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[00:00.000 --> 00:01.960]  Welcome to the show.
[00:01.960 --> 00:07.260]  There is a criminal charge the federal government can bring against people who do not file income
[00:07.260 --> 00:08.760]  tax returns.
[00:08.760 --> 00:11.800]  It's called willful failure to file.
[00:11.800 --> 00:16.820]  Today, you're going to learn the shocking truth about a crucial element government prosecutors
[00:16.820 --> 00:23.960]  know about the criminal allegation that remains hidden from the defendant, the defendant's
[00:23.960 --> 00:28.780]  attorney, and the jury throughout the trial.
[00:28.780 --> 00:33.580]  Do you think anyone should ever be convicted of a crime when crucial information in the
[00:33.580 --> 00:38.980]  possession of the government remains hidden from the defense and the jury?
[00:38.980 --> 00:42.580]  When you're done watching this presentation, you'll understand exactly how the federal
[00:42.580 --> 00:47.260]  government pulls its willful failure to file scam.
[00:47.260 --> 00:53.580]  We're about to have some fun.
[00:53.580 --> 01:04.940]  The Dr. Reality Vodcast with Dave Champion.
[01:04.940 --> 01:06.180]  Let's start with this.
[01:06.180 --> 01:10.060]  As you may know, income tax is my area of expertise.
[01:10.060 --> 01:14.860]  I am the author of Income Tax Shattering the Mist, the bestselling book in America that
[01:14.860 --> 01:19.900]  reveals the truth of the income tax the government does not want you to know.
[01:19.900 --> 01:26.460]  The truth is that U.S. income tax laws do not impose the income tax on ordinary hardworking
[01:26.460 --> 01:28.700]  Americans like you.
[01:28.700 --> 01:34.700]  There is a false societal narrative that it does, but in reality, it doesn't.
[01:34.700 --> 01:38.860]  You'll have a much better understanding of that by the end of this presentation.
[01:38.860 --> 01:41.060]  I practice what I teach.
[01:41.060 --> 01:45.500]  I haven't filed an income tax return or paid a penny of income tax in 32 years.
[01:45.500 --> 01:50.060]  The U.S. Treasury Department is well aware of who I am and has admitted it has copies
[01:50.060 --> 01:52.180]  of Income Tax Shattering the Mist.
[01:52.180 --> 01:54.260]  I make a good living.
[01:54.260 --> 01:57.500]  I don't file tax returns or pay income tax.
[01:57.500 --> 02:03.900]  So why no willful failure to file charge against me in 32 years?
[02:03.900 --> 02:09.040]  The simple answer is the government cannot afford to have the evidence you'll find in
[02:09.040 --> 02:15.440]  Income Tax Shattering the Mist introduced into a courtroom, ever, because it would topple
[02:15.440 --> 02:17.840]  the government's income tax house of cards.
[02:17.840 --> 02:22.760]  As long as the government can keep the American people ignorant about the truth of the income
[02:22.760 --> 02:28.760]  tax, at which the government has been incredibly successful, the government's false income
[02:28.760 --> 02:35.440]  tax narrative, its disinformation, brings in trillions of dollars a year from the American
[02:35.440 --> 02:41.520]  people, to which the government is not entitled under law.
[02:41.520 --> 02:45.920]  In order for you to understand the scam the government is pulling in the willful failure
[02:45.920 --> 02:51.000]  to file cases, I need to give you some information that will allow you to see how the government
[02:51.000 --> 02:54.320]  plays the American people for fools.
[02:54.320 --> 02:59.480]  I'm going to begin by discussing Form W-9 and then I'll transition to Form 1099.
[02:59.480 --> 03:03.840]  At some point you may think I'm getting lost in the weeds discussing those forms, but I
[03:04.440 --> 03:08.360]  promise you the discussion is essential for you to properly understand the willful failure
[03:08.360 --> 03:09.360]  to file scam.
[03:09.360 --> 03:14.160]  I promise I will bring the discussion of those forms back to the issue of willful failure
[03:14.160 --> 03:18.280]  to file and you will be stunned.
[03:18.280 --> 03:25.320]  Before we jump in, I want to let you know I'm running a special on my website drreality.news.
[03:25.320 --> 03:30.600]  Any order containing Income Tax Shattering the Mist gets free shipping by using the code
[03:31.000 --> 03:32.000]  tariffs.
[03:32.000 --> 03:33.280]  More on that later.
[03:33.280 --> 03:37.440]  For today's discussion on willful failure to file, I'm going to use the example of
[03:37.440 --> 03:42.920]  the IRS having received a bunch of forms 1099 for a business person.
[03:42.920 --> 03:48.600]  As an FYI, the same principles you're about to hear apply if the IRS receives W-2s.
[03:48.600 --> 03:51.080]  I'll explain that a bit later.
[03:51.080 --> 03:55.520]  In order to understand the document flow that can lead to a potential willful failure to
[03:55.520 --> 04:03.280]  file charge, we need to understand the true legal purpose of Form W-9 in law.
[04:03.280 --> 04:08.920]  The true legal purpose of Form W-9 is not remotely what the public thinks.
[04:08.920 --> 04:14.320]  We need to begin with the W-9 because, as you likely know, it is the act of providing
[04:14.320 --> 04:21.120]  a W-9 to a business that causes that business to issue a 1099 against you.
[04:21.120 --> 04:26.320]  I was a businessman in Southern California before I learned the truth of the income tax.
[04:26.320 --> 04:33.600]  I'm sure, like many of you, I just saw the W-9 as a routine formality in business without
[04:33.600 --> 04:36.240]  any legal implication.
[04:36.240 --> 04:41.280]  Had I stopped to think about it, I would have realized there had to be a legal implication.
