OMG!!! Was Orly Taitz audited??? One of my Flying Monkey sources sent me this letter from Orly to the IRS. I am not sure it is the real thing, but it sure seems genuine. To be on the safe side, I redacted out Taitz’s identifying information on the letter. I will report and you can decide if it is satz or ersatz:
Note 1. The Image. This is a picture of English Morris dancers. There is an excellent article at wiki:
As far as a relationship to this Internet Article, wiki notes:
Many sides also have a beast: a dancer in a costume made to look like a real or mythical animal. Beasts mainly interact with the audience, particularly children. In some groups this dancer is called the hobby.
You didn’t think I was just picking gratuitous silly pictures, did you???
Note 2. The Exchequer. As mentioned in the Image caption. Once again, wiki says in part:
History of the Exchequer in England and Wales
At an early stage in England (certainly by 1176, the 23rd year of the Reign of Henry II which is the date of the Dialogue concerning the Exchequer, the Exchequer was split into two components: the purely administrative Exchequer of Receipt, which collected revenue, and the judicial Exchequer of Pleas, a court concerned with the King’s revenue.
According to the Dialogue concerning the Exchequer, an early medieval work describing the practice of the Exchequer, the Exchequer itself referred to the cloth laid across a large table, 10 feet by 5 feet (with a lip around the edge “4 fingers high”), upon which counters were placed representing various values. The name referred to the resemblance of the table to a chess board (French: échiquier).
The term “Exchequer” then came to refer to the twice yearly meetings held at Easter and Michaelmas, at which government financial business was transacted and an audit held of sheriffs’ returns.
Under Henry I, the procedure adopted for the audit involved the Treasurer drawing up a summons to be sent to each Sheriff, which he was required to answer. The Treasurer called on each Sheriff to give an account of the income in his shire due from royal demesne lands and from the county farm. The Chancellor of the Exchequer then questioned him concerning debts owed by private individuals. The results of the audit were recorded in a series of records known as the Pipe Rolls. Until the 19th century, the records of the Exchequer were kept in the “Pell Office”, adjacent to Westminster Hall. The office was so named after the skins (i.e., pelts) from which the rolls were made.
Note 3. Hobby Income vs. Business Income. One of the factors tending to indicate the above letter may be genuine is the statement that Taitz’s law practice has been determined to be a hobby. This would prevent her from using losses to offset other income. That should be of legitimate concern to her due to the nature of her conduct, which appears to be predominantly personal in nature. She is often a pro se plaintiff, that is one who represents herself.
As the IRS states, in part:
Business or Hobby? Answer Has Implications for Deductions
FS-2007-18, April 2007
The Internal Revenue Service reminds taxpayers to follow appropriate guidelines when determining whether an activity is a business or a hobby, an activity not engaged in for profit.
In order to educate taxpayers regarding their filing obligations, this fact sheet, the eleventh in a series, explains the rules for determining if an activity qualifies as a business and what limitations apply if the activity is not a business. Incorrect deduction of hobby expenses account for a portion of the overstated adjustments, deductions, exemptions and credits that add up to $30 billion per year in unpaid taxes, according to IRS estimates.
In general, taxpayers may deduct ordinary and necessary expenses for conducting a trade or business. An ordinary expense is an expense that is common and accepted in the taxpayer’s trade or business. A necessary expense is one that is appropriate for the business. Generally, an activity qualifies as a business if it is carried on with the reasonable expectation of earning a profit.
In order to make this determination, taxpayers should consider the following factors:
- Does the time and effort put into the activity indicate an intention to make a profit?
- Does the taxpayer depend on income from the activity?
- If there are losses, are they due to circumstances beyond the taxpayer’s control or did they occur in the start-up phase of the business?
- Has the taxpayer changed methods of operation to improve profitability?
- Does the taxpayer or his/her advisors have the knowledge needed to carry on the activity as a successful business?
- Has the taxpayer made a profit in similar activities in the past?
- Does the activity make a profit in some years?
- Can the taxpayer expect to make a profit in the future from the appreciation of assets used in the activity?
The IRS presumes that an activity is carried on for profit if it makes a profit during at least three of the last five tax years, including the current year — at least two of the last seven years for activities that consist primarily of breeding, showing, training or racing horses.
If an activity is not for profit, losses from that activity may not be used to offset other income. An activity produces a loss when related expenses exceed income. The limit on not-for-profit losses applies to individuals, partnerships, estates, trusts, and S corporations. It does not apply to corporations other than S corporations.
Here is a link to the full document: