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Quatlosers > Larken Rose

Quatlosers Hall of Shame

Larken Rose

These special-editions Quatloos commemorates those who have made a name for themselves in their particular business endeavors.

100 Q
Larken Rose

When a scam gets rolling, all sorts of human cockroaches come out of the woodwork to try to cash in. This is the perfect description of Larken Rose, a scammer come lately to the world of tax protesting who runs tax scam website

Not being smart enough to come up with any unique theory of his own, Larken has simply latched on to the “861” or “Income Can’t Be Defined” arguments that end up with the conclusion that only foreigners are required to pay income tax. Larkin’s argument has been exploded more times than a pack of Blackcats at a 4th of July festival (see below) but this hasn’t stopped Larken from marketing his video for $20 on his other website

Larken’s ally is Thurston Bell, which means that his nemesis is Rick Haraka a/k/a Rick Bryan, who criticizes both Larken and Thurston as to be too wet behind the ears to be able to give advice on how to live a perpetually tax-free existence. Indeed, Larken and Thurston represent the “new breed” of tax scam promoters, i.e., high visibility, no shame, and wanting to make the “Big Splash” to try establish themselves as the next Irwin Schiff.

Larken’s most recent marketing ploy has been to announce his “Operation Glove in Face” via his websites and articles in the militia nut media, where he publicly pleads for the IRS to arrest him for non-payment of taxes since 1997. Crazy as this sounds, the convictions of other tax scam artists, such as Irwin Schiff and Bill Benson, only helped their careers.

Contact: U.S. Justice Department Public Affairs Office,
202-514-2008 or 202-514-1888 (TDD);
Web: http://WWW.USDOJ.GOV

WASHINGTON, Aug. 12 /U.S. Newswire/ -- The Justice Department and Internal Revenue Service announced today that a federal jury in Philadelphia convicted Larken Rose, of Hollywood, Pennsylvania of five counts of willful failure to file federal income tax returns.

Larken Rose, 37, was the joint owner of a medical transcription business operated outside of Philadelphia, Pennsylvania. As set forth in the Indictment and according to the evidence introduced at trial, Rose willfully failed to file personal federal income tax returns for calendar years 1998 through 2002, despite earning $500,000 during those years. Rose also filed false and frivolous amended income tax returns for 1994, 1995, and 1996. On those amended returns, he reported no tax due and requested a refund for all income taxes paid in those years. At trial, Rose claimed that he failed to file returns and sought refund claims based on his determination that his income received inside the United States was not taxable under Internal Revenue Code Section 861 and regulations. The judge instructed the jury that this Section 861 argument is incorrect as a matter of law.

" People who intentionally fail to file returns or pay taxes as required by law can expect to face criminal prosecution and conviction," said Eileen J. O'Connor, Assistant Attorney General for the Justice Department's Tax Division. "And they will still be required to pay the taxes they tried to avoid, plus interest and penalties."

" The conduct of Larken Rose," said Patrick L. Meehan, United States Attorney for the Eastern District of Pennsylvania, "is an affront to all taxpayers who voluntarily pay the taxes required by law."

Nancy Jardini, Chief, IRS Criminal Investigation, said, "Today's conviction reminds us that fulfilling individual tax obligations is a legal requirement and those who willfully evade that responsibility will be prosecuted."

Courts have consistently held that Section 861 does not provide authority for United States citizens to fail to file income tax returns on income earned in the United States, as was highlighted by evidence at trial. The trial evidence also showed that Rose received more than a dozen notices from the IRS that rejected his 861 argument. Further, there were more than ten letters from members of Congress, found at Rose's residence during execution of a search warrant, that provided notice to him that his 861 argument was invalid. In addition, Rose was aware of two district court cases that had rejected the 861 argument. In one case, the district judge informed Rose directly that Rose's view of the law was incorrect. There was also considerable evidence presented at trial, through email correspondence, that Rose intended to create a mass movement of non-compliance to obstruct the enforcement of the tax laws.

In convicting Rose, the jury rejected his claim that he held a good faith belief that the federal income tax laws do not apply to him. District Judge Michael M. Baylson ordered Rose to remain under home detention and set sentencing for November 15, 2005. Rose faces a possible sentence of 12 months on each of the five Counts of which he was found guilty.

