posted November 27, 2013 06:38 PM            

One of the persons on this list is Joseph Banister. He is a former insider at the IRS, one of the level 13 Special Agents. Upon discovering that there is no law passed by Congress requiring anyone to file a tax return (such a law would be violative of the 5th Amendment, since filing a return is akin to being a witness against oneself), he began questioning his superiors about what he found. He was asked to resign. The IRS tried for years to silence him, culminating in a trial in 2005, of which he was acquitted of all charges.

Around tax time, the IRS sends press releases of convictions to encourage voluntary compliance, but you don't get to see all of the victories and wins against them.

Banister is a real thorn in the foot of the IRS. He was one of their own.

posted November 30, 2013 02:59 PM            

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Judges don't sign off on just any whim. The government would have to present reasonable evidence of wrongdoing.

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I'm trying to get you over the hump of this reality, so that you don't go into law thinking that things are the way you think they are.

It's not impossible that a judge wouldn't sign off on it, but chances are VERY strong that they will. The reason being, the IRS attempted audit and the taxpayer evaded. The law states that Congress has the ability to collect taxes, so there has to be a means of enforcement. Enforcement deals with the substantiation of claims made...which the taxpayer is trying to get out of providing.

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Not wanting to waive your 4th and 5th Amendment rights is not indicative of guilt,

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Courts are far less naive than this. If they see the probability of guilt based upon the suspected person's actions, they are likely to pursue justice.

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Neither is evidence of any guilt on your part.

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Nor are they evidence of innocence.

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Glad you learned something.

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I'm still hoping that you learn something before you have to learn it the hard way.

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It isn't a huge legal battle or added expense.

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It is. It obviously is as a matter of fact, because now you have to get an attorney. God help you if you have to pay the IRS's attorney's fees as well for having lost your case.

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Worst case, they get the court order, and then you submit to the audit anyway.

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Worst case, you're looking at a potential six years worth of audit with every discrepancy brought before the court, and you end up with more taxes, more interest on those taxes, legal fees, and maybe jail time for having perjured yourself or misbehaved in the court's eyes.

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The IRS has to make so much per hour or they drop it.

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As far as I know the IRS regularly loses money pursuing audits, so I don't believe this is the case.

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If you resist, they will back off 99 percent of the time.

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What are you basing this on? I don't think you'd hear this statistic from any tax attorney.

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One of the persons on this list is Joseph Banister. He is a former insider at the IRS, one of the level 13 Special Agents. Upon discovering that there is no law passed by Congress requiring anyone to file a tax return (such a law would be violative of the 5th Amendment, since filing a return is akin to being a witness against oneself), he began questioning his superiors about what he found. He was asked to resign. The IRS tried for years to silence him, culminating in a trial in 2005, of which he was acquitted of all charges.

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posted November 30, 2013 05:33 PM            

Banister won his case against the federal government in 2005. Their attempt to railroad him was an epic fail. He pays his taxes without filing a 1040 confession sheet, because he does not want to voluntarily waive his 5th Amendment right not to be a witness against himself. He believes that one cannot file a tax return without waiving that right. Some courts have agreed.

The United States Court of Appeals in Sullivan v. United States ruled that: There can be no question that one who files a return under oath is a witness within the meaning of the Amendment.

The only reason this didn't sound the death knell to the income tax was because Sullivan wrongly raised the issue of the privilege against self-incrimination (which isn't even mentioned in the Fifth Amendment) instead of the right not to be a witness against oneself, so the Court was able to address the issue raised without striking the income tax...but they did make some startling rulings nonetheless.

The Supreme Court in Garner v. United States ruled that: The information revealed in the preparation and filing of an income tax return is, for Fifth Amendment analysis, the testimony of a "witness" as that term is used herein.

So, can people ever be required to be a witness against themselves? No. Not without immunity, that is. This is a fundamental principle in American jurisprudence which goes back to the rack mentality of coercing confessions by torture. AG, your lack of understanding regarding the Fifth Amendment and what it means to be a witness against oneself just confirms how you parrot things you have no true comprehension of. Now run off to the IRS website and copy and paste more diatribe. But I take it that you won't try to argue with what the Supreme Court says the Fifth Amendment means, will you? And the Fifth Amendment also applies to civil matters, as well, which has been ruled in numerous court cases.

The Supreme Court ruled in the well-known Miranda decision that: The Fifth Amendment provision that the individual cannot be compelled to be a witness against himself cannot be abridged.

The Miranda case didn't say, "Unless it is referencing income taxes."

