4/18/2017 Regarding 6020(b) Returns

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Regarding6020(b)Returns

THESTATUTECODIFIEDAT26USC6020(B)imposesamandateonthefederal
government to create a return of its own, and on its own behalf, when it actually
haslegalgroundsforbelievingsomeonehashadtaxablereceiptscontrarytowhat
appearsonhisorherfiledreturn(orwhenareturnisbelievedrequiredbutnone
has been filed). The statute is adequatelyexpressed in the regulations associated
withthismandate:

26C.F.R.301.60201(b)Executionofreturns
(1)Ingeneral.IfanypersonrequiredbytheInternalRevenueCodeor
bytheregulationstomakeareturn...failstomakesuchreturnatthe
time prescribed therefore, or makes, willfully or otherwise, a false,
fraudulent or frivolous return, the Commissioner or other authorized
Internal Revenue Officer employee shall make such return from his
own knowledge and from such information as he can obtain through
testimonyorotherwise....

(2) Form of the return. A document (or set of documents) signed by
theCommissionerorotherauthorizedInternalRevenueOfficer
oremployeeshallbeareturnforapersondescribedinparagraph(b)
(1) of this section if the document (or set of documents)identifiesthe
taxpayerbynameandtaxpayeridentificationnumber,containssufficient
information from which to compute the taxpayer's tax liability, and
purportstobeareturn....(Emphasisadded.)

Further, the 6020(b) mandate invokes another statute: As a required document,

suchsignedreturnscreatedbytheSecretaryonthegovernment'sbehalfmust be
signedunderpenaltiesofperjury:

26U.S.C.6065Verificationofreturns
ExceptasotherwiseprovidedbytheSecretary,any return, declaration,
statement,orotherdocumentrequiredtobemadeunderanyprovision
oftheinternalrevenuelawsorregulationsshallcontainorbeverifiedby
awrittendeclarationthatitismadeunderthepenaltiesofperjury.

TherearenoexceptionsprovidedbytheSecretarytothisrequirementinregardto
6020(b) returns in the regulations regarding these signing and verification
provisions:

26C.F.R.1.60651Verificationofreturns.
(a)Personssigningreturns.
If a return, declaration, statement, or other document made underthe
provisions of subtitle A or F of the Code, or the regulation thereunder,
withrespecttoanytaximposedbysubtitleAoftheCodeisrequiredby
the regulations contained in this chapter, or the form and instructions,
issued with respect to such return, declaration, statement, or other
document, to contain or be verified by a written declaration that it is
madeunderthepenaltiesofperjury,suchreturn,declaration,statement,
orotherdocumentshallbesoverifiedbythepersonsigningit.*

Pursuanttotheserules,then,thelawplainlysaysthatthegovernmentisobligated
tomakeasworn6020(b)returnonitsownbehalf (by the hand of its agent) if it
believes it has a legal basis and authority for alleging that a person has had an
amount of "income" sufficient to require a return (and which is contrary to what
appearsonareturnthatpersonmayhavealreadyfiled).

6020(b) returns are never made in regard to CtCeducated filings, of course. But
sinceitsfailuretoproducesuchreturnsisanacknowledgementbythegovernment
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4/18/2017 Regarding 6020(b) Returns

that it does not have a legal basis and authority for disputing a filed return (or
assertingthatitis"frivolous","false"or"fraudulent",orthatareturnisrequiredbut
unfiled),theDOJhastakentomakingtheridiculousandmendaciousargumentthat
the "shall" in the statute isn't really there, and that the statute doesn't apply to
anythingbuta"failuretofile"situation.

See a discussion and examples of that studied mendacity, and a backdoor
acknowledgementofthetruecharacterofthe6020(b)mandatebytheSixthCircuit
CourtofAppeals,here.

INTERESTINGLY, 6020(b) IS A STATUTE for which there is very little "caselaw".
What there is consists of pretty much what the government attorneys
misrepresented in the contest discussed above, concerning itself only with the
speciousargumentthatcriminalfailuretofilechargescanbeavoidedbecausethe
governmentisobligedtofileareturnonanynonfilersbehalfandthereforenoone
elseiseverunderanactuallegalobligationtofileareturnandthegovernments
ability to allege deficiencies when no original return has been filed without being
first obliged to create and sign a 6020(b) return. (This process relies on taking
unrebutted"informationreturn"allegationsof"income"receivedatfacevalue,and
the regulatory provision concerning "deficiency" proceedings at 26 C.F.R.
301.62111,whichsays:"Ifnoreturnismade,orifthereturn(exceptareturnof
incometaxpursuanttosec.6014)doesnot show any tax, for the purpose of the
definitiontheamountshownasthetaxbythetaxpayeruponhisreturnshallbe
consideredaszero").

