Avoiding Income Taxes with Kelly Alexander

Jason Hartman hosts the founder of Great American Tax Remedy, Kelly Alexander. They discuss how to avoid paying federal income tax. She discusses why she believes she would pass an IRS audit and gives tips on how to report your income. In addition, she gives advice on how to create a strategy to lower both state and federal taxes.

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Announcer 0:11
Welcome to the holistic survival show with Jason Hartman. The economic storm brewing around the world is set to spill into all aspects of our lives. Are you prepared? Where are you going to turn for the critical life skills necessary to survive and prosper? The holistic survival show is your family’s insurance for a better life. Jason will teach you to think independently to understand threats and how to create the ultimate action plan. sudden change or worst case scenario. You’ll be ready. Welcome to ballistic survival, your key resource for protecting the people, places and profits you care about in uncertain times. Ladies and gentlemen, your host, Jason Hartman.

Jason Hartman 1:00
It’s my pleasure to welcome Kelly Alexander to the show. She has a very unique idea. I thought I’ve heard everything over the years. I’ve interviewed many libertarian thinkers and people who claim to have a way to pay zero taxes. Well, this one I have not heard before. So let’s talk about it today. Kelly is the founder of American tax remedy. She is not a CPA, not I guess not a tax expert, just a lay person who came across this idea and researched it and chased it down. And well, she’ll tell you more about it today. Kelly, welcome. How are you? I’m just great. Thank you so much for having me today. Good to have you on the show. So is it really possible to pay no income taxes? Without going to jail?

Kelly Alexander 1:50
Yes, yes. And yes.

Jason Hartman 1:53
And yeah, you’ve been doing this for since 2014? I believe you said right.

Kelly Alexander 1:57
Yes, Yes, I have. I waited a few years before I realized, gee whiz, you know, when I learned it, I guided people to where I learned it to many, many people, not a single one followed through and did it. So I realized there was a need for someone like me to guide and handhold people through that process. And because I had done so much legal research, I was more comfortable with the subject matter, then most people that just hear something like this to go religious can’t possibly beach.

Jason Hartman 2:29
Right, right? Well, I must admit, I’m skeptical. Of course, I and everybody listening would love to not have to pay income tax. So just to give people a little teaser, and we’ll dive into the details. But your method involves you say go ahead and file a tax return, show the government that you’ve made money, but when you deposit checks that you receive as income, you endorse them under your method in a special way, that converts them instead, instead of $2, which are Federal Reserve Notes, to what kind of notes

Kelly Alexander 3:07
United States notes,

Jason Hartman 3:08
United States notes, and you say that United States notes are tax exempt. Is that right?

Kelly Alexander 3:15
That is correct.

Jason Hartman 3:16
Okay, and how. So we’ll dive into the details in a few minutes here. But tell us how you came upon this and how it all evolved?

Kelly Alexander 3:26
Well, just real quick, when I was 16, and got my first job at a fast food restaurant and filled out a W four. It says on there. If you did not pay federal taxes for all of your income for last year, and you expect that you will not owe any taxes, federal income taxes for the upcoming year, and you may put exempt for federal withholdings. And I saw that at age 16. I thought they’re telling us there’s a way to be exempt. And it just was like the grain of sand and the oyster that I lived with for 37 years before I actually dove into this subject and started learning. Back in the early 2000s. I started trading stocks and options on the stock market. And through that process, I became more aware of the Federal Reserve and how it worked. And I began to have questions about the Federal Reserve and that led me into researching it and how it’s not actually a federal agency. It’s a privately held Corporation.

Jason Hartman 4:32
My listeners know all about that stuff. We’ve discussed that ad nauseam. You know, we’ve had g Edward Griffin on the show many times and many other thought leaders on the scam known as central banking. So we don’t need to probably dive into that too much. But what came next. The Federal Reserve issue is not really related to this other than just understanding that $1 is a Federal Reserve Note.

Kelly Alexander 4:55
It’s very related to concern this method is the solution to What g Edward Griffin put in his book so beautifully. He exposes the challenges and the issues that the Federal Reserve raises, the process that I teach is the solution for us as the individual people of the country.

