How to File Federal Income Taxes and Assess Liability Colorado

Steps

1. Assess if one has a FEDERAL INCOME TAX LIABILITY.
   • Are you a citizen of the United States, or are you a resident of any state of the United States or the District of Columbia?
   • Did you receive any compensation from any public or private employer? Or any dividends, interest, or other form of gross income?
     • If the answer to both questions is "yes," then you will need to file a federal income tax return if your total gross income exceeds the standard deduction. See the instructions to Form 1040 for those amounts and other guidance on whether you need to file.
2. Assess whether you're withholding agreement is correct.
   • Do you require a W4 ? If you are an employee for any private sector employer, you are subject to withholding from your wages, and the Form W-4 will allow your employer to withhold the correct amounts.
   • Note: the W4-E form is for students who are working at a university and attending school full time. As such they are exempt by law. Do not use the wrong form, or you might be penalized.
   • Be sure that any form you use is an IRS approved form, or you will be assessed fines and penalties. These fines and penalties can be imposed without a court order. If the IRS should decided to take the issue to court, you will be looking at a lot more than just fines and penalties; you will be looking at jail time and felony convictions as well as the added costs of prosecution.

1. Compile all records and statements to assist in determining whether any taxable activity was engaged in
2. Gather appropriate IRS forms: 1040, 1040 EZ, 1040A depending on your situation
3. Print or obtain any additional IRS forms that may apply to your situation
4. Review all form instructions to ensure you are following them correctly (Alternatively, you may be able to use computer software to help you file)
5. Gather list of any charitable contributions or other deductions, if needed
6. Gather any personal or family member information.
7. Get a calculator, scrap paper, pen, paper clips, etc. - whatever you may need
8. Have a snack and something to drink nearby since you may be here for a while

1. Purchase a tax program for your computer.
2. Gather all of the records it tells you to gather.
3. Enter or download the information it tells you to enter.
4. E-File your taxes for a quicker resolution.
5. Or, let the program print a mail ready version for you to pop in the mail.
6. Enjoy a nice relaxing beverage 15 minutes later, because for most, that is as much time as required to complete.

• There are very few reasons that you would ever need to correct payer information. Unless the entity making payment to you in return for your services did not report the correct amount the entity made payment to your for your services, then you do not need to correct payer information. Further, doing so can subject you to a frivolous filing penalty of $5000, other penalties, interest, and jail time. The author of the book "Cracking the Code" that came up with the stupid idea that private sector payments are not "wages" according to the code, had his idiot theory shot down by the federal courts.
• TERMINATION OF AUTHORITY AND/OR AGREEMENT TO WITHHOLD
  • Needless to say, and despite 3402(p)(3)(B), treating private-sector payments as though they were ?wages? paid to an ?employee? does not transform them into ?income?; since gross income means all income from whatever source derived, including (but not limited to) the following items: (1) Compensation for services, including fees, commissions, fringe benefits, and similar items;... See http://www.law.cornell.edu/uscode/html/uscode26/usc_sec_26_00000061----000-.html

Tips

• Acquire statements of facts - who created the company? Where is the jurisdiction? Who is responsible for the electing of company officers, how are they paid, and who owns the stock/rights in the company?
• Have the administration answer on paper if they are a federal entity (corporation, federal employer, or government contractor.)

Warnings

• Failing to file is Rule No. 1 on the "do not do list" as filing a return is how you correct wrongful assertions of income (w-2, etc.).
• 26 USC 7206 Makes signing any IRS form that contains a jurat statement of "I declare under penalties of perjury..." a felony if you sign said form, and do not believe that everything you have written on the form, all information you have added to the form, is in any way, shape or form, incorrect. This law says that if you do sign a form that contains erroneous information that understates your tax liability (and do so willingly) that you have committed a felony, and that upon prosecution, you can be fined, imprisoned, or both, combined with the costs of prosecution. So make sure the information you put on the form is correct to the best of your knowledge, understanding and belief and that you can back that up in a court of law.
• Not understanding the law itself if you plan on understating your tax liability, may lead you into trouble. When the lawyers and the courts are in conflict as to the meanings and applications of the law, what chance to citizens have? Study, research, and then study some more before you take the first steps in understating your tax liability. Be sure of what you are doing if your are understating your tax liability, and if necessary will be able to back up your actions in a court of law. Then again, if you do what the IRS says to do, you have little to worry about. If you do what Pete Hendrickson says, you will follow him to court - where he lost - and you will as well.
• The courts are NOT in conflict as to the meanings and applications of the law. Sure, there are some crackpot attorneys that disagree with the courts, but that matters not one iota to your situation. Words like "wages" and "income" have their normal meaning in the tax code, despite what people like Pete Hendrickson says otherwise. As proof of this, the court disagreed with Pete and has enjoined him from filing according to his teachings. You need not do any study at all, simply follow the directions filling out the forms and you will be just fine.
• HOWEVER, if you disagree with any of the I.R.S.'s findings, you will encounter a juggernaut that is designed to crush any resistance to what it claims is proper. This is so if you do what Pete Hendrickson did and interpret the word "wages" not to apply to his compensation for services from a private sector payor. This is not true if you don't try and twist the code in an abnormal and absurd manner so you can interpret it to say that you don't owe taxes. You need not study or struggle. The directions are very straightforward. Follow them and you will be fine.
• Keep in mind that nobody has ever been arrested or prosecuted for overpaying taxes or signing an information return that mistakenly increased their liability for taxes. Do not let this threat of a "felony" deter you from filing a 1040 and properly including all items of gross income from section 61 discussed above in the appropriate places on the form. Just follow the instructions on the 1040 form, ignore most of the drivel here about determining if you are liable, and you will be just fine.
• You may want to read up on the US Supreme court rulings dealing with income taxes, as well as the various District court, and Appeals court rulings. If you do, be sure and read the entire case, not the out of context snippets used on the internet. Furthermore, anything in a dissent, a complaint, a brief, or other document not part of the decision - is NOT part of the Court's holding. Finally, there really is no reason to do this unless you have nothing better to do. You especially do not need to do it to fill out your income tax return. Simply follow the directions and you will be fine. Follow Pete Hendrickson, and you will follow him right into court where the court told him he was wrong, wrong, wrong.

