Income Tax 2023-2024 Circular 230 Regulations Governing Practice Before the IRS Internal Revenue Service Get ready and some coffee because we're laying down the facts about Income Tax Preparation 2023-2024 First, a word from our sponsor Yeah, actually we're sponsoring ourselves on this one because apparently the merchandisers they don't want to be seen with us But but that's okay.  Yeah, it's paramount that you let people know that you're an accountant Because apparently we're among the only ones equipped with the number crunching skills to answer society's current deep complex and nuanced questions If you would like a commercial free experience consider subscribing to our website at accountinginstruction.com or accountinginstruction.thinkific.com Circular number 230 Regulations Governing Practice Before the Internal Revenue Service can be found at the IRS website irs.gov irs.gov and is a great resources for those working in the field of taxation It being useful to try to distinguish what are the responsibilities of the taxpayer, what are the responsibilities of the tax professional And what are the differences between the preparation of the tax return and representing say a client before the internal revenue service So in general for example, we as taxpayers are primarily responsible for the positions being taken on the tax return even if we hire someone else to do the tax preparation In other words, if I'm a taxpayer, I hire someone else to help prepare the tax return Then I can't say well look I am not responsible for the positions taken on the tax return because I hired a professional to do that Due to the fact that we're basically hiring the other person as an agent and therefore we're still basically primarily responsible for the positions taken The IRS will come back to the taxpayer primarily to question or audit positions on the tax return However of course the taxpayer does have responsibilities as a tax professional to act in a professional manner when filling out the tax return And we also want to distinguish between the preparation of the tax return and representing someone before the internal revenue service So often times we think of those things as kind of different In other words representing someone before the internal revenue service is similar often times to what you might think of as a lawyer doing in other kind of court situations So for example if there's a criminal case or something like that and you hire a lawyer to act on your behalf They might be able to then go to the court for example and basically make decisions on your behalf acting as your agent in that instance In the event of the internal revenue service coming to a client having a question about a position being taken Possibly you can basically hire someone else maybe not necessarily a lawyer in this case but someone who has tax authority and the ability then to represent someone in a similar way as a lawyer But in a more restricted fashion to the internal revenue service in a similar kind of fashion So that's the you know just a general overview will go over some of these items here again You can look this up in more detail at the iris website for the circular number 230 Okay it contains rules governing the recognition of attorneys so these are people that generally have certification or some kind of ability to be able to possibly represent clients before the internal revenue service Now obviously lawyers that's what the law degree is generally granting or one of the major powers of possibly being an attorney However attorneys are very broad in their ability to represent people and therefore they may not always be professionals in the area of taxation Right so then you've got certified public accountants enrolled agents enrolled retirement plan agents registered tax return preparers and other persons presenting taxpayers before the internal revenue service So we have then sub part a of this part sets forth rules relating to the authority to practice before the internal revenue service the IRS Sub part B of this part prescribes the duties and restrictions relating to such practice Sub part C of this part prescribes the sanctions for violating the regulations Obviously the consequences of violation are important to take a look at Sub part D of this part contains the rules applicable to disciplinary proceedings And sub part E of this part contains general provisions relating to the availability of official records Practice before the internal revenue service the IRS comprehends all matters connected with a presentation to the internal revenue service or any of its officers or employees relating to a taxpayers rights privileges or liabilities under laws or regulations administered by the internal revenue service So in essence acting as basically an agent impossibly in a similar fashion as a lawyer might do for a client in other types of situations many people might be more familiar with Sets presentations include but are not limited to preparing documents filing documents corresponding and communicating with the internal revenue service Our rendering written advice with respect to any entity transaction plan or arrangement or other plan or arrangement having a potential for tax avoidance or evasion and representing a client at conferences hearings and meetings So if you ever dealt with a lawyer if you've been in a legal situation that's where they earn a lot of their money It seems to me is basically being able to represent you in certain situations where if you had to show up to all those situations that you're being pulled into You would be very restrained and the ability to just basically make money if you're tied into a certain legal type of situation So having and being able to possibly pay someone else to act and be there and help to represent you in those situations could be useful in possibly making decisions on your behalf Having the ability to and the knowledge of that particular field So who may practice so we have attorneys remembering that if we're thinking about our practice or if we're thinking about basically hiring someone for taxation Then attorneys clearly have the broadest capacity generally to represent people before the government in a wide range of areas including taxation But oftentimes possibly don't have the specialized knowledge in the field of taxation Now some do but that takes a lot more specialized lawyers right they became a lawyer and then they're going to specialize in a particular field of taxation So often times if you're looking at an attorney you're looking at attorneys that are highly specialized in one area basically of expertise is how it often plays out And then you've got certified public public accountants so when you're talking about people that have an accounting background then they might go into taxation So remember attorneys have a general broader kind of legal background who then could go into taxation But they but it's probably more likely that a CPA who has a very more specific background in in accounting and possibly could decide if they want to get into audit or taxation Because those are often related in similar CPA firms more likely possibly to go into taxation the certified public accountants usually have more specialized knowledge in business kind of things And bookkeeping type of things and accounting problems so they might be better or if you are a CPA or you're looking or you're thinking about a client that needs tax help Then the CPA firms are often good with with the accounting side of things so schedule C's S corporations limited liability companies that have a factor to them that includes you know accounting Enrolled agents so enrolled agents often have the capacity to be able to represent people but in a more restricted fashion as do CPAs for the IRS possibly rather than more broadly in legal situations Might not have as much background in like the accounting in terms of the debits and credits and therefore might specialize more in the individual income tax returns or although of course any of these areas they could expand And touch on different areas as well as the general overview enrolled enrolled actuaries which is a special kind of area for actuaries and enrolled retirement plan agents so now we're kind of outside the scope of what we're really focused in on here But that could touch into you know taxation our registered tax return preparers so now we're talking about the people that are preparing the tax returns others any individual qualifying under section 10.5 e or section 10.7 is eligible to practice before the IRS to the extent provided in those sections Government officers and employees and state officers and employees now note from a practical standpoint that if you're a CPA firm or you're thinking of of doing tax preparation or if you're