By Nancy Thorner – 

In what turned out to be perfect timing, tax expert, Heartland Institute Policy Advisor, and author Daniel J. Pilla was the featured speaker on April 27 at the Heartland Institute on the same day Treasury Secretary Steven Mnuchin and National Economic Council Director Gary Cohn were sent out by President Trump to reveal his tax plan at a White House press conference briefing. Watch Pilla’s presentation at Heartland here.)

Director Cohn called the Trump’s tax reform package the most significant tax reform legislation since 1986, and one of the greatest tax cuts in American history – while fully anticipating attacks “from the left and right” over the plan, whose aim, he said, was to “create jobs and economic growth.”

Speaker Background: Dan Pilla – ‘Premiere Expert on IRS Procedures’

For over three decades, Daniel J. Pilla has been the nation’s leader in taxpayers’ rights defense and IRS abuse prevention and cure. Widely regarded as one of the country’s premiere experts in IRS procedures, he has helped countless thousands of citizens solve personal and business tax problems they thought might never be solved. Pilla has seen every type of tax problem and believes “there is no such thing as a hopeless tax problem.” See here for Pilla’s comprehensive site, the Tax Freedom Institute, which is dedicated to “Understanding Your Taxpayer Rights and Solving Your Tax Problems.”

Pilla is the author of 14 books, dozens of research reports and hundreds of articles. His work is regularly featured on radio and television as well as in major newspapers, leading magazines and trade publications nation-wide. Dan is also a frequent guest on major talk radio programs where he is heard by millions of people each year. His fast-paced interviews provide hard hitting answers to even the toughest questions, as is demonstrated in this YouTube video of Pilla delivering his very entertaining and passionate lecture to Heartland members and friends.

Pilla on Trump’s Tax Plan

Pilla initially questioned whether Trump’s tax plan could be considered radical tax reform, as Heartland Director of Communications Jim Lakely posited in his introduction. Pilla said it wasn’t “radical,” and explained how tax reform has never been a problem in the action sense of the word. He explained his opinion by presenting examples of several attempts at tax reform since 1986, the high mark of the Reagan Revolution.

In the 1990s, he said, there were four major tax reforms in three years. From 2001 to 2015, there were 5,900 tax law changes made to the Internal Revenue code – and this only led to massive confusion. Pilla called the tax code “hideous” – citing its complexity as the reason for so much cheating, even labeling tax complexity as the number-one problem for tax payers. Pilla spoke about a 1998 law which maintained that the IRS must submit to Congress a report on tax law complexity. Only two reports were submitted, both before 2002, indicating that the required report is too difficult for the IRS to produce.

Trump Tax Reform Proposals Pilla Likes

Pilla suggested that several of Trump’s proposed tax reforms are, if not “radical,” a great improvement – which would improve compliance, eliminate complexity for taxpayers, and encourage economic growth.

  • Repeal of the Alternative Minimum Tax, in which government can tax an individual at a higher rate if government decides you haven’t paid enough tax in your initial filing. This “second system” kicks in, and then the taxpayer is obliged to pay the higher result of filing, basically, twice.
  • Repeal of estate and gift tax, which was a part of the Bush tax law (as long as you died in 2010), but was part of 10-year plan and has been phased out. Pilla spoke of the tax as fiscally insignificant and immoral. Less than one-half of one percent of federal revenue is generated by this tax, yet its audit rate is the highest of all other taxes. The immoral premise is that you have no right to pass along to your heirs what is left of your estate after you have already paid all of its taxes.
  • Repeal of a 3.8 percent capital gains surtax (a tax levied on top of another tax) that was to pay for free healthcare. Pilla noted the economic law that what you tax more, you get less of – i.e. high capital gains taxes curtail individuals from selling assets, which spurs economic activity. People hold on to their assets rather than pay the capital gains surtax.

