IRS
“Con”spiracy
Charge in Montana
America’s Creating Debtor Prisons
By
Edward Snook with R.S. Errol
Billings,
Montana
– Henry (Hank) and Judy Matthies of Laurel, Montana were served
superceding indictments on April 25, 2007, by U.S. Attorney Kurt G.
Alme. The indictments charged Hank with two counts of “Willful
Failure to File Income Tax Returns” for years 2000 and 2001 and
both Hank and Judy with “Conspiracy to Defraud the United States”
for the purpose of impeding, impairing, obstructing, and defeating the
lawful government function of the Internal Revenue Service of the Treasury
Department (IRS) in the ascertainment, computation, assessment, and
collection of the revenue; that is, income taxes.
![](images/montana-couple2A.jpg)
Hank and Judy Matthies
It
is highly unusual to be served a superceding indictment without being
served with the original indictment, which was sealed until the Matthies
were arraigned on June 21, 2007. The original indictment charged Hank
with 2 counts of “Willful Failure to File Income Tax Returns”
for years 2000 and 2001. The IRS maneuvered to ensure the original indictment
was handed down by the Grand Jury before the statute of limitations
expired, for the year 2000, on tax day of 2007.
Conspiracy
to Defraud is a Con
Attorney
Jeff Dickstein so eloquently stated in his closing arguments in the
now infamous “Joe Banister” trial – “A conspiracy
to defraud is a con. You defraud someone when you convince them that
what you absolutely know isn’t true is in fact true. You would
have to trick them into believing what you know to be false is true.
Trickery, deceit and craft. To conspire to defraud the United States
means to directly interfere with or obstruct one of its lawful government
functions. The purpose of a conspiracy is to defeat by misrepresentation,
chicanery or to overreach those charged with carrying out the government
functions.”
A
close investigation into the Matthies’ history and belief system,
something the government didn’t take the time to do, verifies
that their actions were a matter of public record; therefore the government’s
charges on conspiracy are ludicrous at best. Who’s conning who?
Objects
of the Conspiracy
The
indictment claims that Hank and his employer overstated the number of
allowances to which he was entitled. Let’s dwell on this allegation
for a moment. Hank Matthies did not overstate the number of allowances
on the W-4 submission since according to the internal revenue code he
could lawfully claim up to 9 allowances. Since allowances are not defined
as dependents Hank was merely reducing the amount of withholding tax,
which tax he knows is unconstitutionally applied to him, from his paycheck.
It should be noted that in order for Hank to get a job he had to fill
out a W-4. Most employers across this country are unaware that filling
out a W-4 is voluntary according to the tax code; therefore they require
a person to fill this out before they will hire them. Hank has always
written “under duress” on the W-4 and he crossed out the
statement “under penalty of perjury,” due to his insistence
with being honest with himself and others. At anytime the IRS could
have instructed both Hank and his employer to reduce the allowances
administratively. He worked for the same employer for over ten years
and not once did the IRS attempt to mandate a change in W-4 allowances.
Who’s conning who?
Furthermore,
the IRS claims that in order to conceal assets from government the Matthies’
transferred assets to trusts and held title to assets in trusts and
in Mrs. Matthies name. They also claimed that the Matthies’ impeded
and obstructed the IRS from determining and collecting the amount of
income tax Hank allegedly owed them and the IRS claims these transfers
were meant to create barriers from collection efforts and exempt income
from tax. Let financial planners take note of these purported illegal
activities.
The
Matthies’ like most concerned families discussed the need for
a trust in order to avoid the ravages of probate. In 1997, Hank told
Judy to get the ball rolling on the trust and she did. The property
deed in the trust’s name was filed with the County Clerk and Recorders
office in accordance with the law. No trick, deceit or craftiness there.
Since it was public record and if the IRS wanted to break the trust
in order to collect what they say he owes, they certainly could have
done that just as they illegally do thousands of times across the country
every year. This writer is not aware of any law that forbids property
to be held in trusts, in fact most prudent Americans use trusts to ensure
that they leave an inheritance protected for the beneficiary when they
decease. Who’s conning who?
The
IRS claims that Hank filed income tax returns and amended returns reporting
no income or deductions in order to conceal and mislead the IRS as to
their actual income and deductions. This charge is preposterous since
Hank filed the returns along with applicable affidavits citing U.S.
Supreme Court cases he relied on to prove he wasn’t liable to
pay a tax on income. If the IRS is stating that he filed these returns
how is it possible that they are charging him with willful failure to
file? Who’s conning who?
Additional
charges state that in order to conceal income from the IRS, Judy Matthies
would cash Hank’s payroll checks instead of depositing them in
a bank account. The Matthies’ like so many other law abiding citizens
declined to use a checking account due to an unpleasant experience with
their banking institution thirty years ago. After being notified of
an over drafted check and subsequent bank charge that was proven to
be incorrect, Hank elected to deal in cash and live within their means.
One would assume that there is still enough “freedom” left
in this country to afford the Matthies’ this right. Hank and Judy
Matthies are deeply religious people who firmly believe that their Creator
has instructed them to be good stewards of that which their Creator
provides them.