That's why the writers of the IRS' (dis)information essays cleverly use the word voluntary over and over again. The goal of the government is to convince us that voluntary really means mandatory, though, because you MUST volunteer. Of course, you can CHOOSE to waive your rights and file a return. That's what these brave IRS agent turncoats are saying, anyway. The government wants it both ways. In tax evasion cases, they rule the returns are made voluntarily. In failure to file cases, they rule that they are mandatory. But there are ample enough court cases that now exist to show that tax returns are required. Being required, that information should not (legally) be used against you unless you are given immunity for your testimony. Quite a legal conudrum that could only be perpetuated by a corrupt federal judiciary that (receiving their paychecks from the treasury) agree to jail innocent Americans.

The one thing that these IRS whistleblowers have covinced me is that most of the IRS is just as duped as everyone else (and these agents were also--for a time). They are not told any of this by the Service. They are not told about what a colossal fraud the tax system is.

I'm not a patriot or a hero. I do respect those who are. I file. And I pay what I self-assess and then consequently owe. But I will never submit to an audit. And I will sleep very well at night knowing that I will not submit to bluff and intimidation. I accurately report my income and deductions, so any coercion by the IRS against me will fail. I have nothing to hide. The law and courts allow me to refuse to allow the government to inspect my books and records. And the Supreme Court says that I cannot be penalized for doing so.

Saying they will go back six years is hogwash. And I would resist those audits as well if they did. You assume that I perjure myself. Only if my returs are wrong would there be additional pernalties. They are wasting their time auditing me. They will get nowhere.

We have already determined that:

1. Audits are voluntary. Getting you to finally admit that was like pulling teeth. You posted a case not applicable to the core issue to try to refute that the Fourth and Fifth Amendments protect one's right to opt out of an audit.

2. Summonses can be ignored.

3. And there can be no penalty (according to the Supreme Court) for ignoring a summons.

posted November 30, 2013 07:33 PM            

In regard to the latter, the Federal Debt Collection Practices Act (a strict liability law, which means that you either broke it or not, and there are no excuses allowed in your defense) is a huge stick, and I will swing it like a pro ball player. Let me preface the following information with a Disclaimer: I AM NOT A LAWYER, AND I AM NOT GIVING LEGAL ADVICE. I AM GIVING LEGAL INFORMATION. THERE IS A DIFFERENCE BETWEEN GENERAL LEGAL INFORMATION AND LEGAL ADVICE. I will turn the tables on them and make them drop their case and then settle ours. I will just hit each of them a federal suit. No bill collector wants to go to federal court and lose on a FDCPA claim and become a statistic (precedent) to be used against the rest of those vultures. Few people show up for court when sued by a bill collector, so they win by default. Then they get a judgment and consequently a wage garnishment on a debt they purchased for pennies on the dollar. This is their business model. But fighting back will likely have most of them drop it. And if it's a valid FDCPA claim, then I can file suit in federal court (their suit is usually in small claims but can be also be in state court). The FDCPA ensures my fee is paid, so my clients won't have to pay me anything to take their case. Upon filing a suit against a debtor, these bottom-feeders produce an Affidavit signed by them saying they are owed the money. By countering with your own Affidavit, they then have to either produce proof (the original contract), which they don't typically have OR a live witness. The added expense flatlines their business model, and they are likely to drop the suit when someone fights back this way, especially when the Defendant answers the Complaint with some great Affirmative Defenses of their own. If in state court, the Defendant can bombard them with Interrogatories as well (not allowed in small claims).

In regard to the former, I am not deluded into thinking I will always win in failure to file cases...but I will win some of them. The key is the word "willful." And with every jury that returns with a full acquital, I will celebrate that win with much fervor.

posted November 30, 2013 10:21 PM            

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Originally posted by Catalina:
However, Banister pays his taxes. He points out the difficulties involved in getting into legal disputes with the IRS and how their definition of "justice" is more like "railroad". And as I said, a former colleague who listened to him did not avoid being auditted or paying the rather large sum they said she owed.

So while they may be right in theory, practically speaking no one has yet fought such a case successfully as you are suggesting. Banister's case was different than refusing to cooperate for an audit.

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posted November 30, 2013 10:44 PM            

On August 27, 2008, the United States Tax Court ruled that Banister was liable for federal income taxes and penalties for failure to file his 2002 federal income tax return and report, as income, $23,000 in a distribution from a retirement plan and other income.[13] Banister appealed, and the United States Court of Appeals ruled against him.

posted December 01, 2013 12:34 PM            

Another Research Foundation Member Found "Not Guilty" on All Counts in Well-Publicized Jury Trial
by Lamarr Hardy

"Hallelujah!" was Lloyd L. Long's first comment, after being acquitted, recently, of all "Willful Failure to File" tax charges lodged against him by the Internal Revenue Service for the years 1989 and 1990. How did he do that? No, it wasn't a "miracle." Long did it by bringing before the jury solid, well-documented evidence, acquired from the Research Foundation, and other sources.