Other Positive Elements of Trump’s Tax Plan

Pilla also spoke highly of these other aspects of the Trump tax plan:

  • Reducing the current seven income tax brackets to just three: 35% on high side; 10% on low side.
  • Eliminating standard deductions, except for mortgage and charitable contributions.
  • Reducing corporate tax to 15 percent. Pilla noted that United States now has the highest corporate income tax in the industrialized world (a top marginal rate of 39 percent). He also explained that corporations don’t pay taxes. Who pays? People do: the owners of the company (stockholders), employees making do with fewer workers, and consumers who pay more for the good being produced. Job-creating small businesses that account for their owners’ personal incomes would likewise benefit by having their top tax rate go from 39.6 percent to the proposed corporate tax rate of 15 percent. Pilla’s suggestion: Reduce the corporate tax rate to ZERO PERCENT.

Several times Pilla reminded his audience that what was presented by Trump’s financial team was only a thumbnail sketch of Trump’s tax plan, only the first volley, so expounding in length about Trump’s tax plan today might not matter much in a few weeks. For him, he said, it would be like tilting at windmills, trying to guess what the final plan will look like.

The Folly of ‘Revenue Neutral’ Tax Cuts

Pilla signaled that the Democrat Party – and some Republicans are of the same ilk – would be a significant hurdle to getting Trump’s tax plan enacted by insisting that any tax plan be “revenue neutral.” That would nullify all the benefits of tax cuts, and only end up shifting the tax burden. It is unfortunate that over time the federal government has come to believe that it owns all of our money and too many people have accepted the idea that government has the right to tell us how much of our money we can keep.

What happened, Pilla said, to providing for the “General Welfare” as set forth under Article 1, Section 8, Clause 1: “The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defense and general Welfare of the United States”? Whereas the General Welfare clause should place limits on government spending, the contemporary view is that Congress’s power to provide for the “General Welfare” is a power to spend for virtually anything that Congress itself views as helpful.

Pilla suggested a novel idea for many legislators: cutting spending across board by 3 percent from our bloated federal government to pay for tax cuts, which would amount to just 3 cents on every dollar the government spends.

Pilla was not pleased that the complexity of the IRS tax code – already cited as the No. 1 tax problem for tax payers by the IRS itself – has not been addressed by a single talking head, nor does Trump’s tax plan address the issue. The Pilla solution: If the problem is not addressed, “bulldoze the tax code and start over again.” 

The IRS in Crisis

Although many individuals try to comply with the tax code, they find it too complicated to do so. The IRS should be offering assistance to those who wish to comply, he said, and enforcing the law against only those who are genuinely resisting compliance. A lot of innocent tax payers in the formal category only receive lip service from the IRS.

Cited by Pilla: The IRS fields more than 100,000 phone calls a year from Americans with questions about complying – many who simply want to set up a schedule for paying their taxes or inquire about refund – but they can’t get through to anyone at the IRS who can help. Millions more choose to walk in to IRS offices and receive help with tax problems. How ironic that the IRS has closed 300 offices – and those remaining open were informed not to answer questions during the tax season. What a dismal message the IRS is sending tax payers when in trying to pay their taxes they can’t get through.

Pilla noted that 42 percent of the IRS budget goes for enforcement, while less that 20 percent is spent on tax-payer assistance. This doesn’t make sense, because 98 percent of tax payment made to the IRS are “voluntary” payments complying with the tax code. In contrast, only 2 percent of taxes collected are the result of enforcement action.

Did the adoption of a Taxpayer Bill of Rights by the Internal Revenue Service on June 10, 2014 become a much-anticipated cornerstone document to provide the nation’s taxpayers with a better understanding of their rights?

What about the law to appoint an IRS Commissioner? Given the way the IRS tax code was treated during the past two years under IRS Commissioner John Koskinen who condoned Lois Lerner’s Tea Party Scandal? Instead of firing Koskinen, Trump kept him on, despite the ire of many Republicans who wanted Koskinen impeached. An IRS commissioner can be removed at the will of a president. Dan Pilla said Trump should have taken such action.

Q&A with Dan Pilla

On the incomprehensible U.S. Tax Code: A tax code that contains four million words is a good sign that corruption will exist, and it does!

On a “tax holiday” for overseas profits, which is part of Trump’s tax proposal: A tax holiday could only be a good thing in its impact. Some $3 trillion is parked off shore and could be brought back by American companies. This money represents capital to expand.