In
order to facilitate check cashing the Matthies’ still have a savings
account, solely for the purpose of operating in commerce. It is clear
that any check cashed by a bank is set into a permanent record of the
transaction. The savings account always had an adequate balance the
IRS could attach at whim. They never levied this account but have the
audacity to charge the Matthies’ for cashing checks. Due to this
bank record how is it that they are being charged with concealing income?
What law forbids citizens the right to cash checks? Think of all the
payroll check cashing facilities across this country. Are these institutions
conspiring against the government as well? The con in this case is trying
to make people believe the Matthies’ are doing an illegal act
when the act is totally benign – totally legal.
Overt
Acts
The
overt acts must demonstrate that there were, in fact, criminal agreements
between the Matthies’ and other known and unknown co-conspirators.
Hank is charged with claiming nine allowances on the W-4. Where is the
criminal agreement between him and his employer? The withholding form
was completed, submitted to and accepted by his employer. Never was
there an issue raised between Hank and the IRS regarding this submission.
The
IRS further states that Judy purchased a 1994 truck with Hank’s
earned income and applied with the State of Montana for title in her
name. Subsequently, Hank submitted a statement to the Montana Department
of Justice, Motor Vehicles Division, that he had no interest in the
1994 truck. This act was motivated by the Matthies’ in an effort
to establish credit in Judy’s name in case of the untimely death
of her spouse. This transaction is replicated by American families time
and time again. All vehicle registrations are a public record sanitized
with sunlight, with no hint of conspiratorial intent. Yet the con-artists
continue the facade of flimsy charges against this hard working family.
Not
stopping there the IRS stated that Judy transferred the truck to a trust,
which she did indeed do after the trust was created. People transfer
vehicles into trusts for many legitimate reasons, one of which is protecting
themselves from lawsuits. She in turn purchased another vehicle which
was titled in her name for the sole purpose of maintaining her personal
credit rating. Is this totally legal transaction that is of public record
a conspiracy? Again, who’s conning who?
Continuing
the slate of charges, Judy is accused of transferring their house into
a couple of trusts over a four year period of time. There is no intent
or criminal agreement to conspire with anyone about their personal business
as all of these actions are public record. Maybe the Clerk and Recorder
who filed these documents is part of the purported conspiracy. How absurd!
The
IRS then states that Judy paid the property taxes owed on the house
that the trust owned. This is true, because the trust did not have a
bank account and it was Judy’s responsibility to pay the taxes.
There’s still no criminal agreement with anyone. It’s called
financial responsibilities.
Now,
with all of this said, Hank and Judy have studied the internal revenue
code, Constitution, Bill of Rights, Supreme Court cases, case law, read
many books, interviewed former IRS agents, attorneys and did extensive
research on the internet regarding the assessment of income taxes by
the IRS. Both determined that the method used by the IRS to apply the
code to Hank was unconstitutional. He was never involved in revenue
taxable activities.
Their
research project gave them the knowledge that all taxing authority in
the United States is derived from the United States Constitution. Contrary
to conventional wisdom the Sixteenth Amendment conferred no new powers
of taxation upon the federal government, and did not extend the taxing
power to new subjects as a result of its alleged ratification.
Over
the years there has been an evolution of the tax regulations to obscure
the method of taxation ordained by the statutes rather than to clarify
them. In addition, the writers of the tax regulations intentionally
made the codes nearly impossible to navigate and understand. The only
reason for this obfuscation of the laws and regulations is to cloud
the issue regarding who is liable for the income tax, thereby enabling
the unwitting compliance to a law that doesn’t exist.
Whether
the law exists is of no consequence to the IRS. This is an agency that
routinely operates under the color of law. They have no power to arrest
a citizen for alleged violations of the tax code; therefore, they will
arrive at their victim’s door with a local law enforcement officer
to enforce the unlawful warrant. The agents in orchestration with the
U.S. Attorneys create crimes where there is no intent to commit crimes,
then they present their one-sided case to a grand jury that is clueless
regarding the tax code and the related regulations. They complete their
successful presentations without ever having to show the grand jury
the law that doesn’t exist. With an ill-gotten indictment the
IRS goes about trying to destroy families by causing financial ruin
through legal fees, confiscation of assets by liens and levies and unbearable
stress on family members. Many times this is the main purpose of their
attack. Obtaining a conviction is just frosting on the cake.
Is
it any wonder the IRS has not provided Hank or Judy Matthies with the
statutes which requires them to file a return or requires them to pay
a tax on income? Logically, if the IRS cannot provide them a copy of
the law that is the basis of the indictment it follows that there are
no grounds for prosecution of the alleged crimes.