[04:41.280 --> 04:43.400]  But I didn't stop to think about it.
[04:43.400 --> 04:48.640]  Back then, I perceived myself to be a taxpayer and I was filing annual tax returns.
[04:49.280 --> 04:54.880]  In that context, why would I bother giving any thought to what a W-9 means in law?
[04:54.880 --> 05:04.480]  In 1993, I learned what the Form W-9 is in law and I have never signed another one.
[05:04.480 --> 05:08.660]  So who is to sign a W-9?
[05:08.660 --> 05:13.480]  To answer that, let's begin with the W-9's instructions.
[05:13.480 --> 05:17.560]  On page two of the instructions, we find this.
[05:17.560 --> 05:25.400]  Use Form W-9 only if you are a U.S. person, including a resident alien, to provide your
[05:25.400 --> 05:27.560]  correct TIN.
[05:27.560 --> 05:29.860]  TIN means Taxpayer Identification Number.
[05:29.860 --> 05:37.040]  In other words, the Form W-9 is to be used to furnish a requester with the taxpayer identification
[05:37.040 --> 05:41.560]  number of a U.S. person.
[05:41.960 --> 05:44.200]  W-9 has no other purpose.
[05:44.200 --> 05:47.240]  So then, what is a U.S. person?
[05:47.240 --> 05:51.960]  To keep it short, a U.S. person is a U.S. citizen, U.S. resident, or a domestic entity
[05:51.960 --> 05:53.540]  such as a corporation or trust.
[05:53.540 --> 06:00.080]  You can verify that at 26 USC 7701A30 if inclined.
[06:00.080 --> 06:06.460]  We all know that virtually all business people provide a W-9 whenever one is requested.
[06:06.460 --> 06:12.060]  The business person never stops to consider the legal implications of signing a W-9.
[06:12.060 --> 06:18.460]  Also, as just mentioned, it can only be signed by a U.S. person.
[06:18.460 --> 06:25.700]  Yet, we have not answered the one really important question.
[06:25.700 --> 06:32.260]  What does the person who signs a W-9, under penalty of perjury, convey to the requester
[06:32.260 --> 06:40.820]  and to the IRS when the person who received the W-9 then files a 1099 against the U.S.
[06:40.820 --> 06:44.540]  person who signed the W-9?
[06:44.540 --> 06:46.180]  You're about to find out.
[06:46.180 --> 06:50.660]  If we go a bit farther down on page 2, we find a block entitled,
[06:50.660 --> 06:53.380]  By signing the filled out form.
[06:53.380 --> 06:55.720]  That block has five items.
[06:55.720 --> 07:01.060]  The tell about the purpose of the W-9 is in sections 4 and 5, so pay careful attention
[07:01.060 --> 07:02.220]  to that.
[07:02.220 --> 07:03.540]  The items read,
[07:03.540 --> 07:07.020]  1. Certify that the TIN you are giving is correct.
[07:07.020 --> 07:10.420]  2. Certify that you are not subject to backup withholding.
[07:10.420 --> 07:16.220]  Or 3. Claim exemption from backup withholding if you are a U.S. exempt payee.
[07:16.220 --> 07:17.140]  And,
[07:17.140 --> 07:22.220]  Certify to your non-foreign status for purposes of withholding under chapters 3 and 4 of the
[07:22.220 --> 07:23.740]  code, if applicable.
[07:23.740 --> 07:24.580]  And,
[07:24.580 --> 07:30.700]  Certify that FACTA codes entered on this form, if any, indicating that you are exempt from
[07:30.700 --> 07:33.580]  the FACTA reporting is correct.
[07:33.580 --> 07:42.580]  Okay, so in item number 4, the signer is certifying that he, she, it is not a foreign person.
[07:42.580 --> 07:49.900]  If the signer is not a foreign person, then he, she, it is a U.S. person, which, as you
[07:49.900 --> 07:54.180]  saw a moment ago, is the only person permitted to sign a W-9.
[07:54.180 --> 07:59.500]  In item 5, the signer is certifying that he, she, it is exempt from FACTA.
[07:59.500 --> 08:05.340]  FACTA is a federal tax law that requires foreign financial institutions to report certain
[08:05.340 --> 08:09.620]  information about some of their customers to the U.S. Treasury Department.
[08:09.620 --> 08:16.740]  The theme in both items 4 and 5 is that the signer is attesting he, she, it is not a foreign
[08:16.740 --> 08:18.300]  entity.
[08:18.300 --> 08:23.460]  However, in light of the way the American business community views the W-9, what's
[08:23.460 --> 08:29.100]  all this talk about being a foreigner versus being a U.S. person?
[08:29.100 --> 08:36.540]  You may have taken note that item 4 connects what one is swearing to on the W-9 to withholding
[08:36.540 --> 08:40.300]  under chapters 3 and 4 of the code.
[08:40.300 --> 08:46.220]  That might lead a thoughtful person to want to know what chapters 3 and 4 address.
[08:46.220 --> 08:48.000]  Let's look.
[08:48.000 --> 08:54.100]  Chapter 3 is entitled, The Withholding of Tax on Non-Resident Aliens and Foreign Corporations.
[08:54.100 --> 09:01.020]  And chapter 4 is entitled, Taxes to Enforce Reporting on Certain Foreign Accounts.
[09:01.020 --> 09:07.900]  That seems odd because what does one American giving another American a form W-9 in the
[09:07.900 --> 09:13.860]  course of ordinary domestic business have to do with withholding income tax from non-resident
[09:13.860 --> 09:19.900]  aliens and foreign corporations or enforcing reporting on foreign bank accounts?
