Clearing Up Common Misconceptions About Taxes

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People have increasingly become aware of the fraudulent voting system, and as a result, have universally opted out by refusing to participate in the charade.  One area where people wish they could also opt out, but have a tough time, is taxes.

Unless you’re fortunate enough to operate a cash business, have access to a shell corporation, have a trusted business associate in a foreign tax haven, or have the legal know how and the financial backing to eliminate your corporate strawman, you have few options in avoiding filing and paying income taxes.  So what to do?  Glad you asked!

Most individuals have been an employee most (if not all) of their entire life and as a result, do not understand business and a few critical factors.  Having said that, let’s first change the way you think about government.  Think of government as a business…A business that operates with an annual loss (budget deficit) and is carrying a debt load of nearly $19 trillion, and trillions more in unfunded liabilities (money it has agreed to pay in the future, but does not have adequate liquidity to actually PAY it).  How long can the business continue to operate thanks to available credit?  Simple answer: it can for only so long.

That’s where the importance of CASH FLOW comes in.  Every week, if you’re a salaried employee, your employer submits payroll tax payments to the US Treasury.  Part of the funds sent in were made available due to your W-4 submission, where you VOLUNTARILY agreed to allow government to essentially garnish your wages.  What you’re really doing is providing an interest free cash loan to government, which it uses to fund its expenditures, with the promise to give you back the difference in the form of a tax refund.  Therefore, by refusing to allow this withholding, you reduce government’s cash flow.  PLEASE NOTE: If you choose to no longer withhold, you must SAVE EVERY PENNY that would’ve been otherwise withheld.  We recommend NOT depositing it into any bank account for a few reasons:

  1. Money deposited into any checking account becomes property of the BANK.  Your “property” is the certificate of deposit (a liability), money the bank PROMISES to pay back.
  2. Good emergency money.  If shit ever hits the fan, would you rather have cash in your hand and worry about the IRS later or have no cash but be on good terms with it?

If enough people did this, government would have two choices to make up for the shortfall:

  1. Scale back its expenditures (war most likely)
  2. Go to the bond market for funding (auction off more debt).  Government is faced with either getting money with no interest from its taxpayers, or paying interest to creditors.

Number one seems most likely, as option number two isn’t viable: the world already has been scaling back its appetite for US government debt (China hasn’t been a net buyer for several years, which has allowed Japan to pass it, becoming America’s largest foreign creditor).  The Federal Reserve has been turning down the liquidity spigot and is set to hike interest rates sometime around September.

Tax Withholding, from the beginning, was all about giving government more money to do what it does.

From the US Treasury Archives:

“World War II

Even before the United States entered the Second World War, increasing defense spending and the need for monies to support the opponents of Axis aggression led to the passage in 1940 of two tax laws that increased individual and corporate taxes, which were followed by another tax hike in 1941. By the end of the war the nature of the income tax had been fundamentally altered. Reductions in exemption levels meant that taxpayers with taxable incomes of only $500 faced a bottom tax rate of 23 percent, while taxpayers with incomes over $1 million faced a top rate of 94 percent. These tax changes increased federal receipts from $8.7 billion in 1941 to $45.2 billion in 1945. Even with an economy stimulated by war-time production, federal taxes as a share of GDP grew from 7.6 percent in 1941 to 20.4 percent in 1945. Beyond the rates and revenues, however, another aspect about the income tax that changed was the increase in the number of income taxpayers from 4 million in 1939 to 43 million in 1945.

Another important feature of the income tax that changed was the return to income tax withholding as had been done during the Civil War. This greatly eased the collection of the tax for both the taxpayer and the Bureau of Internal Revenue. However, it also greatly reduced the taxpayer’s awareness of the amount of tax being collected, i.e. it reduced the transparency of the tax, which made it easier to raise taxes in the future.” [Emphasis added]

There you have it.  By electing NOT to withhold, you are basically giving the middle finger to government.


“But if I don’t file and pay my taxes when I’m supposed to, I will go to jail!”

IRS is basically like the mafia.  It only wants to be paid.  Locking you up in a jail cell requires Federal prosecution (ie SPENDING money), so rest assured, it would be YEARS until this would ever materialize.

Which leads us to…

“So I’ve decided to no longer withhold income taxes…Now what?!’  Glad you asked, as this question leads us to:


  1. To File Or Not To File: Filing a tax return constitutes consent to government (from the legal standpoint)
  2. To Pay or Not To Pay? After deciding whether or not you’re going to file, you again have a choice.  Mail your timely payment (postmarked by April 15th to avoid penalties and interest) or don’t.

According to IRS‘s own website, this is what will happen if you don’t file or pay on time (and once again, jail time is not an immediate consequence):

Eight Facts on Late Filing and Late Payment Penalties

IRS Tax Tip 2013-58, April 18, 2013

April 15 is the annual deadline for most people to file their federal income tax return and pay any taxes they owe. By law, the IRS may assess penalties to taxpayers for both failing to file a tax return and for failing to pay taxes they owe by the deadline.

Here are eight important points about penalties for filing or paying late.

  1. A failure-to-file penalty may apply if you did not file by the tax filing deadline. A failure-to-pay penalty may apply if you did not pay all of the taxes you owe by the tax filing deadline.
  2. The failure-to-file penalty is generally more than the failure-to-pay penalty. You should file your tax return on time each year, even if you’re not able to pay all the taxes you owe by the due date. You can reduce additional interest and penalties by paying as much as you can with your tax return. You should  explore other payment options such as getting a loan or making an installment agreement to make payments. The IRS will work with you.
  3. The penalty for filing late is normally 5 percent of the unpaid taxes for each month or part of a month that a tax return is late. That penalty starts accruing the day after the tax filing due date and will not exceed 25 percent of your unpaid taxes.
  4. If you do not pay your taxes by the tax deadline, you normally will face a failure-to-pay penalty of ½ of 1 percent of your unpaid taxes. That penalty applies for each month or part of a month after the due date and starts accruing the day after the tax-filing due date.
  5. If you timely requested an extension of time to file your individual income tax return and paid at least 90 percent of the taxes you owe with your request, you may not face a failure-to-pay penalty. However, you must pay any remaining balance by the extended due date.
  6. If both the 5 percent failure-to-file penalty and the ½ percent failure-to-pay penalties apply in any month, the maximum penalty that you’ll pay for both is 5 percent.
  7. If you file your return more than 60 days after the due date or extended due date, the minimum penalty is the smaller of $135 or 100 percent of the unpaid tax.
  8. You will not have to pay a late-filing or late-payment penalty if you can show reasonable cause for not filing or paying on time.


“So if I decide not to file or pay, what happens next?”

  • IRS will send you notices regarding your non-filing
  • They will estimate your expected tax liability based on the MAXIMUM allowed by the Internal Revenue Code
  • If you ignore their notices, eventually they will put a LIEN/LEVY on anything tied to your corporate strawman (any bank accounts, stock portfolios, etc) in an effort to compel you to pay
  • Eventually they will move to garnish any wages associated with your corporate strawman
  • If you are to EVER be charged with tax evasion, you must first be SUMMONED to tax court (must be served)

Ultimately how you proceed is up to you.  Hope this sheds some light on a murky subject.  Comment with any questions!








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