Regarding
the issue of Social Security, Attorney Larry Becraft discussed its
constitutionality, as well as that of Obamacare, in a recent lengthy interview
of him and former IRS Special Agent Joe Banister titled “The Illegitimacy of The
Income Tax System”:
The Illegitimacy of The Income Tax System
At
13:30 in the video, Attorney Becraft pointed to a landmark Supreme Court
decision in 1935 ruling on the constitutionality of a precursor to Social
Security (the Railroad Retirement Act) limited to workers in interstate
commerce (railway workers) in which the Court ruled the Act unconstitutional as
a violation of the Due Process clause of the Fifth Amendment and a breaching of
the limited power of Congress to regulate interstate commerce.
He
goes on to explain that Congress ignored this decision when it implemented
Social Security, and in two later cases in 1937 (Helvering v. Davis and Steward
Machine Co v. Davis) the Court upheld the constitutionality of the Social
Security Act.
Attorney
Becraft makes the point that the first case was never overturned, and stands as
a precedential ruling. Accordingly, the Supreme decisions in 1935 and 1937
respectively as to the constitutionality of Social Security are in
irreconcilable conflict, and both cannot be correct. Furthermore, the
preponderance of the constitutional arguments are overwhelming in favor of the
court’s reasoning in the first case in 1935 (Railroad Retirement Board v.
Alton RR Co.).
Attorney
Becraft suggests that since the Court has ruled that the constitutionality of a
federal retirement income scheme in interstate commerce where Congress has the
greatest measure of constitutional latitude cannot be sustained, how can it be
constitutional in the rest of the economy where Congress has no such latitude?
Therefore,
while the Court has created some unfortunate ambiguity, at the very least one
can reasonably assert that the constitutionality of the Social Security system
is in serious doubt.
Here
are some key excerpts from the Supreme Court decision in the Alton RR case:
“The
federal government is one of enumerated powers; those not delegated to the
United States by the Constitution, nor prohibited by it to the states, are
reserved to the states or to the people.
The Constitution is not a statute, but the supreme law of
the land to which all statutes must conform,
and the powers conferred upon the federal government are to be reasonably and
fairly construed, with a view to effectuating their purposes. But recognition
of this principle cannot justify attempted exercise of a power clearly beyond
the true purpose of the grant.
All
agree that the pertinent provision of the Constitution is article 1, 8, cl. 3,
which confers power on the Congress 'to regulate Commerce ... among the several
States; ...' and that this power must be exercised in subjection to the
guarantee of due process of law found in the Fifth Amendment. 4
The
petitioners (Railroad Retirement Board) assert that the questioned act, fairly
considered, is a proper and necessary regulation of interstate commerce; its
various provisions have reasonable relation to the main and controlling
purposes of the enactment, the promotion of efficiency, economy, and safety;
consequently it falls within the power conferred by the commerce clause
and does not offend the principle of due process.
The
respondents (Alton RR Co.) insist that numerous features of the act
contravene the due process guaranty, and further that the requirement of pensions
for employees of railroads is not a regulation of interstate commerce within
the meaning of the Constitution.
These
conflicting views open two fields of inquiry which to some extent overlap. 5
If we assume that under the power to regulate commerce between the
states Congress may require the carriage to make some provision for retiring
and pensioning their employees, then the contention that various provisions of
the act are arbitrary and unreasonable and bear no proper relation to that end
must be considered. If any are found which deprive the railroads of their
property without due process, we must determine whether the remainder may nevertheless
stand.
Broadly,
the record presents the question whether a statutory requirement that retired
employees shall be paid pensions is regulation of commerce between the states
within article 1, 8…
The act is invalid because
several of its inseparable provisions contravene the due process of law clause
of the Fifth Amendment.
We are of opinion that it is also bad for another
reason which goes to the heart of the law, even if it could survive the loss of
the unconstitutional features which we have discussed.
The act is not in purpose
or effect a regulation of interstate commerce within the meaning of the
Constitution.”
- U.S.
Supreme Court, RAILROAD RETIREMENT BOARD v. ALTON R. CO., 295 U.S. 330 (1935)
I hope you find this information helpful in understanding my
concerns about the state of our nation.
