PJ#010, PRIVACY IN A FISHBOWL

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PJ 10

CHAPTER 11

REC #2 HATONN

TUE., NOV. 28, 1989 2:30 P.M. YEAR 3, DAY 104

TUE., NOV. 28, 1989

Hatonn to resume. I believe I was just about to expound on the twilight zone when you sent the entire document to the twilight zone. Thank you, Oberli, for rescuing the document. We are having a hard enough day without wiping out a morning's work.

COMMUNISM AT SUNSET

The handwriting was already on the wall years ago. As market-oriented economies grew like wildfire--West Germany, Britain, France, Japan, Taiwan, Korea--Communist countries fell further and further behind...especially in the fast-moving, market-sensitive high tech areas. Today there are more computers in U.S. public schools than in the entire Soviet Union.

It has been a condition that couldn't continue. The citizens of Communist countries would no longer accept a much lower standard of living in return for the dubious social benefits their systems offered. Further, their leaders could not allow communist ideology to make them economically weak and militarily vulnerable. In other words, economic growth is essential to avoid being com­pletely left behind by the rest of the world.

This would appear to be good news for America. Because it indicates that the Soviets will be spending more and more of their money on factories and com­puters--and less on tanks and missiles. So U.S. defense expenditures can fall without leaving the nation exposed to the Soviet threats. But is this the way it will happen? Of course not--China is waiting for the appropriate time to do both of you in and also, the money you are speaking of will be money YOU will send into Russia, depleting your own coffers while the little American struggles harder and harder. You will keep grains in their survival larders while you go on without even the survival shelters.

Will defense be cut? From what? A lot of the preparations for survival facili­ties for your top secret government is already paid for. What in the world do you think these recent shuttle trips are all about? Aren't you even curious as to what the "secret missions" are meant for? Do you realize that even the crews do not know? God forbid I be the first to tell you, as we are already on trem­bling ground this very day. We have had to interrupt a heavy bombardment of low frequency beams this day and Dharma is turning out something like a wet dishrag. New games every day and in every way--it is most frightening indeed.

Further, just be aware the books are being interrupted in shipment. They won't however effort at stopping them for there are too many ways to produce more. Just be aware and pay attention to your safety. The work is going out and so shall it be. It will not always be pleasant and today is one of those unpleasant times until we can completely jam the frequency--you just hold tight, Dharma, for we have it, chela. I don't believe we'll even have to bring you home for a visit this time.

Back to the facts. All of this good news comes at a critical moment which of course, is also not accidental. The U.S. desperately needs to lower its national deficits, reduce its debt, and bring interest rates down. Forget it, it will not work in that fashion.

Now that is the good part of it and a smiling President Bush can make his happy Thanksgiving speech and all will live happily ever after! Hardly. No, it is a facade by any definition. The facts are, in addition, that Congress will make a major mess out of this seemingly fortunate situation. You see, it could work if played properly but it will not be such. Instead of applying defense savings, if there indeed are any, it will actually increase boondoggle spending--especially in the coming recession and depression. Rather than benefit from Gorbachev's peace initiatives, this would actually make the situation worse--deepen the re­cession, ruin the dollar, and maybe even trigger a deeper recession.

There will only be the very few who will benefit from this "great business ex­change" and they are already so doing. Then there is the government passing out all these low-interest loans all over the map and there is no intention what­soever of ever collecting back the money--probably not even the interest. However, the money will be spent in large measure with already established U.S. industry and the business will flow through the central banks of the grey men and the plan is again working to perfection toward the complete control of a planet.

Well, as I have pounded upon prior to this--a large piece of bad, bad news. This type of peace is not inflationary--it is deflationary. It cannot ever be as be­fore.

War and military spending are major causes of inflation. Governments spend a lot of money. Sooner or later prices rise. After a war military spending usually falls. And so do the prices.

However, since the end of the Depression--a period of 50 years--prices have gone in only one direction: UP!

Why might this be? Because through World War II, Korea, Vietnam, and the Cold War, defense spending has remained at record levels. Cuts in defense will be a long-awaited relief. They could balance the federal budget, saving hun­dreds of billions of dollars, and let Mr. Bush off the hook in addition. But even at that there is a gigantic price to pay, that of deflation.

Inflation is bad news for most people, but deflation is worse. Because most people--and many businesses--are already in debt beyond their proverbial ears. Americans have been on a spending spree for years and years. They are about to pay the price. Companies will fail. Homes and cars will be repossessed and dumped on the market. Real estate will be hard to sell--and very cheap. Banks will go belly up. The vacation, retirement, and spending plans of millions of good old Americans will be dramatically altered.

The last time the U.S. experienced deflation was during your Great Depression--Hear the alarm--because the coming deflation will be much different as I have already pointed out many times before. I am truly not in the "I told you so mode", I simply want you to hear me now and the only way I can hope to achieve that is to continue to repeat it in several different ways.

This depression will be considerably different in that there won't initially be long soup lines or tin lizzies full of "Okies" headed to California. It will be just plain old "bad" all over everywhere. There will be falling real estate prices which will simply take the breath away. The rest of this century will be con­fusing indeed.

Let us just say that this deflation will be the legacy of the Gorbachev era...an unintended Trojan horse welcomed to America as a golden idol of peace.

HOW IT LOOKS FROM THE MOUNTAIN

What can you do? Well, you could simply throw this book away and go back to sleep. There is however, some bit of effort you can take and I have outlined it step by step prior to this so I won't repeat ad nauseam.

Let us take that wondrous grain as a for instance. If you own farmland--or in­vest in commodities, you should know that Gorbachev will have a major impact on food prices. Russia under the Czar was a substantial exporter of grain. Communist policies--not the weather--have caused chronic food shortages. When those looney tune policies are reversed, once again Europeans will buy Soviet grain. Prices will fall and continue to fall for years. As the Soviets be­come more and more efficient producers, using all your nice friendly technol­ogy and left alone for a few years they can outdo you a hundredfold. You can watch this as a spectator, or participate in one way or another, but you must re­alize, it is a trend that is all but inevitable.

On the other hand, the U.S. dollar will rise. That is virtually inevitable also for it is a direct consequence of deflation.

If you are cautious and wise by being knowledgeable and watching carefully, you need not lose everything, but you must pay attention. You must realize how things really work and not the fantasy way you are told in the propaganda issues.

Investments don't just run up and down at random. They are made to move--by people. People who control governments. People who make business deci­sions--people who are prisoners of greed and fear--and they control you.

WHAT TO WATCH FOR

There are a lot of things to watch--tid-bits on the back pages of the paper in tiny print. Big people make big deals. For instance let me point out some strategy carried off beautifully in 1984, and if you were paying attention you could have outguessed the outcome easily.

As oil prices started to fall, Saudi Arabia did a complete reversal in oil strategy. One man was going to decide future oil prices. Sheik Yamani, who set oil poli­cies for Saudi Arabia, set into motion a plan to pull the rug out from under non-OPEC producers, such as Norway and Great Britain. He did a 180-degree turn­about and drove down oil prices.

Well, the strategy cost Yamani his job. But it also created one of the greatest profit opportunities of your lifetime. In a matter of weeks the price of oil fell by half. The price of oil fell below $10 a barrel the day after Easter of that year. WATCH YOUR HOLIDAYS!

Watch the price of gold. When the price of gold moves substantially for exam­ple, it will usually have something to do with actions taken by the major pro­ducers--South Africa and the Soviet Union.

When the price of oil rises or falls dramatically, you can bet that something has happened within OPEC nations.

When major changes take place in bonds, stocks, and even real estate markets--you can generally find the source of it in decisions taken by some government, or quasi-government, officials (such as "central bankers").

Ah, life goes on. The Berlin wall came down right on schedule if all of you had my projected "approximately" schedule. It had to lose importance and yet it had to be a big splash for all the free world to get behind the "movement to freedom" and put up all the money it will take to keep the world afloat.