Assistant Attorney General O'Connor and U.S. Attorney Meehan thanked Assistant United States Attorney, Floyd J. Miller, and United States Department of Justice Tax Division Attorney, Shawn T. Noud, who prosecuted the case. They also thanked the special agents of the Internal Revenue Service, Criminal Investigation, whose efforts were essential to the successful investigation and prosecution of the case.

Additional information about the Justice Department's Tax Division and its enforcement efforts may be found at

In the crazy world of tax protesting, failure sells.

Larken Rose’s Argument Exploded

As stated above, for federal income tax purposes, "gross income" means all income from whatever source derived and includes compensation for services. I.R.C. § 61. Further, Treasury Regulation § 1.1- 1(b) provides, "[i]n general, all citizens of the United States, wherever resident, and all resident alien individuals are liable to the income taxes imposed by the Code whether the income is received from sources within or without the United States." I.R.C. sections 861 and 911 define the sources of income (U.S. versus non-U.S. source income) for such purposes as the prevention of double taxation of income that is subject to tax by more than one country. These sections neither specify whether income is taxable, nor do they determine or define gross income. Further, these frivolous assertions are clearly contrary to well-established legal precedent.

Relevant Case Law:

Great-West Life Assur. Co. v. United States, 678 F.2d 180, 183 (Ct. Cl 1982) - the court stated that "[t]he determination of where income is derived or 'sourced' is generally of no moment to either United States citizens or United States corporations, for such persons are subject to tax under I.R.C. § 1 and I.R.C. § 11, respectively, on their worldwide income.

Williams v. Commissioner, 114 T.C. 136, 138 (2000) - the court rejected the taxpayer's argument that his income was not from any of the sources listed in Treas. Reg. § 1.861-8(a), characterizing it as "reminiscent of tax-protester rhetoric that has been universally rejected by this and other courts.

Corcoran v. Commissioner, T.C. Memo. 2002-18, 83 T.C.M. (CCH) 1108, 1110 (2002) - the court rejected the taxpayers' argument that his income was not from any of the sources in Treas. Reg. § 1.861-8(f), stating that the "source rules [of sections 861 through 865] do not exclude from U.S. taxation income earned by U.S. citizens from sources within the United States." The court further required the taxpayers to pay a $2,000 penalty under section 6673(a)(1) because "they . . . wasted limited judicial and administrative resources.

Aiello v. Commissioner, T.C. Memo. 1995-40, 69 T.C.M. (CCH) 1765 (1995) - the court rejected the taxpayer's argument that the only sources of income for purposes of section 61 are listed in section 861.

Madge v. Commissioner, T.C. Memo. 2000-370, 80 T.C.M. (CCH) 804 (2000) - the court labeled as "frivolous" the position that only foreign income is taxable.

Solomon v. Commissioner, T.C. Memo. 1993-509, 66 T.C.M. (CCH) 1201, 1202 (1993) - the court rejected the taxpayer's argument that his income was exempt from tax by operation of sections 861 and 911, noting that he had no foreign income and that section 861 provides that "compensation for labor or personal services performed in the United States . . . are items of gross income.

See also

Irwin Schiff says Larken Rose “Couldn’t Be Any More Wrong”

The 861 Argument

The 861 argument is a totally erroneous argument. But what is amazing is the convoluted lengths to which its advocates go in seeking to explain why this irrelevant Regulation was worded in such an obscure manner.

In presenting the 861 argument as they do - its advocates reveal that they haven't a clue concerning numerous characteristics of the income tax. The advocates of the 861 argument present it as if it were the very foundation of why people don't have to pay income taxes - since they supposedly do not have income from those sources or items that allegedly fall within the meaning of "gross income" as that term is "defined" in Code Section 61 and as allegedly listed in Treasury Regulation 861. .

The fundamental and glaring flaw in the 861 argument and overlooking all of its other flaws - is that it is based on the assumption that the income tax is imposed on "sources" or "items" of revenue that one might receive and therefore it is important to determine where that revenue comes from, or who received it.

Also the advocates of the 861 argument attempt to make a distinction between "sources" of revenue and" items" of revenue as referred to in Code Section 61 - where no distinction exists.

(Code Section 61, of course, uses the term "income" when it should more correctly use the terms "revenue" or "profit." It falsely uses the term "income" to hide the true character of the "income" tax and what Section 61 purports to tax).

Since the "income" referred to in Code Section 61 means a corporate profit those "sources" or "items" mentioned in Code Section 61 merely refer to those "sources of revenue" or "items of revenue" which go to make up a corporation's "Profit and Loss" statement as constituting its gross revenue.