Sent: Friday, September 27, 2013 6:13 PM
Subject: RE: How to Beat the IRS - (Response to your comments)
Sorry for the delay in replying to your comments.
Article I of the Constitution provides adequate means of funding
for all authorized government activities, but it needs to be done as specified
by the Constitution.
Interest is becoming a problem because of the enormous
accumulated debt growing out of the wildly irresponsible deficit spending in
recent years, most conspicuously in the Bush and Obama administrations. Bush’s
support for the Medicare Part D drug benefit program was unwise and clearly a
fiscal debt bomb from the time of its adoption. It has turned out to be far
more expensive than the original projections, as has happened with virtually
all government spending programs.
As to Social Security and Medicare, whatever “moral argument”
there might be is not relevant if these programs are in conflict with the
Constitution and unsustainable as well. The Constitution provides no authority
for income redistribution schemes. This concept was anathema to the Founders,
as was demonstrated by an early proposal in Congress to authorize payment of a
special benefit to the widow of a veteran. I believe it was either Thomas
Jefferson or John Adams who refused to consider such a proposal, arguing that
the Congress had no authority to spend governmental funds in such a manner.
That said, these programs are, as you well know, massive Ponzi
schemes, and these schemes are about to collapse of their own weight.
You, as a CPA, should understand better than anyone how
actuarially flawed is the financial viability of a program that pays out money
to current beneficiaries from current contributions with a worsening
demographic relationship of contributors to beneficiaries, and no underlying
asset base to support future payments. The system has been a Democratic vote-buying
scam from the beginning, and it became dramatically less stable when LBJ merged
Social Security inflows with general revenues in the early 60s, and then
introduced Medicare to add a huge increase in risk to the future actuarial
stability of the system.
Experts have been warning for years that the longer a fix is
delayed, the more drastic will be the measures needed to restore even temporary
viability to the system. As it stands now the system will collapse of its own
weight within the lifetimes of our children. The SSI (disability) program will
be unsustainable beyond 2016 as I understand it.
So what is more moral – to infect the very core of the nation’s
economy with a rot that will destroy it from within, thereby devastating the
entire middle class (as is happening right before our eyes); or to protect the
system that produced the U.S. economic miracle so that present and future
generations will be able to maintain a system that offers a path for the poor
and disadvantaged in society to rise from their condition to enjoy the benefits
of education and jobs generated by a growing economy?
As to the Stanton case, (and the Brushaber case as well, to
which the Court referred in the Stanton case) – it matters not whether the
plaintiffs won or lost their case. Brushaber also received an unfavorable
decision in his claim. What is important in relation to the Sixteenth
Amendment is what the court said about that Amendment in its rulings.
In the Brushaber case the Court said:
“The contention that the Amendment treats a tax on
income as a direct tax although it is relieved from apportionment and is
necessarily therefore not subject to the rule of uniformity as such rule only
applies to taxes which are not direct, thus destroying the two great
classifications which have been recognized and enforced from the beginning, is
wholly without foundation…
This must be unless it can be said that although the
Constitution, as a result of the Amendment, in express terms excludes the
criterion of source of income, that criterion yet remains for the purpose of
destroying the classifications of the Constitution by taking an excise out of
the class to which it belongs and transferring it to a class in which it cannot
be placed consistently with the requirements of the Constitution. Indeed,
from another point of view, the Amendment demonstrates that no such purpose
was intended, and on the contrary shows that it was drawn with the object
of maintaining the limitations of the Constitution and harmonizing their
operation…
The purpose was not to change the existing
interpretation except to the extent necessary to accomplish the result
intended; that is, the prevention of the resort to the sources from which a
taxed income was derived in order to cause a direct tax on the income to be a
direct tax on the source itself, and thereby to take an income tax out of the
class of excises, duties, and imposts, and place it in the class of direct
taxes.”
- U.S.
Supreme Court, BRUSHABER v.