[09:19.980 --> 09:26.100]  Yet, in item 4 of the certification, it says that the signer is qualified, quote, for the
[09:26.100 --> 09:31.740]  purpose of withholding under chapters 3 and 4.
[09:31.740 --> 09:33.660]  Smell a rat yet?
[09:33.660 --> 09:35.420]  A quick note before I continue.
[09:35.420 --> 09:40.100]  If you enjoy this kind of knowledge that you'll never get from any source other than this
[09:40.100 --> 09:44.220]  channel, please take a moment to subscribe and hit the like button so the algorithms
[09:44.220 --> 09:46.500]  will show this content to more people.
[09:46.620 --> 09:51.940]  Also, for a limited time, you can get free shipping on any of my writings as long as
[09:51.940 --> 09:55.220]  Income Tax Shattering the Miss is included in your order.
[09:55.220 --> 09:57.780]  Simply use the code, tariffs, at checkout.
[09:57.780 --> 10:00.180]  I'll share that again later.
[10:00.180 --> 10:06.500]  What do tax regulations tell us a W-9 is in law?
[10:06.500 --> 10:14.380]  26 CFR 1.1471-B148 states,
[10:14.380 --> 10:22.300]  The term withholding certificate means the Form W-8, Form W-9, or any other certificate,
[10:22.300 --> 10:23.700]  blah, blah, blah.
[10:23.700 --> 10:30.620]  So then, with the Secretary of the Treasury telling us a W-9 is a withholding certificate,
[10:30.620 --> 10:37.740]  what does the Secretary tell us is to be done with this W-9 withholding certificate?
[10:37.740 --> 10:43.700]  Treasury Decision 8881 is entitled, Revisions to Regulations Relating to Withholding of
[10:43.700 --> 10:51.180]  Tax on Certain U.S. Source Income Paid to Foreign Persons and Revision of Information
[10:51.180 --> 10:52.740]  Reporting Regulations.
[10:52.740 --> 11:00.020]  I have read all 244 pages of Treasury Decision 8881 and can assure you it pertains exclusively
[11:00.020 --> 11:03.500]  to U.S. source income being paid to foreign persons.
[11:03.500 --> 11:09.180]  Beginning at the bottom of page 14, we see Section 7 entitled, Withholding Certificates,
[11:09.180 --> 11:12.900]  and subsection A entitled, Forms W-9.
[11:12.900 --> 11:21.160]  The opening sentence reads, Section 1.1441-1D contains rules for a payee to establish its
[11:21.160 --> 11:24.100]  status as a U.S. payee.
[11:24.100 --> 11:31.900]  Under paragraph D, a payee that provides a Form W-9 may be treated as a U.S. payee that
[11:31.900 --> 11:39.300]  is not subject to withholding under Section 1441.
[11:39.300 --> 11:42.020]  Let's take a moment to unpack that.
[11:42.940 --> 11:47.460]  Why is a Form W-9 being discussed at all in a Treasury decision dealing exclusively with
[11:47.460 --> 11:50.180]  U.S. source income being paid to foreign persons?
[11:50.180 --> 11:51.740]  Hmmmm.
[11:51.740 --> 11:57.620]  Second, the sentence uses U.S. payee rather than U.S. person.
[11:57.620 --> 11:58.620]  Why?
[11:58.620 --> 12:02.700]  Because U.S. person can be either a payor or a payee.
[12:02.700 --> 12:08.380]  Here, the Secretary is clarifying that the U.S. person in the sentence is a payee.
[12:08.380 --> 12:15.260]  Third, the Secretary says that a person who provides a W-9 is not subject to withholding
[12:15.260 --> 12:17.300]  under Section 1441.
[12:17.300 --> 12:18.300]  Hmmmm.
[12:18.300 --> 12:21.260]  So, what is 1441?
[12:21.260 --> 12:25.720]  Remember a moment ago I showed you that Chapter 3 is entitled, Withholding of Tax on Non-Resident
[12:25.720 --> 12:28.060]  Aliens and Foreign Corporations?
[12:28.060 --> 12:34.580]  The first subchapter in Chapter 3 is subchapter A, and you can see here that 1441 is the first
[12:34.580 --> 12:39.460]  section and is entitled, Withholding of Tax on Non-Resident Aliens.
[12:39.460 --> 12:42.580]  Let's quickly review where we're at.
[12:42.580 --> 12:45.700]  Form W-9 is a withholding certificate.
[12:45.700 --> 12:49.020]  Withholding certificates are provided to withholding agents.
[12:49.020 --> 12:51.500]  We'll get to withholding agents in a moment.
[12:51.500 --> 12:57.780]  Treasury decision 8881, which deals exclusively with U.S. source income paid to foreign persons,
[12:57.780 --> 13:04.460]  states that a person who provides a W-9 is not subject to withholding under Section 1441.
[13:04.460 --> 13:11.460]  1441 deals exclusively with collecting U.S. income tax from non-resident aliens.
[13:11.460 --> 13:18.540]  You may have noticed there is a repeated connection in the law between Form W-9 and the payment
[13:18.540 --> 13:21.620]  of U.S. source income to foreign persons.
[13:21.620 --> 13:28.180]  Because a Form W-9 is a withholding certificate, which is provided to a withholding agent,
[13:28.180 --> 13:30.420]  let's find out who is a withholding agent.
[13:30.420 --> 13:37.180]  The definition of withholding agent can be found at 26 U.S.C. 7701A16 and reads,
[13:37.180 --> 13:42.700]  The term withholding agent means any person required to deduct and withhold any tax under
[13:42.700 --> 13:49.220]  the provisions of Section 1441, 1442, 1443, or 1461.