Long based his defense on his personal belief that he was not a person required to file Federal income tax returns. Long's war of words was engaged through his attorneys, the nationally-prominent Lowell Becraft of Huntsville, Alabama and Russell J. Leonard of Sewanee, Tennessee, who fought with the most powerful and time-honored weapon available: THE TRUTH!

ARGUMENTS OPEN JURY EYES IN 3-DAY COURT BATTLE
To open his defense, Long testified under oath that he had personally studied the IR Code (Title 26), and truly believed the income tax to be an excise tax which applied only to specific type of individuals or "persons" specified in the IR Code.

According to Long's research, the income tax applied ONLY to non- resident aliens, and U.S. citizens living abroad in a country where a tax treaty exists with the United States (Internal Revenue Code Sections 1441-1443).

Long stated that the only other IR Code section he found that deals with the issue of who is liable for income tax on the "withholding agent." In conclusion Long said "I am not one of those people referred to in Sections 1441, 1442, and 1461, and therefore I believe the law cannot apply to me." Long, to verify his statement, picked up his copy of IR Code book, (a 2 1/4 inch thick, 5 lb. volume containing 9,416 pages of small print!) and cited one of the pages he had carefully tabbed from Section 7701(a)(16) which defines the term "withholding agent" used in Section 1461.

The jury also heard Long say that "there are many other tax liability sections that apply 'privileged occupation' to those who are involved in the sale or manufacture of alcoholic beverages, tobacco products, and the manufacture of firearms, BUT I CAN FIND NO SECTION IN SUBTITLE A THAT APPLIES TO ME."

FILING "REQUIRED BY LAW" DECLARES PROSECUTION LAWYER
In presenting the case for the Internal Revenue Service, assistant U.S. Attorney Curtis Collier, assisted by IRS special agent Michael Cheasley, declared that Mr. Long had a gross income in excess of $49,000 for each of the years 1989 and 1990, and that he had "willfully" failed to file income tax returns for those years as "required by law."

In trial, the defense admitted that Mr. Long did in fact have income in excess of $49,000 for each of the years in question, and that he did not file a return. Attorney Becraft, in defense of Long, proceeded to prove to the jury beyond a reasonable doubt that Long was not "liable" for an income tax, nor was he "required by law" to file.

COURT RULINGS CITED AS PROOF
Defense testimony showed a case titled "Brushaber v Union Pacific Railroad" wherein it was the unanimous decision of the U.S. Supreme Court that the Sixteenth Amendment (to the Constitution) did not give congress any new power to tax any new subjects; it merely tried to simplify the way in which the tax was imposed. The ruling also showed that the income tax was, in fact, an excise tax on corporate privileges and privileged occupations.

The defense then brought out a case entitled "Flint v Stone Tracy Co." wherein an excise tax was defined as being a tax laid upon the manufacture, sale and consumption of commodities within the country; upon licenses to pursue certain occupations; and upon corporate privileges.

Long's attorneys also brought out a case entitled "Simins v Arehns" wherein the court ruled that the income tax was neither a property tax nor a tax upon occupations of common right, but was an excise tax.

Next the defense turned to the case of "Redfield v Fisher." In this instance, the court ruled that an individual, unlike the corporation, cannot be taxed for the mere privilege of existing, but that the individual's right to live and own property was a natural right upon which an excise cannot be imposed. Defense also pointed to several studies done by the Congressional Research Service showing the INCOME TAX is an EXCISE.

A Tennessee Supreme Court case, "Jack Cole v Commissioner," provided the fifth defense argument. Here, the court ruled that CITIZENS ARE ENTITLED BY RIGHT TO INCOME OR EARNINGS AND THAT RIGHT COULD NOT BE TAXED AS A PRIVILEGE.

Finally, Long's legal team pointed to another Tennessee Supreme Court case, "Corn v Fort," in which the court ruled that individuals have a right to combine their activities as partnerships; and that this is a natural right, independent and antecedent of government.

NO IRS CHALLENGE
What's interesting to note here is that the prosecution did not challenge or attempt to refute any of the cases cited, or the conclusions of the courts. Furthermore, on the following defense, once again the prosecution did not challenge or attempt to refute the point made by Long's attorneys, nor were they able to show a statute that made anyone liable for income tax.

This testimony, brought out by Defense was the fact that NOWHERE IN THE ENTIRE INTERNAL REVENUE CODE (some 9,722 separate Sections, as of 1992!) WAS ANYONE ACTUALLY MADE LIABLE FOR THE INCOME TAX.