On getting rid of the income tax: The taxes on income levied by the federal government brings in 98 percent of federal revenue. Eliminate the income tax and instead impose a national consumption or sales tax.

President Barack Obama’s administration currently has 15 Cabinet Departments (State, Treasury, Defense, Justice, Interior, Agriculture, Commerce, Labor, Health and Human Services, Housing and Urban Development, Transportation, Energy, Education, Veterans Affairs, Homeland Security) and 7 additional positions which have Cabinet-level rank (White House Chief of Staff, EPA, Office of Management & Budget, US Trade Representative, US Ambassador to United Nations, Council of Economic Advisers, Small Business Administration) plus the National Security Administration, NSA, which is really a part of the Department of Defense.

Out of the 15 Cabinet Departments, there are currently 7 which have on-going scandals of which the American people may, or may not, be aware.   In addition, there are 2 actions going on within the Cabinet-level ranks, which are of questionable nature.  While some of these activities were begun under the Bush administration, they have exploded exponentially under Obama’s direction.  Bush has unfortunately been blamed for everything bad that has happened during Obama’s administration.  Isn’t it ironic that suddenly because Bush did it (NSA scandal), it’s acceptable for the current administration to do likewise?  (The same excuse is claimed with the drone program which has also grown enormously with extended range under Obama.)

With multiple scandals filling the news, and accusations, denials and investigations flying from all directions on a daily basis, it seemed necessary to take a step backwards to enable a broader view and better understanding of this scandal-ridden administration to prevent issue fatigue from setting in.  With the existence of so many scandals, there could be a tendency to disengage from the gross infractions of the Obama administration, throwing up our hands in despair, which would indicate passivity and disinterest, both dangerous in a democracy.

Realizing that scandals have legs of their own makes it difficult to ascertain their duration and  lasting impact, delay was considered in releasing our expose but speedily rejected on the premise that sharing what was known at this point made more sense than delaying the report.  Nevertheless, our comments still provide a fairly wide scope of the still percolating scandals, enough to realize how corrupt the Obama administration truly is, with future updates a definite possibility.

Now the question remains, will the scandal information outlined in this easy-to-understand format be heeded, or will individuals willingly blind themselves to the disturbing facts and simply dismiss them as not relative to their lives?  The act of burying heads in the sand creates a government which, having no opposition from its citizens, can run rough-shod over the populous.  Even elected Republican legislators seem to lack the fortitude to deal with the multiple scandals where justice is demanded and begs to be served.

It would be a blow to the rule of law, which forms the basis of our Democracy,  if the many scandals in the Obama administration become relics of a forgotten past, allowing the administration to skirt the justice that it so deserves.  It is often said that success begets success.  It can also be said that corruption allowed to flourish will only breed more corruption when those guilty of misdeeds and worse determine that the arm of justice has no hold over them.

The Department of State

All US embassies and consulates are under the control and responsibility of the Department of State.  Under then Secretary of State, Hillary Clinton, the true story behind the attacks and deaths at the Consulate in Benghazi, Libya, is still unanswered.  We have still not had answers to many questions by Secretary Clinton, and we have still never heard a word from any of the 20-30 Consular staff who were rescued from Benghazi, the night of September 11, 2012.

In recent weeks, another scandal has been exposed by the news media which relates to security personnel traveling with Secretary Clinton overseas who have been caught hiring and/or soliciting prostitutes.  In addition, the Belgian Ambassador has been accused of soliciting prostitutes and minors for sexual activity.  The Department of State has been accused of white-washing or quashing investigations into these activities.

The Department of the Treasury

The current and ever-expanding scandal of the IRS singling out and deliberately delaying applications of Conservative, religious and Tea Party groups on a political basis seems to grow worse by the day.  It’s also been suggested that, not only did the IRS deliberately limit the free speech and political rights of these groups, but the IRS may have passed group and personal information from these applications to liberal political groups to be used against the Republicans during the 2012 elections.  It has now been discovered that enormous amounts of money have been wasted on parties, hotels, travel and utter nonsense up to $50 million – so far.