So any attempt to create a distinction between "items" of revenue and "sources" of revenue as those terms are used in listing a corporation's total (or gross) "income" is "a distinction without a difference."

And it is ludicrous to see the extent to which 861 advocates go in trying to conjure up such a distinction. What Code Section 61 purports to tax is "Income" (or revenue) FROM "whatever source derived" which would include all manner of income (and revenue) regardless of where it comes from- either from domestic or foreign sources.

However, note that Code Section 61 doesn't attempt to put a tax "ON" anything (except profit) - and the legal significance of the distinction between "ON" and "FROM" as used in this Code Section seems to be totally lost on 861 advocates.

The alleged definition of "Gross income" as used in Code Section 61 attempts to be all-inclusive, and that is what the courts will rule. No court is going to rule that the phrase "from whatever source derived" excludes some "sources" of income.

If one accepts the fallacy that what Section 61 purports to tax are "sources" or "items" of revenue (and not "profit"), then the revenue from all "sources" would be taxable.

Read the law. That's what it says - if you accept its basic fallacy. Once you understand that Section 61 only purports to tax corporate profit (which advocates of the 861 argument appear not to understand at all), you realize that it makes no difference where your items of revenue come from, either foreign or domestic sources - since the tax is only allegedly imposed on "profit," not on the individual "items" or "sources" that produced it.

As long as you do not have a "profit" (and individuals can not have a profit) you have received nothing that can possibly fall within the meaning of "Gross income" as that term is used in Code Section 61.

That is what the Brushaber Court (240 US 1) said was the whole purpose of the 16th Amendment. (See page 198 of "The Great Income Tax Hoax") The Supreme Court said in that decision, "The whole purpose of the 16 Amendment" was to separate a tax on income "from a consideration of the source" that produced the income.

However the whole basis of the 861 argument is to focus on, and consider the "sources," that allegedly produced your revenue. Therefore the advocates of the 861 argument admit to not knowing what the 16 Amendment and the Brushaber decision were all about.

What is also incredible is that advocates of the 861 argument believe that argument is more fundamental as to why we don't have to pay income taxes, than the fact that no statute exists that makes anyone (American citizens or resident aliens) even "liable" for the payment of income taxes - regardless of where their revenue comes from.

And while the Code provides a different definition of income for Americans living abroad than those living here, it is my claim that even Americans living abroad don't have to pay federal income taxes.

So advocates of the 861 argument close their eyes entirely to the fundamental fact that there are no provisions making Americans liable for income taxes regardless of where their revenue comes from.

In addition to everything else, 861 advocates also overlook that the income tax is still - legally - based on "self assessment."

This means that if you don't assess yourself with an income tax liability, under the law - you can't owe any income taxes regardless of where your revenue comes from or what produced it. So in addition to everything else, 861 advocates admit to not even knowing about the "self-assessment" basis of the income tax.

In addition to that, 861 advocates claim that according to par. 8f of 861, I would have to file a return and pay income taxes on revenue I might have received from the extraction of foreign oil and gas; and certain other types of revenue the character of which I can't even begin to understand.

The point is, I don't care where anybody's revenue comes from, they don't have to file returns and pay income taxes on any of it for a variety of reasons - which apparently the advocates of the 861 argument know nothing about.

For example: Since all information on a tax return can be used against you, how can the law require you to file and pay income taxes even on sources of revenue allegedly reportable under 861? The answer is no law requires you to do so - for that very reason.

And lastly since all Americans have a constitutional right not to pay a federal tax which is not imposed either pursuant to the rule of apportionment or the rule of geographic uniformity (read the Brown decision posted on my web site where this is explained in detail), and since the income tax is not imposed pursuant to either rule, its payment can not be made mandatory - regardless of where your revenue comes from.

And an understanding of this simple concept is far more valid and relevant than all the complicated gobbledygook upon which the 861 argument is based.

It is also obvious that pursuant to the wording of Code Section 61 only a corporate profit can fall within the meaning of "Gross income" - and "wages" "salary" and "compensation for personal services" simply do not fall within that definition.

As a matter of fact, these items were specifically removed from Code Section 61, even though they specifically appeared in Code Section 22 (the forerunner of Code Section 61) of the 1939 Code as shown in Exhibit G of "Schiff Report" 6-2.