[13:49.220 --> 13:55.020]  You've already seen that 1441 addresses withholding of U.S. income tax from non-resident aliens.
[13:55.020 --> 13:59.860]  1442, 1443, and 1461 address the same topic.
[13:59.860 --> 14:06.180]  In other words, the singular characteristic that defines a withholding agent is withholding
[14:06.180 --> 14:12.660]  U.S. source income tax from U.S. source income of a foreign person.
[14:12.660 --> 14:18.300]  We can see that Form W-9, which is a withholding certificate, is provided to a withholding
[14:18.300 --> 14:23.860]  agent and the withholding agent is the person who withholds U.S. income tax from U.S. source
[14:23.860 --> 14:27.660]  income belonging to a foreign person.
[14:27.660 --> 14:33.300]  Because Treasury Decision 8881 pertains exclusively to U.S. source income belonging to a foreign
[14:33.300 --> 14:40.020]  person, you may wonder why it says a person who provides a W-9 is not subject to withholding
[14:40.020 --> 14:41.020]  under 1441.
[14:41.020 --> 14:43.820]  Allow me to explain.
[14:43.820 --> 14:48.200]  Payments of U.S. source income belonging to a non-resident alien or foreign corporation
[14:48.200 --> 14:53.600]  are made by a person referred to in law as a payor.
[14:53.600 --> 14:56.140]  What is the definition of payor?
[14:56.140 --> 15:03.660]  That appears in the regulations of 26 CFR 1.1441-1C19 and reads,
[15:03.660 --> 15:16.020]  The term payor is defined in 31.3406A2 of this chapter and 1.6049-482 and generally includes
[15:16.020 --> 15:18.660]  a withholding agent.
[15:18.660 --> 15:25.540]  The important words there are that a payor generally includes a withholding agent.
[15:25.540 --> 15:31.620]  In law, generally means it is always true unless an exception appears in the law for
[15:31.620 --> 15:35.780]  a specific section, subsection, paragraph, or sentence.
[15:35.780 --> 15:40.300]  I've been reading income tax law for more than three decades and I have never seen an
[15:40.300 --> 15:41.500]  exception.
[15:41.500 --> 15:46.740]  In other words, payor is synonymous with withholding agent.
[15:46.740 --> 15:50.460]  Although we've already covered the definition of a withholding agent in the statutes, let's
[15:50.460 --> 15:53.360]  see what the definition is in the regulations.
[15:53.360 --> 15:59.560]  We find that at 26 CFR 1.1441-7A and it reads,
[15:59.560 --> 16:03.680]  For purposes of Chapter 3 of the Internal Revenue Code and the regulations under such
[16:03.680 --> 16:08.920]  chapter, the term withholding agent means any person, U.S. or foreign, that has the
[16:08.920 --> 16:14.720]  control, receipt, custody, disposal, or payment of an item of income of a foreign person subject
[16:14.720 --> 16:17.280]  to withholding.
[16:17.280 --> 16:19.440]  Let's do another quick recap.
[16:19.440 --> 16:22.520]  W-9 is a withholding certificate.
[16:22.520 --> 16:27.640]  The W-9 is to be used only by a U.S. person.
[16:27.640 --> 16:31.800]  Withholding certificates are provided exclusively to withholding agents.
[16:31.800 --> 16:36.760]  A withholding agent is a person who has control of U.S. source income belonging to a foreign
[16:36.760 --> 16:38.780]  person.
[16:38.780 --> 16:42.920]  Withholding agent is synonymous with payor.
[16:42.920 --> 16:46.660]  I know this is a lot coming at you fast, so perhaps until you have a chance to read Income
[16:46.660 --> 16:52.220]  Tax Shattering the Mist, the important aspect on which to focus right now is this.
[16:52.220 --> 16:58.780]  A U.S. person completes the W-9, gives it to a withholding agent, and the withholding
[16:58.780 --> 17:04.140]  agent is a person who has control of U.S. source income belonging to a foreign person.
[17:04.140 --> 17:11.300]  So I ask you, what does that have to do with domestic companies doing business together
[17:11.300 --> 17:14.540]  without a foreign person owning the income?
[17:14.540 --> 17:16.300]  Answer.
[17:16.300 --> 17:17.300]  Not a damn thing.
[17:17.540 --> 17:23.180]  I hope it's clear to you at this point that a U.S. person signs a form W-9 for the purpose
[17:23.180 --> 17:28.380]  of giving it to a payor withholding agent who is making payment of U.S. source income
[17:28.380 --> 17:30.940]  belonging to a foreign person.
[17:30.940 --> 17:37.060]  So then, what is the role of this U.S. person in that process?
[17:37.060 --> 17:38.540]  I'm glad you asked.
[17:38.540 --> 17:42.660]  Let me answer that by giving you an example of how it works.
[17:42.660 --> 17:47.180]  Let's say a wealthy Bolivian wants to invest in Apple.
[17:47.180 --> 17:51.260]  U.S. law requires him to go through a U.S. agent to do that.
[17:51.260 --> 17:56.020]  In this scenario, let's say the Bolivian gentleman has a lot of U.S. business interests,
[17:56.020 --> 17:59.900]  so he has a U.S. law firm looking after those interests.
[17:59.900 --> 18:05.440]  He sends several million dollars to the law firm with instructions to buy Apple stock.
[18:05.440 --> 18:10.140]  The law firm forwards that money to the brokerage house it uses for such matters.
[18:10.140 --> 18:14.020]  The Apple shares are purchased in the name of the law firm.
[18:14.020 --> 18:18.820]  Over time, the shares appreciate, and the Bolivian decides to take his profits.
[18:18.820 --> 18:24.860]  He tells the law firm to sell his Apple shares, send him the profit, and reinvest the original
[18:24.860 --> 18:27.860]  capital in shares of Nike.