Jason Hartman 5:16
All right, so what happened? How did you discover this? This specific thing? I’m not talking about general Federal Reserve conspiracy theories, all this kind of stuff, which is certainly interesting, and I love it. But yes, but this specific technique,

Kelly Alexander 5:30
I started going to groups that were learning about different types of commercial remedy. And then I learned about banking law, banking law is entitled 12 of the United States codes. And there is a statute in there subsection 411 that says, Federal Reserve Notes shall be redeemed in lawful money at the US Treasury, or at any Federal Reserve Bank. And then from there, I found very few, but there are few people that know of this method that I learned from also. And I started testing it and doing things with my employer and my bank and figuring it all out in the nuts and bolts form.

Jason Hartman 6:12
So was there a book a speaker, something you saw that gave you this specific information of how to do this?

Kelly Alexander 6:19
It wasn’t a book was not a speaker, I found some information online. And I pieced together you know, budget, just just different things that all kind of little by little by little unfolded it.

Jason Hartman 6:32
Right? Pretty much you’re saying that you’re the creator of this idea, right? I wouldn’t

Kelly Alexander 6:36
say that. I’m the creator, I discovered it. But and so few people know about it, that I feel like, I want to get the word out. Do

Jason Hartman 6:45
you know anybody else who’s doing this?

Kelly Alexander 6:47
Yes, I do. Okay, who

Jason Hartman 6:48
else is doing it?

Kelly Alexander 6:49
There’s a group of people in out of Colorado, they now have a website called lawful money trust. They’ve been doing it since the early 2000s. successfully. That gentleman was a law student is now an attorney. So his background is different than mine. In that area,

Jason Hartman 7:09
what’s his name? By the way? I’m just

Kelly Alexander 7:11
name is David Merrill,

Jason Hartman 7:13
David Merrill, okay, with lawful money, trust. Right. And that’s, and he’s got a group of people that are doing this technique, too. Yeah. Do you know how long he’s been doing it

Kelly Alexander 7:21
since the early 2000s. Okay,

Jason Hartman 7:23
so he’s not in jail yet. Right. All right. Now, tell us the technique. Specifically, it sounds like what you do is when you receive a check his income by the way, what what do you do for a living? Is this, this is what you do? Or do you have another job or business?

Kelly Alexander 7:38
I’ve had a 25 year career in the fashion industry, actually. And I do work related to that while I build up this business.

Jason Hartman 7:48
So er, d? Are you basically doing freelance work in the fashion industry then? And then you’re getting checks that way? Because I want to follow the path.

Kelly Alexander 7:56
Yes. Currently, I have an actual w two job. And so I receive a paycheck. Okay.

Jason Hartman 8:03
And so now that’s the point when you get your paycheck. And by the way, where are you located? I’m in Las Vegas, Las Vegas, okay. When you get your paycheck from your day job, if you will, and you’re a W two employee, what do you do?

Kelly Alexander 8:17
Okay, in my case, I received my paycheck through direct deposit.

Jason Hartman 8:21
Okay, which doesn’t allow you to endorse it. And that’s kind of a technique you talked about,

Kelly Alexander 8:27
right. However, most businesses pay their employees with direct deposit these days, so much money is moving around electronically. So there is a form called a direct deposit authorization, and that gets filled out prior or as soon as you become an employee, and there is an authorization on there that you sign that substitutes for your endorsement. Okay, so on that paperwork, you notate that you’re redeeming for lawful money pursuant to title 12, subsection 411.

Jason Hartman 8:59
So in other words, you fill out this direct deposit form. And above your signature, you write in this verbiage that you just said, You’re saying,

Kelly Alexander 9:08
again, what is the verbiage redeemed for lawful money pursuant to title 12? USC 411?

Jason Hartman 9:16
Okay, so, title 12 us code, I guess, right? Yes, US code 411. Isn’t it funny that it’s 411? Like information, the old number for information? Okay, that’s coincidence. All right. So this code we’ll talk about in a moment. So when those checks go into your bank, do you bank at a big normal bank? Like, you know, one of the big banks?

Kelly Alexander 9:36
Yeah, I bank at Chase.

