, 2010.

    RadRevD Posts: 3333

    to Why Not...

    Why do you say "dribble"? Do you think America is immune from collapse? We may be reaping the comeuppance for what we likely did to the USSR! What goes around comes around. Ever hear of Leo Wanta? Is there even a shade of validity to his claims. It's hard to believe a government employee could sue for $4T from a sum of $26T that he amassed breaking the Soviet economy.

    North Korea was recently accused of counterfeiting our $100 bill. Counterfeit US Bearer Bonds in the tens of $$$Billons were confiscated by Italian Customs. How much got through? Then there's the Treasury printing more than it's machines are capable of with no credible backing. This is all part of THE PROGRESSIVE PLAN FOR AMERICA

    ( http://www.lifeaftertheoilcrash.net/Archives2008/OrlovPartOne.html )

  • not from around here posted at 10:49 am on Sat, Sep 4, 2010.

    not from around here Posts: 23

    I suggest reading some of the original source material: Hart v. Commissioner, 79 TCM 1619 - Tax Court 2000. My favorite parts:

    "In an attachment to the 1994 return, petitioner stated: "The wages I earned as reflected on my W-2 form are nontaxable personal property." The attachment also contained other typical tax protester arguments. The 1995 return contained a similar attachment. In 1994, $4,777 in Federal income tax was withheld from petitioner's wages. There is no evidence that tax was withheld in 1995. Yet, on both returns, petitioner claimed refunds of $4,777. Petitioner did not file a 1996 tax return."

    "Suffice it to say that petitioner is not exempt from having to pay Federal income taxes. Abrams v. Commissioner [Dec. 41,031], 82 T.C. 403, 407 (1984). Payments of compensation for services performed are included in gross income and subject to the Federal income tax. Sec. 61(a)(1). Likewise, interest, rental income, and IRA distributions are included in gross income and subject to Federal income tax. Secs. 1, 61(a)(4), 61(a)(5), 61(a)(9), 61(a)(11), 408(d). Petitioner's income from wages, interest, rent, and IRA distributions is taxable."

    "Petitioner admitted that he did not file a tax return for 1996, and he did not provide any reason for his failure to file."

    "Clearly, by purposely not paying his taxes, petitioner has not behaved as a reasonable and prudent person. Petitioner has shown an intentional disregard of the rules and regulations. We uphold the imposition of the accuracy-related penalties under section 6662(a) for the underpayments of the 1994 and 1995 tax liabilities."

    "Petitioner has pursued a frivolous and groundless position throughout this proceeding. At the beginning of this trial, petitioner was clearly warned that if he proceeded with the arguments contained in his written submission, then he would be subject to penalties. Petitioner knew or should have known that his position was groundless and frivolous, yet he persisted in maintaining this proceeding primarily to impede the proper workings of our judicial system and to delay the payment of his Federal income tax liabilities."

    Phil Hart gets no sympathy whatsoever from me.

  • Why Not posted at 9:56 am on Sat, Sep 4, 2010.

    Why Not Posts: 5265

    Read it Dan-O, both sides of the issue actually and the brief Hart V Commissioner - 9th Circuit. Can you say Frivolous, or no leg to stand on?

    Pardon me for the silly example I used, you are correct, the super rich do pay a significant higher dollar amount than say your upper middle class engineer with a kid in college, house and car payment. They pay disproportionately less percentage wise though Dan-O and they ain't paying the alternative minimum tax either. Why not? Because they have write-offs, or shall I say can afford: Jets, flight crews, second homes in Palm Springs, or Punta Canta for the political elite like Congressman Charlie-R.

    Unlike some people I call a spade a spade, Phil Hart is a criminal, on the same page as the LCDC in my book

  • Dan Gookin posted at 9:50 am on Sat, Sep 4, 2010.

    Dan Gookin Posts: 752

    Hart said. "There isn't anything that backs up the government interpretation."

    Well, only the world's largest military machine and lots of nukes.

    The government can be wrong all day long. Thats Part A. When enough citizens recognize the problem they protest and get involved. That's Part B. Part C is the system working (thanks to active citizens) and fixing the problem. Phil is jumping over Part B. It doesn't work that way.