Noteworthy also, is that the Soviets are prepared to make major concessions to Germany and Japan--major concessions.

Gorbachev desperately needs foreign money to carry out his programs and these two countries have more cash than any others.

The payoff for the Soviets? Billions in foreign credits from its two richest trading partners, and America thrown in for good measure.

YOU CONTINUE TO SIT IN SURPRISE

You sit waiting for 48 Hours or 60 Minutes to give you a little inside comment. Brothers, the news is out there if you will but bother to see and hear.

As far back as February 1988 it seeped out that there would be a major change in top secret Soviet gold trading strategy.

Even the CIA was "scooped" by leakers in predicting the overthrow of the gov­ernment of the Sudan (bad for Chevron). There was advance forecast of the up­surge of guerilla war in Colombia (bad for Occidental and all the drug deals, agreements and contracts). It was known months in advance that leftist Alan Garcia would be elected President of Peru and declare a debt moratorium (really bad for bank shares). The coups d'etat are known weeks in advance of every one and in fact, funds are funnelled into the system as well as arms and trainers for the operations. Do you think it an accident that the two major Israeli train­ers were found in Columbia? Well, it WAS an accident that they were found--not that they were there.

WATCH FOR SOME OF THE BLACK CLOUDS

Look for an incredible series of bank failures. The S&Ls alone are in the hole by billions of dollars. There is no place to get the money to cover them.

There will be massive failures of the pension plans and programs.

The stock market will be a disaster. Prices will fall, across the board. Most investors will lose and lose very big indeed.

Most Americans' wealth is in the form of real estate . . . the family home, etc. The real estate will be especially hard hit, for a number of reasons.

The fact is, even though farmland prices are still soft in some areas, they've got a lot farther to drop. Even Texas, for example, has a lot of room left for prices to fall. Few people alive today remember, but farmland prices fell almost every year during the first half of this century. Surprise!

It will not be an easy time for most people. However, if you pay attention and are timely, you can make it. Look around and check a few things to see how prepared you are today:

• 1. Have you paid off most of your debts? If debt payments take up more than 25% of your disposable income, you should reduce your fun and get that debt down immediately--or the family jewels and farm will go.

• 2. If your income declined by 50% would you still be able to live comfortably, without losing property to foreclosure? How about by 75%? How about by 100%? Think about it.

• 3. Do you have at least enough cash on hand to meet 6 months living expenses? If not, add to your cash position. It will take a while to collapse the entire ball of melting wax.

It is the time for careful action in "Caesar's world" my dear brothers. I do not come to bring bad news, I come to help show you the way that you might make the journey in completeness.

Dharma, I would like to leave this for a while as I am being summoned to my duties. Thank you, chela, for your assistance.

I take leave now and move to stand-by.

SALU, HATONN CLEARING FREQUENCY

PJ 10

CHAPTER 12

REC #1 HATONN

WED., NOV. 29, 1989 7:00 A.M. YEAR 3, DAY 105

WED., NOV. 29, 1989

Greetings in Light, Hatonn here to resume our work. Oh my, I find that even with all the "pull" I have, I can't get pertinent information to you quickly enough.

BULLETIN

Dharma, you are just going to have to trust me, chela. It is ALL under way to some extent and you must be ready for this next barrage on your senses.

I am reminding you of that which I have brought forth in the past--GET SPIRAL TO ECONOMIC DISASTER AND READ IT. I HAVE TOLD YOU TO GET OUT OF THE BANKS AND THRIFTS AND INTO CASH, ETC. I HAVE FURTHER TOLD YOU TO ACCEPT NOTHING HIGHER THAN $20 BILLS IN CASH AND KEEP THE WITHDRAWALS UNDER THE RE­PORTABLE LIMIT. GO TO THE BANK EVERY DAY IF NEED BE. SCATTER YOUR ASSETS AROUND TO SEVERAL BANKS UNTIL YOU MAKE IT FEASIBLE TO WITHDRAW THE NON-REPORTABLE AMOUNT FROM EACH. DO IT!

"THEY" ARE READY TO MAKE THE "BIG SWITCH" IN MONEY--NOW! IF THERE WERE MORE EFFICIENCY INSTEAD OF TOTAL INCOMPE­TENCY IN YOUR GOVERNMENT YOU WOULD HAVE LANDED IN THE SWITCH BETWEEN THANKSGIVING AND CHRISTMAS AND THE FINAL OPPORTUNITY FOR EXCHANGE BETWEEN CHRISTMAS AND NEW YEAR'S DAY. THEY WOULD, OF COURSE, GRANT A LITTLE BIT OF AMNESTY TO THE "TINY" CITIZEN LATER BUT VERY CON­FOUNDED LITTLE.

GET YOUR HUNDRED DOLLAR BILLS AND YOUR FIFTY DOLLAR BILLS OUT OF THE MATTRESS, OUT OF THE SUGAR BOWL AND GET IT CONVERTED NOW TO NOTHING LARGER THAN A $20 BILL.

THEY HAVE ALREADY GIVEN THE NEW CURRENCY A "TRIAL RUN" AND COULDN'T HANDLE THE CHANGEOVER BECAUSE OF TOTAL STUPIDITY--EVEN THE PRINTING FALLS OFF IN YOUR HANDS.

The new bills are tinted varying shades of pink, blue and brown, blighted with holograms, diffracting gratings, metal and fiber threads and chemical alarms.

AND JUST WAIT UNTIL YOU SEE THE SATANIC SYMBOL (SEAL) ON ALL THIS NEW AND WONDROUS "SALVATION OF THE ECONOMY" CURRENCY. I SHALL LEAVE THE SURPRISE FOR YOU. THE EAGLE IS GOING TO LOOK LIKE A PHOENIX, DEAR FRIENDS, AND THE SYSTEM WILL BE EVENTUALLY BASED ON AN "EAGLE" EXCHANGE SCALE. OF COURSE, AS LEAKS IN INFORMATION OCCUR THE PLANS CHANGE ACCORDINGLY SO I ALMOST HESITATE TO OPEN MY MOUTH AND SO DO ALL YOUR PREDICTORS.

WELL. WHEN?

Since the Thanksgiving showdown, more time had to be extended. As hard as this may be for you ones to accept, it was mostly due to drug contracts. The drug lords threatened to blow up the entire of Colombia and a dozen other places--they did blow up an airline, if that currency swap was not called off. They may be able to postpone it again but don't count on it.

Further, you had the Saudi-Arabians and Japan ready to close all exchanges. It was truly a black Thanksgiving. While you feasted and fiddled your Rome al­most burned. Certainly your turkey got scorched.

The New Money will probably be a gigantic financial steamroller. Will you be rolled flat, or are you listening? The printing plant is all ready for operation. It is in Ft. Worth, Texas. It is a gigantic facility, blocks long. It is a top-secret printing plant, mammoth in size, protected by nuclear-style security and equipped with the latest German printing presses.

Stage One of the new money system fell on its face because the old Washington, D.C. plant couldn't handle the new technology of imbedding polyester threads and microprinting. They have it down pretty well now, friends.

Stage Two will curdle your blood. There are some leaks coming forth from your sector but mostly even they are terrified for their lives--the only valid slips have come from a Federal Reserve insider. I shall blow the whistle on no one--I am only going to enlighten you to some general plans and hold my scribe in security. You had better just carefully heed what little help I might have been up to this point.

The entire plan has been kept under wraps because it would, and will, throw the entire world into panic and ultimate collapse. The switch will take place at a most inappropriate time and the exchange will be totally limited and conducted like a security death camp. You, as "little people" may not recognize it but the "big boys" most certainly will.