DEFENSE CITES IRS'S OWN CODE BOOK
Long's attorneys showed that in the IRS's own privacy act (Notice #609), only three sections were cited, and that none of these sections made anyone liable for the income tax. They also proved that this was not an oversight, by showing that the alcohol tax was worded so clearly that no one could misinterpret who was made liable for the alcohol tax.

At this time, Defense presented one of the arguments provided by Long's Research Foundation studies. They read to the jury the Mission Statement of the Internal Revenue Service, which state that the income tax relied upon "VOLUNTARY COMPLIANCE," and a quote from the head of the Alcohol and Tobacco Tax Division of the IRS which, in essence, showed that the income tax is 100% voluntary, as opposed to the alcohol tax, which is 100% enforced.

LONG TESTIFIES
Under oath, Lloyd L. Long now testified that in 1988 he knew that the income tax was, in fact, an excise tax based on his personal research on the issue, and that he was not enjoying any corporate privileges nor engaged in any privileged occupation, and further that income or earnings from the exercise of common right could not be taxed as an excise or otherwise, and that nowhere in the Internal Revenue Code was he made liable for the tax; that he had always believed that the income tax was voluntary (just as the IRS own Mission Statement states!).

LONG'S EXTENSIVE PRE-TRIAL RESEARCH USED IN EVIDENCE
Lloyd L. Long came to his attorneys, and to trial "prepared to be acquitted" (as it were). What had he already done? Long had written a series of letters to the IRS explaining that he believed that he had no licenses or privileges issued to him by the Federal government. In his letters he asked the IRS for direct answers to simple questions such as: "Am I required to file federal income tax returns?" and "Am I liable for federal income taxes?" (He was building a strong evidentiary foundation for his belief that he was NOT a person "required.")

THE IRS NEVER GAVE A DIRECT ANSWER TO ANY OF LONG'S PERSONAL LETTERS OR QUESTIONS. Instead, they inferred and insinuated and extrapolated and beat around the bush, and generally avoided answering his letters. This is when Long testified "I decided to stop 'volunteering' because if the IRS can't answer my questions, I must assume that I'm correct; that there is NO section of the IRS Code that makes me liable for the income tax.

IRS WITNESS CRUMPLES UNDER CROSS-EXAMINATION
The IRS now brought in two "expert" witnesses, who -- it was learned - - were actually IRS employees who had received special training as professional witnesses.

Under cross-examination, Defense attorney Larry Becraft faced down Special Agent, Ms. Jeu. She admitted that a secret code, known only to the IRS and encoded on Mr. Long's permanent record, showed that THE IRS KNEW THAT HE WAS NOT REQUIRED TO MAIL OR FILE A 1040 INCOME TAX RETURN. Ms. Jeu, of course, made every effort to avoid the admission, to the point that she was beginning to frustrate the jury. Finally the judge ordered her to answer the question!

Under cross-examination by Mr. Becraft, the other Special Agent gave testimony that conflicted with the Privacy Act notice. (Attempts by the IRS at a cover-up of the truth must have been obvious to the jury, by this time.)

GOVERNMENT USES "GUILT BY ASSOCIATION" AS A DESPERATE PLOY
In a last ditch attempt, the Prosecution tried to insinuate "guilt by association." They claimed Mr. Long had "known and relied upon persons of questionable character." Their argument was that the writers of some of the books he had read, and some of the people he knew and relied on as the basis for his belief had been convicted of tax-related charges in the past, and were in fact "criminals."

Long responded that just because a person had been convicted of a crime by a court, this did not invalidate everything he said. To illustrate his point, Long pointed out that "the Apostle Paul was a murderer, but by the Grace of God he became the greatest of the Apostles." He added "I did not rely on anything that I did not personally check out thoroughly."

BECRAFT SUMMATION "FINISHES" IRS
In summation, Mr. Becraft reminded the jury that Galileo was imprisoned for holding a belief that conflicted with what everyone else "knew as a fact" and that Columbus, acting on a belief which conflicted with what everyone else knew as a "fact," discovered something no one else thought existed.

The jury agreed with the Defense. By finding Lloyd L. Long "Not Guilty" on all counts, they have ventured into hitherto uncharted territory in their monumental decision.

A Chattanooga TV station quoted a government spokesman as saying that this case will change the way the IRS will handle such cases in the future. The spokesman for the government indicated that the government will, "be less likely to prosecute if a jury isn't going to decide in our favor."

posted December 01, 2013 12:48 PM            

The following information is agreed upon by the federal courts, the IRS, and the United States Department of Justice. While it therefore isn’t "controversial" information, or even disputed by anyone knowledgeable about the subject, it is nonetheless contrary to the public’s general perception, and because of that is included here.