looking at someone who's thinking about Hiring someone to help them out with their taxes oftentimes on the lower income side of things they're going to spend a lot more of their time you know preparing The tax returns and there might be a lot of turnover in small and lower income tax preparations like an possibly an H&R block for example might have more turnover To crank out you know taxes might not have as much focus on representing people before the IRS in the event that the IRS comes back with a question right they could I'm not you know but that might be more of the And then higher income people are when you're when you're going into a larger CPA firms then part of the value that they might be providing people is that they are more likely to they're going to be around here when you get audited because remember the audit could happen Like three years after the tax return was prepared and so it would be nice if you can go to the CPA firm that prepared the tax return and say I would like you to help me defend this position before the IRS and they have the knowledge because they At least did the tax return three years ago possibly and can help to represent in that kind of scenario so from a practical standpoint the lower income tax returns might you know CPA firms might have a lot more turnover and might not really be around And focus as much time on practicing before the IRS in a similar fashion as like a lawyer where it would whereas again in the larger firms that might be a large part of the business because there might be a lot of questions about great areas in the code and positions That were taken in specific situations and larger more complex tax returns. Okay, so fees in general a practitioner may not charge an unconscionable fee in connection with any matter before the internal revenue service. So obviously we get into questions about what it means to be an incognito inconscionable fee but unconscionable fee but generally you know a reasonable person what what a reasonable think would be an unconscionable fee except as provided in paragraph B2,3 and 4 of this section a practitioner may not charge a contingent fee for services rendered in connection with any matter before the internal revenue service. Now this could seem strange at first because if you look at some areas of the legal profession You might say hey look they do that all the time in legal they say hey look at you know I'll represent you for free and you'll I'm only going to I'm only going to take money if we win we're going to win millions of dollars and then I and then I take half of it for my fee but if I lose like it But that's not the case with the IRS typically because you could see with other cases lower income individuals would not be able to hire a lawyer if they couldn't hire people in that scenario on a contingent fee basically saying look do you think I have a case lawyer I can't pay you right now because I don't have any money And my possibly my medical bills are out of control but if you win the case then then you'll get the money and everybody because I'll have the money to pay you so that kind of makes sense but when you're representing before the IRS then you don't want to give an incentive that that you're going to take a position that's not proper For as a tax professional right because we want to basically say I'm taking a position that is going to be a legitimate position that's within that's within the law so so and so you don't want to incentivize people to try to inflate refunds to try to get a Commission on the refund particularly on the tax preparation side of things because it leads to scamming meaning if you file a fraudulent tax return it might not get audited for three years later and the person that filed the tax return could be gone by that time So so so again the the idea is that you don't want to so you don't want to allow them to get paid on a contingent fee to try to incentivize them to take really extreme kind of positions In any case contingent fee is any fee that is based in whole or in part on whether or not a position taken on a tax return or other filing avoids challenged by the internal revenue service or is sustained either by the internal revenue service or in litigation So you can see like CPA firms if you didn't allow that CPA firms can also play the statistics right meaning that what would happen is you're going to say hey look the tax law is set up in a similar way as other laws like speeding on the freeway So if you speed on the freeway you're probably not going to get a ticket but the law is such that if you do get a ticket the cost is so high that it's going to prevent you from speeding One ticket is going to say I'm not going to speed at all because the one ticket is pretty high that's how the system kind of works so if you're a rational thinker you can I'm not going to speed because I'm going to get caught one time out of twenty but that one time is going to be hurt really bad And so the tax is the same way you're not going to get audited possibly every time you take a position that is incorrect or an extreme position but when you do the penalties could be high Now if you allow a CPA firm to say collect money based on the contingencies of the positions they take they can just say well yeah I'm just going to get hit you know I have thousands of clients You know some of them ten percent of them are going to get hit for these radical positions that I'm taking but because I have hundreds of clients it's going to be worth it right I'll be able to pay them back the penalties and whatnot and I'll just keep on doing right and that would hurt the profession so the CPA profession the tax profession has an incentive like lawyers to build trust like doctors and so on to build trust Because the more of a scam happens on the professional side of things the less value there is to being in the profession of tax professionals because what those people are doing when they're scamming is they're making money off of the good name of the other people that aren't scamming So a contingent fee includes a fee that is based on a percentage of the refund reported on a return that is based on a percentage of the taxes saved or that otherwise depend on the specific result attained So a contingent fee also includes any fee arrangement in which a practitioner will reimburse the client for all of a portion of the client's fee in the event that a position taken on a tax return or other filing is challenged by the internal revenue service or not sustained Whether pursuant to an indemnity agreement or a guarantee recession rights or any other arrangement so you can see what the IRS is trying to prevent here right because again that the tax firm could say I'm going to take these radical positions which I'm not likely to be able to defend in the event of an audit But I'm going to only get audited like 10% of the clients that I have and I'll just pay those people back I'll just pay them for the position that I lost and the other 90% are going to be fine and I'm going to get contingent I'm going to get a contingent fee based on these high refunds that I got which are going to be higher than what anybody else can get So you can see how they're trying to avoid people playing the numbers like that in basically a dishonest way So return of clients records so in general a practitioner must at the request of a client properly return any and all records of the client that are necessary for the client to comply with his or her tax obligations Now this seems pretty obvious but often times when people get into these disputes about I did the work you didn't pay me then they can get kind of heated at some times and people might say well I'm just not going to give you your records back But the records are theirs right so the W-2s are theirs the 1099s are theirs you can't just keep their stuff right so that they can't do their taxes with somebody else You're going to have to cut the losses and say okay you know we're not going to get paid or whatever and then let them go just let the client go and go your separate ways which is difficult at times But the practitioner may retain copies of the records returned to a client so the original is theirs you might have the copies because of course you might have done services based on their behalf And if there are questions about it you should have the ability to say this is why I did what I did based on the information provided to me here are the copies So the existence of a dispute over fees generally does not relieve the practitioner of his or her responsibility under this section So you can't say I'm going to get mad at you I'm going to hold your documents hostage so that you cannot be in compliance with the IRS that's not professional So nevertheless if applicable state law