The government and Treasury tout this as an effort to stop drug trafficking. THE BIG B-WORD, FRIENDS! THIS WILL ALLOW THE DRUG KING­PINS AND BIG MONEY SHIFTERS TO SIMPLY NOT HAVE TO HANDLE BILLS AT ALL--THE UNDERWORLD WILL GO ON A CARD SYSTEM AND MAKE THEIR DEPOSITS DIRECTLY AND SECRETLY INTO THE PROPER BANKS AND DEPOSITORIES. IT WILL HELP PREVENT INDI­VIDUALS FROM HIDING ANY WEALTH AT ALL. YOU ARE GOING TO HAVE TO HAVE A TOTAL ACCOUNTING AS YOU MAKE THE TRADE-OVER.

There will be a great effect on gold and silver prices which are best kept to the scanners and probabilities at present. You ones must learn to think in com­pletely new terms for naught will remain the same in the long-run. Ah yes, the trial run was held in Hawaii so the mainland wouldn't note it. It did bear the exchange rate which will be forthcoming which will likely be ten to one.

I am not telling you to not participate, you must participate in the exchange for the greenback will be phased out completely. The new currency will have value--but every piece will have your name on it in the system.

The day of the big "turn-in" the IRS will surround every bank! Get in there and convert those big bills as it is about all you can do at this point.

As you move along you will also find coming into use multicolored Treasury checks--which will be necessary for playing in the "big casino".

The switch will enhance the underground economy almost immediately--I speak of the criminal underground. They have followed it all along and have made preparations. The resistors have precipitated things like the Colombian drug lord wars. To exist nicely one has to play the game according to the new rules and share with the rest of the criminals.

You will have a world dollar panic and only those in relatively stable short-term bond markets and those in paper and computer exchanges will be able to con­tinue. WE have most carefully followed this and remain most optimistic about our own resources being stable and profitable--our hope for building and foun­dation funding is based on riding piggy-back with the way the big boys have it structured and catch the fall-off. To have any appearance of credibility at all, they must allow continuance of business.

These are the ways in which it could be sold to your gullible Congress. Fur­ther, it will work to our advantage for quite a while. That is why we urge you to get secure at a personal level, move into all the privacy you can attain, get into corporations in order to protect self and see if we can ride this ocean from the top instead of buried in the sand-bottom.

HEADED FOR THE TARGET ZONE--EASY DHARMA!

You ask God for help, I am here to do that which I can--together we can do nicely but it will require attention and follow-through. You live in a most physical world and you must survive in a physical manner--all WE can do is of­fer better foresight. It will take courage and great bravery. Dharma thinks she has about run out of both but she has NOT! WE will continue as long as there is anyone to receive.

I CAN ONLY ASK THAT YOU ON THE RECEIVING END BE GENEROUS IN YOUR GIFTS FOR IT IS INCREDIBLY EXPENSIVE IN A FINANCIAL MANNER TO GET THIS INFORMATION TO YOU.

Your government is supposed to protect your rights. Instead it steals your freedom and your money. The Founding Fathers of your wondrously gifted country didn't plan it this way. Today's politicians and bureaucrats might as well be working for Satan's dictators. Their only desire is to tax, inflate, regulate, intervene, harass, switch currencies and snoop on you until the fishbowl has not a shred of shelter within. The politicians and bureaucrats have gotten onto the bandwagon and are totally subservient to the "big banker grey men" for they know it is the only way to make it with any assets and continue to live "high on the proverbial hog". So be it at your expense.

You might think you are loved and adored because YOU are the one footing the bills in Washington and the world--forget it, you are most despised. You Americans who have worked hard and accumulated some savings--you are a minority and you are a target of the IRS, the Fed, the Congress, and the rest of the gang--further, they have found a way to "getcha"!

The choice is yours as to what you will do. The Feds and the power Elite de­sire to pull the wool over your eyes. It is so much easier to remove a sheep's wool if the sheep is tranquilized or sleeping--even easier if the sheep is dead.

I would hope that most of you coming in contact with this word consider your­selves something other than sheep--perhaps change to "hawkeye" and don't stand still while they fleece you. WE are most dedicated to enlightenment of you wondrous "middle-class" Americans and protecting your savings from the federal shears for it will be you who must pull yourselves together and rebuild this world.

You are on the collision course with financial holocaust and when that happens you are in direct firing line for the final holocaust. When the financial holo­caust hits, the plan is to use the crisis to loot all your savings and render you a helpless society.

Oh, you think the Armand Hammers of the world will keep on thriving? YES THEY WILL. THEY ARE THE ONES WHO HAVE LAID THE PLANS FOR YOUR ENTRAPMENT AND THEY HAVE NOW LOCKED THE CELL DOOR.

WHAT AFTER?

Well, there will be a full-out drive for world government, a world currency and a world central bank.

There will be exchange controls to hold you hostage, while the dollar drops down the bottomless pit.

There is a plan already in place to simply SUSPEND the Constitution when the Feds launch another no-win foreign war; the teetering FDIC and FSLIC will have all accounts frozen in a breakdown; the famous mutual funds and broker­age houses will be totally unsound; the taxpayers will be attacked in a most de­praved and frantic manner until all visible assets are completely depleted; the long-term bond market will totally flop; there will first be signs of inflationary depression and then the truth will dawn that it is totally deflationary. Oh yes, I almost forgot, the Trilateral-CFR really have dandy plans for Amer­ica! Further, there is a Monetary Control Act that will allow the Fed to "back" your dollar with worthless Third-World bonds and declare Depression-style "bank holidays" on its own say-so without public notice; the IRS will surge in power with nothing allowed to be hidden regardless of tactics required by police action.

Now we move into mention of some most dangerous and gruesome material: How about something called the "Bohemian Grove", the top-secret, pagan play­ground of the powerful. There will also be a federal "smear campaign" to lump pro-privacy Americans with drug dealers and dear ones, they know how to do it so that the accusation fits. If you show any "assets" at all you will be vulnera­ble to that attack. If you can retain your assets and live like a billionaire--DON'T DO IT! YOU MUST LIVE SIMPLY, DRIVE OLDER AUTOS AND ACQUIRE NOTHING THAT APPEARS FLASHY NOR EXPENSIVE.

You must further face the fact that there is a tremendous Israeli lobby in your country that can cost the life of ones who expose it. This is more deadly than you can imagine and it is a part and parcel of the ending revelations and prophecy, just as is the Skull & Bones demonic power cult of which George Bush is a prime member.

The "smartcard" that I was just speaking of in the writing of yesterday is an up­dated version of the Soviet-style internal passport. The Trilateral Commission wants to force all ones to carry this item and will probably succeed after the currency control is in place. You will move into a cashless society with the Feds keeping electronic track of your every move!

There is coming a massive international banking collapse all in place but you will not read about it in the mainstream media until it's well underway and too late to reverse.

Oh yes, you are also headed for a "return-free tax system", so be it, you won't have to hassle with those complicated forms any more--it will be much worse, believe me. It is the dream-child of the IRS and YOUR nightmare to end them all.

You must get with it now. Trouble is starting to roll and you must get your­selves prepared as much as is possible. Your "Establishment buddies" won't be happy until they own you lock, stock, and barrel--and you will be wearing the barrel.

You must now forget the old-fashioned methods of business. The Feds have taken all the old investment rules and thrown them out the window. You will update or you are sunk.

Only a few people will have the courage and the will to look into the future without flinching, read the signs of what is coming, and protect themselves and those they love.

Those of you who act decisively, and have the correct information to act upon, will survive big government and its economic debacle. In fact, history shows that bad times offer the greatest profit opportunities and a great massing of pub­lic spirit and "goodness".

To the unthinking, everything may seem OK. But this is the calm before the storm. You must become deeply concerned about what lies ahead. There is truly massive tribulation coming dead ahead.

You must move into things which protect you from the IRS--there are still ways of structuring your lives whereby these things can be improved upon and some protection gleaned. I am efforting at putting a journal together right now but we are so bombarded by daily activities that we are having difficulty in getting it to print.

I am requesting input for desirable manner in which to handle these documents. Ones must accept their own responsibilities in supporting the publications; you ones cannot bear the burden of this magnitude as you have already gone far be­yond that which could be acceptable. Mankind must care about himself enough to participate.