On 6/13/13, the Treasury Inspector General has indicated there is evidence that up to 1,000 IRS employees were misusing their government-issued travel and credit cards in 2010-2011.

This last week, it has also come out that the IRS sent more than $46 million in tax refunds to 23,994 “unauthorized” alien workers who all listed the same address in Atlanta, Ga., in 2011, according to an audit report by the Treasury Inspector General for Tax Administration (TIGTA).

They also sent:

  • 11,284 refunds worth a combined $2,l64,976 at a second Atlanta address;
  • 3,608 refunds worth $2,691,448 to a third;
  • 2,386 refunds worth $1,232,943 to a fourth.

Other locations on the IG’s Top Ten list included:

  • an address in Oxnard, Calif., where the IRS sent 2,507 refunds worth $10,395,847;
  • an address in Raleigh, North Carolina, where the IRS sent 2,408 refunds worth $7,284,212;
  • an address in Phoenix, Ariz., where the IRS sent 2,047 refunds worth $5,558,608;
  • an address in Palm Beach Gardens, Fla., where the IRS sent 1,972 refunds worth $2,256,302;
  • an address in San Jose, Calif., where the IRS sent 1,942 refunds worth $5,091,027;
  • and address in Arvin, Calif., where the IRS sent 1,846 refunds worth $3,298,87

In May, 2013, it was announced that the IRS allegedly stole medical records from more than 10,000,000 Americans during a raid on a Southern California health care facility.  More than 60 million medical records were ‘lifted’ from this facility.  This was as a result of one warrant for one person’s records, but the IRS took the other records, too.

Remember, the IRS is going to be in charge of administering the insurance side of Obamacare.  Your medical records will now be accessible to them.

The Department of Defense

Under Secretary of Defense, Leon Panetta, there have still been no clear answers as to why no aid was sent to Benghazi on September 11, 2012, when four Americans died in Islamic Jihadist attacks.  No one has been made to say who gave the order to ‘stand down’ or to send no support to these Americans.  Nor, do we have any good explanation why the consulate wasn’t better protected before the attacks, especially during the September 11 anniversary time.

The additional scandal of sexual assaults throughout the military has recently been brought to the forefront of the news because military authorities have not been responsive to this issue.

The Department of Justice

Attorney General, Eric Holder, has failed in major responsibilities going all the way back to refusing to prosecute the New Black Panther Party for voter intimidation in Philadelphia in the national elections of 2008.  He has also slipped through the loopholes of responsibility for the Fast and Furious gunrunning program to Mexico, even though an American border guard and many dozens of Mexican citizens were killed using those very guns.  And, currently, Holder has admitted to monitoring 20 phones lines of over 100 reporters of the Associated Press and had signed a subpoena that accused reporter James Rosen of Fox News as a possible co-conspirator for leaking classified information about North Korea.  The DOJ had to go to three federal judges before they found one who would sign this subpoena.

The Department of Health and Human Services

Throughout this current series of scandals, and little mentioned by the media, is the question of whether or not Kathleen Sebelius, Secretary of HHS, has been arm-twisting insurance companies and other health related industries for money to support and pay for the implementation of Obamacare.  Congress has withheld much of the funding for the health care program and it appears Sebelius is finding other ways to raise money.  The problem is that these agencies which she is reportedly strong-arming will be under her direction and administration as Obamacare is installed by 2014, a blatant conflict of interest, or more commonly known as extortion.

The Department of Veterans Affairs

Under former General Erik Shenseki, now Director of the VA, there is a current backlog of 600,000 disability claims filed by our veterans.  The average wait for attention to these claims has been running up to 300 days.  Depending on the city and office locations, some veterans may wait 800-900 days to receive determinations on their claims.

And, just recently, Secretary Shinseki has gutted the independent board which researched Gulf War illnesses and has cut its budget.  The Research Advisory Committee, which used to oversee the VA staff in this area has now been replaced by VA people it used to review.  In 2012, a no-confidence vote against the VA and a whistle-blower testified that the VA misled the public about research that would lead to expensive benefits for veterans.  Good timing, Secretary Shinseki.