Jason Hartman 9:38
Okay. All right. So that you bank at the criminal organization known as JP Morgan Chase. Just kind of throw that in there. They were at the center of the robo signing scandal, illegally foreclosed on lots of people’s homes. But you know, all these big banks are so crooked Wells Fargo being the leader of the crooks now, but you know, it changes sometimes

Kelly Alexander 9:59
they change it You know, they bat the ball around? Yeah,

Jason Hartman 10:01
they bat the ball around. That’s a good way to put it. Okay, so you bank at Chase, big, huge bank, right? This money goes into your account, then what happens?

Kelly Alexander 10:11
So that verbiage on the endorsement signals to the bank that they cannot treat this the same way that they treat Federal Reserve Notes, because you’ve made this conversion or redemption or exchange. They cannot fractionally lend against the money that you deposit.

Jason Hartman 10:30
Well, they must hate that. I’m surprised they haven’t kicked you out.

Kelly Alexander 10:34
They don’t like it. However, tile 12 411 says they shall be redeemed, which means it is not maybe or when we feel like it or it shall is mandatory in legal terminology.

Jason Hartman 10:50
Okay. So the bank has to feel like earmark your direct deposits from your employer. Right? Yes. Okay. Yes, no. Well, how do you pay your bills? I mean, because you’re the same way your your account is in dollars, right? your checking account,

Kelly Alexander 11:07
right? So I pay my bills exactly the same way, the same

Jason Hartman 11:11
way everybody else does. Or the same way you use this? What is it called us notes.

Kelly Alexander 11:17
United States notes has not changed the way that I pay my bills. However, anybody pays their bills, they can continue paying them the same way

Jason Hartman 11:25
with good old fashioned checks or online bill pay or wire transfer or whatever, right? Yeah, okay.

Kelly Alexander 11:32
Correct. The important transaction is when the money enters your bank account, okay? That’s the point of redemption.

Jason Hartman 11:40
Do you go to the ATM and withdraw Federal Reserve Notes otherwise known as dollars,

Kelly Alexander 11:45
a person can but if you deposited the money in them, they come out as what you put them in? They look very similar to Federal Reserve Notes. However, back in 1971, the US Treasury put out a statement saying that Federal Reserve Notes serve the purpose of both currencies. So they were not they stopped at that point in time issuing physical United States notes. Okay, there’s 300 million of them in circulation. And that comes from title 31, subsection 5115. And it talks about how they’re issued and who issues them. And there’s no more than 300 million currently in circulation that cannot be held as reserves,

Jason Hartman 12:32
are they when you say there’s 300 million, do they have the same value as $1?

Kelly Alexander 12:37
They have the exact same dollar is

Jason Hartman 12:39
very much just 301 wealthy person could gobble up the entire supply, right?

Kelly Alexander 12:44
Yes. Well, at this point in time, there is so little demand for United States notes because people do not know that they’re available for use. You know, my hope is that in time when people learn about this, there will be greater demand and that will be revised upwards. Yes. It’s like $1. A person for the National Guard. Yeah, basically,

Jason Hartman 13:07
basically. Okay, so you’ve got this money in your account. It’s your marked as us notes. You pay your bills, normally with Federal Reserve Notes, otherwise known as common dollars. If you withdraw cash, do you get it in dollars? I kind of asked you that, but I don’t. Really

Kelly Alexander 13:24
Yes, you still will physically receive federal reserve notes.

Jason Hartman 13:28
What dollars aka dollars. Okay, got it. Yeah. What makes what is the way the money goes in you said

Kelly Alexander 13:34
is the way the money goes in and that you have documented your election of which currency you’re using.

Jason Hartman 13:41
Okay. And you file a tax return every year, right? Yes. Okay. And tell us what your tax return says or what it looks like, what do you do there? You have to do something special, right?

Kelly Alexander 13:52
Yes, there’s an area where after I put in my, you know, W two income and you know, various things, there’s a place to say redeemed for lawful money. 12 USC 411. And the amount of my income that I have redeemed.

Jason Hartman 14:09
So in other words, if you make $100,000, you could redeem in quotes. 80,000 of it in federal or in US notes, right? Correct. Correct. And 20,000 in Federal Reserve Notes, aka dollars. Sure. So and then you would pay tax only on the 20,000. Right? The Federal Reserve Notes, okay. But with you, you just take 100% of it in US notes, right. Yes. What section? Is this on? On your tax return? It is at 1040 long form your filing? Yes. Okay. And what what section what line? I mean, it’s one of the lines, right?