Legalese

• To understand HOW TO understand IF one is to be properly classified as liable for the Federal Income Tax one must know how to define the TERMS used and how they are applied. This really doesn't apply to most people. Generally speaking, the words used in the Internal Revenue Code have their commonly understood meanings, but some terms are specially defined. See section 61 below. You do not have to struggle with any term to figure it out.
  • NOTE: How a term is defined is also important, but generally not to you. Take for example, the term "wages" below. Notice how the definition starts. "for the purposes of this chapter.." That means that the term being defined applies only to that chapter. So even though it might be defined in the three different chapters, for your purposes, it has the normal meaning of "compensation for services" from whatever source, including private sector payors. If you are a citizen of the U.S. or reside in any state you are liable for Federal Income Tax if your get compensation for your services exceeding a minimum amount.
• The term "wages" is defined 3 different times, in 3 different ways in the Internal Revenue code. Each term is for a different tax. So when one talks about receiving wages, do they mean the tax at chapter 21, 23, or 24? The terms are NOT interchangeable, and the definition found in chapter 21, cannot be used for chapter 24, because chapter 24 has its own definition of "wages". Fortunately, these different definitions are only important to employers who must decide whether or not to withhold taxes from payments to employees, and have nothing to do with the determination of federal income tax liability on Form 1040. And, employer has its common meaning - any public, private, or otherwise payor that gives compensation directly to anyone for services. Those it gives compensation directly to for services are typically employees - although they could be contractors in very limited circumstances.
• "income" - 'gains, profits, and income' derived from (i.e., made above and beyond, separate from the source of investment) various sources like investments, interest, dividends, payments from a public office, rents, salaries, property, etc.
• Additionally, Social Security, disability, and unemployment payments from the federal government might also be included in 'gross income.'
• "compensation for services"
  • Perhaps it is much easier to cut and past from the code. As can be seen, compensation for services is right there at the top. It is not limited to compensation for services of government employees, officers of corporations, or residents of DC. It is simply compensation for services.

Things You'll Need

• First and foremost, you will need a good level of knowledge, so that you can make a proper legal determination of your personal status, and that of the status of any potential tax liability. However, you cannot "determine" your personal status. The law has already determined that status. Only if you do not know your status, or the status of any tax liability and you sign a federal 1040 income tax return, and you fail to report compensation for services or other "income," you could be arrested, and charged with committing a felony under 26USC7206, a crime which can result in 10 years imprisonment,or thousands of dollars in fines, or both, combined with the cost of prosecution. So, to be safe, report all incoming amounts that are listed in section 61, and you will be just fine.
• Actually, nobody has ever been arrested or prosecuted for overpaying taxes or signing an information return that mistakenly increased their liability for taxes. Do not let this threat of a "felony" deter you from filing a 1040 and properly including all items of gross income from section 61 discussed above in the appropriate places on the form. Just follow the instructions on the 1040 form, ignore most of the drivel here about determining if you are liable, and you will be just fine.
• Form 1040 with any necessary schedules (or possible Form 1040-EZ)
• Knowledge of how to read, write and do basic math.
• Instruction booklets for 1040 form, for the tax tables listed therein.
• you will need to figure out if you have Income, (it is not defined in any tax law book, or any law book for that matter), and if that income is taxable. You will then need to find out if that Taxable Income is adjustable. The IRS 1040 long form book will give you the information you will need to determine the allowable adjustments.
• You cannot "determine" your personal status. The congress and the law have already determined that status. The courts have interpreted that law to mean that if you receive any kind of compensation for your services, that compensation must be reported on whatever version of the 1040 you use. Pete Hendrickson lost in court over this issue. Despite that, he still leads his sheep to slaughter by telling them that private sector earnings are not "income" subject to taxation. Unfortunately for these sheeple, they will all follow him over the cliff he has already fallen off of.
• Since the determination has already been made, please don't be intimidated by all this nonsense about having to "know the law" to fill out your tax forms.

Sources and Citations

• VIDEO EXPLANATION

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