"If you don’t pay taxes, you go to jail." That is what most people believe. However, the crimes related to federal income taxes contain the factor of "willfulness." This means that not paying (or filing a return) is only a crime if the law required such a payment (or filing), and that the individual knew that the law required it. As will be shown below, even if you unreasonably (but honestly) believe the law does not require a certain act, you are not committing a "willful" crime by failing to do that act. (This applies to criminal prosecution, but not to civil penalties.)

There is a simple reason why federal tax-related crimes must be "willful," based mostly on basic logic. When you file a tax return, 26 USC § 6065 requires that you sign it "under the penalties of perjury." Furthermore, 26 USC § 7206 states that if you sign such a return, but do not "believe [it] to be true and correct as to every material matter," you have committed a felony. In other words, you are swearing that you believe the information to be correct, and can be imprisoned if you put down information you know to be false.

There are thousands of pages of federal income tax statutes and regulations. Since even the tax "experts" rarely agree on the meaning of many sections of the law, it would be ridiculous to imprison someone for not understanding every last detail. However, making it a crime to accidentally put down the wrong amount owed would amount to just that (and most CPA’s and tax attorneys would be in prison).

Suppose an individual believes he has no "gross income" or "taxable income" as defined by law, and is therefore not required to file an income tax return. If the government were to force him to file a return reporting his income as taxable, they would be forcing him to commit a felony under 26 USC § 7206, since he would be signing under penalty of perjury a return that he did not believe to be "true and correct." Obviously, the law cannot require someone to commit a felony. So it follows that only "willful" failure to file a required return, or a "willful" attempt to evade taxes, is a crime. The 1991 Supreme Court decision in United States v. Cheek (498 US 192) agrees.

"[Complexity of tax laws makes it] difficult for the average citizen to know and comprehend the extent of the duties and obligations imposed by the tax laws. Congress has accordingly softened the impact of the common law presumption by making specific intent to violate the law an element of certain federal criminal tax offenses." [U.S. v. Cheek, 498 US 192]

And Congress’ laws show exactly that.

"Sec. 7201. Attempt to evade or defeat tax
Any person who willfully attempts in any manner to evade or defeat any tax imposed by this title shall… be guilty of a felony…" [26 USC § 7201]

"Sec. 7203. Willful failure to file return, supply information, or pay tax
Any person… required by this title or by regulations made under authority thereof to make a return… who willfully fails to… make such return… at the time or times required by law or regulations, shall… be guilty of a misdemeanor…" [26 USC § 7203]

Even if the above-mentioned individual were incorrect in his beliefs, he could not be imprisoned for doing what he believed constituted complying with the law. After describing the specifics of the case, the first thing the court said in the Cheek decision was:

"Held: 1. A good-faith misunderstanding of the law or a good-faith belief that one is not violating the law negates willfulness, whether or not the claimed belief or misunderstanding is objectively reasonable. Statutory willfulness, which protects the average citizen from prosecution for innocent mistakes made due to the complexity of the tax laws… is the voluntary, intentional violation of a known legal duty."

In this particular case, the defendant used a legally flawed argument (that wages are not "income"). Nonetheless, what anyone else thought is irrelevant to whether the defendant was guilty of a "willful" offense.

"[I]f the jury credited Cheek's assertion that he truly believed that the Code did not treat wages as income, the Government would not have carried its burden to prove willfulness, however unreasonable a court might deem such a belief."

When this case was in District Court (before it made it to the Supreme Court), the District Justice included the following statement in the instructions to the jury, after the jury could not reach a verdict: "An honest but unreasonable belief is not a defense, and does not negate willfulness." The Supreme Court said this was an improper instruction.

"[The defendant] challenges the ruling that a good-faith misunderstanding of the law or a good-faith belief that one is not violating the law, if it is to negate willfulness, must be objectively reasonable. We agree that the Court of Appeals and the District Court erred in this respect."

The Supreme Court then summed up "willfulness" as follows:

"Willfulness, as construed by our prior decisions in criminal tax cases, requires the Government to prove that the law imposed a duty on the defendant, that the defendant knew of this duty, and that he voluntarily and intentionally violated that duty."

The manual of the Tax Division of the Department of Justice (which is the instruction manual for U.S. attorneys who actually prosecute tax law violations) agrees that "willfulness" is an essential ingredient of tax evasion and failure to file (and even cites the above Supreme Court decision).

