INSTRUCTIONS: 3.15.  Protect the Privacy of Your Financial Transactions

The key to staying out of trouble with the IRS and avoiding becoming a target of illegal enforcement of income taxes is to eliminate the paper trail that ties any income to you or your family members.  Most of that paper trail originates in the following:

  1. Deposits to accounts you maintain at various financial institutions, and especially those made by check.
  2. Checks written to various family members drawn by you on accounts you maintain at various financial institutions.
  3. Forms filled out by the bank when you deposit large sums of cash exceeding $2,999 into your accounts.

Endorsing and forwarding checks written out to us

In order to exploit the financial system to protect the privacy of our financial transactions, we must keep in mind that most checks processed for deposit in our account are processed via computer and therefore are seldom examined for whether they are made out to the individual who is in custody of the check and cashed the check.  This is especially true of ATM deposits.  We also need to keep in mind that the reason we are depositing the money in our account in the first place is so that we can pay our bills.  Now if we are depositing money to pay our bills, the question is:  Why not pay the bills directly with the checks we are depositing to take out the middle man so we aren’t implicated?  Here is how to do exactly that:

  1. Endorse the check on the back with your signature.
  2. Write “Pay to ___________(institution name), acct #_______________”, where we fill in the name of the third party whose bill we want to pay under “institution name”.
  3. Mail in the third party check with our bill or statement.

The kind of income we should do this with is income received in check form from employers and third parties for wages or personal business revenue.  It is also very effective for rental income.

Use of Blank Payees on Checks

Another relatively simple technique that is good for avoiding tying income to oneself is to instruct people who pay you money by check to leave the payee field deliberately blank.  When you are ready to redeem the check, fill in the payee field with the name of an organization that you owe money to and mail it in with your bill.  For instance, fill in the name of your mortgage company in the payee field of the blank check and use it to pay your home mortgage.  This causes checks to behave like cash, which is helpful in protecting your privacy.

One side-effect of this technique is that it complicates accounting but its still manageable.  For instance, the checks you send to pay bills must always be LESS than the amount of the bill you are paying or you will overpay, which means that you will have to send a second check to make up the difference.

Avoiding the Use of Direct Deposit

It is very important to avoid linking specific accounts to your employer.  Employers, when threatened by the IRS, will frequently violate your privacy by giving out information about you to the IRS.  Among the things they will give out include the financial account that you direct deposit your paycheck to. Therefore, we recommend one of two approaches:

  • Stop doing direct deposit altogether and get a paycheck.  Then get cash for the check and finally deposit the check.
  • Keep most of your money in accounts that are not linked to you by direct deposit.

Change your financial institutions frequently to cover your tracks

When you itemize deductions on a 1040A tax return, the IRS demands that you include a Schedule C if you had more than $400 in interest earnings.  On the form, they require you to specify the institution which you earned the interest from but they do not ask for the account number.  Some of you may wonder why they only ask for the institution.  There are two reasons why they take this approach:

1.  If they are pursuing you, then they will most often want to do “discovery”, which is a fancy legal term for the process of gathering evidence they can use against you to support their case.  The law does not allow them to send random requests for information to ALL financial institutions in order to find out which ones have your money because that would be a massive violation of your privacy.  Therefore, they must target only specific institutions which they KNOW have your money and request the information they want directly from them.  If you are stupid enough to tell them all the institutions that you bank with, then they have all the information they need in order hang you and will send out a subpoena or discovery request directly to your banking institutions demanding your account statements and cancelled checks.  The recent Banking Secrecy Act makes this event even easier for them, because unless you specifically “opted out”, then banks will think they are authorized by federal law to provide information about you to third parties including the IRS without your specific knowledge or consent.  This is a very bad situation to put yourself in and you are hazarding your liberty and your property if you don’t explicitly opt-out at every financial institution you do business with and make sure that all your accounts DO NOT have SSN’s on them!  The same Congressmen who want to STEAL your money by obfuscating the Internal Revenue Code also want to make sure they can destroy enough of your privacy so that it’s convenient and cost effective to find out whatever they want to know about you to make it easier to steal the money.

2.  If the IRS wants to steal your money, after they find out who you bank with, they will try to send out an IRS form 668-A(c )(DO) “Notice of Levy” form.  They can’t send out this notice until they at least know who you bank with and what is in your accounts.  Don’t be stupid enough to tell them because you are outside the jurisdiction of the Internal Revenue Code and because the Fifth Amendment says you can’t be compelled under both criminal or civil proceedings to incriminate yourself.  The purpose of the 668-A(c )(CO) form is to convince the financial institution to surrender your money to the IRS and to do so:

2.1.  In violation of 26 U.S.C. 6331(a), which says that only "public officers" or instrumentalities of the U.S. government may be levied upon.  Paragraph (a) of this section is conveniently removed from the back of the form.

2.2.  In violation of the Fourth Amendment to the U.S. Constitution, which says that our right to due process demands that a search warrant or seizure warrant must be issued by an impartial Magistrate before the federal government is authorized to seize or search your property.

2.3.  In violation of 42 U.S.C. 407(a), which says that Social Security payments may not be levied upon.

2.4.  In violation of 26 U.S.C. 6331(h)(1), which says that continuing levies may not exceed 15% of your salary.

Based on the above considerations, you should avoid making it easy for them to either do discovery with any of your present or past financial institutions or attempt illegal enforcement actions against you.  You can accomplish this by the following techniques:

1.  Change your banking institutions frequently.  Do so at least once per year.  This is especially true if you have direct deposit, because the IRS will often try to twist the arm of your employer to divulge where they do the direct deposit.  You employer may even divulge on your W-2 form and your monthly leave and earnings statements where your direct deposit is sent to.  This makes you easy prey for a levy.  By changing your financial institution frequently, when the IRS attempts discovery by serving a subpoena on your financial institution, the only account they will get any information back about is the account you had for the last year but not previous accounts.  That way they won’t get enough historical information to do a cash flow analysis or go further back than the present year to develop evidence about prior year imputed liabilities, which would be likely to involve penalties and interest that they can run up large debts against you to twist your arm to settle with.

2.  Do NOT attach a Social Security Number to any of your financial accounts.  We show you in section 3.5.3.14 how to open a financial account without a Social Security Number.  Keep in mind also that you don’t have a valid Social Security Number because (see section 9.6.1 entitled “Social Security Asseveration of Coercion for further details):

2.1.  The number was assigned when you were not an adult without your consent.

2.2.  The program is compulsory because the government does not provide a way for you to terminate your participation, which means that you are compelled to be a witness against yourself in violation of the Fifth Amendment.

3.  Avoid the use of credit.  Most lenders will extend credit to only if you provide them with a Social Security Number.  This provides another paper trail to track you down, and a way to find your real property so they can attach a lien to it.  They can use the credit reporting bureaus like TRW, Trans Union, and Equifax to pull a credit report on you and track down your loans, and if they find a real estate loan that has a high dollar value, then they will go hunting for your property and serve the county recorder with an illegal “Notice of Lien”, which incidentally violates the Fourth Amendment.  Therefore, if you must use credit cards, have no more than one and preferably get them from other countries or international banks that have branches outside the country.  Debit cards that are non-interest bearing also provide an attractive alternative that you can easily get without an SSN.

4.  If you file tax returns, DO NOT fill out Schedule C forms.  Instead, simply don’t declare any institution you bank with or any earnings you might have and put “duress” under your signature on the return because you are outside the territorial or subject matter jurisdiction of the Internal Revenue Code, which only applies inside the federal zone, and because there is no statute making anyone liable for Subtitle A income taxes.