You are headed for more riots in the cities. There will be increasing "welfare" riots and marchings as one thing after another is cut--most need the hacking and stopping but it will precipitate unrest as never before witnessed. There will be a massive destruction of wealth. There will be almost total erosion of civil liber­ties and vicious economic controls.

Envy and "taking from another" will simply run rampant. There will be such a suppression of privacy that the fishbowl will look like a shrouded closet.

There will be massive scale closing of banks and S&Ls while the big boys gain control in their central banks.

Perhaps since there are little elementals there might also be a "tooth-fairy" but I believe the New Age concepts are lulling you dear hearts to sleep--I Hatonn, have never met a "tooth fairy" and I have met a lot of discarnate energy forms. YOU ONES BETTER GET ON WITH "REALITY" IN THIS "ILLUSION" OR YOUR FISHBOWL WILL ALSO BE WITHOUT WATER FOR THE FISHES WHICH ARE YOU! YOU ARE ALREADY HOOKED!!!!

Here is a good one which I hear every day from every source: "Maybe the re­covery is permanent--this time. Maybe this administration will give you the balanced budget, sound money, and drastic spending and tax cuts that they promise and promise and promise". Maybe there IS a "tooth-fairy"--GOOD LUCK! My scanners do not show any probability of such and confounded little possibility of such a thing. TROUBLE IS COMING AND IT IS COMING RIGHT SOON--I WONDER HOW MANY WILL TAKE THESE WORDS AND THESE SHORT WEEKS TO ACT? SO BE IT AND SELAH!

Dharma, let us close this please that we might get it into proper hands for those who want it ahead of the book. We will re-print it within the book as this morning's chapter but it needs attention prior to release of the journal on some instances.

I will move to stand-by, perhaps we can work more on the journal a bit later in the day.

SALU,

HATONN TO CLEAR FREQUENCY

[wave]

PJ 10

CHAPTER 13

REC #2 HATONN

WED., NOV. 29, 1989 1:42 P.M. YEAR 3, DAY 105

WED., NOV. 29, 1989

Hatonn present that we might continue. Please allow Dalene to know that all will be alright if she is patient a bit longer. Blood is thicker than "tricks".

Dharma, we will have a lot of additions to make regarding the economy but let us see if we can get a bit of work done on the journal and hopefully be able to add updating either at the end or the beginning of the journal as we go to pass with it.

CONSIDER SURVEILLANCE ON THE JOB

Well over six million American clerical workers work under continuous electronic surveillance. These individuals, many of whom work in "data entry" have their typing speed, input accuracy, length of time at their work station, etc., automatically monitored. For instance, IRS phone representatives are electronically monitored 13 different ways and they are not even aware of it. For instance, clerks who respond to citizens on the phone are told to NOT give last names--every time one does so it is entered into the data.

Other insurance measures of no secret memos being passed around is that some companies, especially those associated with the government or military, require "electronic mail", a computerized system that permits workers to communicate from a computer terminal whereby all can be monitored at the computer center. There are many instances of workers being fired from government positions after complaints are sent via electronic mail. ALL messages are filed according to subject, author, addressee and receiver, etc.

Often the telephone is the first to be monitored. There is a device coming into current use throughout the industrial and governmental complexes and that is a "station message detail recorder" which provides employers with a printout of every call made from every extension in the system. Therefore, your employer may monitor or record your phone calls without your consent or knowledge. The only protection you have is to assume you ARE monitored and not make calls that you would rather not have a matter of record from the system nor send messages on the electronic mail.

LIE DETECTORS

In December of 1988, a federal law took effect barring most private employers from using polygraph or lie detector tests to screen job applicants. The new law also greatly restricts use of the devices to test present employees. It is a shady subject with so many loopholes that you are literally unable to determine your "legal" rights.

Certainly you can be required to take a polygraph test if you work for a gov­ernment agency, a security firm, if your work affects national security or health and safety or if you handle large amounts of money.

Lie detectors are more than a gross invasion of privacy. They are very fre­quently totally inaccurate. Even the industry council promoting lie detector tests, the American Polygraph Association, claims an accuracy rate of only 90 percent. Even if these figures do not exaggerate the polygraph's accuracy, they imply that one out of ten individuals who take a polygraph test could be falsely implicated for actions they did not take or crimes they did not commit.

Further, no matter what you may be told--it is quite easy to outwit the device with just a little bit of training by a good instructor. Guess who gets the infor­mation and instructions? Of course--the good old criminal.

You should resist any efforts your employer makes to force you to take a lie detector test. If you must undergo a test, you might consider trying to defeat the test, since the results are wrong in a significant percentage of cases.

Let's have a look at rendering the system useless.

To protect oneself, one must be capable of making the system useless. This is easily accomplished once one understands how the machine operates. A polygraph measures bodily functions in the form of electrical impulses. These impulses are converted to mechanical signals which in turn move a series of pens over graph paper.

Polygraph theory says that when one lies, these measurements will fluctuate more widely from a normal, "control" baseline than when one is telling the truth. This baseline is established at the beginning of the polygraph session by plotting the body's response when the subject answers questions to which the examiner already knows the truthful answers.

For instance, the subject may be asked to confirm that he has the same name as that identified on his birth certificate. A trickier baseline question is, "Have you ever stolen anything"? The examiner realizes that virtually everyone has stolen something in their lifetime. A "yes" answer is the proper response. Such questions establish a background rate against which the examiner can ask in­creasingly incriminating questions later in the session.

To defeat the polygraph, all one must do is insure that the control baseline is unrealistically high. When incriminating questions are asked later in the ses­sion, the examiner will be comparing the body's response against an already-high baseline. No matter how the subject responds to the incriminating ques­tions, the examiner will be unable to conclude that he is lying.

Therefore, when the examiner asks a control question, one must make certain his body reacts as if he were under tension. For instance, one could flex his toes or press his foot against the floor as he answered. Another technique would be to clench one's teeth or bite one's tongue as he answers. Or muscles could be tightened in the arms, shoulders or legs.

Most polygraph examiners are trained to intimidate their subjects, and will ex­press doubt about one's willingness to cooperate when it becomes clear that they cannot construct an accurate baseline. At this point, one should simply tell the examiner that he is doing the best he can. One should emphasize his willing­ness to cooperate, all the while keeping up the same procedure each time the ex­aminer asks a control question.

The examiner will not wish to let the subject or the organization sponsoring the tests know that anyone can "beat" the machine. Therefore the odds are excel­lent that the examiner's failure to establish an accurate baseline on his subject will not be publicized outside the examination room.

If a lie detector is in your future and you need more information, get your hands on the February 15, 1987 Royal Society of Liechtenstein communique. (See ap­pendix). The above information, however, will work nicely. If you can't get the material and are really frightened for any reason--go to a good hyp­notherapist and get good at responding in this manner with each question asked--you can become a lie detector passer no matter what they throw at you.

THE COMPUTER THREAT

This lifeline of a business is also a very big pain in the privacy.

Computers contain employee records, company trade secrets and other valuable data. Protecting this data from destruction and unauthorized access should be, but is not usually, a priority. It just doesn't concern most people. Further, many computers require a code; to remember the code, employees often simply tape a piece of paper containing the code sequence to their computer screens. Access to other computers is usually as simple as turning them on with a switch. Unprotected data can be copied to a "floppy disk" then spirited away. Or a saboteur can introduce a "virus" on the computer's hard disk, destroying or oth­erwise rendering the data useless.