The Department of Homeland Security

The massive problems produced by illegal immigrants in the country and what to do about them has been aggravated by Secretary Janet Napolitano, who chooses whom to deport and whom to put on hold, regardless of what the federal law on immigration says.  She also declares the southern border with Mexico under control and the safest in years, even though it has been shown again and again, it is not secure.  A vast swath of the procedural vote on the so-called “border surge” deal brokered by Sens. Bob Corker (R-TN) and John Hoeven (R-ND) paving the ways for passage of the entire comprehensive immigration reform bill, comes down to nothing more than giving the unelected current DHS Secretary, Janet Napolitano, the kind of discretionary power that one would expect to be granted to the officials of a banana republic.  She has the discretion to ignore the border fencing and any other of the so-called border triggers.

Now, let us look at the Cabinet-level agencies which are having questionable activities and scandals of their own.

The National Security Administration (NSA) (technically a part of the Department of Defense)

The Fourth Amendment to the United States Constitution states:

“The right of the people to be secure in their persons, houses, papers, and effects, against unreasonable searches and seizures, shall not be violated, and no Warrants shall issue, but upon probable cause, supported by Oath or affirmation, and particularly describing the place to be searched, and the persons or things to be seized.”  (Italics are added.)

Recently exposed by The Guardian newspaper in England, the NSA, under the Patriot Act, has for approximately 7 years been trolling billions and billions of phone calls made by American citizens in an effort to relate any suspicious calls to terrorist links.  It appears that FISA (Foreign Intelligence Surveillance Act) courts just can’t say “No” to requests to pursue potential terrorist connections and have approved thousands of warrants submitted to them.  What billions and billions of phone calls made by everyday Americans have to do with foreign agents is highly questionable.   In addition, reports have been out recently that the NSA has also been requesting information from the internet, e-mails, pictures and other computer-related sources in a program called Prism.  The major internet companies (Google, AOL, Yahoo, etc.) claim the government has no ‘direct’ access to their internet customers’ information.  If the Feds don’t have ‘direct’ access, do they have some other kind of access?  All of this has been done under great secrecy with the support of certain Congressional members and committees who claim they are doing this to keep us ‘safe’ and that we should ‘trust them’.

In addition, it has also been exposed that the NSA is building a Data Center in Utah where they will store these billions of accumulated records for an indefinite period of time.  They can then go back years later and search them if they think there is a questionable person or action they want to check.

The Environmental Protection Agency

Under former EPA Director, Lisa Jackson, it was discovered that she kept and maintained a secret e-mail account under the name of a Richard Windsor, so that she could communicate with others in the government without having her messages known.  Secretary of HHS, Kathleen Sebelius, also admitted that she had a separate e-mail address beyond the agency account so she could deal with her daily work.  Supposedly, these accounts are all available under a Freedom of Information Account (FOIA) request– if – you happen to know about the account and the e-mail address and request it in the FOIA.  From additional information in the news reports, it appears there are many, many secret e-mail accounts throughout departments in the Obama administration.

It has also recently been reported that in April 2013, the EPA illegally released the names, addresses, phone numbers and e-mails of approximately 80,000 farmers across the US to environmental groups.  The apparent intent was to allow these groups to protest, picket or otherwise attack the farmers.  Further details are being developed about this issue.

As Benjamin Franklin said in 1775, “They who can give up essential liberty to obtain a little temporary safety, deserve neither liberty nor safety.”

There are those of you who will exclaim that we must do everything to fight the terrorists.  We see no good reason to pull billions and billions of records of millions and millions of American citizens for whom there have been no suspicions or warrants or probable cause and keeping them for years to be checked later.  Security programs were supposedly set up to monitor for foreign or suspicious terror connections.  Let them run the program that way.

As for the political Washington class who say, “Trust us to do the right thing,” may we suggest you read the above commentary over again.

Wednesday, June 26, 2013 at 01:45 PM | Permalink




Who is George V. Hansen and why should his name, who he was, and what he did be of importance, especially in light of the IRS scandal where conservatives groups, organizations and individuals were targeted just because of their belief systems?