allows a or permits the retention of a client's records by a practitioner in the case of a dispute over fees for services rendered the practitioner need only return those records that must be attached to the taxpayers return So there could be some conditions on state law this overlap between state law and federal law can be complex sometimes So the practitioner however must provide the client with reasonable access to review and copy any additional records of the client retained by the practitioner under state law that are necessary for the client to comply with his or her federal tax obligations Conflict in interest except as provided by paragraph B of this section a practitioner shall not represent a client before the internal revenue service if the representation involves a conflict of interest a conflict of interest exists if So in other words obviously if you're representing somebody as an agent before the internal revenue service then you shouldn't be representing someone where their interests are commingled in some way with yours Right because then it's going to look it's going to look like you're not Independent not a lot of people have problems with this kind of thing because they say why don't care what it looks like I'm going to be honest right and it doesn't matter but it does matter because when people Questions somebody about their professionalism whether or not their decision is legitimate or not they're going to question whether or not they have vested interests in the situation and you can't just say well yeah I have a vested interest in the situation but I still was honest You could say that but it's still going to look bad right the better thing to do would be to not be the one you know acting in that situation because the appearance could look bad from a professional standpoint So the representation of one client will be directly adverse to another client so obviously if you're representing two clients on the different sides of a particular dispute you're basically arguing with yourself Now again a lot of people a lot of people have problems with wrapping their mind around this they're like well I can I can be fair on both sides of the dispute and again you probably You might be able to but again the appearance of it could look you could see how you get into sticky situations in terms of the look of it the claims they could have So there is a significant risk that the representation of one or more clients will be materially limited by the practitioner's responsibilities to another client a former client or a third person or by a personal interest of the practitioner So once again there is a significant risk that the representation of one or more clients will be materially limited by the practitioner's representation to another client So again you have two clients that might have different interests the interests of one could cause a problem in the other a former client or third person or by the personal interest of the practitioner Again if you're personally involved in the decision the decision has a personal impact on you it's going to be difficult for people to say well that person's impartial even though you could try to be impartial Okay advertising and solicitation restrictions so our practitioner may not with respect to any internal revenue service matter in any way use or participate in the use of any form of public communication or private solicitation containing a false fraudulent or coercive statement or claim or a misleading or deceptive statement or claim so note that as professionals clearly there's going to be a incentive and hopefully that incentive is self regulated within the profession Just like a law firm just like in the case of medicine when the profession starts to deceive the public then it has a very negative impact on the entire profession again they're making money off of basically the good name of the people that are not doing that And so it becomes really important honesty becomes important because usually in a in a business transaction the dissent that both people have significant knowledge about the transaction Meaning if you're going to buy an apple from a store you can see the apple you can see it's not rotten and in your and you're able to see the price you have everything you need to make the decision When you're talking about medicine law taxation there's an uneven amount of knowledge on one side versus the other because most people don't know a whole lot about the law or taxation or what the proper fees might be in this kind of stuff So that leads to the possibility of someone being able to deceive especially if they've been propped up from the idea of being professional being a profession that's why it's really painful to see doctors or something like that that are lying to people And that kind of thing because they've been propped up as professionals and they should be held to the standard of that because they have the uneven number of amount of information when dealing with people so they have the ability to take advantage Okay enrolled agents enrolled retirement plan agents are registered tax return preparers in describing their professional designation may not utilize the term certified or imply an employer employee relationship with the internal revenue service So examples of acceptable descriptions for enrolled agents are enrolled to represent taxpayers before the internal revenue service enrolled to practice before the internal revenue service and admitted to practice before the internal revenue service Now obviously from a marketing standpoint you know you go like that's not this a lot of wordy wordy stuff there so you can see where that runs into people when they're trying to market themselves they end up sometimes getting in trouble because again the formal language that we're trying to put in places to not be deceptive in nature So similarly examples of acceptable descriptions for enrolled retirement plan agents are quote enrolled to represent taxpayers before the internal revenue service as a retirement plan agent and quote enrolled to practice before the internal revenue service as a retirement plan agent and quote rolls right off the tongue that's going to pull people in no problem so an acceptable an example of an acceptable description for registered tax returns preparer is quote designated as a registered tax return preparer by the internal revenue service and quote Advertising and solicitation restrictions a practitioner may not make directly or indirectly an uninvited written or oral solicitation of employment in matters related to the internal revenue service if the solicitation violates federal or state law or other applicable rule e.g. attorneys or are precluded from making a solicitation that is prohibited by the contact rules applicable to all attorneys in their states of license so clearly this touches in on the kind of interplay between federal law and you know the state laws So any lawful solicitation made by or on behalf of a practitioner eligible to practice before the internal revenue service must nevertheless clearly identify the solicitation as such and if applicable identify the source of the information used in choosing the recipient standards with respect to tax returns and documents affidavits and other papers so a tax returns one a practitioner may not willfully recklessly or through gross incompetence sign a tax return or claim the refund that the practitioner knows or reasonably should know contains a position that a lacks a reasonable basis B is an unreasonable position as described in section 669 for a two of the internal revenue code including related regulations and other published guidance so in other words note that as the tax preparer the question is you know how much responsibility do I have in making sure that everything is exactly correct because we're reliant as the taxpayer on the documentation provided by the client so it's it can't be the case that we we have the responsibility to make sure that that everything that the client tells us is not a lie so then the but obviously if what we're being given is just on an unreasonable position it doesn't it's clearly wrong then as a professional then we should be that's you know where does the line be drawn on that is kind of the question so let's go through it one more time a practitioner may not willfully recklessly or through gross incompetence a sign a tax return or claim a refund that the practitioner knows or reasonably should know contains a position that a lacks reasonable basis so you put a position on there that there's no reasonable basis you're pretty darn sure that if you get audited by you would lose it would be the general idea B is unreasonable position as described in section 669 for a two of the internal revenue code so unreasonable position including the related regulations see is a willful attempt by the practitioner to understate the liability for tax or a reckless or intentional disregard of rules or regulations by the practitioner as described in section 669 for B two of the code so obviously if we're willfully attempting to understate the liability then you know we're we're we're succumbing to either pressure from the client to try to understate the liability to pull in more clients are possibly people are trying to basically get paid on the refund which goes back to that commission type of situation so and then advice advise a client to take a position on a tax return or claim the refund or prepare a portion of a tax return or claim for refund containing a position that a lacks a reasonable basis B is an unreasonable position as described in section 669 for a two of the code including the regulations and other published guidance or see is a willful attempt by the practitioner to understate the liability for tax or a reckless or intentional disregard for rules or regulations by the practitioner as described in section 669 for B two of the code including the related regulations and other publication guidance.