The limited scope of these rulings was nicely summarized by Chief United States
Bankruptcy Court Judge Albert Dabrowski in 2006 (all emphasis in this excerpt is
suppliedbyJudgeDabrowski):

By its explicit language, Internal Revenue Code (hereafter, IRC)

6020(b)requirestheTreasurySecretarytomakeasubstitutereturn
foranypersonwhofailstomakearequiredreturnunderanyinternal
revenue law or regulation. Given the Secretarys obligation under
6020(b)2...
2IRC6020(b)(1)providesinrelevantpartasfollows

Ifanypersonfailstomakeanyreturnrequiredby
any internal revenue law or regulation made
thereunder at the time prescribed therefor . . .
the Secretary shall make such return from his
ownknowledge and from such information as he
canobtainthroughtestimonyorotherwise.

(emphasissupplied).

ThisCourtisnotunmindfulofthefactthatdespitetheplain
languageof6020(b)(1),certaincourts,includingtheSecond
Circuit Court of Appeals, have published opinions containing
language which, when read in isolation, may appear to
negate the mandatory nature of 6020(b)(1). E.g., Schiff v.
U.S., 919 F.2d 830, 832 (2d Cir. 1990) Roat v. C.I.R., 847
F.2d 1379, 1381 (9th Cir. 1988). However, it is important to
note that the subject language of these decisions is
addressed to the mandatory vs. permissive nature of a
substitute return for the purposes of tax deficiency
determination and criminal prosecution they have not
explicitly held that the Secretary is relieved of an obligation
tomakeasubstitutereturnforallpurposes...

Ridgway v. United States, CASE NO. 0230358, United States Bankruptcy Court,
DistrictofCt.,2006

***

Bytheway,itisimportanttopointoutthattheIRSroutinelydeployssomethingit
calls a "Substitute for Return" (SFR). This item is nicely described in this GAO
responsetoaninquiryin2000bySenatorDanielMoynihan:

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4/18/2017 Regarding 6020(b) Returns

Hereishowthisisdiscussedinthecurrent"InternalRevenueManual":

4.12.1.8.4(10052010)
SubstituteforReturn

1.Whenithasbeendetermined that a taxpayer is liable for filing a

return,anduponduenoticefromtheServicefailstodoso,anSFR
willbepreparedbyExamination.

A.Examinationusesthisproceduretoestablishanaccountand
examinetherecordsofataxpayerwhenthetaxpayerrefuses
orisunabletofileandinformationreceived indicates that a
returnshouldbefiled.

B.The examiner will follow the steps outlined IRM 4.12.1.5.2

IDRSResearch,toconfirmnoreturnhasbeenfiled.

C.An SFR, in and of itself, does not constitute a return

under IRC 6020(b). For the purpose of asserting the
Failure to Pay Penalty, additional steps should be taken
before submitting the SFR package. See IRM 20.1.2.1.4,
Substitute for Return IRC section 6651(g) (Emphasis
added)

You'll have noticed the "For the purpose of asserting the Failure to Pay Penalty,
additionalstepsshouldbetakenbeforesubmittingtheSFRpackage"language.This
isareferencetotheassemblyofa"purported"6020(b)returnforpurposesofthe
FTPpenalty,basedonaspecificationat26U.S.C.6651(g)thatreads:

(g)TreatmentofreturnspreparedbySecretaryundersection6020(b)

In the case of any return made by the Secretary under

section6020(b)

(1)suchreturnshallbedisregardedforpurposes
ofdetermining the amount of the addition under
paragraph (1) of subsection (a) ["failure to file"
penalty],but
(2)suchreturnshallbetreatedasthereturnfiled
by the taxpayer for purposes of determining the
amountoftheadditionunderparagraphs(2)and
(3)ofsubsection(a)["failuretopay"penalty]

That purported "6020(b) return" for this purpose is achieved by the addition of a
Form 13496 certification a certification that declares the SFR to be a 6020(b)
return for purposes of the section 6651(g) provision, as explained at IRM
20.1.2.1.4,SubstituteforReturnIRCsection6651(g):

ProcedurestoensureFTPpenaltiesonIMFandBMFSFRsaresustained
intaxcourt.

A.Background:Intwotaxcourtcasesin2003,thejudgedeniedthe
ServicetheassessmentoftheFTPpenaltyonanSFRbecausethe
requirementsforavalidIRCsection6020(b)returnwerenotmet.
InconjunctionwithChiefCounsel,Form13496,IRCsection
6020(b)Certification,wasconceivedtoensurethatFTPpenalties
onBMFandIMFSFRswouldbesustainedinfuturecourtcases.

Seeoneoftheseformshere.

Notethateventhoughlabeleda"6020(b)Certification,thisformdoesNOTactually
amount to (or convey) true 6020(b) stature, for lack of a perjury statement. It is
plainly just a pretext for alleging compliance with the specialized and limited
6651(g)provision,justastheIRMlanguagequotedabovedeclares(andjustasthe
"Form13496"itselfdeclares).