[18:27.860 --> 18:38.620]  In this scenario, Apple, the brokerage firm, and the law firm are all U.S. persons involved
[18:38.620 --> 18:43.660]  in the flow of U.S. income to its foreign owner.
[18:43.660 --> 18:52.900]  More to the point, Apple, the brokerage firm, and the law firm are all withholding agents
[18:52.900 --> 18:59.460]  because tax law states that every U.S. person in the pipeline of U.S. source income moving
[18:59.460 --> 19:05.220]  to its foreign owner is a withholding agent without regard to which U.S. person ends up
[19:05.220 --> 19:07.540]  actually conducting the withholding.
[19:07.540 --> 19:13.020]  In this scenario, the brokerage house gives Apple a W-9, which causes Apple to issue a
[19:13.020 --> 19:19.860]  1099 in the name of the brokerage house, thus allowing the IRS to track the U.S. source
[19:19.860 --> 19:27.500]  income from its origin point, Apple, to the second U.S. person in the pipeline, the brokerage
[19:27.500 --> 19:28.500]  house.
[19:28.500 --> 19:34.380]  Then, the law firm provides the brokerage house with a W-9, which causes the brokerage
[19:34.460 --> 19:40.100]  house to issue a 1099 in the name of the law firm, thus allowing the IRS to track the U.S.
[19:40.100 --> 19:46.420]  source income from the second U.S. person in the pipeline to the third U.S. person in
[19:46.420 --> 19:49.100]  the pipeline, which is the law firm.
[19:49.100 --> 19:55.660]  The law firm withholds the U.S. income tax and sends the balance to its Bolivian client.
[19:55.660 --> 19:59.900]  By withholding the tax, the law firm becomes liable to the United States government to
[19:59.900 --> 20:05.540]  pay the U.S. income tax imposed on the Bolivian's U.S. income.
[20:05.540 --> 20:10.580]  Strictly for illustrative purposes, let's switch it up and say Apple did the withholding
[20:10.580 --> 20:12.580]  at the source.
[20:12.580 --> 20:18.020]  In that case, Apple becomes liable to pay the tax to the government, and Apple would
[20:18.020 --> 20:24.060]  not request a W-9 from the next U.S. person in the pipeline because there's no longer
[20:24.060 --> 20:26.860]  any need to track the income.
[20:26.860 --> 20:30.620]  The withholding of U.S. income tax has already been done.
[20:30.620 --> 20:37.180]  In summary, W-9s and 1099s are nothing more than a means of providing documents to the
[20:37.180 --> 20:43.540]  IRS that allow it to track U.S. source income belonging to a foreign person from its U.S.
[20:43.540 --> 20:48.700]  point of origin to whichever U.S. person ends up doing the withholding.
[20:48.700 --> 20:54.060]  As I mentioned at the outset, providing a W-9 to a requester compels that company to
[20:54.060 --> 20:56.500]  file a Form 1099.
[20:56.500 --> 21:01.620]  In other words, Forms W-9 and 1099 are legally linked.
[21:01.620 --> 21:04.580]  One precipitates the other.
[21:04.580 --> 21:06.620]  Another way to say it is this.
[21:06.620 --> 21:16.140]  Form 1099 communicates to the IRS that to which the U.S. person swore on the W-9.
[21:16.140 --> 21:19.300]  With that understood, here's a question for you.
[21:19.300 --> 21:26.780]  Because the W-9 is used exclusively by a U.S. person to attest, under penalty of perjury,
[21:26.780 --> 21:33.780]  that he-she-it is involved in the flow, the pipeline, of U.S. source income from its origin
[21:33.780 --> 21:40.860]  point to its foreign owner, and the W-9 then compels the production of a 1099, what do
[21:40.860 --> 21:45.420]  you think the 1099 conveys to the IRS?
[21:45.420 --> 21:50.060]  If you were thinking a 1099 tells the IRS that you're a U.S. person who received U.S.
[21:50.060 --> 21:55.780]  source income as it moved from its origin point to its foreign owner, you hit the nail
[21:55.780 --> 21:57.460]  on the head.
[21:57.460 --> 22:03.900]  As a side note, the last time I counted, there were 17 variations of Form 1099.
[22:03.900 --> 22:09.340]  To distinguish one 1099 from another, the Treasury Department puts letters after the
[22:10.340 --> 22:17.620]  Examples are 1099A, 1099NEC, and 1099G.
[22:17.620 --> 22:21.080]  All variations have the same meaning.
[22:21.080 --> 22:26.820]  The person whose name appears on the 1099 has received U.S. source income belonging
[22:26.820 --> 22:29.780]  to a foreign person.
[22:29.780 --> 22:35.740]  Let me return to the statement I just made that a W-9 is exclusively to declare oneself
[22:35.740 --> 22:40.820]  a U.S. person who received U.S. source income as it moved from its origin point to its
[22:40.820 --> 22:41.820]  foreign owner.
[22:41.820 --> 22:48.980]  I've been reading income tax law for 32 years, and nowhere does the Secretary of the Treasury
[22:48.980 --> 22:55.460]  indicate a W-9 is to be used for any purpose other than a U.S. person receiving U.S. source
[22:55.460 --> 23:01.020]  income as it moves from its origin point to its foreign owner.
[23:01.020 --> 23:07.740]  How could it be anything else when it's a withholding certificate, and withholding certificates
[23:07.740 --> 23:11.780]  are only to be given to withholding agents?
[23:11.780 --> 23:17.020]  With that knowledge under your belt, let's get to the main point of this presentation,
[23:17.020 --> 23:24.220]  which is how what you just learned plays into a willful failure-to-file charge.