It's great to welcome Yaron Brooke to the program today. Yaron is the chairman of the Einrand Institute and host of the Yaron Brooke show. This is the first in a series of discussions that we're producing in partnership with the Einrand Institute. We're going to be talking eventually about capitalism, about welfare programs, about a maybe universal basic income and more today. We are going to start by talking about Einrand herself and her ideas. Yaron, so great to have you on. Oh, happy to be here. Thanks for having me on, David. So in my audience, I don't think it will come as a shock to my audience to hear that my sort of worldview overall is not particularly in line with objectivism and Einrand's ideas as I understand them. But it's possible, of course, that I that I misunderstand them to some degree. So just to like get started from your perspective, how do you if someone says I've never heard of Einrand? I don't know what objectivism is. What's the entry point to starting a conversation about that? Well, first, I would note she was a very successful author. She a Russian, a Russian immigrant, somebody who came to this country very young with nothing. She started out literally with nothing, came to Hollywood to try to get a job and worked in the back lot as an extra, started as an extra, worked in the wardrobe department, learned English in order to be able to write, write scripts for Hollywood and ultimately write novels and became, you know, one of the most successful American authors ever. I mean, whether you agree with her or not, Fountainhead and Atlas Shrugged have sold millions and millions of copies and given given that the thickness of the book, it's a pretty amazing story. They sell probably more today than they did when she was alive. So she was a very, very successful author and, you know, she developed a philosophy to a large extent in order to serve her literature. The philosophy was there in order to help her define and describe what she called the ideal man, ideal man or woman, the ideal human being. And her philosophy is she called it a philosophy for living, on earth for living life here, now on this planet. And it was really trying to project or did project a heroic view of man. So she had a very heroic view of what we as individuals are capable of. So that would be an introduction. And then, you know, I'd love to be able to go kind of into an overview of what her philosophy really stands for. Yeah. And I think, you know, having, having read, it's been a while, but I read The Fountainhead, I read a lot and a lot of literature. It was not my cup of tea politics aside, but we are not here to adjudicate literary critique here. But I think that your point about the philosophy serves the writing is an interesting one because I think you would probably agree much of the popularization of the fiction writing today is from groups that are actually really more into the the political philosophy of iron rand than the fiction. And and in that sense, it's maybe a good entry point into what the philosophy is. Yes, I think most people, most people are using the literature in order to get somewhere, but that was not her goal. Her goal was not particularly when she was young was not I want to change the world or I want to present a particular philosophy that will therefore write literature right from a very young age wanted to write literature. And then she came to a point where she wanted to project a particular type of human being, how would you know, how to walk in in The Fountainhead. And she said, well, what is the what is the views out there in the world of what this kind of human being looks like? What is an ideal man based on the philosophies that are acceptable in society? And she looked out there and she studied and she she read a lot of philosophy and she said, none of these are me. None of these are what I want to present. None of them are what I sense is is the ideal man. I therefore I need to do some thinking, some studying and to develop a philosophical view of what that looks like. So so she develops the philosophy again in service of the literature. So if we start with the metaphysics, Iron Man really views the world as reality is what it is. It's not what me or you feel like it should be. It's not why what some other consciousness, God or some other mystical element thinks it should be. It is what it is to quote Aristotle. A is a it's unmutable. And then how do we know reality? Well, here again, we know reality through our reason, through our senses. Our senses are valid. Our senses actually give us information about reality as it is. And it is a reason that gives us information about reality. So emotions are not tools of cognition and neither is revelation. There is no such thing as mystical revelation. Truth needs to be ascertained through reason and reason alone. And here I think maybe, you know, your audience might, you know, at this point, at least up to this point, think, OK, to the extent that they're secular, they might think that this is something that they they agree with. And I think this is a good foundation on which we can build maybe whatever their whatever agreement they might be. But then the question is who reasons, right? And the fact is that only individuals can reason just like we don't have a collective stomach and we can't eat for each other. We don't have a collective brain. There's no such thing as a collective consciousness. There's no floating consciousness above us all that reasons that discovers the truth. Only individuals can use their reason to discover the truth for themselves. And in morality, it's only our individual life that is the starting point for any kind of for any kind of meaning. So it's our individual life that we must attain. So her morality is based on the idea that our focus in morality should be on our own survival and that our moral purpose in life is our own individual happiness. So it's not a morality of we should sacrifice. It's not a morality. It's a morality that rejects the idea that your life is in service to the group, service to other people or service to a God, your life, the purpose of your life is in service of your own survival. And the purpose of it all is your own happiness. But it also rejects the idea that we should ask other people to sacrifice for us. That is, it rejects the idea of exploiting other people, of using other people in order to achieve our happiness. Our happiness is our responsibility and we must earn it. So let's let's I mean, that's a lot there. So let's start digging into where if we go a little further, we might start to get to some points of disagreement. So the idea of, you know, of a reality independent of consciousness, so to speak, yes, that is not unique to objectivism. So while it will likely sound relatively inoffensive to many in my audience and even something that they generally would would agree with, it's important, I think, to understand that it is not unique to objectivism. And when we talk about something like a reason as an example, the idea of reason, I think, is very appealing to to the vast majority of my audience. The issue, I think, for some in my audience and for me is that when you look at the epistemology of objectivism, you start getting into things like to pick an example. Existence is identity, which for me at least starts to border a little bit on the Deepak Chopra type of stuff, you know, cosmic consciousness and all of these things that they sort of sound like they make sense. But at the same time, does this really mean anything objectively? So I ran actually never says existence as identity. You're conflating two different things that she says. OK, she says existence exists. It just exists independent of consciousness. And then she says things are what they are. A is A. You A cannot be B. It cannot be its contradiction.  