Amid an unusual spotlight on IRS conduct, a Colorado businessman contends his case is one the government particularly wants to keep hidden, because it could cause the whole federal agency to self-destruct.
Jeff Maehr, a Colorado chiropractor who has engaged in a number of business ventures, including PureHealthSystems.com, admits he has refused to file federal income tax returns since 2002, but he says the IRS is afraid to press criminal charges against him.
“They don’t want this to go to court, because there is so much information there that would blow them out of the water if this became public knowledge,” Maehr claimed.
“They are scared to death to bring this in front of a jury and give it a public hearing,” he said. “Instead, they know the IRS goes through administrative processes and ignorant judges and courts who all play this little game.”
Maehr insists he is not a “tax protester.”
“It’s not that I’m unwilling to pay my taxes. In fact, I acknowledge the principle of taxes is constitutional,” Maehr said. “However, I only want to pay the taxes that I owe.”
As WND previously reported, the U.S. Supreme Court docketed a case by Maehr in which he contended that while the government has constitutional authority to tax, the IRS has engaged in “unlawful, unconstitutional, unfair and biased” practices to declare salaries and wages to be income without any legal basis. Earlier this month, however, the high court declined to hear his case.
Maehr said there are questions he has asked the IRS that the agency has yet to answer.
“I am not talking about the answer given on their website, I am talking about a specific law or statute that defines income as wages,” he said. “They apparently cannot produce it, or they would’ve done so already.”
Maehr said that in 2007, the IRS attempted to gather the information from various sources such as PayPal and his mortgage company to prepare a $280,000 assessment it determined he owed for 2003 to 2006.
However, despite its claims, the IRS has made no apparent effort to hold Maehr accountable for refusing to pay.
Additionally, the agency has not attempted to go after Maehr for income from 2007 to 2011.
Maehr noted that the federal government’s unwillingness to prosecute him is particularly noteworthy because it has had no problem pressing charges against high-profile people such as actor Wesley Snipes.
Snipes was convicted and sentenced to three years in prison for failing to file tax returns for 1999 to 2001. The three years are a fraction of the time Maehr has refused to file.
However, Maehr says he has a paper trail that has prevented the IRS from going after him as it did Snipes.
“There are certain parameters they have to follow when attempting to prosecute somebody for willful failure to file,” Maehr said. “They have to be able to prove that I knew I had a duty to file and I didn’t file.
“However, my paper trail clearly shows that I do not believe I had a duty to file and the reasons for my believing that – and here’s where I have asked the questions, and I want them to answer and show me where that duty is in the law in the Internal Revenue Code.”
Maehr insisted that for the IRS to prosecute him, it would have to answer his questions in court.
“They would need to prove their case in court that wages are income and they can’t possibly make the case,” he said.
Maehr asserts the courts and IRS are engaging in circular logic.
“The IRS attempts to argue in court cases that my argument is frivolous. However, in each of these instances there has never been any evidence entered into court,” he said. “They then turned around and cited previous rulings as to why my case is frivolous. Essentially they are saying it is frivolous simply because they say so.”
He said, for example, courts say his case is frivolous “because everybody knows that when you get some finances for working from somebody that’s income and that’s all profit.”
“However, they don’t want to look at the original intent of the law. They don’t want to look at the Constitution, indirect or direct taxation or any of the facts. Instead they simply ignore it all,” he said.
Maehr began researching the issue in 2002 and discovered legal cases indicating that the definition of income excludes wages and salaries.
Asking for help to clear up his confusion, Maehr asked the IRS to provide the statutory authority that wages were, in fact, income. Instead, he says the IRS simply pointed to its own statements to back up its assertions.
“I started writing some letters to the IRS and asking them some very basic questions,” Maehr explained. “I told them there appears to be this question and I would honestly like an answer since a particular law would say something, while on the other hand, they were saying something completely different.
“I simply asked them to please clarify their statements. However, it was always non-answers coming back, and finally they sent me a letter saying they were not going to respond to any of my questions anymore, and if I wanted to find an answer I would have to find it in the courts.”
So that is exactly what Maehr did.
However, he soon discovered that the courts were unwilling to address his claims, despite his clearly having standing.
A copy of a ruling from the 10th U.S. Circuit Court of Appeals in Denver, before judges Michael Murphy, Bobby Baldock and Harris Hartz, was included in Maehr’s filing. The ruling appears to support Maehr’s argument, because the judges, without responding to his questions and challenges to the constitutionality of the issue, dismissed the claims as “frivolous” and ruled, without support its argument, that Maehr’s petition “contains no valid challenges.”
In his petition, Maehr cites a wide range of historical court and congressional statements that back up his assertions regarding taxes. For instance, Black’s Law Dictionary defines income tax as being “a tax on the yearly profits arising from property, professions, trades and offices.”
Maehr argues based on this and other references that wages are not “profits” but are instead the simple exchange of labor for money. To bolster his assertion, he notes that while businesses frequently pay taxes on their profits, they do not pay taxes on their expenses.
Likewise, the labor of an individual is the “expense” required to obtain the money, therefore it is not “profit,” and to declare otherwise would subject corporations such as Sears to “income taxes” on 100 percent of their cash register receipts, he argues.
The U.S. Supreme Court itself said an 1883 case, “It has been well said that, the property which every man has in his own labor, as it is the original foundation of all other property, so it is the most sacred and inviolable.”
In 1969, the high court ruled: “Whatever may constitute income, therefore, must have the essential feature of gain to the recipient. This was true when the 16th amendment became effective. … If there is no gain, there is no income. … [Income] is not synonymous with receipts.”
And a 1946 case stated, “Reasonable compensation for labor or services rendered is not profit.”
Despite these references and the refusal of other courts to consider the merits of his case, the Supreme Court likewise turned down his petition.
Maehr said while he understands that the Supreme Court typically refuses to hear about 95 percent of the cases it receives, he believes his case met the criteria established because it involves an important issue of interpretation of the Constitution and federal law that directly affects every American.
“Based on their own criteria this is exactly the type of case that they should hear. It involves a constitutional issue and addresses a large segment of the population. A lot of their previous cases over the years and decades have always focused on constitutional law issues and due process.”
“With them refusing to hear this case and considering all the facts, they have basically stated I don’t get due process rights through the courts and I am not allowed to defend myself against the IRS. They will not hear it, none of the courts are willing to hear the case and adjudicate it.”
Maehr says while the news is focused on the IRS targeting of conservative groups, critics of the agency are missing a golden opportunity.
“The recent scandals coming out about the IRS shows the whole agency is corrupt, and what’s amazing is issues such as mine are not being jumped on,” he said. “What they have done with the targeting of the conservative groups pales in insignificance when compared to forcing every man, woman and child to pay a tax that they are not legally and constitutionally liable for.”