UNION PACIFIC R. CO., 240 U.S. 1 (1916)
_____________________________________________________________________________________
Here is what the Court had to say in the Stanton case:
As the first proposition is plainly in conflict with the
meaning of the 16th Amendment as interpreted in the Brushaber Case, it may also
be put out of view…
The tax is not within the purview of the 16th Amendment,
and consequently it must be treated as a direct tax on property because of its
ownership, and as such void for want of apportionment. But, aside from the
obvious error of the proposition, intrinsically considered, it manifestly
disregards the fact that by the previous ruling it was settled that the
provisions of the 16th Amendment conferred no new power of taxation,
but simply prohibited the previous complete and plenary power of income
taxation possessed by Congress from the beginning from being taken out of the
category of indirect taxation to which it inherently belonged, and being placed
in the category of direct taxation subject to apportionment by a consideration
of the sources from which the income was derived,
- U.S. Supreme Court, STANTON v. BALTIC MINING CO, 240 U.S. 103 (1916)
Chuck this is not my argument, nor is it an attempt on my part
to manipulate the facts to support some agenda. I only want the truth. I can
see what is happening to our country, and I have learned from extensive study
that the root cause of most of our problems as a nation is our failure to
adhere strictly to the provisions of one of the most profound and perfect
documents ever created in the history of mankind – the United States
Constitution. We ignore it at our peril. The examples of this are many, but one
of the most obvious is the introduction of a fiat currency in defiance of the
explicit prohibition against such in the Constitution. Never in monetary
history has a nation with a fiat currency ever succeeded in avoiding
self-destruction.
As to the age of the Brushaber and Stanton cases – they were
definitive and stand unchallenged and unchanged as to the effect of the
Sixteenth Amendment. Yet they are of much more recent vintage than the historic
Hylton case from 1796 – perhaps the most thorough and thoughtful
analysis of the taxing clauses of the Constitution which has ever been written.
Then there is the historic case of Marbury v. Madison, a
case decided in 1803 and written by Chief Justice John Marshall which has
provided controlling precedent for over 200 years in several areas of
jurisprudence.
Here are several excerpts from the Hylton case:
If there are any other species of taxes that are not direct, and not included within the words duties, imposts, or excises, they may be laid by the rule of uniformity, or not; as Congress shall think proper and reasonable. If the framers of the Constitution did not contemplate other taxes than direct taxes, and duties, imposts, and excises, there is great inaccuracy in their language.
If these four species of taxes were all that were meditated, the general power to lay taxes was unnecessary. If it was intended, that Congress should have authority to lay only one of the four above enumerated, to wit, direct taxes, by the rule of apportionment, and the other three by the rule of uniformity, the expressions would have run thus: 'Congress shall have power to lay and collect direct taxes, and duties, imposts, [3 U.S. 171, 174] and excises; the first shall be laid according to the census; and the three last shall be uniform throughout the United States.' The power, in the eighth section of the first article, to lay and collect taxes, included a power to lay direct taxes, (whether capitation, or any other) and also duties, imposts, and excises; and every other species or kind of tax whatsoever, and called by any other name. Duties, imposts, and excises, were enumerated, after the general term taxes, only for the purpose of declaring, that they were to be laid by the rule of uniformity.
I consider the Constitution to stand in this manner. A general power is given to Congress, to lay and collect taxes, of every kind or nature, without any restraint, except only on exports; but two rules are prescribed for their government, namely, uniformity and apportionment: Three kinds of taxes, to wit, duties, imposts, and excises by the first rule, and capitation, or other direct taxes, by the second rule.
I believe some taxes may be both direct and indirect at the same time. If so, would Congress be prohibited from laying such a tax, because it is partly a direct tax?
The Constitution evidently contemplated no taxes as direct taxes, but only such as Congress could lay in proportion to the census. The rule of apportionment is only to be adopted in such cases where it can reasonably apply; and the subject taxed, must ever determine the application of the rule.
If it is proposed to tax any specific article by the rule of apportionment, and it would evidently create great inequality and injustice, it is unreasonable to say that the Constitution intended such tax should be laid by that rule…
___________________________________
Apportionment is an operation on states, and involves valuations and
assessments, which are arbitrary, and should not be resorted to but in case of
necessity. Uniformity is an instant operation on individuals, without the intervention of assessments, or any regard to states, and is at once easy, certain, and efficacious. All taxes on expenses or consumption are indirect taxes.