Kelly Alexander 14:45
It just shows that

Jason Hartman 14:46
it was a new schedule or something or

Kelly Alexander 14:49
it’s not on a schedule, it’s on the one of the front pages. They changed the 1040 this last year with all the revised revisions to the tax code. So I believe it was used to be line 21. And now it’s line six, I’d have to verify that. But

Jason Hartman 15:06
I want to look for one of my tax returns while I’m talking to you. So I can look at that myself. Okay, interesting. You’re not operating as a corporate entity or an LLC or anything like that, right? You’re just operating as an individual with a social security number.

Kelly Alexander 15:19
Yes, at this time. That’s true, although I will probably set it up as an LLC. In time,

Jason Hartman 15:25
why would you do that? Do you need to? Or does it matter?

Kelly Alexander 15:28
That’s exactly the question that I have. And I’m still doing some exploration to make a final decision on what’s the best way to handle it is.

Jason Hartman 15:38
So is it this simple? Or is there more to it? Kelly, I know, you basically are in the business of helping people do this under what entity would what’s your business name, US tax remedy? The Great American tax remedy Great American DAX remedy? So I mean, can someone just listen to this episode and start doing this? And you bet you started in 2000? Your tax year? 2014. Right?

Kelly Alexander 16:04
Correct. Okay, yes, yeah, the process itself is very simple. It’s mind blowingly, simple. The understanding of all the background takes a little more education and guidance, and I have a presentation that I share with clients, and I review with them and, you know, to help them develop confidence and understanding of how it all fits together, and why it all fits together. So that part is a little more involved. But the process itself is remarkably simple. And what I haven’t shared with you is, when a person redeems their Federal Reserve money for United States notes, that causes the Federal Reserve to surrender an equal amount of that whatever that redemption value is, of the bonds that they hold as collateral from the US Treasury, they have to surrender those back to the Treasury, which means the national debt is lowered. So let’s say over the course of a year, you’ve redeemed $100,000, the Federal Reserve takes $100,000 of bond and basically tears it up, or gives it back to the Treasury and our US national debt drops by $100,000.

Jason Hartman 17:26
Okay, I found a tax return. So on the 1040 tax return, you talked about, I believe, line six in line 21. Was that correct?

Kelly Alexander 17:35
Yes. Okay, fine. Line six for the current filing, which was 2018. Yeah, got it. So this happens to be 2017 return. So that would be line 21.

Jason Hartman 17:48
Yeah. Okay. So just so you know, line six is exemptions, right? Six, a is yourself. Six, B is your spouse and then C is dependents, you can put down your kids, but on line 21, it says other income, correct. Okay. What can you do there,

Kelly Alexander 18:04
I basically just put in that I’ve redeemed, and I put in a negative number of my other income because the other income is tax exempt.

Jason Hartman 18:15
So you’re basically taking the US notes is a tax deduction, in essence, a loss, right? Yes. So in that example I gave earlier, if you make $100,000 in income, they’re going to send a W four or 1099 to the IRS, right? Or a W two, I don’t know, I get those two mixed up. Anyway, whatever. They’re gonna tell the IRS you made $100,000. So that’s what the IRS will see in their computer. And then you’re going to give the IRS a tax return and says, Yeah, that’s true. I made $100,000. But I redeemed 80,000 of them for us notes, and that’s a legitimate deduction. So I only pay tax on 20,000 in income. That’s how it works.

Kelly Alexander 19:01
That’s how it works.

Jason Hartman 19:02
Okay. Wow. And you’re doing this with all of your income. So if you make $100,000 at your job, you’re saying you redeemed 100,000 in the US notes. So you have zero income, according to the IRS. I have zero taxable taxable income fair. Yeah, right. Right. Okay. In the first year, you filed a tax return like this is 2014. Right? Correct. Okay, so 2014 2015 2016 2017 2018 did you file your 2018 return yet? Yes. Wow. So five years of tax returns? Yes. Have you been audited? No. Wow. That’s amazing. Are you concerned about being audited?

Kelly Alexander 19:46
I wish they would.

Jason Hartman 19:48
Use proof of concept is what you want really be?

Kelly Alexander 19:51
Yes.