"8.03 ELEMENTS OF EVASION
To establish a violation of section 7201, the following elements must be proved:
1. An attempt to evade or defeat a tax or the payment thereof…
2. An additional tax due and owing…
3. Willfulness. Cheek v. United States, 498 U.S. 192…
The government must prove each element beyond a reasonable doubt."

"10.04[1] Elements
To establish the offense of failure to make (file) a return, the government must prove three essential elements beyond a reasonable doubt:
1. Defendant was a person required to file a return;
2. Defendant failed to file at the time required by law; and,
3. The failure to file was willful."

And the manual defines "willfulness," and again cites the Cheek decision.

"8.06 WILLFULNESS
8.06[1] Definition
Willfulness has been defined by the courts as a voluntary, intentional violation of a known legal duty… Willfulness is determined by a subjective standard, thus the defendant is not required to have been objectively reasonable in his misunderstanding of his legal duties or belief that he was in compliance with the law. Cheek v. United States, 498 U.S. 192 (1991)"

Notice how the belief of the defendant need not even be reasonable to negate the element of "willfulness." (But we at this site highly advocate being reasonable.) The manual even admits that "willfulness" is difficult to prove, and must be inferred based on actions by the defendant.

"8.06[2] Proof of Willfulness
The element of willfulness can be the most difficult element to prove in an evasion case. Absent an admission or confession, which is seldom available, or accomplice testimony, willfulness is rarely subject to direct proof and must generally be inferred from the defendant's acts or conduct."

Keep in mind, this is the instruction manual for those who actually prosecute tax-related federal crimes; this is telling them how to do it successfully.

"There are obvious questions raised as to willfulness when the law is vague or highly debatable, such as whether a transaction has generated taxable income… To aid in establishing willfulness at trial, items turning on reasonably debatable interpretations of the Tax Code and questionable items of income should be eliminated from the case…"

This is a direct warning for the U.S. Attorneys to avoid arguing about what the tax code means if the defendant’s "interpretation" is even debatably valid. (And apparently the Department of Justice admits that deciding what income is legally taxable is "highly debatable.") The manual then, quoting the Supreme Court, mentions behaviors which may indicate a "willful" attempt to violate federal tax laws (though the final decision of course is a jury’s responsibility):

"The Supreme Court has furnished excellent guidance on the type of evidence from which willfulness can be inferred… Keeping a double set of books, making false entries or alterations, or false invoices or documents, destruction of books or records, concealment of assets or covering up sources of income, handling of one's affairs to avoid making the records usual in transactions of the kind, and any conduct, the likely effect of which would be to mislead or to conceal."

Clearly the Department of Justice focuses prosecutions on those engaging in deceit or hiding, rather than on those who openly and honestly disagree about the correct application of law (the manual even warns prosecutors to avoid the latter). Ignorance or disagreement about what the law requires is a defense against "willfulness," with one exception: trying to be ignorant of the law is not a defense to "willfulness."

In conclusion, an individual cannot be prosecuted for honestly disagreeing about the correct application of the federal tax laws (and abiding by his own "interpretation"). But such a disagreement, to be credible, cannot be based on rumor, wishful thinking, or feigned ignorance, but must be backed by research and documentation which establishes a sound legal argument. Of course, it is much better to have a legally correct argument than to try to show an honest belief in the correctness of a flawed argument.

(It is important to note that, according to the Supreme Court, a challenge to the Constitutionality of the law is not an adequate defense against "willfulness." If a position is based on a complaint about the law, rather than based on what the law says, then the defense is worthless, and the jury will be instructed to ignore it. In the Supreme Court's words (from the "Cheek" decision above), "a defendant's views about the validity of the tax statutes are irrelevant to the issue of willfulness, need not be heard by the jury, and if they are, an instruction to disregard them would be proper. For this purpose, it makes no difference whether the claims of invalidity are frivolous or have substance." This makes many of the common "tax resistor" issues worthless for defense against prosecution.)

posted December 01, 2013 12:50 PM            

by Carl F. Worden

Forget the war in Iraq, Afghanistan and our excellent adventure in Liberia. Forget about Kobe, Arnold, Arriana, Scott and Laci. The biggest news of the entire week is that on August 8, 2003, the IRS was unable to convince a jury in Memphis, Tennessee that the Federal Tax Code requires the citizens to pay individual income taxes. I kid you not. I watched as many Sunday news programs as I could possibly stand, and I didn’t hear a single mention of the IRS’ debacle in Memphis. If you ever had doubts about the mainstream media being controlled by the federal government, doubt no more.

For those not already aware, FedEx Pilot Vernice Kuglin began studying the IRS Code some years ago, and was simply unable to find anywhere in the code that she was required to pay federal income taxes.