A tax on carriages is of this kind, and of course is not a direct tax.
Indirect taxes are circuitous modes of reaching the revenue of individuals, who generally live according to their income. In many cases of this nature the individual may be said to tax himself.
I shall close the discourse with reading a passage or two from Smith's Wealth of Nations.
“The impossibility of taxing
people in proportion to their revenue, by any capitation, seems to have given
occasion to the invention of taxes upon consumable commodities; the state
not knowing how to tax directly and proportionally the revenue of its subjects,
endeavours to tax it indirectly by taxing their expense, which it is supposed
in most cases will be neatly in proportion to their revenue. Their expense
is taxed by taxing the consumable commodities upon which it is laid out. (3
Vol. page 331).”
- U.S. Supreme Court, HYLTON v. U S, 3 U.S. 171 (1796)
As to the possibility of my prosecution for filing a correct income tax
return in which I state the truth of the constitutional status of my receipts,
I feel that I have a moral obligation, once knowing the truth, not to perjure
myself by affixing my signature to a statement that I know to be untruthful. I
am doing just that if I submit to the intimidation of the IRS tax swindle
scheme by certifying that my untaxable receipts are in fact taxable.
Furthermore, by participating in the preservation of this scheme by submitting
to it, I become thereby complicit in the fraud upon the American people which
it represents. Chuck, I ask you - is this not a duty which our oath of office as naval officers imposes on us?
I, [name], do solemnly swear (or affirm) that I will support and defend the Constitution of the United States against all enemies, foreign and domestic; that I will bear true faith and allegiance to the same; that I take this obligation freely, without any mental reservation or purpose of evasion; and that I will well and faithfully discharge the duties of the office on which I am about to enter. So help me God.
So if I am subjected to prosecution by the IRS, I will defend myself as best I can in my own little battle to preserve what the Founders bequeathed to this nation at great sacrifice.
“Is
it not a moral imperative and a responsibility of citizenship that we demand of
our government and its elected officials and representatives that the
government must be in compliance with the Constitution or the very rule of law
itself is in jeopardy?”
***********************************************************************
Here is Pete Hendrickson on this subject:
Educated Americans know
that even though it is easily-mistaken as a tax on "all that comes
in" (and that such mistakes are deliberately encouraged and viciously
exploited by revenue- and power-hungry governments which have designed the tax
law to be confusing and to conceal its true nature), the income tax is actually
a Constitutionally-harmonious tax of limited application, which
has nothing to do with simply earning money and which mandates nothing at all
unless one chooses to engage in a narrow class of specialized activities.
BECAUSE THEY ARE EQUIPPED
WITH THIS UNIQUELY COMPREHENSIVE AND COMPLETE knowledge of federal tax law, CtC-educated
Americans maintain control of their resources and regulate the excesses of the
state. This is just as intended by the Founders, who set the federal tax
structure up to encourage exactly that control-- administered by individual,
grown-up Americans unilaterally looking after their own interests and the rule
of law in exactly this way.
It is that knowledge and
control that allows American grown-ups like James G. and Travis and Angie
Scott-- whose victories upholding the rule of law against arrogant state
efforts to impose inapplicable mandates on them are added this week to the mountain
of others by which they have been preceded-- to effectively rebut all
allegations of any federal income tax liability, Social Security and Medicare
taxes included, and reclaim control over the disposition of their property:
Every single American can
and should be doing the same. Contrary to the deeply-rooted mythology
cluttering the minds of most Americans-- even those otherwise well-versed in
understanding of original intent and of other areas of the Constitution as
drafted and as amended-- there is no coercive federal tax on individual
Americans.
The Founders had no
tolerance for such demented, illiberal notions, and allowed no such tax.
Our grandparents'
generation was no more moronic than the Founders in this regard. They,
too, never allowed for such a tax-- absurd, government-promoted
mythology to the contrary notwithstanding. CtC-educated
Americans know all this, having studied in-depth information and authority on
every aspect of the federal tax structure, and having put that knowledge into
practice personally for years now.