Born September 14, 1930, Hansen’s bio speaks of a former Republican politician from the state of Idaho who served in the U.S. House of Representatives for 14 years representing Idaho’s 2nd district from 1965 to 1969 and again from 1975 to 1985. He also served in the U.S. Air Force from 1959 – 1954 and the U.S. Naval Reserve from 1964 to 1970.

So far nothing unusual. George Hansen could have been one of hundreds of other U.S. congressmen who retired and then went back home after they called it quits or were not reelected.

While in Congress Hansen was known as one of the most conservative members of Congress. In particular, Hansen was a vocal critic of the Internal Revenue Service. He also introduced the idea of the flat tax.

It was in 1980 when Congressman Hansen published a book titled To Harass Our People: the IRS and Government Abuse of Power. Hansen was one of the first members of Congress to point a finger at the IRS to reveal corruption in government.

Only four years after Hansen’s book was published in 1984, seven-term veteran lawmaker Hansen was reprimanded by the House when he failed to include transactions on federal disclosure forms. Was it a coincidence?

The House’s query led to a conviction for which then out-of-Congress Hansen spent 11 months in prison, financially destroying him and his family.  His imprisonment included torture through medical neglect and subjection to “diesel therapy,” a form of punishment in which prisoners are painfully shackled and then transported for days or weeks without respite.  Diesel therapy is usually applied to political prisoners and those who are considered trouble makers.   The gruesome details of Hansen’s imprisonment were written about by Rayelan Allan, Remembering George Hansen, first published in January, 1997 by Rumor Mill News.

Congressman George Hansen always insisted that he was wrongly prosecuted, but it took eleven years for the wrongness of his conviction to be realized on the basis of the U.S. Court decision Hubbard v. United States. Originally convicted of violating Title 18 Section 1001, relating to false statements Hansen allegedly made on his financial disclosure form, it was on May 16, 1995, that the Supreme Court ruled that federal prosecutors  — including Iran-Contra Independent counsel Lawrence Walsh — were wrong in charging officials with unsworn lies to Congress.  One of the three was George Hansen.

Just how much power does the IRS have in 2013?  George Hansen noted the following in his 1980 book, To Harrass Our People:

  • Only the IRS can attach 100% of a tax debtor’s wages and/or property.
  • Only the IRS can invade the privacy of a citizen without court process of any kind.
  • Only the IRS can seize property without a court order.
  • Only the IRS can compel the production of documents, records, and other materials without a court case being in existence.
  • Only the IRS can with impunity publish the details of a citizens debt.
  • Only the IRS can legally, without a court order, subject citizens to electronic surveillance.
  • Only the IRS can force waiver of statute of limitations and other citizen’s rights through the threat of Arbitrary assessment.
  • Only the IRS uses extralegal coercion. Threats to witnesses to examine their taxes regularly produces whatever evidence the IRS dictates.
  • Only the IRS is free to violate a written agreement with a citizen.
  • Only the IRS uses reprisals against citizen and public officials alike.
  • Only the IRS can take property on the basis of conjecture.
  • Only the IRS is free to maintain lists of citizen guilty of no crime for the purpose of harassing and monitoring them.
  • Only the IRS envelops all citizens.
  • Only the IRS publicly admits that it’s purpose is to instill fear in the citizenry as a technique of performing it’s function.

Thirty-three years ago Hansen noted the power of the IRS in government. He was the first to get a full scale investigation into the crimes of the IRS against the American people.  Has anything changed since 1980? The power of the IRS should be of concern to all Americans, for it extends into the lives of all of us.  But where is the outrage?  Maybe we are just scandal weary?

As power begets power, members of Congressional Oversight Committees owe the American people a thorough investigation.  They must not be soft in their approach in going after those culpable.

For too long the IRS has adopted an attitude of superiority in believing it could do whatever it desired in  regard to the American people.  Such an attitude breeds corruption and scandal.  The recent scandal of targeting conservatives by the IRS must be viewed as the straw that broke the camel’s back.  Heads must roll if the American people are to regain back their lost confidence and trust of the IRS.

Tuesday, June 11, 2013 at 09:00 AM | Permalink

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