And your understanding of this is far easier to use in explaining why "wages" and "compensation for personnel service" can not be taxable as income, rather than seeking to explain why such items do not fall into the items of allegedly taxable "sources" supposedly listed in Treasury Regulation 861.

However, there is yet another reason why the 861 argument is nonsense. Code Section 861 occupies 2 pages in the Code - but its alleged Regulation runs to 92 pages. Frankly, I get lost trying to understand it. But why do I have to understand it?

The law itself is very simple to understand and it tells me that nothing I receive in the form of revenue falls within the meaning of "Gross income" and is not taxable for a variety of other reasons. So why do I have to bother digesting 92 pages of complicated legalese?

The Regulation itself does not have the force and effect of law anyway. If you check, you will see that the support for Treasury Reg. 861 is always shown to be T.Ds (Treasury Decisions), not Code Section 861.

So the Regulation, not being legislative, is not even binding on the public (Though it is binding on the IRS, but who cares?).

In addition to everything else, the language of 861 is so complicated that I don't even believe that it says what its advocates say it says - that only 12 or so items fall within the sources of income that can be taxable to Americans.

As I read the Regulation, there seems to be a whole list of items in 861-1 that appear to be taxable to Americans as "income from domestic sources."

But apart from 861 there is 862 and 863 and 864 all complicated gobbledygook, and all focusing on the alleged taxability of various "sources" of revenue - when "sources" of revenue are not even made subject to the tax in the first place and no law requires anyone to pay income taxes in the second place - so why bother trying to decipher all that legalese.

Try reading Reg. 861, 862, 863 & 864. So if anybody seriously believes in the fundamental importance of Treas. Reg. 861 they are admitting to being ignorant concerning a whole range of issues involving income taxes.

Now having said that - I am aware that some people who have made the effort to understand the 861 argument and present it so it does makes some sense have been able to confuse IRS agents with it. Fine.

Maybe, in some cases making an erroneous argument can be more effective than making a valid one - based on the fact that "income" means a corporate profit.

However, those who use my material don't bother arguing "the law" to IRS agents anyway. Our approach is based on merely asking the agents to show us the law that authorizes them to do whatever it is they are trying to do, and we will pay the tax.

We are not going to waste our time explaining or debating the meaning of "income" with IRS agents. For those who want to do that, maybe the 861 argument is effective - but such people shouldn't kid themselves into thinking that they are making a legally valid argument. But if it works for you, fine - be my guest.

Now, while some may be able to confuse IRS agents with the 861 argument, I believe it will not fly at all in any court. The fact that it won't fly in court doesn't necessarily mean that the argument is invalid.

The fact that the law doesn't authorize a tax on wages also doesn't "fly" in our courts - as of today. But it certainly will fly and prevail some day, since it is a correct statement of the law, while the 861 argument is not.

I believe that those making the 861 argument will find themselves in Tax Court (a make believe court, I know), either in connection with challenging a "Deficiency Notice" or appealing a Collection Due Process "determination" - and they will base their position on the 861 argument.

And the Tax Court will hold the 861 argument, in both cases, "frivolous," and may even impose sanctions on those who raise it. I hope I am wrong in this, but this is what I expect will happen.

In the end, the 861 argument will fade away, as will those who have based their reputations on it.

More On the 861 Argument
by Irwin Schiff

When I first came across the 861 argument, I didn’t pay much attention to it because its erroneous character was immediately apparent – as covered above.

I also never sought to expose the fallacy of the 861 argument, because I don’t have time to address all of the erroneous arguments that are advanced in the anti-income tax movement. I was only motivated to do so when I did the piece on Thurston Bell, since his reliance on the 861 argument merely underscored how little Thurston Bell actually knows about income taxes.

However, yesterday, in cleaning out my files (in connection with our move to new offices), I came across an article entitled “Taxable Income” by Larken Rose.

Since it was only 6 pages long, I though I’d read it. I didn’t have to read very far to discover where Larken Rose (who, I believe, was the originator of the 861 argument) went wrong.

Under the caption “13) Cover-Up of 1954,” he writes,

“In 1954, the Code underwent a major rearranging and numbering (and to some extent, rewording). This change-over did not substantially change the law itself, but simply rearranged. it.”

Larken Rose couldn’t be more wrong. Congress, in going from the 1939 Code to the 1954 Code, fundamentally and significantly changed the income tax “laws.”

For one thing, Section 11 of the 1939 Code provided that income taxes had to be “paid. ” Such a provision was removed from the 1954 Code, and nowhere in the 1954 Code does the law require that income taxes have to “be paid.”