MORE, THESE EDUCATED
AMERICANS KNOW that like the income tax overall, the Obamacare "individual
mandate" and penalty only apply to folks who, in any given year, receive
more than the exemption amount of the specialized kind of gains that qualify as
"income" within the context of the tax. Thus, CtC-educated
Americans know that the mandate and penalty simply don't apply to most of them,
and how to stop it from being imposed on them unless they choose to switch from
their untaxed economic activities to the narrow variety subject to the tax.
From: XXXX
Sent: Sunday, September 22, 2013 9:49 PM
Subject: Re: How to Beat the IRS - Supplemental Comments
Sent: Sunday, September 22, 2013 9:49 PM
Subject: Re: How to Beat the IRS - Supplemental Comments
This is an interesting
conversation with Steve. Assuming you are correct, how is the government
going to pay for interest and military expenses which I think are mandated by
the constitution. You also have the moral argument about paying Social
Security and Medicare. Many people in old age have no other support for
their daily living expenses and medical expenses.
You cite the Stanton v Baltic
Mining Case. This case was decided by the Supreme Court in 1916, almost
100 years ago. Stanton lost the case. Move on. There are
times where you might not agree with the Supreme Court, but in our system of
government they have the final say.
In 2013 you would have a lot
more support if you wanted Congress to limit the complexity of the current IRS
regulations. As a tax professional I deal with the complexity all the
time.
Please forward my e-mail to
Steve. I do not have his e-mail address.
FYI – Steve is a Navy squadron-mate and retired American
Airlines captain who is a Republican state legislator in the New Hampshire
House of Representatives.
Sent: Sunday, September 22, 2013 2:55 PM
To: XXXX
Subject: RE: How to Beat the IRS (audio archive on Freedom's Radio)
Steve,
To answer your question – CtC exposes the fact that the income
tax is nothing more than an excise
on government-connected receipts or on the exercise of a federal privilege. The
Supreme Court (in Brushaber v.
Union Pacific RR Co;Stanton v. Baltic Mining Co.; and Peck v. Lowe and other decisions) explicitly
affirmed this. Look it up – it’s
right there.
A tax on all private sector receipts would fail the
constitutional test on at least three counts:
1. It would be an unapportioned direct tax;
2. It would reflect an incorrect application of the concept of
“income” (revenues minus costs), particularly as related to the exchange of
labor for something else;
{In other words, a direct tax on “all that comes in” implies
that the time and skill employed in labor has no value, a view which has been
explicitly rejected by the U.S. Supreme Court [Butcher’s Union Co. v.
Crescent City Co. (1883) and Coppage v. Kansas (1915)]}.
3. It would interfere with the free exercise of economic and
personal rights guaranteed by the Constitution.
For example, it is impossible to enforce an unapportioned direct
tax without gross violations of the fourth and fifth amendments. The problems
associated with capitations are spelled
out by Adam Smith in his treatise on “capitations”in “Wealth of Nations” and that is the reason this very word was used by the Founders in Article I Section 9 of the
Constitution.
Finally, as Peter Hendrickson points out in CtC, the Supreme
Court underscored the essence of the distinction between direct and indirect
taxes in Knowlton v. Moore (1900) as follows, “quoting the
long-standing official French definitions as helpfully illustrative of the
distinctions drawn in the United States Constitution” :
“Direct taxes bear immediately upon persons, upon the
possession and enjoyments of rights; indirect taxes are levied upon the
happening of an event or an exchange.”
So a CtC-educated return uses a Form 4852 to rebut any
allegations by third parties that private sector earnings qualify as taxable
income, and thereby corrects the information on these information returns
implying otherwise. Any other receipts
not reported by a third party which are of a private character are simply none
of their business.
I believe that Social Security payments constitute
federally-connected receipts, so they will be reported as income, but they will
be entirely offset by allowable deductions.
A signature attesting, under penalty of perjury, to anything other than this treatment as being true and correct would, as Pete stated, be a
certification of something that is not true (i.e. a false statement).
