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BUMP for future use.

The New Dealers who instituted withholding were certainly not shy about admitting the true purpose...not revenue collection, but social engineering.

Those Insidious Withholding Taxes
"the IRS has effectively created a tax on tax dollars withheld -- either for Social Security or federal income tax. The IRS defines "gross income," yet never includes tax withholdings in the definition. The term "wages," according to the IRS, excludes collected taxes within the definition. Nevertheless, the IRS does not follow the law when it comes to excluding collected taxes from "wages."

Bill Would End Tax Withholding - Congressman calls current revenue system 'inherently deceptive'

Lynn Meredith hasn't paid federal income tax for years.

"Unless the government is standing right next to me doing one-third to one-half of my labor, they don't have a right to one-third or one-half of my compensation," she said.

"There is no law that compels me to file a tax return. I have a choice, as every American has a choice," she added. Meredith is so zealous about her beliefs, she has marketed them to other Americans — in two books and hundreds of seminars, all aimed at private citizens who she considers "in slavery" to the IRS.

Voluntary or Mandatory?

Her pitch revolves around a few basic principles: First, she says — believe it or not — federal income tax, isn't mandatory, but voluntary.

Second, Meredith claims the money you earn is not really "income," but an even trade for your labor, and thus not liable to tax. And finally, she says any assets you do have can be safely protected in a made-up version of a legitimate trust fund called a "pure trust." Is a pure trust legal? "Yes. A pure trust is perfect legal," she said, adding, "The pure trust legally is not required to file a tax return."

But that is not how the IRS sees it. Last April — the 15th to be exact — agents arrested Meredith and six colleagues on 16 counts of conspiring to defraud the U.S. government by, among other things, failing to file income tax returns and encouraging others to do the same. The indictment calls the trusts "bogus," Meredith's advice "misleading," their tax returns "fraudulent."

Living Large — and Proudly

Meredith claims the IRS is simply harassing her, and has filed a civil suit against the agency for what she calls the violation of her liberties during a 1998 raid on her home. In defiance, she proudly flaunts her collection of vintage cars, garaged in her spacious apartment building just a block from the beach in Southern California. "I don't keep a low profile because you don't have to drive beat-up cars," she told me as we tooled around in her black Jaguar. "You don't have to live in squalor."

Meredith admits she's made money from her enterprise, but she doesn't call it "income" and she disputes the IRS charge that she earned at least $6.2 million. She also notes that she pays sales, auto and property taxes. But no income tax.

'A Great Big Lie'?

The IRS wouldn't discuss her case with us since it's pending, but attorney Jay Adkisson, who has tracked plenty of what he calls "tax scams" (including Meredith's) on his Web site, told us, "Lynn Meredith is a scam artist. Nothing more, nothing less.

Lynn Meredith says she's telling people "the truth" when she says that paying federal income tax is a matter of choice. (ABCNEWS.com)

She is somebody that has taken the U.S. Constitution and she has wrapped it in the flag and she is prostituting it. She's selling it for money." As for the "pure trusts," Adkisson pointed out, "Anybody who says that neither are being taxed, or that the trust is not being taxed, and I cannot be taxed, they're telling a great big lie. And they'll end up in jail. He also said, "The income tax system is voluntary in the sense that we can choose to fill out a form and send the money in, and avoid the tax collector coming out to our house. Voluntary does not mean that we can avoid the tax. It's a crazy claim. It's a goofy claim."

Waiting on the Courts

Today Lynne Meredith's operation has been shut down — her offices are closed, her seminars ended by the IRS. It cost her brother half a million dollars to get her out on bail — and even now, as she awaits her trial scheduled for June, her freedom is severely curtailed. Meredith is not permitted to sell her books, or her trusts, and must be home by 11 p.m. She is also prohibited from traveling outside the county, and her movements are tracked by a government-issue ankle bracelet.

Still, she says she remains confident, despite the fact that a number of other tax-avoidance promoters have been sent to prison. If she loses at trial in June, she said, "I will appeal it to the 9th Circuit, and then I will appeal it to the Supreme Court of the United States."

And if she loses there? "Well then I guess I'll have to go to jail."