What can you do? Well, you can begin by simply adopting for your business the recommendations drafted by the National Local Area Network Laboratory in 1988, and now adopted by more than 75 of your major companies. These are fairly open and above board and simply for general use. As a for instance, this computer that Dharma uses appears to be a simple PC and she is not even adept at its function--however, every word is reproduced onto surveillance along with her physical condition while she is receiving from any of us of the higher frequencies. It is fine with us--actually saves a lot of time in some instances, to have her so nicely monitored--WE MONITOR THEIR EQUIPMENT AND THEY KNOW IT SO ALL STAYS PRETTY ABOVE-BOARD. I HAVE A LOT OF SMILING SURVEILLANCE OFFICERS RIGHT NOW IN RE­SPONSE TO THESE WORDS. SOME OF OUR BEST WORKERS HAVE COME RIGHT OFF THE SURVEILLANCE TEAMS. TRUTH IS A GREAT PERSUADER AND AFTER THEY LEARN THE TRUTH OF OUR PRES­ENCE THERE GETS TO BE A LOT OF VERY NERVOUS SURVEIL­LANCE PERSONNEL.

At any rate, back to the basics.

All software should be purchased from known, reputable sources.

All purchased software should be in its original shrink wrap or sealed diskette containers when received.

Back-up copies of all original software should be made as soon as the software package is opened. Back-up copies should be stored off-site.

Once purchased, all software should be reviewed carefully, by a system man­ager before it is installed on a distributed system (computer network).

New software should be quarantined on an isolated computer. This testing will greatly reduce the risk of system virus contamination.

A back-up copy of all system software and data should be made at least once a month, with the back-up copy stored for at least one year before re-use. This will allow restoration of a system that has been contaminated by a "time-re­leased" virus. A plan that includes "grandfathered" rotation of back-up copies will reduce risk even further.

System administrators should restrict access to system programs and data on a "need-to-use" basis. This isolates problems, protects critical applications, and facilitates problem diagnosis.

All programs on a system should be checked regularly for size (program length) changes. Any size deviations could be evidence of tampering or virus infiltra­tion.

Many "shareware" or "freeware" programs are invaluable applications. How­ever, these programs are the prime entry point for system viruses. Skeptical re­view of such programs is prudent. Also, extended preliminary quarantine is es­sential before these programs are introduced on a distributed system.

Any software that exhibits symptoms of possible virus contamination should be removed from general use immediately. System managers should develop plans for quick removal from service of all copies of a suspect program, and immedi­ate back-up of all related data. These plans should be made known to all users, and tested and reviewed periodically.

There are some good ideas which should be put in here about now. If you are weary of on-the-job privacy invasion, you might consider working for yourself.

Self-employment, by its very nature, is more private than working for someone else. You will be responsible only to yourself. No application forms, drug tests or lie detector tests will be necessary in order to go into business. And if your business prospers, you will reap the rewards of an owner, not an em­ployee--especially if you incorporate!

Depending on the type of work you do, you may find it necessary to register your business with the appropriate governmental authorities. But as long as you don't hire employees, allow public access to your business or pollute the envi­ronment, the government shouldn't be very interested.

Of course you'll still have to pay taxes on your income but you can have a lot more breaks in that area and a lot of flexibility if you really manage with exper­tise. You are less likely to be audited if you are a small corporation, and if you REQUEST AN EXTENSION TO FILING YOUR TAX RETURN, YOU ARE VERY UNLIKELY TO BE AUDITED. THE SYSTEM IS GEARED TO GIVE THE CORPORATIONS HECK AT DUE-DATE TIME.

NOW, ASSUMING YOU KNOW HOW I FEEL REGARDING INCORPORATION (IN NEVADA), I WILL CONTINUE BY TELLING YOU ALTER­NATIVES AND HOW YOU CAN IMPROVE YOUR POSITION-BUT--EV­ERYTHING YOU CAN DO, YOU CAN DO BETTER WITH A CORPORA­TION. OLD CORPORATIONS NEVER DIE--THEY JUST GET A NEW PRESIDENT!

One reason you will likely be audited if you are just in business as "yourself" is that the IRS believes that many self-employed individuals do most of their busi­ness "off the books". The "home office" deduction taken by many self-em­ployed individuals is a particularly high-profile "red flag". So you will want to take steps to "audit-proof" your tax return.

I WILL REPEAT SOMETHING HERE WHICH YOU WILL HEAR FROM ME HUNDREDS OF TIMES--EVEN WITH INCORPORATION, YOU WILL HAVE TO KEEP PERFECT RECORDS--PERFECT! AS THIS "CATCHES ON" THE GOVERNMENT WILL BE OUT TO STOP THE FLOW AND WILL INVESTIGATE EVERY SET OF CORPORATE RECORDS THEY CAN LOCATE--(IF THEY CAN LOCATE THEM--ANOTHER GOOD POINT MR. CHRISTIE OF NEVADA CORP. H.Q., CAN ASSIST YOU WITH). YOU MUST SHOW YOU ARE IN BUSINESS BY YOUR RECORDS DONE TO PERFECTION!

Well, what kind of business could you form? It should involve work you enjoy doing, that you are good at and that you are convinced can supplement (or re­place) your existing income i.e., if you are good mechanic--open your own shop.

If you are a draftsman, consider a home shop. Go into rare coins if you are a collector and enjoy it as a hobby. A hobby turned into a business gives great pleasure as well as income.

There are major advantages to remaining forever--SMALL. Even if your busi­ness becomes a roaring success--plan well and fragment to more small busi­nesses and branches. Bigness brings the limelight and the whole retinue of IRS.

Of course, you can't avoid interaction with the government altogether. You will be required to file an income statement quarterly along with any taxes due to the IRS. You might also find it advantageous to have the IRS assign you a "federal employer identification number" or FEIN, that identifies your business. You will have one already if you have incorporated.

You'll need the FEIN in order to form a tax-deferred profit-sharing or pension plan for your business. In addition you will find it handy to ward off requests for your Social Security number. If someone insists on obtaining your SSN, five them your FEIN instead. It is easy enough to do a DBA through your county clerck's office and they can instruct you in all these matters.

Many local governments will also require you to purchase a license if you are sef-employed. There may be an exemption if you work out of your home or don't deal with the public. The license will cost you anywhere from $10 to hundreds of dollars for every community in which your business operates.

You should avoid purchasing a business license unless the alternative is for your self-employment income to be shut off. The reason: Businesses are one of the first sources of revenue bureaucrats turn to when governments need income. Via "business and occupation" taxes. A business license may also make you vulnerable to surprise inspections by bureaucrats administering programs rang­ing from zoning laws to building codes.

One universal, or almost so, requirement for a business known by any name but your own is filing of a "Fictitious Name Statement" as referred to above DBA (doing business as) with local authorities. Again, you may be exempt if you are a sole proprietor working out of your home.

Most ones will dribble on and on along these lines in advising you and then end up telling you NOT TO INCORPORATE! Mostly, that is true, true, true--you can end up with even more red-tape.

A few well-informed advisors will however, now end up with the following incorporating:

"INCORPORATING IN A STATE LIKE NEVADA HAS MANY ADVAN­TAGES, NEVADA IS THE ONE STATE THAT DOES NOT HAVE AN AUTOMATIC EXCHANGE OF TAX FORMS WITH THE FEDERAL GOV­ERNMENT. IT IS NOT EXPENSIVE TO INCORPORATE THERE".

THAT MESSAGE CAME FROM ONE OF YOUR LEADING BUSINESS NEWSLETTER PUBLISHERS.

No, this will not be utopia for very long--but it will be as long or longer than any other alternative. You see, where you have the major "big boys" hiding their faces you can better hide yours. Nevada is not apt to change very quickly for this is the major industry other than gaming. Further, if the Feds crack they are going to be putting their best workers and comrades out of business. USE THE LAWS GIVEN YOU TO YOUR BEST ADVANTAGE-WHY SH­OULD THE "BAD" GUYS ALWAYS FINISH FIRST? GET IN THERE AND TAKE SOME ACTION WHILE THERE IS ANYTHING LEFT TO ACT "WITH".

So be it, Dharma for this day. I note you are most fatigued and have not yet recovered. You will be improving rapidly now that we have located all the frequency beams. Have a good evening and put these disquieting topics from your mind for a respite.

SALU, SALU, SALU

HATONN TO CLEAR FREQUENCY.