And here’s the most remarkable part: Back in 1995, Kuglin wrote letters in good faith to the IRS, asking them to show her where the Tax Code requires individual citizens to pay federal income taxes. Incredibly, the IRS never answered a single one of her letters!

As she studied the facts, laws and related documents more, Kuglin became convinced that, regardless of the IRS’ failure to respond one way or the other, she was exempt from paying federal income taxes. So, Kuglin filled out W-4 forms showing 99 exemptions, and turned them in to her employer. Doing that meant Kuglin got to take home almost all of her paycheck each payday, instead of what was left after the feds ravaged it.

The IRS went after Kuglin for six counts of tax evasion on $920,000.00 income, and for filing “false” W-4 forms, charges that could have put the 58 year-old Kuglin in federal prison for up to 30 years and cost her 1.5 million in fines.

Apparently, things didn’t go quite the slam-dunk way federal prosecutor Joe Murphy thought they would. My money says the IRS wishes they had never gone after Kuglin at all. In fact, after the jury returned not guilty verdicts on all counts, Murphy is reported to have demanded that the judge order Kuglin to file her forms, pay her taxes and “obey the law”. The judge reportedly replied, “Sir, I don’t work for the IRS.”

Now pinch yourself and review this astonishing turn of events: A highly trained and educated federal prosecutor in Memphis was unable to convince 12 American citizens that Vernice Kuglin was required to pay federal income taxes. He was clearly unable to produce a single section of the Tax Code to that end, and the jury was unanimous in clearing Kuglin of all charges against her. If the foregoing was not so, Kuglin would have been convicted.

Jurors tend not to be very sympathetic with tax scofflaws, since each one of them is also a taxpayer and they understandably feel resentment towards anyone not paying “their fair share”. So in order for this federal jury to completely vindicate Kuglin, the government’s failure to prove their case against her had to have been clear and unequivocal!

I haven’t read the trial transcript yet, but I must assume the federal prosecutor at least tried to twist some vague and ambiguous section of the Tax Code to make it look like it applied to Kuglin. I don’t know that, but I’ll bet he tried. What else could he use to prosecute her with?

Thanks to the IRS’ arrogance and stupidity, and Kuglin’s refusal to plead to lesser charges, Kuglin accomplished what Bob Schultz and the other “tax protesters” had been denied all along: To force the IRS into a public debate and to answer the question of whether or not the Tax Code requires an individual to pay personal income taxes. Kuglin and her two attorneys, Larry Becraft and Robert Bernhoft, have unequivocally forced the IRS to show its hand, and 12 judges hearing that debate ruled the answer to be “NO”.

I think it’s time for everyone reading this to send a very polite letter to the IRS, telling them they read about the case in Memphis, and is it true that there is no section in the U.S. Tax Code that requires an individual citizen to pay federal income taxes?

Don’t be threatening in any way, or announce that you plan to stop paying federal income taxes. This request is for your personal edification, and you just simply want to know the truth.

Like Kuglin, you probably won’t get an answer back, but just to prove you sent the letter and that they received it, be certain to send the letter via certified U.S. Mail, with a return receipt requested. When you get that receipt back, staple it to a copy of the letter you sent the IRS, and put it somewhere real secure, like a personal safe or bank deposit box.

I don’t have to explain why, now do I?

Now, how many calls to FOX’ Bill O’Reilly will it take to convince him we know he’s doing a spin in the No-Spin Zone by sitting on this story? Start e-mailing O’Reilly at oreilly@foxnews.com, and be sure to give him your city and state. He’s gonna love me.

Carl F. Worden

Source: http://www.sierratimes.com/03/08/10/ar_IRS_vs._KUGLIN.htm

xoxox

This is the original story:

Memphis, Tenn

Today in a Memphis Federal Court Vernice B. Kuglin (Vernie) was found not guilty of six counts of Tax evasion and Willful failure to file tax returns. Ms. Kuglin's Attorneys Larry Becraft and Robert G. Bernhoft told reporters that Ms Kuglin was indicted seven months ago and had refused to plead the case out for a lesser sentence.

Trial started on Monday morning August 4 with jury selection and testimony began Tuesday morning. During her testimony Ms Kuglin testified that since 1995 she had sent numerous letters to the IRS requesting that they inform her of what law required her to pay the Individual Income Tax. To this day she has not received an answer to that very important question. On Friday afternoon at 1:30 the jury returned not guilty verdicts on all counts.

posted December 01, 2013 12:57 PM            

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF SOUTH CAROLINA
GREENVILLE DIVISION

Jane Doe Henderson and )
John Doe Henderson, )
)
Plaintiffs, ) CA NO. 91-805-20K
)
vs. ) ORDER
)
The United States and )
The Palmetto Bank, Heritage )
Federal Savings and Loan )
Association, Citizens and )
Southern National Bank of South
Carolina, Interstate Johnson Lane
Corporation, and NCNB National
Bank of South Carolina,

Defendants.