So, yes, there's a sense in which this is not original. Very much a sense where this is Aristotle and she she she thinks of basically three fundamental coaxiomatic ideas at the core of metaphysics. And that is the existence exists, the law of identity. There was the tilian law of identity of A is A and the law of causality. Things act based on their own nature. I don't think that's very controversial to a secular, you know, secular philosophers, certainly to philosophers who believe in reality, which is not everybody.  Hegel would be an example that things are, you know, they are contradictions in reality in and of itself. So so while I think she he or she is very much with the tilian, I do think the way she puts it all together is uniquely hers. But I don't think this is where you get into controversy. I do think there's some issues in epistemology which could and are more controversial and where there is more probably more conflict between her and other philosophers and where I think she's more original. Now, we're not going to get very deep into this because among other things, it's not my area of expertise. But, you know, for example, Immanuel Kant has a very different view of human reason. Human reason, to a large extent, for Kant is detached from what we'll call real reality, right? It's it human reason, in a sense, creates its own reality because it is a it is there's a filter between the real world out there that we never know that we never will know and what our conception of the world is and that reason is more played inside your own mind. And at the end of the day, he leads us towards a philosophy of the primacy of consciousness, where consciousness is primary, not reality. His view of reason detaches us from actual reality, from actual facts, from from from truth in my view. And I think that's why Rand Viewed Kant is is is the most damaging of all philosophers out there in terms of in terms of the the Enlightenment's movement towards a proper understanding of reason. Immanuel Kant comes and throws a wrench into it and blows us into a completely different direction. I think, for sure, one of the most controversial general areas is the way in which this worldview would dictate politics be done today, which is, in a sense, very relevant to many in the audience who say, well, hold on, if I adopt a Randian worldview, what does that mean about how government should function, et cetera? But before we get to that, the one thing that we get long before we get to that. Yes, the one thing I did want to mention is there is there a sort of existentialismist idea that goes through some of this and specifically what I mean by that is the idea from existentialism that what is important that it is an achievement merely to live one's life and to sort of be that that is in and of itself something to consider an achievement. Am I wrong to feel that there is some something about that through Ayn Rand's philosophy? It is, but she is very different than the existentialists in this sense. Absolutely, yes. So there is a and, you know, before we get to politics, I think her probably where there's real controversy, I think with the audience and probably with you is in her ethics. And I think that's where we should spend some time. But this is related. So for the existentialists, there's this the achievement is just to survive. And it doesn't matter so much how you survive. And indeed, happiness is really fleeting and almost an impossibility for them. For Rand, survival is an achievement, but it's not just any survival. It's not survival at the material level. It's survival. What she considers survival, quite human being survival as a full functioning human being as a as a fully manifest human being. So it's survival to your fullest potential. That's what to who is the moral ideal. It's to thrive in every dimension of our lives. It's to make the most of the life that we have. And again, in opposition, if you will, to the existentialists who are very driven by emotional considerations and and by, you know, or even to differentiate her from Nietzsche, where there is this power of will, which again is emotion, Rand believes that the way to achieve success in living as a human being is to commit oneself to reason, to commit oneself to rationality, to commit myself to facts, to be, you know, exclusively honest about everything and committed to the facts of reality and everything one does and to focus one's lives on living the best life one can for oneself, but guided by reason, not by emotion, not by something called the will, but by guided by one's own reason and one's own one's understanding of what is true and of the facts of reality. Yeah, I mean, I think where we will, we start to run into a problem. And I've had these discussions before with people who subscribe to any ideology. It doesn't matter what it is.  And when the principles that one would espouse for themselves come into conflict with someone else attempting to live those same principles. And it seems like that is where the real hard work is. And if we want to use this to lead into the ethics, that's fine, or we can stay here. But the principles are a great starting point. But I feel like there are only 20 percent of the conversation and the 80 percent, I believe, is done in figuring out how this applies in the real world. Oh, no, no doubt. I mean, everybody has to first understand the principles and accept them or not accept them, but first you have to understand them. And then one has to apply them and an application is not easy. It's it's not trivial. I think, you know, it's it's about living and it's about living consistent with those principles. And what does it mean, therefore, to live one's life for oneself guided by reason? Well, for a reason, it means certain virtues. It means committing oneself to certain virtues. It's committing oneself to one's mind, committing oneself to rational, rationally thinking through, not acting on emotions. And a lot of that is not it's not only in conflict with other people. I mean, we have plenty of situations in life where our mind tells us to do one thing and our emotions are guiding us in a different direction. And we need guidance in order to decide should I follow my emotion or should I follow my reason? And it's not obvious.  And Rand says, no, in any decision, you must use your mind. You must think it through. You must follow the facts and and and reason. So it's not just with other people, but suddenly when it comes to other people, there's a question of justice, which then is an application of this morality. How do you how should you treat other people? And Rand would argue you should treat them injustice. And what does that mean? You should treat them based on how they deserve to be treated. And in different contexts in one life, desert means different things. So already there are certain moral codes that would say you should treat people the same. That, you know, the justice requires equality and Rand rejects that Rand views justice as an issue of desert. And we could go over every one of her virtues. She has seven, which he articulates, every one of those virtues. And each one of those applies reason and rationality to a certain aspect of one's life with the goal being living the best life that you can with a goal being your own individual happiness. Yeah, I mean, I guess to put in the most straightforward way, the way in which this creates an obvious conflict is that person A, living their best life may require or at least it may be most readily achieved via actions that prevent person B from living their best life as just equally and definitively defined by Randy and philosophy. And how does how do we account for that? So Rand has a whole essay on this. And, you know, she has an essay, which asks the question, answers the question, is there a conflict between rational men, a rational, malignant, constant conflict or their values in constant conflict? And her view is no, that there is no conflict there. And you would have to come up with with particular, you know, particular scenarios in order to kind of untangle all that. But she could argue that my seeking my values does not conflict with your seeking your own values in the big scheme of things. Now, in the moment, it might appear for that to be that. So, for example, only one of us can get the job, right? There's a job where both were both were both applying for it. We're both rational, both being honest, we're both qualified. But only one of us is going to get the job. And she would argue that a rational person would not want a job. If somebody else was more qualified for him, for whatever reason, then he was. He would not want the job if he was getting some special favor, or if he was being viewed as, yeah, you're less qualified, but we'll take you. That is, it's not a value to that person to get a job under those circumstances. And therefore it is consistent with his own values, sometimes not to get a job. So it might be hard. It might in the moment be unpleasant. But in the scope of one's life, it is not a contradiction. I don't know. I mean, this, this starts to get edging into there's an interesting clip. It's not a perfect analogy, but there's a very interesting discussion that took place between Jordan Peterson and a guy named Matt Dilla Hunty. And in a discussion about morality, absent religious doctrine, Jordan Peterson asserted that even those who believe that they are atheists, if they are moral, deep down, they actually are religious. They may just not even know it. And when you say that even if in the short term it appears as though this is a violation of the values because they wanted the job, even if they were less qualified, that in the long run, it is more consistent with one's values, not to get the job. Even if it means your family starves, even if it means all sorts.  