[23:24.220 --> 23:29.580]  In the 32 years I've been in this space, no defendant in a willful failure-to-file
[23:29.580 --> 23:36.540]  case has ever known what we've discussed today, and that ignorance also extends to
[23:36.540 --> 23:38.260]  their attorneys.
[23:38.260 --> 23:43.580]  At trial, the government introduces the 1099s it possesses for the years concerning which
[23:43.580 --> 23:45.840]  the defendant has been charged.
[23:45.840 --> 23:52.780]  The prosecutor knows what those 1099s mean, but the defendant and his counsel do not.
[23:52.780 --> 23:58.700]  The defendant believes he is being prosecuted for not paying the tax on his personal earnings,
[23:58.700 --> 24:02.820]  and in his mind, the 1099s are merely evidence of that.
[24:02.820 --> 24:09.100]  The defendant may be in court because he has a sincere and well-founded belief that the
[24:09.100 --> 24:15.300]  federal government has no constitutional authority to impose the income tax on his personal earnings.
[24:15.300 --> 24:18.140]  And he's right about that.
[24:18.140 --> 24:21.940]  The Supreme Court just confirmed that in 2024 in the Moore decision.
[24:21.940 --> 24:25.260]  I'll put the link to that video down in the notes.
[24:25.340 --> 24:31.580]  A defendant's pretrial arguments of law concerning the federal government's lack of constitutional
[24:31.580 --> 24:38.260]  authority to tax his personal earnings will be dismissed outright by the court.
[24:38.260 --> 24:42.380]  Trial watchers will then claim that proves the court is corrupt.
[24:42.380 --> 24:47.580]  In reality, the court will dismiss that argument because the prosecutor and the judge know
[24:47.580 --> 24:52.460]  what the defendant and his attorney do not, which is that the defendant is not being prosecuted
[24:52.460 --> 24:56.980]  for failing to file a return for his personal earnings, but rather for failure to pay the
[24:56.980 --> 25:03.020]  income tax he was legally required to withhold from a foreign person.
[25:03.020 --> 25:07.260]  Phrased simplistically, the government is prosecuting him for apples and the defendant
[25:07.260 --> 25:09.300]  wrongly thinks the case is about oranges.
[25:09.300 --> 25:16.380]  Keep in mind that the 1099s entered into evidence by the prosecution constitute presumptive
[25:16.380 --> 25:22.380]  evidence based on the defendant's sworn statement on the W-9s that he received U.S. source income
[25:22.380 --> 25:28.500]  belonging to a foreign person, and the defense never disputes that.
[25:28.500 --> 25:33.140]  Even though the defendant has no idea about the legal implications of 1099s and obviously
[25:33.140 --> 25:37.660]  did not receive U.S. source income belonging to a foreign person, let's pretend for a
[25:37.660 --> 25:42.540]  moment that he did receive U.S. source income belonging to a foreign person and see what
[25:42.540 --> 25:44.500]  that would look like.
[25:44.500 --> 25:47.380]  In that scenario, the defendant would have four choices.
[25:47.380 --> 25:50.260]  First, withhold the tax and pay it over to the government.
[25:50.260 --> 25:52.940]  If that happened, there wouldn't be a trial.
[25:52.940 --> 25:58.580]  Second, withhold the tax and not pay it over to the government, which could lead to a willful
[25:58.580 --> 26:01.860]  failure to file charge if the act was done willfully.
[26:01.860 --> 26:07.300]  Third, is not to have withheld at all, which would make the defendant liable for the tax
[26:07.300 --> 26:12.420]  because every U.S. person who touches U.S. source income belonging to a foreign person
[26:12.420 --> 26:14.740]  is considered a withholding agent.
[26:14.740 --> 26:19.780]  Accordingly, not withholding makes the withholding agent liable for the amount of tax that was
[26:19.780 --> 26:23.020]  supposed to be withheld but wasn't.
[26:23.020 --> 26:27.260]  And lastly, the defendant could have pushed the foreign person's U.S. source income down
[26:27.260 --> 26:30.160]  the pipeline to the next U.S. person.
[26:30.160 --> 26:34.220]  In that case, the defendant would have filed a 1099 showing he pushed the money down the
[26:34.220 --> 26:38.900]  pipeline and identifying the U.S. person who received it.
[26:38.900 --> 26:41.460]  But back to what happens in a willful failure to file case.
[26:41.460 --> 26:46.080]  There is no way for the defendant to put on an effective defense because neither he nor
[26:46.080 --> 26:50.480]  his attorney understand the true nature of the allegation against him.
[26:50.480 --> 26:54.880]  Anything and everything the defense puts forth will be off point from the true nature of
[26:54.880 --> 26:59.000]  the allegation and therefore worthless.
[26:59.000 --> 27:05.720]  Is it any wonder the government enjoys a 90% conviction rate in criminal tax cases?
[27:05.720 --> 27:10.240]  It's not that the government is that good, it's that the public and criminal tax defense
[27:10.240 --> 27:15.400]  attorneys are thoroughly ignorant of the true nature of the allegation.
[27:15.400 --> 27:21.640]  I should point out that felonies such as tax evasion rely on the same underlying ignorance
[27:21.640 --> 27:26.880]  because if the potential defendant isn't a foreign person with U.S. source income or
[27:26.880 --> 27:32.880]  a U.S. personal withholding agent, the income tax has nothing to do with him.
[27:32.880 --> 27:38.600]  That said, keep in mind that probably 99.9% of criminal tax defendants believe they do
[27:38.600 --> 27:43.000]  owe the tax, as do their attorneys.
