Pete Hendrickson

[Continued from page 1]

SUNNI: [laughs] You were kind enough to send me a review copy of Cracking the Code, and I'll admit it: I tried really hard to comprehend it, but I'm not sure I succeeded. That's not to say your book is badly written or anything -- it's one of the clearest books on taxation that I've read. But the govgoons intend for the subject to be confusing and intimidating. How can anybody cut through all that and be reasonably confident he or she's getting it right?

PETE: Well, with all due respect, I doubt that you actually found it hard to understand, per se. Instead, I'm guessing that because what you read contradicts so much that you've been led to believe over the course of your life, you imagine that you're not understanding something. The mental sea-change is dramatic. Many people tell me that it took several re-readings before they succeeded in clearing away the vestiges of their previous misunderstanding. And this is not at all surprising. After all, much of the general misunderstanding of tax law is connected with, and supported by, misunderstanding about broader issues, such as governmental jurisdictional limitations. In learning the truth about taxation, a reader necessarily must absorb some rather startling revelations about these other areas, many of which interface with the average American even more pervasively than the income tax. Thus, Cracking the Code is not simply a turn of the kaleidoscope relative to the subject of taxes, but shifts a reader's perspective on everything related to government. I don't need to point out that government has become, far and away, the dominant factor in the lives of all Americans over the last 70 years. So, the truth can be quite dizzying. If you'll indulge me, here's an excerpt from the book's introduction related to this:

When can you be sure you're getting it right (which is to say, when can you be sure that I got it right)? Well, for one thing, visit losthorizons.com and look at all those refund checks and notices, and lien and levy cancellations. Read through the carefully nuanced language used by the government in its correspondences with CtC readers, noticing that what I teach about the law in the book is never once challenged or contradicted. These are ways of reassuring yourself. However, when you've read enough to really absorb the information in the book, you'll know it, and you will find yourself affirming that fact every time you have dealings with government from that moment on. Suddenly, you'll see what you had always missed before, and every such observation will precisely align with your new knowledge.

SUNNI: In addition to the state-generated FUD (fear, uncertainty, and doubt), there are a lot of other tax activists who add to it, with their emphasis on whether the U.S. flag in a courtroom has fringe on it, using ZIP codes, and stuff like that. How much of a problem is that for you in getting out your message?

PETE: A considerable problem, I'm afraid. It's human nature to just not see something which looms too large. This is the "elephant in the living room" syndrome. The income tax is already plenty pachydermic to most people without the sort of complicating flights of fancy to which you refer. The pleasing reality is that the tax structure is actually quite simple once it is understood, but these fanciful conspiracy-based notions can give it such a daunting (or lunatic fringe) aspect that many who are exposed to them can be discouraged from making any real study of the subject. In fact, these notions are even discouraging to many who embrace them. Why bother to meaningfully research something which you imagine is the product of a far-reaching conspiracy, or a mutated legal system? You'd not be permitted to make use of anything you might learn anyway ... So, many of the adherents of these fancies do little except complain about the evil conspirators.

SUNNI: Do you expect to become an IRS/govgoon target like Irwin Schiff? What do you think he did "wrong"? I mean, there are a lot of anti-tax activists out there, and not all of them get the attention he has ... I'd think your online forum at Lost Horizons would get a lot of IRS attention, for starters.

PETE: I already have been, briefly. A year ago the IRS launched an "investigation" of me, my book and my web site, alleging that it had cause to suspect something illegitimate about what I am presenting. This quickly led to legal contests in two federal district courts. Earlier this month the Department of Justice asked if I would allow the government to abandon both contests, and do so without demanding compensation for my legal expenses. I was a nice guy, and let them off the hook.

SUNNI: Extremely nice, I'd say, Pete ... I imagine you're familiar with Bob Schulz and the We the People Foundation ... What are your thoughts on his approach? Do you think his hunger strike was a good tactic?

PETE: I like Bob Schulz a lot. He is a sincere and dedicated man, and has shown great leadership in organizing those discontented with the current income tax regime. His efforts would be more productive if he were to focus this organized discontent into positive action as provided for by the law, rather than mere protest, however. If those who make up the crowds he manages to assemble would simply claim their rights, as my readers do, he and they would get a lot more of the mainstream publicity that he's seeking, and that this subject needs and deserves. I suppose I could say the same thing about his hunger strike, but its impossible to not admire him for being so willing to suffer for his cause, whatever it may or may not have accomplished.

SUNNI: Do you really think the state will ever admit to any chicanery with respect to the income tax -- who it applies to, all that sort of thing? If so, what will it take to get to that point?

PETE: No, because the chicanery, though real enough in practical effect, is careful to never cross the line into outright fraud. For instance, although the government may well recognize that 99 out of 100 business owners erroneously believe that the "wages" they are commanded to report means the same thing as 'earnings', and is perfectly content to exploit this misunderstanding, it never, ever substitutes the word 'earnings' for the legal term "wages" anywhere with any legal significance. Indeed, even in its own Code of Federal Regulations for Title 26 (the Tax Code) the term "wages" is bracketed by quote marks, so anyone bothering to look is advised over and over again that the term is not the common word 'wages' which is synonym of 'earnings'. So the errors are all the responsibility of the private actors, and the government retains the ability to say, "Hey, we didn't lie to you. We've got nothing to apologize for."

Page 3