I don't believe a part of morality. Most of us apply for jobs are not in the situation where your family starves. It's one job out of many. But I think I think it's absolutely real. I think that, you know, lots of people get jobs, which way they are not qualified for and they feel terrible once they discover that they're not qualified for. And the long term negative consequences on their lives are not good. And they'd be better off if they didn't get the job in the long run. There are a lot of you can you can imagine and I think it's self evident that there are a lot of situations where we want something, but actually not getting that something at that moment in time is actually better for us. Now, we might not realize it at the time. We're all going to be disappointed. We're all going to be sad sometimes.  There are ups and downs and challenges. But the point is that if one lives consistently according to these ideas, one does achieve a state of happiness. One does achieve success. And when one reviews one's life, when you look at these situations, I think if you approach it rationally, you don't feel like oh, there's this. I hate this other guy because he got the job and I didn't. I, you know, if if I think that the decisions make rationally, then he got the job and I didn't. I don't know. I think that I think that it's a bit dismissive of the reality that, you know, in the scenario where the two people vying for the job are middle class people who if they don't get this job, they'll find some other job. I think it is very sort of establishment centric in the sense that there are hundreds of millions or even billions of people on this planet for whom it really might be the opportunity that exists to feed their family and to avoid absolutely horrible conditions. And the idea of saying, listen, in the long run, just adhering to the values is going to be better for everybody. For a lot of people, it's not getting the job, even if you're unqualified, is actually going to be better objectively. Yes and no. But look, I'm assuming here that people are rational. I'm assuming people here are living and thinking long term. And yes, there are situations in life where you you grab what you can get. Certainly as the countries in the world right now, where people are starving, where I don't expect them to have this kind of attitude and and they are living a lifeboat scenario. They are living survival, you know, get the job or die. And then you grab the job. I mean, I'm not going to judge somebody like that in that kind of scenario. I'm just saying that and I don't consider this middle class because I consider I consider this true in in any free economy that this is true of of anybody in whatever their social economic status is that in a free economy, if you know, you're never on the verge of starvation, an advanced free economy, you're never on the verge of starvation, options exist. And and maybe this now spills into economics and spills into politics. But you've got to take over if you want to have a healthy, successful life. If you're going to be happy long term, you're going to have to take that long term perspective. And again, that long term perspective might be painful in the short run, but it'll pay off the pay off multiple times in the long run. And this is not just look, I'm trying to think of a of a of a scenario. But, you know, even without a specific one, I mean, I think this is an example of why some people hear this and they say, wow, that sounds extraordinarily dismissive of a lot of people's situations. It sounds like and this is I don't know if you would agree that Randy in philosophy feeds into applied to modern politics, a sort of libertarian ideology. I don't like libertarian, but free market ideology certainly certainly firstly feeds into free markets. And look, let's let's take let's take a political issue for for the hell of it. Yeah. And let's take something like affirmative action, right? So a certain percentage of people get a jobs not because they qualified, but because of the color of their skin, which I find offensive. And I will hold on a second. I think that that we need we can't go further until we don't necessarily agree about what that if you have hold on a second, though, but you've identified people can be equally qualified. You could have equally qualified people where deference is given to a group that has been historically oppressed, but that's hypothetically possible. Let's make an assumption. I'm not saying it's true always. OK, certainly is not true always. Sometimes the person with the different color of the skin is better. And sometimes they're the same. But let's say there are circumstances and I believe they are circumstances. And I think the empirical evidence suggests once in a while, somebody gets in for a job they're not fully qualified for. There were more people who are more qualified for and they get the job in spite of that. Yeah, I would argue the primary reason for that is nepotism, not affirmative action. But fair whatever the reason may be, but there certainly are cases where it's affirmative action and you can just look at the admission standards at Harvard to see that in action. But what does that say to them? Put aside the political issue, let's talk just about the person. What does that reflect about in terms of their own self esteem? And in terms of the pride that they have in getting that job? Well, first, they don't know why they got the job. And there's a there's a probability. It might be very low. You know, maybe I'll accept what you say. And it's very low, but there might be a probability that they didn't get the job because of their qualification. Maybe it's because of nepotism. Maybe it's affirmative action. Maybe it's a thousand different other things. But it affects their self esteem. OK, they don't know why they got the job. It reduces the ability to have pride in what they achieve in that job. When they fail in that job, if they fail or in the school, if they fail, that is crushing to them, right? So I think it has real world application. And I'm against nepotism. I'm against people getting what they don't deserve, what they don't deserve on their merits. And when people do get it, it has a psychological self esteem. Price to pay, and I would rather live in a world in which we minimize that. You're never going to minimize, you know, nepotism completely, but I would like to minimize it as much as possible. And I think the only way to minimize it is to, for both parties or parties, to adopt a rational approach to hiring, for example, or to any activity in life. And look, we don't live in a rational world. We don't live in which people are, for the most part, rational and put aside the politics, put aside the particular politics, even in personal ethics. People are not rational. People are not honest. People are deceiving themselves and lying to themselves all the time. And people are committing, following emotions and following lots of things that I think are wrong. So it doesn't surprise me that people are upset by lots of stuff that happens to them all around them. And the fact that I know that the hire that people are hiring might not be basing the hiring on the most rational, merit-based assessment that they might be nepotism, let's say, or other standards going into it would cause me to be frustrated if I don't get a job. Yeah, I mean, listen, we're not going to now adjudicate affirmative action in total because we've got so many