[27:43.000 --> 27:47.000]  As a side note, despite the narrative that cases in the federal system are assigned to
[27:47.000 --> 27:52.440]  judges based on a random assignment, there are plenty of obvious exceptions.
[27:52.440 --> 27:57.040]  As an example, anyone who has paid attention to criminal tax cases over the years sees
[27:57.040 --> 28:01.060]  the same judges' names time and again.
[28:01.060 --> 28:02.060]  Why is that?
[28:02.060 --> 28:06.280]  It's because relatively few judges know the truth we've been discussing today.
[28:06.280 --> 28:11.760]  So chief judges, make sure criminal tax cases are assigned to the judges who know how the
[28:11.760 --> 28:14.920]  scam works.
[28:14.920 --> 28:20.600]  Some of you are probably thinking this kind of prosecution has to be unconstitutional.
[28:20.600 --> 28:21.800]  It's not.
[28:21.800 --> 28:26.680]  The reason it's not is that while the prosecution is required to disclose all evidence to the
[28:26.680 --> 28:32.720]  defense that the government intends to introduce a trial, the prosecutor is not required to
[28:32.720 --> 28:36.680]  teach tax law to the defense attorney.
[28:36.680 --> 28:41.080]  Because the defense attorney has no clue how tax law operates and thinks everyone owes
[28:41.080 --> 28:47.160]  income tax, the defense blunders into court without a realistic chance of winning.
[28:47.160 --> 28:52.000]  I bet quite a few of you are wondering how to avoid getting yourself into a mess like
[28:52.000 --> 28:53.000]  this.
[28:53.000 --> 28:56.080]  The good news is, it's super easy.
[28:56.080 --> 29:00.920]  A criminal tax case is filed only after the presumptive taxpayer has exhausted his due
[29:00.920 --> 29:03.200]  process rights.
[29:03.200 --> 29:07.840]  Using one's right of due process to put the facts and the law into the administrative
[29:07.840 --> 29:10.000]  record is the key.
[29:10.320 --> 29:15.040]  That's because the government does not pursue anyone for income tax, let alone take them
[29:15.040 --> 29:22.600]  to trial, who correctly puts the accurate facts and law into the administrative record.
[29:22.600 --> 29:26.960]  And to be clear, it's not that IRS employees or government employees or government attorneys
[29:26.960 --> 29:30.840]  are wonderfully moral people who want to do the right thing.
[29:30.840 --> 29:36.960]  It's that they cannot afford to have the income tax house of cards collapsed by someone who
[29:36.960 --> 29:42.920]  knows what the law really says, bringing the truth into a courtroom.
[29:42.920 --> 29:46.440]  Let me tell you a quick story about Wesley Snipes.
[29:46.440 --> 29:50.520]  Shortly after the government filed a willful affair to file charges against him, his people
[29:50.520 --> 29:54.880]  reached out to me and asked if I would join his defense team.
[29:54.880 --> 29:56.080]  I was thrilled.
[29:56.080 --> 30:00.720]  I relished the opportunity to sit across the table from a federal prosecutor and discuss
[30:00.720 --> 30:05.780]  the pretrial arguments of law Snipes would be making to the court and what cross-examination
[30:05.780 --> 30:09.740]  of their criminal investigators would look like, which would essentially cover the points
[30:09.740 --> 30:11.340]  we've discussed today.
[30:11.340 --> 30:16.640]  What I wanted to do was to put the prosecutors in the position that they had to file a motion
[30:16.640 --> 30:21.400]  to dismiss the charges against Snipes because they could not afford to have the evidence
[30:21.400 --> 30:28.480]  we would submit at trial reported by every news outlet in America and lose the case.
[30:28.480 --> 30:35.060]  My only requirement to join Snipes' defense team was that Snipes drop the errant 861 position
[30:35.200 --> 30:40.440]  on which he had relied for not filing, and rely on the law correctly.
[30:40.440 --> 30:43.820]  Rely on the law as you've seen it today.
[30:43.820 --> 30:50.420]  Unfortunately I was told that 861 was the Hill Snipes was prepared to die on.
[30:50.420 --> 30:52.100]  We know how that turned out.
[30:52.100 --> 30:56.140]  At the beginning, I asked you why, after not filing a tax return or paying income tax in
[30:56.140 --> 31:01.500]  32 years, I have not been charged with the willful failure to file.
[31:01.500 --> 31:03.080]  Now you know.
[31:03.080 --> 31:05.440]  Let me sum it up for you in two sentences.
[31:05.440 --> 31:07.440]  Are you ready?
[31:07.440 --> 31:13.000]  The government only prosecutes people who believe they owe the tax or are relying on
[31:13.000 --> 31:16.880]  some cockamamie argument to support not filing.
[31:16.880 --> 31:22.880]  The government never prosecutes anyone who knows what the law really says.
[31:22.880 --> 31:29.840]  Let's quickly touch on how this works if Forms W-2 have been filed rather than 1099s.
[31:30.200 --> 31:34.680]  I'm not going to dig into this as I did the W-9 and 1099 issue because you can read all
[31:34.680 --> 31:38.320]  about the W-4s and W-2s and income tax shattering the mist.
[31:38.320 --> 31:44.680]  For today, I'll simply say what a Form W-2, which is predicated on the payor having a
[31:44.680 --> 31:54.800]  valid W-4, signifies to the IRS that the person whose name appears on the W-2 is a non-resident
[31:54.800 --> 32:02.520]  alien who received U.S. source income in the form of wages.
[32:02.520 --> 32:06.520]  Let me simplify that for you with the following two sentences.
[32:06.520 --> 32:11.400]  Form 1099 reflects U.S. source income paid to a U.S. person acting as the domestic agent
[32:11.400 --> 32:14.120]  of the income's foreign owner.