The bottom line is that the educated return is very simple to
complete. No complicated schedules are required.
Does this answer your question?
I had to read CtC and its companion “Your Grandpa Was Not a
Moron” three times to reach a complete grasp and level of comfort with these
concepts, given a personal
history of over 50 years of
filing incorrect income tax returns.
The drafters of the IRC and the authors of IRS publications use
custom statutorily-fixed definitions (legal “terms of art”) for words such as “employee”, “employer”, “wages”,
“trade or business”, “state”, “United States” and “taxable” in
an exceedingly clever scheme to create the impression that these words carry
their common meanings and therefore result in tax liability when in fact no
such liability exists. For example – when used in Title 26 (the Internal
Revenue Code) the words “trade
or business” mean “exercising the functions of a public
office”.
This is too profoundly at variance with what we have been
tricked into believing for so long to explain completely in a short message. I
urge you to read CtC for a better grasp of the deception employed by the
government to carry out the income tax fraud.
And don’t be misled by such luminaries as Mark Levin, Bill
O’Reilly, Sean Hannity, Newt Gingrich, or even Rand Paul. They do not
understand what the Constitution says. They are all talking about a “Flat Tax”
or a “Fair Tax”. None of these taxes are constitutional.
The options spelled out in Article I of the Constitution are a
direct tax with apportionment (which was done several times early in our
history) or indirect taxes of various types subject to the requirement of uniformity.
That’s it.
Dave
From: XXXX
Sent: Sunday, September 22, 2013 8:59 AM
Subject: Re: How to Beat the IRS (audio archive on Freedom's Radio)
Sent: Sunday, September 22, 2013 8:59 AM
Subject: Re: How to Beat the IRS (audio archive on Freedom's Radio)
OK. I'm not sure how you are "beating the
IRS" but I guess, somehow, you are. Are you sending them any less
than you would without CtC? BTW, I suggest that you also file a 2013.
Steve
On Sep 21, 2013, at 4:31 PM, David LaRocque wrote:
Steve,
CtC does not recommend not filing, but rather to file correctly
by rebutting false representations made by others (W-2s and 1099s) as to the
taxable status of payments or gains received.
I intend to file a CtC-educated correct return for 2012 on
October 15. I will also file amended returns for 2010 and 2011 to obtain
refunds of taxes paid in those years.
Dave
From: XXXX
Sent: Saturday, September 21, 2013 1:27 PM
Subject: Re: How to Beat the IRS (audio archive on Freedom's Radio)
Sent: Saturday, September 21, 2013 1:27 PM
Subject: Re: How to Beat the IRS (audio archive on Freedom's Radio)
Dave —
How long have you not been filing your annual income taxes?
Steve
On Sep 21, 2013, at 12:50 PM, David LaRocque wrote:
IRS
Information Technology Does Not Meet Legal ‘Rules of Evidence’ Requirements
How to Beat the IRS
(audio archive on
Freedom's Radio)
“Deficiencies remain concerning (1) material weaknesses in internal
control over… information security, (2) a significant deficiency in its
internal control over tax refund disbursements, (3) a noncompliance with the
law concerning the timely release of tax liens, and (4) financial management
systems’ lack of substantial compliance with FFMIA requirements.”
-
GAO Audit Report, IRS Fiscal Years 2010-2011
This
program is worth listening to:
On
the calendar, click on the program for Thursday, September 19, 2013, then click
on the link in blue to activate the player. Scroll to the 30 minute point to
bypass introductory stuff. The speaker is introduced as “Mr. Smith”, but he is
really Red Beckman, who appears regularly on “Walls in Your Mind” on
BlogTalkRadio (see below from a recent email).
Red
Beckman worked with Bill Benson in performing the research that proved that the
Sixteenth Amendment was never legally ratified.
In
this presentation on Freedom’s Radio, Red explains how the computer-generated
transcripts introduced into evidence by the IRS at due process hearings or in
Tax Court, do not, according to repeated General Accounting Office
reports, meet required legal standards for accuracy, trustworthiness,
reliability, and data security. Accordingly, by objecting to these IRS
transcripts and having them disallowed as evidence of record, a defendant will
have removed the only evidence the IRS can present, thereby effectively
destroying the IRS case.