other things to talk about. But I think this is sort of like when the focus around the climate becomes should the government force you to use a particular type of straw. I argue that's the wrong conversation. When a hundred companies do 70 percent of the pollution, me changing the type of straw I use, I think is a red herring in the same way. When you look at something like college admissions at the, at the really elite schools and you look at the number of people that are either legacy admissions related to someone who's made a big donation, and you compare it to cases in which what you've got equally qualified people where deference was given to someone from an underprivileged group. I focus on the bulk of the problem myself, but that's probably a conversation. I mean, again, my focus is completely different. Yes, I would love for Harvard to be a truly private institution that does not get a dime from the government. And as a consequence, makes its own admissions decisions. And if it wants to discriminate in any way, it has the right to discriminate. So what I want is for the government, what I ideally want with all these issues is for the government to get out of the way and private citizens to engage in it and maybe later we'll get to the pollution question and what counts as pollution and what doesn't and how you deal with real pollution issues. But, but, you know, I think that once we once we acknowledge that once we let private individuals do what they want to do, rather than have to abide by some government regulation, some government standard, that then you have to adjudicate by who should be discriminated against? Who is it Asians? Is it whites? And then we we get into a conversation that's all racist because we're judging people by the race one way or the other, whether it's whether it's the way we treat Asians or the way we treat whites or the way we treat blacks or anybody else. I think that's a losing proposition to begin with. We, you know, they and and this is this is a really bad place to be. And it's a bad place. The country isn't. But going back to personal morality, yeah, the key here is for people to take their life seriously. And look, there's nothing in this philosophy that is middle class or elitist in any way. I truly believe that these are the set of ideas. These are set of virtues that apply to anybody, anybody starting out in any position in life if they want to have a good life and a good life is not measured in money. You know, so it's not about money. It's not it's not just about money. Money is a factor, but it's not just about money. That's another. I mean, people always think of I ran in materialistic terms, but it's not just about money.  And it's not always easy to follow those principles. The decisions don't always going to make you happy. I give you a given example from the fountain head, which you said you have read. I don't know if you remember the scene or not, but there's a scene in the fountain head. How it work is the struggling architect. And there's a scene in the fountain head where this bank is going to hire him to build a building and they're going to pay him a lot of money. But they just want to make few changes to his design. And a few changes to his design completely destroy the integrity of the building, the integrity of a design. And he says no. And he walks away and he lands up working in a quarry in order to feed himself. Because yeah, sometimes your decisions are very tough. Now, is he better off from making that decision long term, not taking the money and going to work in the quarry? Ayn Rand's point is yes, your personal integrity, living by those ideas and sticking to that integrity and living a complete life without compromise. Sometimes it's going to require you to go work in a quarry. Sometimes it's going to require you to somehow lose a lot of money and struggle. But if you follow through on it, you will be successful in living, whether it comes in dollar signs or not, you will be successful in life. And that is why they call it a fictional novel. But you see people who do that. It happens. But the opposite happens as well as the reality. I mean, there are many cases. The opposite. The opposite. I compromise on the building.  The opposite would be the opposite would be in the short term, in the short term, you compromise that compromise allows you in the long term to take the fruits of that compromise and change the system. That is what the problem is. I mean, listen, this is like, I'll give you an example and then maybe this will be a good, we're getting into the politics. So it may be a good place to pause. I often have to make decisions about, listen, air travel. Would you grant that air travel does pollute the planet? We can disagree about what the solution would be or how much. But planes flying around this, this releases emissions into the atmosphere. Would you would you grant that you're on? I grant that it releases emissions into that. Very good. One could argue I should stop all air travel to places where I am going to speak about what I do. But I could also say, listen, the cost that I am exhibiting by releasing this is smaller than the number of people I might inspire who in the next 50 years will go and make positive changes. That that is how I might compromise my value in the short term. But in the long term, I actually am doing a better thing. Well, I mean, you know, if you really accept what you believe and let's let's say we'll accept an extreme version of that where the world is literally, you know, it's in the next 12 years. If we don't stop flying in the next 12, the world is going to end. Then I'm not sure that's a good compromise. I don't buy into that. I'm not sure you do. But but yes, one has to one has to have a hierarchy of values and figure out how to ascertain how to gain our most important values. And sometimes one has to give up a lower value in order to attain a higher value. And that's, you know, what I meant is arguing is for creating a higher care value, defining a higher care value and making sure you never give up high value, your integrity as an artist. Okay, or low value, that would be a sacrifice. But giving up a lower value for the sake of a higher value. Well, of course you do that every day, every minute that you live is a minute you can do 55 different things and you choose to do one. And in a sense, you're giving up doing the 54 other things, but you're not. So the idea here is, is to have principles by which one defines one's values, one creates a higher care value and then one makes sure that you're never sacrificing something higher for something lower one's life consistently based on that. All right. Well, we've now expanded to just beyond the initial definition, which was just about any compromise to the idea of a hierarchy, which I think is a more well developed idea. Sure.  Obviously, if my wife wants to go to movies and I want to go to restaurant and we can't, and I compromise and go to movies with her, that's not a moral compromise that we're going to, you know, that, that I believe you should never do. So it's, it's a question of how important is something to you. Absolutely. And what should never give up what's really, really important for something less important. So let's pause the conversation there. In part two, we're really getting into economics and politics. And in part two, we're going to be dealing with capitalism specifically. We've been speaking with your on Brooke, who is chairman of the Ayn Rand Institute and host of the Iran Brooke show. And we will have our next conversation with your on coming up very soon.