If this one fact alone does not constitute a “substantial change” in the law, then I don’t know what would.

In addition, all of the numerous references to the IRS (actually the Commissioner) that were in the 1939 Code were removed from the 1954 Code, and consequently the IRS was given no authority or power to enforce the provisions of the 1954 Code as it had been given such authority in the 1939 Code.

In addition, Section 22 of the 1939 Code listed “sources” or “items” which presumably were to be taxed as “income.” No claim was made in the 1939 Code that it sought to “define” the meaning of “Gross income.”

By contrast, Section 61 of the 1954 makes no attempt to list items that were to be taxable as “income.” Instead, Code Section 61 of the 1994 Code claimed to “define” the meaning of “Gross income,” (but failed to do so, for reasons I need not get into here, but which are fully explained in my books and tapes) and gave examples of items that presumably fell within that meaning.

But remember, the tax was to be imposed ON “income” (whatever that meant), but not on the listed items themselves. If the tax were to be imposed directly on those listed items, the tax would have to be apportioned – in order not to run afoul of the apportionment provisions of the Constitution and the Pollock decision, which, remember, was not repealed by the 16th Amendment.

Another big change between the 1939 Code and the 1954 Code is how they treated the meaning of a “deficiency.” The 1939 Code allowed the Commissioner of Internal Revenue to determine a “deficiency” even when no return was filed and no tax due was shown on any return.

No such authority is given to the IRS in the 1954 Code. Pursuant to the provisions of 6211 of the 1954 Code, only the Secretary of the Treasury (or his delegate, and not the Commissioner) can prepare a “deficiency” and only “if a return was made by the taxpayer and an amount was shown as the tax by the taxpayer thereon.”

And since 6211 is not supported by a legislative regulation, Section 6211 is really a benign statute. According to the actual provisions of the 1954 Code, if you do not file a tax return or if you file a return and show no tax due, you actually fall outside the provisions of the 1954 Code, and the income tax “laws” can not apply to you. Not so according to the provisions of the 1939 Code.

The 1939 Code allowed the IRS to subject you to the provisions of the 1939 Code, even if you didn’t file a return or show a an income tax due.

Basically in changing the Code as it did, Congress sought to bring the Code into conformity with a number of early, Supreme Court decisions that had held, among other things, that: 1) the 16th Amendment did not “amend” the Constitution, nor give the government any new taxing power, and 2) the effect of the Amendment was merely to allow the government to put an excise tax on corporate profit – a power Congress always had.

In changing the “law” as it did, Congress sought to make the 1954 Code constitutional, whereas the 1939 Code was unconstitutional on a variety of grounds.

And Larkin Rose bases much of his 861 argument on the provisions (and regulations) that apply to the 1939 Code – laws that Congress repealed when it went to the 1954 Code.

It is understandable how Larken Rose missed these changes. Neither Congress nor the billion-dollar tax industry that feeds on the preparation of income tax returns and the payment of income taxes wanted these changes publicized.

In summation, the 861 argument rests on Larken Rose’s mistaken belief that there was no “substantial change in the law” as between the 1939 and 1954 Codes. How wrong could an assumption be? If this doesn’t put the final nail in the coffin of the 861 argument, then I don’t know what would.

~ Irwin Schiff

Tax Scammer Hit with Injunction for Failed 861 Argument

U.S. Judge Christopher C. Conner has issued a preliminary injunction against Thurston Paul Bell of Hanover, Pennsylvania, prohibiting him from marketing a tax scam known as the "861 scam" that takes the absurd position that only foreign workers owe income taxes.

Mr. Bell has also been ordered to post a copy of the injunction on the website of his bogus tax organization, the National Institutute for Taxpayer Education, at NITE is popularly known by those who investigate scams as the "National Institute for Tax Evasion", and is known for promoting bogus tax theories that have been proven to be failures.

In addition to advising his clients that they have been the victim of a tax scam and that they are liable for back taxes and penalties to the IRS, Mr. Bell is also required to turn over information relating to his clients to the U.S. Justice Department, which presumably will now track down Mr. Bell's clients and prosecute them individually for tax evasion.

The 861 argument is a theory that has been consistently rejected by the courts. In a recent case, Mr. Brian Takaba argued the 861 theory in his defense, but the tax court ruled that the argument was frivolous, and hit Mr. Takaba with not only the tax but also a $15,000 fine which Mr. Takaba must now pay.