Jason Hartman 19:52
Yes. What I didn’t, you can certainly invite them daata you if you do something really cagey other. Well, this seems really cagey to me, but I I told you I’m skeptical.

Kelly Alexander 20:04
I understand. And that’s healthy to be skeptical, because it requires understanding it well enough that you see the whole picture.

Jason Hartman 20:14
And this is another one of those things, dear listeners that I would love to be wrong about. I hope I’m wrong. And Kelly is right, because, hey, my next call after this is to my CPA, gonna ask him and he’s gonna go, you’re nuts.

Kelly Alexander 20:29
So let me address the CPAs. They are extremely educated, and capable and smart people that do their best to keep you out of trouble with the IRS. However, because this remedy comes from banking law, it is outside the scope of the actual tax codes, which means it’s outside the scope of a CPAs or a tax attorneys area of expertise. When you bring something like this to them, they’re going to be unfamiliar with it. And when people are unfamiliar with something, they’re naturally negative on it,

Jason Hartman 21:09
sure they are but who do you think works at the IRS? CPAs and tax attorneys? And those are the people that are gonna audit you and question your tax return.

Kelly Alexander 21:19
They are, but then that involves bringing the law to them the title 12 law and say, Can you show me where this doesn’t apply?

Jason Hartman 21:30
Yeah. Can we of course, I’m sure you’ve seen videos, you know, there are documentaries about how income tax is illegal. it’s unconstitutional. Don’t know about this. Right?

Kelly Alexander 21:43
Those are flawed statements. Okay. Income tax is not unconstitutional. And the reason it’s not unconstitutional is because we have a choice whether or not to use those federal reserve notes. If we were forced to use Federal Reserve Notes and pay the taxes that come with them, then the taxation would be unconstitutional. But because we have the choice yet, we are not taught that we are happy that we have that choice. People get mad and all blustery and upset. Well, it’s unconstitutional. No, it’s not unconstitutional, because all

Jason Hartman 22:20
those libertarian folks that produce those videos, probably ended up in big trouble.

Kelly Alexander 22:27
Yes, they have.

Jason Hartman 22:28
Yeah. You know, I mean, Peter shifts father, Irwin Schiff, who recently passed away. Yeah, he was a tax protester and, you know, ruined his life to protesting tax.

Kelly Alexander 22:39
He didn’t understand that component. It is not correct to say that taxes are unconstitutional. That’s a flawed statement. It’s a dead end argument and it gets you nowhere but jail.

Jason Hartman 22:49
Okay. Let’s go back to the CPA discussion. Is the CPA filing your return for you doing it yourself? I do it myself? Hmm. Do you have a complicated return with investment properties and other assets and things? Or

Kelly Alexander 23:03
Well, okay, because I redeem my income, I don’t need to track and figure out and look for every deduction that I can find to lower my tax liability, I found it to be lowered by 100%. Do it. So my tax returns have become very simple. The first year that someone does this, it’s a combination of the traditional way of filing taxes and this new way. So if someone starts with me, say in mid year, July, for example, this process is from that point going forward is not retroactive. Sure.

Jason Hartman 23:44
It’s just a percentage, like it’s your example I gave if you made 100,000. And you took 20,000, and let it be Federal Reserve Notes, aka dollars, you’d pay tax on the 20. And the 80 would be redeemed for us notes. And that’s not taxable, according to you. Right. Right. Okay. Right. But you know, very few people are going to be willing to do this and take the chance without getting the blessing of a CPA is going to stick their name on that return. I mean, you do realize that right? I mean, I don’t think I do it,

Kelly Alexander 24:17
of course. Well, there is so much conditioning, you know, through the education system, through the media, through the politicians through school, everything. And so yes, there is enormous amount of that to allow to shed and some people have personality types where they’re just more willing to go down this road.

Jason Hartman 24:42
But if I was going to do this, I want to get ideally a big accounting firm, to stick their name on my return and bless it. Okay, I

Kelly Alexander 24:51
understand.