PJ 10

CHAPTER 14

REC #1 HATONN

THU., NOV. 30, 1989 6:00 A.M. YEAR 3, DAY 106

THU., NOV. 30, 1989

Hatonn present and all accounted for at this station. Let us continue on our project, please.

Please take note of these things on this date:

1) The murder of Herr Herrhausen of the Deutsch Bank in Germany. This is a most important incident. This man was a most outspoken worker toward a uni­fied European Market and this is a remarkable effort at stopping the next stage of unification. This was a most powerful figure. The work will continue but there are a lot of very nervous bankers this day.

2) The MX missile raises its ugly head again. Why would you be so interested in non-location, moving location, etc., etc., etc., if your adversity is all fin­ished? And, what are you doing in your outer atmosphere with your shuttles? Keep the eyes moving but remember that sometimes the hand is quicker than the eye. The plan is to scatter these missiles and furthermore--the pinpointed loca­tions have gone forth on every general program in the world--good strategic re­lease. Then there is mumble-jumble about crisis time and running them around on railroad cars--can't you just see all the MX missiles lifting off railroad cars about your country. Then, a major base for storage will be Fairchild Base in Washington state. How comfy for those ones around that area--you have just pointed out, this morning, fifteen pinpoint target areas--well, even the enemy knows that old trick, you nerds.

3) Now, a biggie: Japan and the Soviets have a major $2 billion dollar joint venture going in Siberia--their twenty-first such venture. Now what would they be doing playing around in the Siberian oil fields?

4) The Japanese overvalued market swung sharply upward today--what do you suppose is going to happen shortly? So be it--keep your eyes on the bouncing ball if you can't follow the hands!

* * *

Let us continue with our "privacy", oh, fragile as it is!

AT WORK

We are going to merge into discussions regarding taxes and the work-place pri­vacy. We will even throw in a little "moonlighting" in the Underground Econ­omy.

The IRS is intensely interested in scrutinizing the tax returns of self-employed individuals because it is much easier to generate unreported income as an em­ployer than as an employee. "Guerilla" "capitalists" do not pay taxes!. If they do, they falsify their tax returns and under-report their income.

When IRS is questioning independent compensation plans they use a form with twenty items on it. IRS decides whether or not any of these items apply to the taxpayer. If they do, the IRS may arbitrarily choose to deem an individual an employee. If this happens the penalties and interest to the employer are severe.

However, when an individual incorporates himself and takes certain precautions he is almost categorically accepted as a non-employee or self-employed inde­pendent contractor.

Sooner or later an individual operating his own business may be invited to sell his product or services "off the books". One such example might be when John Doe is a repairman and self-employed. When JD goes to a house call to fix an appliance, he might well tell the homeowner, "Look, I have a lot of expenses if I have to run this job through the books. If you just pay me cash, I can do it for 35% less." Usually, people will jump at the chance to save that much, and JD is glad to get the untraceable cash. JD reports none of this income although the expenses for parts, etc. are buried among his on-the-books business.

This can be a most difficult situation to trace and of course is illegal. I do not wish to mislead you for you will make of your own choices. JD is self-em­ployed and does invite further incursions by the IRS against all entrepreneurs.

Crossing the line from tax "avoidance" to tax "evasion" is tempting but the "definition in difference of the two is some 15 years in the pen". Just keep in mind that tax evasion is a federal felony, punishable by up to 5 years in prison and a $50,000 fine. Moreover, to enforce a judgment against you, the IRS can even confiscate your home, your vehicle, even your entire business.

Besides--remember that taxpayer hotline for informers? The customer might very well obtain a reward for turning JD in to the IRS. IN 1987 ALONE, THE IRS PAID $1.8 MILLION IN REWARDS TO 580 TAX "SNITCHES".

There are still plenty of opportunities for tax "avoidance" through legitimate de­ductions. Take full advantage of these, as well as reducing your profile from the IRS and other government agencies and private concerns through the legal techniques. There are an abundance of them if you incorporate and handle your expenditures and new equipment investment in timely manner--you do need help so I suggest you run to your nearest Corporation Manual. Call Cort Christie at Nevada Corporate Headquarters, Inc. 800-398-1077, (702)896-7001. You don't even need to resort to tax "evasion" of any type whatsoever to reduce or eliminate your taxes. To do so only places you at great risk and you will get on the most monitored and most harassed list.

Before I move on I will give you a list of the twenty questions the IRS asks in order to make evaluations:

Applicable? Non Applicable?

1. Instruction
2. Training
3. Integration
4. Services rendered personally
5. Hiring, supervising, and paying assistants.
6. Continuing relationships
7. Set hours of work
8. Full time required
9. Doing work on employer's premises
10. Order of sequence
11. Oral or written reports
12. Payment by hour, week, month
13. Payment of business and/or traveling expenses
14. Furnishing tools, materials
15. Significant investment
16. Realization of profit or loss
17. Working for more than one firm at a time
18. Making services available to General Public
19. Right to discharge
20. Right to terminate

If however, you handle your self-employment in a proper and professional manner, I can give you some 6 to 7 pages of deductions not otherwise available to you.

Another good investment in information is a book called NONPROFIT CAN BE PROFITABLE! by: Theodore H. Swenson for the Mother Earth American Fellowship Church, Inc. If you send him $3.00 he will send you all sorts of wondrous things. (See appendix.)

Another book that you might find enlightening is GUERILLA CAPITALISM, by Adam Cash. (See appendix.)

PRIVACY AND THE IRS

Please shiver now, as I quote former IRS Commissioner, "Internal Revenue Service Strategic Plan", document #6941, May 9, 1984, Roscoe Eggar, Jr.: "It is with considerable pride that I approve the Strategic Plan to carry out the Mis­sion of the Service.

"The Plan consists of the Statement of Strategic Direction and the 55 initiatives to translate them into action. It provides a strong foundation for directing tax administration efforts well into the 1990s and lays the groundwork for the Ser­vice's entry into the 21st century.

"Within the next five to 10 years, paper returns will be a thing of the past. And tax processing procedures that now take weeks and months will be reduced dramatically. Early indications are that the automated system enables us not only to collect more efficiently but to collect more dollars in less time". SO BE IT!

LOW BLOW--BRACE YOURSELF

This "strategic plan", with its automated return system and reduced processing time will unquestionably raise the IRS's efficiency. In the process however, the already enormous potential for abuse of innocent taxpayers by this powerful bu­reaucracy may become even more unbearable.

In its ongoing struggle to "balance the budget" and handle debt, Congress has already given the IRS power and authority far greater than any other similar government agency. Under IRS regulations you are guilty until you prove your innocence, at your expense!

Without so much as a court order the IRS can:

Sell your home at auction and use the proceeds to pay off taxes that it claims you owe.

Gain access to and seize the assets in your bank account and safety de­posit box.

Compel you to turn over personal records and give testimony against yourself.

Seize your paycheck and force you to support yourself and your family on no more than the standard deduction for you and each of your depen­dents.

Confiscate your Social Security check or pension check, even if
that is your only source of income.

Ask around, if one of these things has not already happened to you, you will find a friend who has had it happen or knows someone who has. It is going on all the time!

You would think that the IRS would wield this power most gingerly so as to not create the appearance of abuse--not so, they use it as a loud and clear Gestapo warning.

Again, I am going to give you some well-published examples:

An Amish farmer assessed for several thousand dollars in back taxes was the victim of an armed raid complete with federal marshals brandishing loaded machine guns at the unarmed family which included the farmer's wife and five-year old daughter.

IRS agents kidnapped seven children in a Detroit area school, releasing them only after their parents paid fees due the school that the IRS ap­plied to a tax levy.

An Alaska couple, disputing a tax assessment, had it tripled. To enforce the assessment, IRS agents seized the couple's car while they were in it. Smashing the windows, the agents dragged the couple from the vehicle, leaving them bleeding on the pavement as a tow truck hauled their vehi­cle away.