Go
to the 55 minute point on the recording to hear Red describe exactly how this
objection should be made.
Here
are several links to examples of GAO reports describing the many problems with
the IRS information technology system. As Red explains, IRS computers are not
capable of automatic calculation of individual income tax data. All such
calculations are made by hand by IRS agents and the results manually entered
into IRS computers. This brings into sharp focus the well-known observation that
no two IRS agents are likely to achieve the same result on any set of input
data for an individual income tax return.
******************************************************************
FINANCIAL
AUDIT – IRS’s Fiscal Years 2011 and 2010 Financial Statements
What GAO Found
“In
GAO’s opinion, IRS’s fiscal years 2011 and 2010 financial statements are fairly
presented in all material respects.
However,
serious internal control and financial management systems deficiencies
continued to make it necessary for IRS to use resource-intensive compensating
processes to prepare its balance sheet. Because of these and other internal
control, compliance, and system-related deficiencies, IRS did not, in GAO’s
opinion, maintain effective internal control over financial reporting as of
September 30, 2011, and thus did not have reasonable assurance that losses and
misstatements material to the financial statements would be prevented or
detected and corrected timely.
During
fiscal year 2011, IRS continued to make strides in addressing its deficiencies
in internal control. For example, to address its information security
deficiencies,
IRS formed cross-functional working groups to identify and remediate specific
at-risk information security control areas and made improvements in
several system-level information security controls.
However,
deficiencies remain concerning (1) material
weaknesses in internal control over unpaid tax assessments and information
security, (2) a significant deficiency in its internal control over tax
refund disbursements, (3) a
noncompliance with the law concerning the timely release of tax liens, and
(4) financial management systems’ lack of substantial compliance with FFMIA
requirements. The continuing material weakness in internal control over unpaid
tax assessments results primarily from IRS’s reliance on financial management
systems that do not substantially comply with FFMIA requirements and that
affect IRS’s ability to produce reliable financial statements without
significant compensating procedures.
IRS’s
continued material weakness in information security controls limit IRS’s ability to
provide reasonable assurance that (1) the financial statements are fairly
presented; (2) financial management information relied on to support day-to-day
decision making is current, complete, and accurate; and (3) proprietary
information processed by these automated systems is appropriately safeguarded.
These issues increase the risk of
inappropriate access, alteration, or abuse of proprietary IRS
programs
and
electronic data and taxpayer information.
Further,
during fiscal year 2011, IRS
continued to face management challenges in developing and institutionalizing
the use of financial management information, specifically cost- and
revenue-based, outcome oriented performance information, to assist it in making operational
decisions and measuring the
effectiveness of its programs.
Sustained
management efforts will be necessary to build on the progress made to date and
to fully address IRS’s remaining internal control, compliance, and systems
deficiencies and remaining financial management challenges.”
________________________________________
“Also
in fiscal year 2007, IRS continued to have a material weakness in internal
control over information security. In particular, it had deficiencies in its
controls over access to the automated systems and software applications it
relies upon to process its financial transactions, produce its internal and
external financial reports, and safeguard related sensitive infiltrations. As
result, IRS was limited in its
ability to provide reasonable assurance that (1) its financial statements,
taken as a whole, were fairly presented; (2) the financial information IRS
relied on to make decisions on a daily basis was accurate, complete, and
timely, and (3) proprietary financial and taxpayer information was
appropriately safeguarded.”
*****************************************************************************
Information
on Red Beckman:
What
Matters More, The Power to Elect or
the
Authority to Hold Bad Politicians Accountable?
If The
People realized that the
authority delegated to government is but a fraction of the authority held and
reserved by The People,
and they realized that The People could set up People’s
Boards of Government Review to oversee ALL
government activity for the purpose of holding Elected, Appointed and
Commissioned government actors accountable to their Oaths of Office, then is it possible that the solution
has always been in the hands of The People?
Terry
Dodd, Red Beckman and Dr. Kate
invite you to
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