The 861 argument has been the tax scam of choice by not only Thurston Bell, but also tax scammers Larken Rose and Rick Haraka a/k/a/ Rick Bryan.

Read more about the injunction against Thurston Bell at

Similar Justice Department actions have included:

FRIDAY, JUNE 28, 2002
(202) 514-2007
TDD (202) 514-1888



WASHINGTON, D.C. – The Justice Department filed suit today in Denver against Colorado Mufflers Unlimited, Inc., of Northglenn, Colo. According to the suit, the company, which does business as Exhaust Pros, filed false claims for refund with the Internal Revenue Service for 1997 and 1998.

Colorado Mufflers sought a refund of payroll taxes it had paid by asserting the so-called 861 argument. That argument says that only income from foreign sources is subject to U.S. tax, and not amounts U.S. employers pay to U.S. citizens. The Internal Revenue Service mistakenly paid the refund, and the suit filed today seeks to recover that refund plus interest, nearly $90,000 in all.

"The 861 argument is nonsense. People who file false claims for refund are breaking the law and will be held accountable for their actions," said Eileen J. O'Connor, Assistant Attorney General for the Justice Department's Tax Division.

In a related case, the Department previously filed suit in federal court in Harrisburg, Pa. against Thurston Bell. Bell is the founder of the National Institute for Taxation Education (NITE). According to the papers filed in that case, Bell uses NITE's Web site to promote his corrupt 861 scheme to potential clients. The Web site claims that the tax refunds Colorado Mufflers received were the result of "information, data and training" that is made available exclusively through NITE membership. Contrary to that assertion, however, the refunds were merely the result of an administrative error which today's lawsuit seeks to reverse.

According to the government's filings against Bell, he charges customers $195 for membership in NITE. The suit against Bell seeks to bar him from promoting his corrupt 861 scheme and to require him to remove from the NITE website all materials promoting tax evasion.

Bell's case is one of four cases the Justice Department has filed recently to stop the promotion of the foreign-source income scheme. Earlier this month, a federal court in Tampa banned Douglas P. Rosile, Sr., a Venice, Fla.-based former accountant, from preparing tax returns and from promoting the foreign-source income argument. Last month the federal court in Tampa ordered David Bosset to stop preparing tax returns and promoting fraudulent tax schemes based on the Section 861 argument, which it called "absurd on its face." In January, the Department obtained an injunction against Harold E. "Hal" Hearn, an Atlanta-based CPA, prohibiting him from preparing returns based on, or promoting, the foreign-source income argument.

Tax evasion schemes cost United States taxpayers billions of dollars a year. According to a report the General Accounting Office issued in May 2002, however, IRS and Justice Department efforts have led to increasing numbers of convictions for promoters and individuals involved in tax fraud schemes.

(202) 514-2007
TDD (202) 514-1888

St. Petersburg Man Alleged to Promote Frivolous "Section 861" Scheme

WASHINGTON, D.C. - The Department of Justice today filed a lawsuit against Everte C. Farnell of St. Petersburg, Fla., alleging that he is promoting an illegal tax scheme. The lawsuit, filed in federal court in Tampa, is part of the Justice Department's continuing crackdown against a nationwide tax scam in which promoters falsely claim that income from sources in the United States is not subject to federal income tax. The scam is known as the "Section 861 argument," after the tax code provision it misinterprets.

"The courts have uniformly rejected the Section 861 argument, penalized those who assert it, and enjoined those who promote it," said Eileen J. O'Connor, Assistant Attorney General for the Justice Department's Tax Division. "Promoters of this scam line their pockets, while getting their customers in serious trouble."

The government's complaint states that Farnell touts himself as the "Chief Tax Consultant" of the "Problem Resolution Group" of the so-called "National Institute for Taxation Education" or "NITE." According to court papers filed in a government suit against NITE's owner, Thurston Bell, NITE and Bell operate a website promoting the Section 861 argument. The complaint also states that Farnell prepares tax returns for clients who declare their income is zero, regardless of how much money they earned.

The Justice Department has already obtained injunctions against three other promoters of the bogus "Section 861 argument" - Harold Hearn of Atlanta, David Bosset of Spring Hill, Fla., and Douglas Rosile of Venice, Fla.

NEW! - Affidavit for Search Warrant for Rose Residence -- Part 1

NEW! - Affidavit for Search Warrant for Rose Residence -- Part 2

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