A former U.S. Senator investigating the IRS had falsified versions of his tax records leaked to his opponent in the midst of a hotly-contested re­election campaign.

The IRS confiscated the bank account of a nine-year old girl to pay part of a tax claim against her grandmother.

A Virginia businessman was fined $400 for failing to pay two cents of his $22,894 payroll withholding tax bill.

A police commission in a small town in Pennsylvania was ordered to pay $700 on a one cent underpayment in its deductions from employee pay­checks.

Funny? Can't be in America? Oh yes, it is in your good old "free" America! Of course it is not in the least bit funny!

Unfortunately, determining exactly what your share of taxes might be is not an easy task to calculate in some instances, even with professional assistance. Paying your share of taxes is beyond the ability of some to calculate so errors can be easily understood--but not by the IRS enforcers.

No one, including and especially the IRS, seems to have an exact knowledge of your nation's complex tax laws. A 1988 survey by the Government Accounting Office revealed that IRS agents responding to phoned-in questions from taxpay­ers provide the correct answer only 61 percent of the time. Boy, that seems to leave 39% hanging out with incorrect answers. Further, the ones answering the questions are required not to give surnames so the poor taxpayer cannot go back to a clerk a second time or incriminate the guilty party.

Not even tax preparation professionals are much help. One investigation took the same tax data to eleven different tax preparers--and received eleven differing estimates for taxes due. A similar study by Money magazine asked fifty tax preparation specialists to calculate and prepare a family's 1988 tax return. The specialists came up with fifty different answers. Their top estimate of tax lia­bility in this study was triple that of the lowest estimate.

How about the average American doing his own taxes? Less than 11 % can even begin to figure out the tax form. It appears that you are stuck with the problem but it seems no-one can figure the mess out enough to even begin to decide that which is fair.

And so what happens? It falls to individual IRS agents, or their superiors, to interpret tax regulations as best they can. Some agents will take a liberal interpretation and enforce the law with some discretion. Others will insist on the strictest possible interpretations. Further, you can count on the enforcement moving right along with the mood of the agent on any random day.

WHAT TO DO!

Well, if you see fit to NOT incorporate in Nevada where you can attain some level of security and privacy as well as utilize all possible avoidance techniques, then I can only list the remaining options.

1. Maintain a low profile. Don't flaunt your wealth; doing so raises the envy of all and IRS agents are not immune from this human frailty. If you crave luxury, purchase it where it is not necessarily visible "from the outside". For instance, you might purchase a modest house in a modest neighborhood, but furnish it immaculately. Or you could pur­chase a "Ford" or a "Chevy", but customize it to enhance your pleasure. It is most shallow esteem that would require this, however.

2. Keep records substantiating the income and deductions you claim on your tax returns. Forever, if you can. You will be required to produce thorough records to prove the deductions which you claim. Keep a minimum of three years but at least six years if at all possible.

3. If you file a return and do not pay what you owe it is worse. That gives an open invitation for the IRS to seize whatever assets are available to satisfy the liability you have brought to their attention.

4. Avoid "red-flag" items on your returns. Questionable deductions almost always bring at least a cursory examination from the IRS. Fa­vorite targets include moving expenses, medical expenses, entertainment expenses and "home office" expenses for the self-employed. In addi­tion, expenses that don't match the profession you list on your return may draw IRS scrutiny. Always send in photocopies of any cancelled checks to tax-deductible charities, and include the organization's IRS ex­emption number on each check.

5. Taking the standard deduction unless itemizing your deductions might save you a significant amount. Itemized returns are audited much more frequently than non-itemized returns. If itemizing doesn't save you a great deal, don't do it.

6. Keep meticulous records of all contacts with the IRS. Send all cor­respondence by certified mail, return receipt requested. Tape all conver­sations with IRS agents, both over the telephone and face-to-face. Ille­gal you ask? No, not if the other party is informed. See Tax Avoidance Digest. (See appendix.)

7. Be respectful of the IRS at all times. Don't make the mistake of thinking you can get away with obscenities, etc. Tax protestors are rou­tinely given special scrutiny. Keep your mouth shut--get good at groveling--it could save your bank-account! (See appendix for Personal Fi­nance).

8. Make certain your tax return is neat and contains no mathematical errors. Type your return, or even better, prepare it with a computerized program. Turbo Tax for IBM and compatibles; Mac-In-Tax for MacIntosh.

9. Have a professional prepare your return if it is at all complex. Be a bit creative here. You can have a $10/hr. bookkeeper prepare the doc­umentation, and have a CPA file it. According to an ex-IRS regional commissioner, signing your own return as the preparer increases your chance of being audited. If your return is at all complex, professional preparation is essential. If really complicated get a CPA or Tax Attor­ney to handle it for you; the fee may well be worth it.

10. Be wise. don't declare every last deduction to which you feel enti­tled. If you end up in the auditors audience, you have the right to bring to the auditor's attention deductions to which you were entitled, but did not take. Seeing that the government stands to lose, not gain, money from the audit, the IRS agent may simply cancel the procedure right there on the spot.

11.If you have underwithheld at year end. Have your employer with­hold a larger amount out of the year's last paychecks. The withholding is treated as though it occurred at an appropriate rate over the course of the year and thus penalties are avoided. Besides it says, "Look how hard I tried".

12. If you can't pay your taxes. Unless you fraudulently conceal your assets or otherwise conspire to beat the government out of money, no crime has been committed merely because you can't afford to pay your taxes. Respond to all notices sent to you requesting payment--im­mediately. Make every attempt to speak to someone at the IRS and fol­low up the conversation with a confirming letter. The IRS will probably work out a time-payment plan.

The best time for this is at the start of the collection process. If you have ignored IRS attempts to work out an arrangement and it is now at your door with a Notice of Seizure, it is extremely unlikely that a part payment agreement will be offered. Get a current financial statement and then start your negotiations. If you have no assets and no income, there is nothing the IRS can levy. If you are in this desperate predica­ment, it does provide an opportunity to discuss an Offer in Compromise with the IRS.

An Offer in Compromise is a little-publicized procedure whereby the IRS will accept a one-time payment of as little as 10 cents for each $1 owed in settlement of your tax debt. If the IRS feels it will receive more money from you in the long run by entering into an Offer in Compro­mise and a collateral agreement (an agreement whereby you agree to pay a certain percentage of your income for 5 to 10 years), it may agree to the compromise.

The best chance of successfully using the Offer in Compromise route is when the tax debt has been on the books for a number of years. The IRS must be convinced that conventional collection procedures won't work. That is why a relatively recent tax obligation will not be settled in this manner. ALWAYS USE A TAX PROFESSIONAL TO GET YOU THROUGH THE OFFER IN COMPROMISE PROCEDURE!

13. When not to trust a bill from the IRS. When the IRS comes up with a deficiency as the result of an audit, the taxpayer is given a waiver to sign and mail back to the Service. According to the tax law, if the IRS does not demand payment of the tax bill 30 days after the waiver was executed, interest on the deficiency stops running.

PROBLEM: The IRS has been charging some tax-payers interest right up to the date of billing, which is often several months after the waiver was signed and returned. This extra interest can be several hundred dollars more than you should pay.

WHAT TO DO: Carefully check interest charges before paying the defi­ciency bill. Interest should be charged for the period beginning with the due date of the return and ending 30 days after you sign the waiver and mail it back to the IRS. Pay the tax you owe and the interest that you determine to be correct. Clearly explain in an accompanying letter how you arrived at your figures, including a detailed computation of the cor­rect interest. Note: Pay the deficiency bill within 10 days after you get it. If you don't, interest will start running once again.

14. Shielding your home from IRS seizure. If a married man is about to file a return and knows he cannot pay the taxes due, he should con­sider filing separately. This may increase the tax liability, but it may also shelter his wife from the debt. That means jointly owned property (the family home, perhaps) will be exempt from seizure, unless there is evidence of fraud or collusion.