Thisbringsustothethirdelementofthe6020(b)provisions,thefirsttwoofwhich
were presented at the beginning of this discussion in their regulatory form at 26
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4/18/2017 Regarding 6020(b) Returns

C.F.R.301.60201(b)Executionofreturns(1)and(2):

(3)Statusofreturns.Anyreturnmadeinaccordancewithparagraph(b)
(1)ofthissectionandsignedbytheCommissionerorotherauthorized
InternalRevenueOfficeroremployeeshallbegoodandsufficientforall
legal purposes except insofar as any Federal statute expressly
providesotherwise....

Thetextinboldhereexplainswhya"Form13496Certification"isspokenofinthe
extremely limited and qualified terms relating solely to the 6651(g) provision that
weseeintheIRMexcerptsaboveandnotasanactual6020(b)goodandsufficient
foralllegalpurposes:becauseit'snot.Remember,aFederalstatuteDOESexpressly
provide that an unsworn certification is NOT good and sufficient for all legal
purposes:

26U.S.C.6065Verificationofreturns
ExceptasotherwiseprovidedbytheSecretary,any return, declaration,
statement,orotherdocumentrequiredtobemadeunderanyprovision
oftheinternalrevenuelawsorregulationsshallcontainorbeverifiedby
awrittendeclarationthatitismadeunderthepenaltiesofperjury.

WhilethispretensemaybeenoughtogetsomeTaxCourtjudgestoconcludethat
6651(g) requirements have been met, it suffices for nothing else, and in no way
makesanSFRintoanactual6020(b)return.

"Whatevertheforminwhichthegovernmentfunctions,anyoneenteringintoan
arrangementwiththegovernmenttakestheriskofhavingaccuratelyascertained
thathewhopurportstoactforthegovernmentstayswithintheboundsofhis
authority....Andthisissoeventhough...theagenthimselfmaybeunawareofthe
limitationsuponhisauthority."
UnitedStatesSupremeCourt,FederalCropIns.Corp.v.Merrill,332US380388
(1947)

Personsdealingwiththegovernmentarechargedwithknowinggovernment
statutesandregulations,andtheyassumetheriskthatgovernmentagentsmay
exceedtheirauthorityandprovidemisinformation.
NinthCircuitCourtofAppeals,Lavinv.Marsh,644f.2d1378(1981)

***

NOTE: Find the actual statutory provisions concerning the mandate currently
reflected at 26 U.S.C. 6020(b) here (access is based on compliance with the
requestpresentedhere).

*TheIRSandDOJhavebeenknowntocitetoa1975TaxCourtruling, Hartmanv.Commissioner,65
T.C. 542 (1975) a "deficiency" case concerning a nonfiler in which, like cases cited in the motion
exchangediscussedabove,itwasheldthatno6020(b)wasrequiredforadeficiencyproceedingtogo
forward when no return had been filed for the proposition that a[n actual] 6020(b) need not be
signed under penalties of perjury. But though the ruling of this agency court does indeed say this
(purely as a disposal of an irrelevant contention, since neither a 1040 nor a 6020(b) return was
involved in the case), it does so without citation of authority and incompletedisregardforindeed,
apparent ignorance of 26 U.S.C. 6065. Further, the rambling on this point conflates two different
issues,reflectingconfusionprobablyborrowedfromHartman,whoapparentlyarguedthatthe6020(b)
language somehow imposed a requirement for a signature under oath for mere deficiency
determinationsandfindings:

"Finally,petitionerarguesthatthe"somadeandsubscribed"languageofsection6020(b)
(2)(seep.544supra)requiresthatalldeterminationsandfindingsoftheCommissioner
mustbeunderoath.(Emphasisadded.)Contrarytopetitioner'sposition,section6020(b)
(2)imposesnooathrequirementatall.Thelanguagecitedbypetitionersimplyrefersto
a return made by the Secretary or his delegate pursuant to section 6020(b)(1) and
"subscribed" by him. Webster's Third New International Dictionary (1965) defines
"subscribe"as"towrite(asone'sname)underneathsign(one'sname)toadocument."
WefindnoreasontobelieveCongressintendedtogivethewordotherthanthisordinary
andwellknownmeaning."

Hartmanv.Commissioner,65T.C.542(1975)

Can'targuewiththecourtaboutthemeaningof"subscribed"byitself,butofcoursethatsubscription
mustbemadeinconformitywithotherrules,oneofwhichisfoundin26U.S.C.6065.Inshort,the
citation of this case by government attorneys is just corrupt lawyering in an effort to abuse a non
precedentialjudicialexpressionofignoranceorcorruption.

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"ResistancetotyrannyisobediencetoGod"
ThomasJefferson

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