Enter
the tax division of the Department of Justice where the baton is passed
to prosecutors that have tried and true methods of extracting convictions
from uninformed juries. The defendants, armed with volumes of evidence
upholding their innocence are blind sided by prosecutorial maneuvers
that in effect strip all of their evidence from their defense. The main
weapon used is the “Motion in Limine.” According to Black’s
Law 6th Edition, “it is a pretrial motion requesting a court to
prohibit opposing counsel from referring to or offering evidence on
matters so highly prejudicial to the moving party that curative instructions
cannot prevent a predispositional effect on the jury. Purpose of such
motion is to avoid injection into trial of matters which are irrelevant…”
What is irrelevant about there not being a law? Of course the information
about the non-existence of the law would be highly prejudicial to the
prosecutors; therefore, it is always automatically excluded with the
judge’s blessing. Even if the jury was astute enough to ask to
see the law the judge informs them that reading the law is not necessary
and to follow his jury instructions, which almost always leads to convictions
and is actually a form of jury tampering. In essence the DOJ and the
judges are a part of the con. It’s not us conspiring to defraud
them, it’s them conspiring to defraud us!
All
Americans have a duty to obey the law. They do not have a duty to cower
to the IRS, who in fact is an agency that routinely and illegally intimidates
citizens with unbridled power. Where is it mandated that we are here
to bow down to an agency operating under the color of law and that we
obey their dictates when we know they’re false?
Hank
and Judy Matthies are being charged with conspiracy because the IRS
knows they don’t have to present direct proof of a conspiracy
or prove a criminal agreement. The only thing they have to prove is
an overt act that doesn’t even have to be unlawful. Cashing checks
without a checking account comes to mind. Just grab a handful of hypotheses,
throw them at the wall and see if any stick. This is the real con the
IRS pulls off on an annual basis against scores of hard working American
citizens and they accomplish this by using the complicity of uninformed
juries.
In
retrospect the IRS could have taken intermediary steps to capture alleged
back taxes. This agency does that every day to many citizens through
illegal methods such as notice of levy as opposed to court orders. Make
no mistake about it, the mission of the IRS is to ensure “voluntary
compliance,” which in itself is an oxymoron. The cost to the well
intended taxpayer is inconsequential to the agency as they are known
for intimidating anyone that falls out of line. They in fact take great
pride in crushing elderly citizens, hard working wage earners and entrepreneurs.
Their motive is to have their acts of financial rape spread far and
wide in order to enhance their reputation for ruthlessness. The Matthies’
are far from affluent in material possessions. They work hard, live
in a modest home tax appraised for approximately $51,000 and tend to
their family. In the IRS manual these are characteristics of the ideal
victim. The Matthies’ just want to see the law that doesn’t
exist. Where is the con in that motive?
The
IRS, DOJ and the judge involved in this case are sorely mistaken if
they think threatening Hank and Judy Matthies with prison and supervised
release, plus fining them $250,000.00 will make them change their minds.
That’s absolutely not going to happen. Hank and Judy know the
truth about the IRS and the income tax. They know, as does this writer
that absolutely no law exists that requires them to pay such a tax and
they are going to stand on the truth. The Matthies’ are honest,
law abiding Christians and they recognize when they’re being conned.
The
IRS wants us all to believe that a husband and wife cannot discuss the
way they want to handle their personal, household and financial affairs.
Nothing could be further from the truth. Our personal, household and
financial affairs are absolutely none of their business. We all have
the right to privacy and have the right to be secure in our houses,
papers and effects as per the 4th Amendment. The IRS denies that these
constitutional rights even exist.
Recent
Court Cases Prove the Matthies’ Position
Shreveport,
Louisiana - A federal jury found Shreveport, La. Attorney Tommy Cryer
not guilty on July 11, 2007 of two misdemeanor counts of failure to
file income taxes and dismissed two felony charges of tax evasion prior
to trial. Cryer was represented by renowned tax attorney Lowell (Larry)
Becraft Jr. of Huntsville, Alabama. Mr. Becraft is currently representing
Hank and Judy Matthies in their battle with the IRS and their case mirrors
that of Cryer’s.
Cryer
stopped filing income taxes 10 years ago and challenged the government
for years on the legality of filing federal income taxes. He said the
court could not list any laws that make his revenues taxable. The IRS
and the US Attorney’s Office were unable to produce any law, simply
because none exist.
San
Jose, California – Ex-IRS criminal investigator Joe Banister was
indicted on or about November 18, 2004 on one count of conspiracy, three
counts of willfully aiding, assisting, counseling, and procuring the
filing of an amended tax return which was false with regard to a material
matter. Banister was acquitted on June 23, 2005.
Mr.
Banister was an IRS agent earning $80,000.00 annually, who began to
study the Income Tax Code and discovered it did not apply to most American
citizens and that it was being enforced by the IRS and Government of
the United States illegally. When Banister questioned his superiors
about his findings he was asked to resign. According to Observer sources
Banister was devastated when he discovered that he had taken part in
wrongfully destroying the lives of innocent people based on a law that
didn’t exist.
This
ongoing battle is not about money. Most certainly not for the IRS and
absolutely not for the Matthies'. For the IRS (government) it is about
power and control. The government has an endless flow of money at its
disposal. For Hank and Judy it is about principle, morals and doing
what is right. It would have been more cost effective for them if they
would have voluntarily filed and paid. They continue to be embroiled
in this battle in hopes of leaving a better country for their children,
grandchildren and future generations of all Americans.
Who’s
Conning Who IRS?
Editor's
Note: If you have been targeted by the IRS and have a case against you
pending, contact us immediately!
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