15. Impact of Bankruptcy on debts to IRS. Income tax debts can be discharged in bankruptcy if they are at least three years old when the bankruptcy petition is filed. This three-year period is measured from the due date of the tax return if it was filed on time. If the return was filed late, the three year period starts from the filing date. But a bankruptcy discharge won't release the taxpayer from fraud penalties or from liabil­ity for income and Social Security taxes withheld from exempt-em­ployees' salaries that were not paid over to the IRS.

** Property attached by the IRS, but not yet sold at tax sale, is still legally the taxpayer's property. If he goes bankrupt, it can be taken by the trustee, under the turnover rules of the Bankruptcy Law.**

LET US TALK TACTICS

AUDIT:

Prepare meticulously for the audit. Gather all your receipts for the deductions the IRS has questioned. List each, in detail, on a sheet of paper. Also, metic­ulously reconstruct cash expenditures for which you don't have receipts. Ex­plain exactly how and when you made those expenditures.

By representing your case in factual detail, you establish your credibility. And credibility is everything at an audit. It will be easier for the auditor to allow nondocumented items if you can show him that you kept some receipts, that you made an effort to comply with IRS rules and regulations through a diary, etc., and that you have reconstructed, as best you could, your cash outlays. You can also suggest that an auditor select a test period of your documents and always, keep talking to get the auditor to see things in your way. But always be willing to concede some little matter for, remember, the auditor's goal is to close the case and move on to his next audit.

If your business is being audited, have it done at your accountant's office, not at your home or your place of business.

All IRS audits require the agent to ask if you have reported all your income. DO NOT LIE! Deflect the question by asking "Why do you want to know that?" or "I'll have to get back to you on that later, I think so but I had better check it out before I give you a definite answer".

Another good way to avoid answering the question is to simply not show up for the audit. The deduction in question will be automatically disallowed, but you can appeal the agent's disallowance at the appeals level of the IRS. At the ap­peals level, you are generally not asked whether you have reported all of your income.

Special agents: Their job is to develop evidence for criminal tax cases. If they show up at your door, don't answer any of their questions, even seemingly in­nocuous ones. Tell them to talk with your lawyer. Then retain a lawyer who is knowledgeable in criminal tax matters--look for a former assistant U.S. attor­ney.

SURVIVING THAT AUDIT

Knowing how the system at the IRS works gives an experienced practitioner an advantage when it comes to representing a client at an audit. Here are some of the truly "inside" things that go on.

Postponing Appointments: It is possible, though not likely, that the IRS will actually change its mind about auditing you if you have postponed the appoint­ment enough times. The IRS is constantly under pressure to start and finish tax examinations. If the return selected for an audit becomes "old" (i.e., more than two years have passed since the return was filed), the IRS may not want to start the audit. Especially if the amount in question is minimal. This situation may develop if you are notified of an audit about 15 to 16 months after filing. By the time you have cancelled one or two appointments, the 24-month period may have been reached.

When to cancel: The day before the appointment, as late as possible. By that time, the next available appointment will probably not be for 6 to 8 weeks.

Best time to schedule: To someone uninitiated, it may seem ridiculous that one time of the day or month is better than another to have your return audited. However, a real advantage can be gained by following some simple tips. Try to schedule an audit before a three-day weekend. The auditor may be less inter­ested in the audit and more interested in the holiday. Another excellent time to schedule an appointment is at the end of the month. If an auditor has not "closed" enough cases that month he or she may be inclined to go easy on you to gain a quick agreement and another closed case. As for the best time of the day, most pros like to start an audit at about 10 o'clock in the morning. By the time it comes to discussing adjustments with the auditor, it will be close to lunch time. If you are persistent, the auditor may be willing to make concessions just to get rid of you so as not to interfere with lunch plans.

AUDITS THE IRS FORGETS:

Asking the IRS to transfer your case to another district may be the key to avoiding an audit. Don't expect the IRS to admit it, but transferred cases often fall between the cracks and never get worked on even though the taxpayer has been notified of the examination. Delays caused in processing the case file be­tween districts, combined with the fact that the case is likely to go to the bottom of the pile when it is assigned to a new agent, may bring help from the statute of limitations. Rather than asking the taxpayer to extend the statute of limita­tions, as is the usual practice, many agents are inclined to take the easy way out and close transferred cases without auditing them.

New Rules: If an auditor comes to your door. Agents may enter private premises "only when invited in by the rightful occupant".

When to request your own audit: When a business is closed down, the records and key personnel who can provide tax explanation may disappear. A subse­quent IRS examination could prove very costly to the business's former owner.

When someone dies, the heirs can count only on sharing in the after-tax size of the estate (unless incorporated). So the sooner the IRS examines matters to set­tle things, the better.

When a taxpayer requests a prompt assessment of taxes due, the IRS must act within 18 months. Otherwise, the IRS has three years to conduct an examina­tion. Use Form 4810 to ask for the prompt assessment. You don't have to use this form, but if you don't use it, eliminate any uncertainty on the part of the IRS by having your letter mention that the request is being made under Code Section 6501(d).

Caution to out of state bankers: Failure to report income deposited in a bank could be considered careless. Carelessness is punishable, generally, by a 5% negligence penalty. But when the omitted income represented deposits made in a bank in a different state, one court regarded the omission as a fraudulent, will­ful attempt to conceal income.

Who gets nailed for claimed tax fraud? Business owners, other executives, Company officers, Attorneys, Dentists & Doctors, Non-CPA accountants and CPAs in that general order. Less than 20% of IRS fraud investigations end in convictions.

HERE IS WHERE YOU WATCH IT!

Criminal tax investigations are the ultimate weapon in the IRS enforcement ar­senal. They are conducted by IRS Special Agents who are very, very good at what they do. They work in pairs in order to corroborate each other's testi­mony about taxpayers' statements. They may not seem like policemen--BUT THEY ARE!

Special Agents will usually give a Miranda warning, letting the taxpayer know that what he says may be used against him in court, and that he does not have to answer questions without an attorney present. The trouble is that many taxpay­ers are afraid of appearing guilty by refusing to cooperate. And the agents will press for answers.

Typical questions:

.. Did you report all of your income?
.. Where do you keep your savings and checking accounts?
.. What kind of a car do you own?
.. What is the procedure for reporting sales in your business?
.. Do you gamble?
.. Did you have a lot of cash on hand at the beginning of last year?

CAUTION: A false or misleading answer may, itself, be a crime!

The interview is usually very low-key, seeming to imply that if the taxpayer co­operates, the agents will close their file. BEWARE: THAT RARELY HAP­PENS!

The agents are trying to establish that a taxpayer failed to report or misreported his income and that the error or omission was willful. To do this, they can, and will, subpoena copies of checking account statements, cancelled checks, savings accounts, deposit and withdrawal tickets and signature cards. You will really wish you had listened and had none of those bank accounts!

They also talk to neighbors and business associates. They will look at public records to find out whether the taxpayer owns any real estate, cars, boats, etc. Insurance records may indicate ownership of furs, jewels and other expensive possessions. Passport records give a clue to expensive overseas vacations a tax­payer may have taken.

Mail surveillance helps them determine who a businessman's customers and suppliers are. Although the IRS will not open a taxpayer's mail, they can tell a lot just by looking at the outsides of the envelopes and then, of course, as I told you before--the FBI can!

I advise all ones confronted with Special Agents to simply say, "I prefer not to make any statements at this time, please contact my attorney".

Criminal prosecutions are aimed at keeping taxpayers in line and honest. They are interested in example and punishment; they usually will not plea-bargain. They will always ask for jail time rather than probation. They are not im­pressed by a taxpayer's exemplary record. In fact, a pillar of the community is a desirable defendant from the IRS's point of view. They will be conciliatory only if they do not have enough evidence to build a solid case. They are anx­ious to protect a winning image so beware!

Dharma, this has been most long indeed. May we please take a respite. Thank you for your attention.

SALU,

HATONN TO STAND-BY