Hey guys, welcome back to my YouTube channel. This is Daniel Rosal here. I am here today on the steep Moshe Baram Road. I'm just about to take a right turn on to D'Arch of Rhone, Hebron Road. And what I thought to do, what I thought I would do today because I was in the area running in errands, I thought I'd do the walk I did in the summer which was going south towards the crossing with Bethlehem crossing checkpoint 300 But what I do instead because the scenery right there is really nice. I would take a left turn and scurrp by the entrance to Harchal Ma, which is a little bit over the green line. In fact, I will make a comment when I'm passing the green line itself. As I did the last time, there's really nothing there. It's just a line on the map. The high rises we're seeing in front of us are located on D'Arch of Rhone. Towards the end of the Arnona neighborhood in South Jerusalem. This is all South Jerusalem here and once I get over this hilly stretch, turning right, I'm going to stop talking for a minute to catch my breath. Throw on a face mask because although this is a beautiful walk, it is running right next to a major traffic artery. So this is one thing I hope that when COVID finally ends or at least becomes an endemic. One thing I'm looking forward to maybe seeing stick around is wearing face masks in certain circumstances because it's a big thing in Eastern cultures, not so much in the West. And as an asthmatic, I find my breathing is much much better if I'm going on a walk or jog like this. When I stick a mask on my face to KN95 to clean up the air a bit. So just to the left, here would be Ramat Rachele. In fact, you can see it there up in the hill, which is a kibbutt on the periphery of Jerusalem. There's a hotel there with a fitness center. In fact, if I were to take this road, I could get into it. We're seeing those blue and white buses running in two directions. The ones traveling opposite me traveling southbound are running into Jerusalem. And the ones traveling on the my side of the road are running to Bethlehem. As well as that, this road leads to the main transit into Gusha Tzion, which is called Kvisham in a road. The highway that goes through the tunnels, because it actually passes under Bejala around Bethlehem. So that's why it's called as such. We're just passing there Ramat Rachele. I finally got right into I actually ended up not fixing my phone. I ended up just using an older phone. I'm going to buy a new one. So I need to have a functional display now, which is nice. This now is looking westward as I turn the camera to the right. And the turn off, the last turn off here is going towards Bates of Fafa, which is like the last Arab neighborhood in South Jerusalem, following that there is Gilo and also Har Gilo. As I continue along this road, there'll be a couple of things worth pointing out. There's a memorial that I hope we will pass, should be on this side of the road. There's also the Mar Elias Monastery. Clearly because I'm travelling south in the sun it's setting. The sun's in the camera a little bit. But as I turn off it should be a little bit easier to see. So this supermarket complex on the left, I believe is already part of Ramat Rachele. We can already see some open ground here on the left. You can walk both directions on the street as I showed in my video on the summer. This road, by the way, will be running into Ramat Rachele. What I was about to say though, it's possible to walk both directions on this road as I showed in the summer. You can walk all the way to the checkpoint with Bates of Fafa and Checkpoint 300. So if you're able to enter Bates of Fafa legally as a tourist, whatever, it's totally viable. It's just not that heavily populated as you can see both in this direction and on the other side of the road leading into Jerusalem. There's really no one else walking at this particular hour of the day. Those Israeli buses, one of them is now a Superbus but the first Egid bus was going to Gilo. So that's kind of the last what are called ring neighbourhoods in Jerusalem. As you can see the signpost is directing us both to Gushet Tion along right 60 to Gilo itself. Tangentially this phenomenon of there being multiple bus companies in Jerusalem is a new development. The second bus here, the 75 is run by the Superbus company and the 30 bus just ahead of it is run by Egid. So this was only actually in the last few months that Superbus got a license to operate in Jerusalem and when it did it has broken the monopoly that was hit her toe held by Egid and if I may say so their buses are more comfortable. So the last thing we learn is that competition is good. So this is kind of the tail end of Baitsefafa I'm not exactly sure what is down here but it is some kind of craggy craggy landscape. Seems to be my go to word for these videos describing stuff as craggy. This road I believe would be leading us into Baitsefafa as you can see from the Arab bus there. Now we are sort of beginning to get into the whole reason that I wanted to come on this walk now that we are out of the city a little bit you can start to see some of the very nice greenery on both sides of the road. So we pretty much passed Ramat Rachel now you can see it off in the distance there and we get little respite from construction as we get out of the Jerusalem urbanization. So we have officially just crossed the green line I forgot to mention exactly where it was but if you can see my location on the map here we are just about 20 meters past the green line so we are now officially over it and technically anything beyond this point is already controversial thus if you read the Wikipedia page for Gilo or you will see it referred to in Israeli settlement. Just to be clear I am not endorsing that position I am just stating what the facts are. The facts at least as most people perceive them in the international community. Here we can see a bit of snow still not melted most of it is gone at this stage I am recording this just today or two after the snowing. What I want to be doing differently on this video versus the last time I came out here is taking this left turn this is going on to right 398 and so I am going to be taking this turn off Hebron Road the Mar Elias Monastery which I might come back to later is on the opposite side of the road just a little bit ahead of us this, by taking this road Haik O Ma is going to be on the right which is the south the Matra Kale is going to be on the left the Palestinian village of Um Tuba is going to be on the left and Sur Bahar they are both kind of looks like amalgamated into one village so this is what I wanted to come and record today just to see what the views are like from this section of the road pretty much from this point onwards the 398 travelling eastward of is going to be going into East Jerusalem there is really not much more of Jewish Jerusalem beyond this point after the Matra Kale which is the complex up on the hill so it's going to be pretty much all and this road actually loops down southbound around by Bethlehem and Bates Ahor which is one of the Bates Ahor is really part of Bethlehem although I think it's actually technically classed as area A I'm just waiting for this light to turn green and on the other side this is looking back towards those two towers where we were about 10 minutes ago that is in Arnona and then all the way to Jerusalem you've got a really roof in this point all over the city you can see the cranes in downtown Jerusalem all the way from up here in the south this is the kind of place where if Jerusalem ever gets around to installing decent cycling lanes they would be really needed because you can see trying to cycle on this road would be a bit risky to say the least so once you finally get across and across to the right of the road go by Hartleman and see what else can be seen finally green after the longest traffic light in the world so we're now onto the 398 and this is exactly what I came out here to see a bit of a bit of nature I'm going to try to get to the other side but I want to wait for some less chaotic crossing in the road looks like there are a couple of roads through here I never really appreciate it until recently just how many trails there are running through Jerusalem I'm not sure all of them are even mapped on all trails there we go so those buildings in the distance would already be in Hartleman in fact the Israeli government I believe recently announced the awarding of a tender for building in Hartleman which was controversial so living in Jerusalem it's kind of hard to you just get used to living here and then you're like well why would building in Hartleman be controversial because living in this city you're not reminded daily of the existence of the green line or any that stuff so yeah this is Hartleman in front of us we are both considered a settlement but also one of the ring neighborhoods is the word used to describe these neighborhoods that are attached to the city of Jerusalem so you can get buses right within Jerusalem to Hartleman back functions really as part of the city although this complex up on the hill here or Matrakel if I'm not mistaken is actually its own municipality and like I said earlier because it's getting a bit fuming here so this is labeled on the map as Omtuba the Palestinian Arab town on the other side of the wall I'm walking now on the route 398 which is going to wind around Hartleman don't really have any particular destination other than to try you can kind of see it from within this town as well Sur Bahar is also on this road facing eastward looking into East Jerusalem and past the separation barrier and up here on the right is Hartleman the town the edge of Jerusalem so it looks like that's about as far as I can go on this walk you can see where the actual pedestrian lane is going to come to an end on both sides so looks like there is a little track path but I probably will leave this adventure for another day thank you for watching