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Friday, December 14, 2007

Agorist Toolkit - Tax Resister Insurance

I liked this post at the Picket Line. I liked the bit about the War Tax Resister Penalty Fund:

(It occurs to me that those tax resisters who apply to the War Tax Resisters Penalty Fund for reimbursement of interest and penalties can actually end up ahead of the game this way!)

If you're a war tax resister, you can apply to this fund for reimbursement of the interest and penalties that the IRS charges you. I'm surprised the government hasn't shut this group down. That's probably because they aren't that popular or widely used.

The poster is confused about how profitable tax resistance really is. This is actually a straightforward calculation.

Suppose that the interest rate you earn on your investments is HIGHER than what the IRS is charging in interest and penalties. In that case, tax resistance is practically riskless. You can stonewall for a year, pay, and still show a profit. I earn over 15%/year on my investments, so theoretically I could profitably do this. Of course, you would have to deduct the time and effort spent contesting the IRS.

You should also figure out your odds of escaping detection. For W-2 or 1099 income, the odds of hiding the income from the IRS are zero. For other forms of tax resistance, you may be able to hide the income from the IRS. Once you know the true odds of successful tax resistance, then it becomes a probability calculation. At this point, it starts becoming an insurable risk.

Even if you waste $1000 of time and the IRS wastes $100,000 of time to collect a $10,000 tax bill, you aren't really profiting. If you're the only tax resister, the IRS has an *UNLIMITED* budget relative to you. You should only consider your personal gain/loss and not the government's gain/loss.

Also, if you're a tax resister, you should stick to things where the only penalty is a civil penalty. If you're risking criminal charges, the stakes are higher.

Personally, this tax resister is taking the wrong approach. If your income is on a W-2 or 1099 and you're a tax resister, you're probably SOL. Your income is automatically reported to the IRS. If you have dividends, capital gains, or interest, that income is also automatically reported to the IRS. If you want to be a tax resister, you have to focus on generating income WITHOUT IT BEING REPORTED TO THE GOVERNMENT. The only way to do this is in-person cash transactions.

I think this is a good agorist business opportunity. Here's how I would set up an agorist tax resister insurance program.

You would have to register for tax resister insurance coverage BEFORE you earn the income that you're trying to resist paying taxes on. You can't buy tax resister insurance after you get a letter from the IRS, although you still could hire them to help defend yourself.

The tax resister insurance association would provide you guidance for how to realize income WITHOUT generating a report to the government. If all your income is on a W-2 or 1099 or from investments, you probably are SOL when it comes to tax resistance.

I would advise the tax resister to file a tax return that includes ALL income the government ALREADY knows about. Did you work and get paid on a W-2 or 1099? You should report that and pay the tax. Did you sell stock and get a capital gain? You should report that and pay the tax.

I would advise the tax resister to NOT deposit cash in their bank account. That triggers all sorts of government alerts and reporting requirements. In order to convert Federal Reserve Points into inflation-protected investments, I would offer an agorist gold and silver metal dealership.

Legally, if you aren't a lawyer, you can't represent someone else in any official capacity. However, you CAN help them prepare letters and defend themselves sui juris (representing themselves).

The agorist insurance association would keep a catalog of what techniques work and what techniques don't work. If the IRS catches you and you wind up being forced to pay, the insurance would cover interest and penalties.

Of course, the agorist tax resister association would have to operate itself as an off-the-books business. If you tried doing this as a legal business, you would find yourself shut down in a hurry (especially if you were good at it!).

I probably would charge premiums equal to 1% of the avoided tax in the first year, and later adjust based on my experiences. Remember: the insurance association isn't JUST providing insurance. It's also providing techniques and instructions that help people be a more successful tax resister. After a few years, the tax resistance insurer would have pretty good statistics about the risks of getting caught. The tax resistance insurer will not be so stupid as to keep a written list of his customers, in case he himself is raided by the IRS.

1 comment:

Anonymous said...

Keep up the good work.

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