Mortgage write-downs/short sales are providing the IRS with a backdoor to further enslave the population.
Like many acts of legislation, the Community Reinvestment Act of 1977 (CRA) may have had altruistic roots. But sadly, the CRA became a promotional tool that backfired greatly on the American people. The CRA was created with the purported aim at helping low-income neighborhoods gain the American dream of home ownership. The real outcome was far different from the stated intention.
The CRA was pushed mostly by President Bill Clinton in the 1990s (here he is trying to take credit for it) and continued while George W. Bush was in office. Prior to Clinton’s term, home loans largely meant that a family had to save enough money to put 20 percent down on the purchase price. Yet in the 16 disastrous years of the Clinton-Bush (the son) era, lending standards were lowered. Many loans were granted without a single penny of downpayment. The guarantee for the increased risk was put on the shoulders of the American taxpayer.
Well, it didn’t take long before those American taxpayers were feeling the backlash of irresponsible policymaking and political promotion. Reality finally kicked in: housing prices simply could not increase in value indefinitely. When the housing crisis hit the home values around 2007, there was a glut of foreclosures. Still today, millions of homeowners are underwater on their notes (9.7 million as of 2014 according to Zillow).
But, ahh yes, here comes the government to the rescue (try to contain your enthusiasm). The federal government in 2007 created a Principal Reduction Alternative that would allow banks to adjust the mortgages (monthly payments or principal) in cases where owners owe considerably more than the current value of the home. Sounds like a good program, right?
Well, yet again, we have to look more carefully at the implementation and results, rather than the promoted intention. The result has brought even more disastrous consequences to those whom the legislation was supposed to help.
You see, when a home loan or credit-card loan is written off, partially or completely, the amount deducted must be reported as “income” on the person’s Form 1040, if he is required to file one.
For example, John Q. Public buys a home in 2008 for $500,000. He continues living in the home and making the payments on time, even after the value of the home drops to $400,000. Then he unexpectedly loses his job, and a foreclosure is likely. In order to keep his mortgage alive and him in the house, the bank agrees to lower his monthly payments to factor in the new value. The bank is then required to fill out a Form 1099-C and provide it to both the homeowner and the Internal Revenue Service, where the $100,000 forgiven must be counted as income.
“This is yet another example of the National Government showing its true intentions when it creates legislation,” said Adele Weiss, principal of Weiss+Associates, a European-based consultancy firm specializing in the Federal Income Tax. “It’s easy to see that the National Government is every bit a predator as the banks were in taking advantage of people’s lack of financial savvy. This (income) is more phantom income, as it never became a reality in the homeowner’s books.”
The Form 1099-C is similar to the 1099 workers receive from employers at year’s end. The C version stands for Cancellation of Debt and it accompanies paperwork allowing the homeowner a choice to make installment payments over time, at interest. There are also some exceptions granted that would annul the write-down as ‘income.’ Exceptions have reportedly been hard to obtain. Weiss adds:
“This is a kind of involuntary financial servitude. The figures written down are often higher than a person’s annual income, so the tax ramifications are severe. The installment system makes it seem like a yoke around the person’s neck for years to come.”
In addition, Ron Faris, president of Ocwen Financial Services, a West Palm Beach-based service provider specializing in subprime mortgages,stated to a congressional subcommittee thathomeowners still have a high chance of re-defaulting, even after changes are made.
So it’s entirely possible that John Q. Public, in the above example, could receive a Form 1099-C reporting the $100,000 shortfall as income, and later re-default and lose the home again, yet keeping the original tax liability on the $100k.
For people in this situation, the Revocation of Election process offered by Weiss+Associates provides a solution to this mess. The ROE process legally removes the person from the U.S. tax system for the current tax year plus all future years.
In essence, the written-down amount, along with any earnings not effectively connected with the performance of the functions of a public office, is not taxable, because that person is not a ‘U.S. Taxpayer.’
Weiss’ firm boasts over 3,000 clients with a solid track record in properly identifying a person’s true tax status as a lawful non-taxpayer. Lawful Nontaxpayers were addressed in the Federal Appellate case Economy Plumbing & Heating v. United States 470 F.2d 585 (1972) as being those who are neither of the subject nor of the object of federal revenue laws.
“Revenue laws relate to taxpayers and not to nontaxpayers. The latter (meaning the nontaxpayers) are without their scope. No (IRS) procedure is prescribed for nontaxpayers …”
The Revocation of Election process is provided for by the U.S. Congress in IRC statutes. It permits American Nationals to leave the U.S. Tax Club and to do such on a permanent basis so that the National Government does not violate the 13th Amendment. The National Government tells you the facts and the truth for those who are seeking this knowledge and choose to exercise their option.
For more information on the Revocation of Election process as well as your rights and responsibilities as a U.S. homeowner, please direct email inquiries to [email protected].
Article posted with permission from Constitution.comDon't forget to Like Freedom Outpost on Facebook, Google Plus, & Twitter. You can also get Freedom Outpost delivered to your Amazon Kindle device here.