[32:14.120 --> 32:19.620]  Form W-2 reflects U.S. source income paid directly to a non-resident alien in the form
[32:19.620 --> 32:22.200]  of wages.
[32:22.200 --> 32:27.200]  Everything which you know after this presentation kind of makes you wonder why Americans sign
[32:27.200 --> 32:31.840]  hundreds of millions of W-9s every year.
[32:31.840 --> 32:37.920]  Now let's talk about how you can get 100% dialed in on all of this.
[32:37.920 --> 32:42.800]  Anyone who wants to know what income tax law really says should read income tax shattering
[32:42.800 --> 32:48.060]  the mist, readers have often called it the Bible concerning the truth of the income tax.
[32:48.060 --> 32:51.000]  If you order it right now, I'll pay the shipping.
[32:51.000 --> 32:57.300]  In fact, right now I'm offering free shipping on any order from my doctorreality.news site
[32:57.300 --> 33:01.160]  if the order contains a copy of income tax shattering the mist.
[33:01.160 --> 33:06.440]  I'm going to suggest you purchase the four-pack containing income tax shattering the mist,
[33:06.440 --> 33:11.560]  the business guide to payroll withholding, the business handbook for form W-9 1099 in
[33:11.560 --> 33:15.800]  U.S. person, which you just heard about, and body science.
[33:15.800 --> 33:20.340]  The first reason to get the four-pack is that the price is already deeply discounted from
[33:20.340 --> 33:22.340]  purchasing the four items individually.
[33:22.340 --> 33:26.460]  The second reason is that in addition to it being deeply discounted, you get free shipping
[33:26.460 --> 33:28.660]  by using the code tariffs.
[33:28.660 --> 33:32.060]  Here's a quick overview of each item in the four-pack.
[33:32.060 --> 33:36.420]  Income tax shattering the mist, you already know what that's going to give you, mountains
[33:36.420 --> 33:41.740]  of incontrovertible proof that the income tax has never been imposed on ordinary hardworking
[33:41.740 --> 33:43.780]  Americans like you.
[33:43.780 --> 33:48.980]  The business guide to payroll withholding is a 13-page item intended to help workers
[33:48.980 --> 33:54.100]  convey the truth we've been discussing today to the company for which they work in order
[33:54.100 --> 33:57.860]  to ask them to follow the law and stop withholding.
[33:57.860 --> 34:02.460]  Not everyone is articulate or can recall legal citations on the spur of the moment, so I
[34:02.460 --> 34:06.340]  wrote the business guide to payroll withholding to help with that.
[34:06.340 --> 34:09.500]  It's also a great primer if you just want to wake somebody up to the truth of the income
[34:09.500 --> 34:10.760]  tax.
[34:10.760 --> 34:17.760]  The business handbook for form W-9 1099 in U.S. person is also 13 pages and is intended
[34:17.760 --> 34:22.120]  to help self-employed people communicate to those with whom they do business why they
[34:22.120 --> 34:28.960]  are not required to furnish a form W-9, which you know now, and why the person or entity
[34:28.960 --> 34:35.560]  paying them is not legally required, in fact, is not legally permitted to file a form 1099.
[34:35.560 --> 34:39.080]  The handbook is also a great primer if you want to wake somebody up about the truth of
[34:39.080 --> 34:40.640]  the income tax.
[34:40.640 --> 34:46.680]  Body science is my groundbreaking work on human physiology that is the key to what so
[34:46.680 --> 34:51.080]  many people say they want, which is to turn around the health of the American people.
[34:51.080 --> 34:56.680]  Sadly, the vast majority of Americans prefer to get their views on nutritional physiology
[34:56.680 --> 35:02.880]  from a corrupt media rather than a physiologist who tears down the false establishment health
[35:02.880 --> 35:09.200]  narratives and gives you the science of getting and staying healthy, presented in a way everyone
[35:09.200 --> 35:10.920]  can understand.
[35:10.920 --> 35:15.360]  If you're sincere about getting and staying healthy, and you want that for the people
[35:15.360 --> 35:18.200]  you care about, you need to read body science.
[35:18.200 --> 35:19.600]  I practice what I preach.
[35:19.600 --> 35:22.960]  I adhere to everything you'll discover in body science at 65.
[35:22.960 --> 35:25.680]  I'm as healthy as I was at 25.
[35:25.680 --> 35:26.960]  I'm in perfect health.
[35:26.960 --> 35:32.720]  No chronic diseases, no big pharma products, and I haven't been sick a day in years.
[35:32.720 --> 35:38.520]  During the COVID event, I never wore a mask, never social distanced, shook hands with people,
[35:38.520 --> 35:43.360]  hugged my friends, lived life as I always had, and never got COVID.
[35:43.360 --> 35:48.960]  That's how your immune system will function if you follow what you learn in body science.
[35:48.960 --> 35:55.320]  So go to DrReality.News and pick up Income Tax Shattering the Mist or the four-pack.
[35:55.320 --> 35:59.480]  Remember to use the coupon code TERRAFS to get free shipping on any order containing
[35:59.480 --> 36:01.280]  Income Tax Shattering the Mist.
[36:01.280 --> 36:06.360]  Also, purchasing any of my writings helps me to continue to be here for you with these
[36:06.360 --> 36:09.500]  revealing and thought-provoking presentations.
[36:09.500 --> 36:14.440]  If you found today's content intriguing and compelling, please spread the word by
[36:14.440 --> 36:16.300]  sharing this video far and wide.
[36:16.300 --> 36:18.100]  Thank you for sharing your time with me today.
[36:18.100 --> 36:20.100]  I hope you consider it time well spent.