Jason Hartman 24:53
Alright, at least one a CPA, even if it’s a solo CPA to do it. I wouldn’t want to be filing my own tax return. It just seems reckless to me I. Okay, so you haven’t been audited? That’s awesome. You haven’t received a letter from the IRS, you know, why aren’t you making money, you should declare this income, you’ve written nothing,

Kelly Alexander 25:12
nothing. Let me tell you something else that I omitted. In my progression of coming to this method. I learned some other method that was ultimately flawed. I received a $50,000 refund from the IRS that was not based on money I paid in. It was based on my banking activity,

Jason Hartman 25:34
you mean you got a refund from them, or you had to pay them 50,000 sounds like you should be so you had to pay them,

Kelly Alexander 25:39
I received a refund, okay. And a few months, some months later, they sent me a letter and they said that refund should not have been issued, we need the money back, blah, blah, blah. So I got into some hot water with IRS doing some other methods that had some merit to it, but ultimately was flawed. But you got $50,000. Why do you say you got into some trouble? It sounds like you’ve benefited? Well, I’ve benefited for a window of time. And then they challenged me on it. And they said we need the money back. It should not have been issued it was you weren’t entitled to that refund. Okay, what gave

Jason Hartman 26:15
you they gave you 50,000 as a refund, like on a normal tax procedure, right? You just got a normal refund without debating

Kelly Alexander 26:23
normal refund, but it was not a normal tax return.

Jason Hartman 26:26
Right. And then you ultimately they said, No, you got to give us that refund back?

Kelly Alexander 26:30
Yes. Okay. So I got into hot water with IRS, you know, and paying that back and sorting it all out and so forth. And it was part of my learning curve. Okay.

Jason Hartman 26:39
All right. What What year was that?

Kelly Alexander 26:41
That was filing 2008.

Jason Hartman 26:44
Okay, so, so there was quite a bit of there were several years between that year, or Yes, I have this lesson and then starting again in 2014, with this new tactic. So how long have you lived in Nevada?

Kelly Alexander 26:58
Since 2006?

Jason Hartman 27:00
Did you live in a state with income taxes before that? I lived in California. Yes. Well, you you have my path. I lived in the Socialist Republic of California, then Nevada. So now I live in Florida and other no income tax state I very intentionally want to live in I know income tax state. But you know, it would be interesting to see if the Franchise Tax Board would and I’m going to say it fall for this. Because, you know, I would argue and some would probably agree with me that the Franchise Tax Board in California is more vicious than the IRS because they are okay. Yeah.

Kelly Alexander 27:33
Yes. The state is mismanaged. is so grossly Yeah, it’s ridiculous.

Jason Hartman 27:39
Yes. It’d be interesting to see if you could pull it pass the ftb. In California, I think they would almost be more difficult than the IRS.

Kelly Alexander 27:47
I agree.

Jason Hartman 27:48
I agree. Do you know anyone in California is doing it? I mean, you got these people in Colorado, Colorado has state income taxes.

Kelly Alexander 27:54
Yes, I do have one person I’m working with in California. And he elected to just do it for his federal return only for his first year. That’s just weird. Because if you get audited and you paid the state, but you ain’t pay the feds, it seems like the feds would have a really easy case to say, look, you got to pay us to just my laundry. But well, I mean, the laws, the law. And there’s a a Supreme Court case cite Maryland versus McCulloch that says that states are not allowed to tax the constitutional money at the country, which is why this applies to state income as well as federal income.

Jason Hartman 28:35
Interesting. What year was that Supreme Court case?

Kelly Alexander 28:39
That was back in the 1800s? I would have to look up really old.

Jason Hartman 28:44
really old. It’s before the Federal Reserve even existed. Yes. Okay. So in Maryland versus McCullough.

Kelly Alexander 28:50
McCulloch? Yes. Mr. D, CO, LL, O u gh.

Jason Hartman 28:55
And so you you cite this is one of the decisions that defends what you’re doing, right? Yes. Okay. Very interesting. Is there anything else you want people to know, wrap it up for us, Kelly.

Kelly Alexander 29:05
Basically, if you want to learn more, I just recommend that you go to my landing page at my tax remedy.com. And I have a free download that explains this. That’s, you know, easy to read. It’s 12 pages and it’s a way to contact me if you want to receive a consultation for your unique situation. If you want to learn more. You know, just taking it one step down the down this path to find out if it suits you feels right, whatever.

Jason Hartman 29:35
Okay. Hey, thanks for joining us, Kelly. Thank you Have a great day.

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