  • will-- posted at 8:57 am on Sat, Sep 4, 2010.

    will-- Posts: 1202

    "while letting the guys flying private jets pay disproportionaly less tax..."

    How wrong you are! It's a fact that the top few percent of income earners in the U.S. pay more than fifty percent of the total tax burden.

    An explaination as to why the 16th ammendment was not legally ratified:


  • Why Not posted at 7:54 am on Sat, Sep 4, 2010.

    Why Not Posts: 5265

    Okay Rev after reading the article, wiping a few tears away then reading your dribble, here’s the problem. We have laws that are in fact not perfect. Phil Hart challenged them and lost, not once but if I recall correctly he’s O for 3.

    I completely agree with Mr. Hart, the tax system is unfair, impossibly complicated and it inflicts the most pain on the backbone of the American populace while letting the guys flying private jets pay disproportionaly less tax. It’s wrong, and if we had a National VAT and only that the system would be in fact much fairer.

    Back to Po Ole Phil, he needs to resign his position and pay up because he broke the law, book or no book, belief or no belief, he is still dodging paying his fair share under the current system. This is criminal and I am really curious about why he is not sitting in Club Fed. Look, we all hate the tax system, but it’s what we have and it funds the our democracy and pays the interest on Obama’s debt.

  • RadRevD posted at 7:14 am on Sat, Sep 4, 2010.

    RadRevD Posts: 3333

    to TakeBackTheUSA...are you bipolar?
    I read your varying comments and find it difficult to determine if you are a conservative or a bleeding heart progressive.

    Phil Hart's error is a leap from belief that the united States of America is still a Republic. She walked slowly away from that (or was dragged unwillingly) long ago as evidenced by the Federal Reserve System & IRS. Now she is running pell mell into an unlimited hereditary monarchy. To date, after fours not one of the CDA Press readers is willing to discuss Philip Freneau's points in his Rules for Changing a Limited Republic into an Unlimited Hereditary Monarchy.

    Bertrand Russell displayed a quite snide attitude towards the USA in his text Impact of Science on Society. It was as if he was blaming the ravages of British Colonial Years on America and refusing to lay blame on the British Crown and the Royal Society. What I perceive afflicting the USA was prescribed by Russell in 1951. The problem with the entitled majority is that they just don't get it! They fail to study history or to know their enemies both domestic and foreign.

    If you really want to TakeBackTheUSA, and not waste the time of Patriots trying to blow smoke up rears, secure a copy of Miracle on Main Street by F. Tupper Saucy and apply its tenets. He clearly reveals what is Constitutional Income and who is subject to income taxation. Personally I am not, but my business is.

    As for myself, I believe a collision course has been set with a One World Government with a nearing date of destiny. It is no longer worth my time to discuss the intricacies of all that I have read and see in play. It is my role to warn of impending gloom and doom as some call it. I prefer to see the Son breaking through a cloudy day with a righteous brew of koolaid to quench my thirst for justice. Sadly, most today are wiling to reject demand for accountability from their Creator with deference for RezBarry's Parade of Yes We Can. His life is a pitiful portrait of self-exaltation as depicted in Isaiah 14:12ff.

  • CHSdad posted at 6:23 am on Sat, Sep 4, 2010.

    CHSdad Posts: 383

    Didn't Hart lose a court case over this? But in his own mind that doesn't count because it didn't go his way. So much for intelligent design.

  • TakeBackTheUSA posted at 5:16 am on Sat, Sep 4, 2010.

    TakeBackTheUSA Posts: 765

    It is unconscionable that the Hagadone Press paints this felon like a victim. I'd like to say, "Only in Idaho", but probably not. There have been more than a few derogatory comments about Athol electing this moron, and I'll join the throng if they re-elect him now after all this publicity. There is a cost for civilization and keeping this country free. Taxes are how it's all paid for. A national sales tax is far too regressive, especially in a backwards state that imposes it on food. The only reason business thrives in this country is because of its inherent stability. Eventually people in despotic countries will revolt and throw their economies into chaos. Then all these profit-uber-alles companies will want to come back here. Business needs to pay a WHOLE lot more than they do to preserve their freedom to do that.

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