This matter is before the court on a petition to quash certain Internal Revenue summonses.

The internal Revenue Service ( IRS ) issued five (5) summonses between March 15, 1991 and June 7, 1991, in the course of an investigation of James M. Henderson and Mary Henderson (collectively the "Henderson's ). The IRS was attempting to determine the correct federal income tax liability of the Henderson's for the years of 1985, 1986, 1987, 1988 and1989, and to inquire into any offense connected with the administration or enforcement of the internal revenue laws. The summonses were directed to and served upon various financial institutions.' The Henderson were given proper notice of each of the summonses.

The Henderson's filed a petition' to quash the summonses. In this petition, the Henderson's assert that the summonses were not properly attested that they were true copies of the original when they were served. The United States has filed a motion to dismiss the petition to quash and a petition to enforce the summonses.

The court must first determine whether it has jurisdiction to decide the petition to quash or the petition to enforce the summonses. The IRS contends that this court lacks jurisdiction to decide the petition to quash as it relates to the summonses directed to Interstate Johnson Lane Corp. and C&S Bank. In general, the United States, and therefore the IRS, is immune to Suit except where the Congress has expressly waived immunity by statute. See United States v. Sherwood, 312 U.S. 584 (1941). In the Internal Revenue Code, Congress has waived sovereign immunity in certain instances. "The United States district court shall have jurisdiction to hear and determine any proceeding [properly brought to quash an IRS summons]…" 26 U.S.C. § 7609(h)(l). A person has the right to begin a proceeding

It is not disputed that the IRS has the authority to issue summonses for these purposes.

See 26 U.S.C. § 7602(a) & (b).
The summonses were to (1) Palmetto Bank, served March 15, 1991; (2) Heritage Federal S & L, served March 15, 1991; (3) C&S Bank, served March 21, 1991; (4) Interstate Johnson Lane Corp., served May 17, 1991; and (5) NCNB Bank, served June 7, 1991.

The petition to quash was originally filed on March 22, 1991 seeking to quash the summonses directed to Heritage Federal S & L and Palmetto Bank. An amended petition was filed on April 18, 1991 seeking in addition to quash the summons to C & S Bank. A second amended petition was filed on June 7, 1991 seeking in addition to quash the summons to Interstate Johnson Lane. A third amended petition was filed on June 25, 1991 seeking additionally to quash the summons to NCNB Bank.

to quash a summons not later than the 20th day after the day he is given notice of the summons in the manner required by the law. 26 U.S.C. § 7609(b)(2). Therefore, if a proceeding to quash is not begun within the twenty day period, the district court is without jurisdiction to quash the summons. In this case, the Henderson's were given notice sufficient under the law of the summons to c&s Bank on March 22, 1991. A proceeding must have been begun by April 11, 1991. The Henderson's did not amend the petition to quash to include this summons until April 18, 1991. The Henderson's were given notice sufficient under the law of the summons to Interstate Johnson Lane Corp. on May 17, 1991. A proceeding must have been begun by June 6, 1991. The Henderson's did not amend the petition to quash to include this summons until June 7, 1991. Therefore, the Henderson's did not meet the jurisdictional deadline to begin proceedings to quash these two summonses, and this court lacks jurisdiction to decide the petition to quash as it relates to the summonses to Interstates Johnson Lane Corp. and C&S Bank.'

The summonses were issued by agent Suzanne Bell. Agent Bell, in her affidavit, stated that the books, records, papers, and other data sought are either not in the possession of the IRS or are not readily accessible without undue administrative burden and expense. She further stated that the information sought is necessary and relevant to the investigation and that no referral to the Department of Justice for criminal proceedings has been made. Bell also stated that all administrative procedures had been followed.

This court does, however, have jurisdiction to decide the petition to enforce as it relates to all of the summonses. 26 U.S.C. § 7604(a). Jurisdiction to determine questions of enforcement is granted independently from jurisdiction to determine a petition to quash. S~ 26 U.S.C. § 7604(a) and 7609(h)(l)

To enforce the summonses, the United States need only show that the summonses were issued for a legitimate purpose, that the data sought may be relevant to that legitimate purpose, that the data is not already in the government's possession, and that the administrative steps required by the Internal Revenue Code were followed. United Stales v. Powell, 379 U.S. 48 (1964); United States v. LaSalle National Bank, 437 U.S. 298, 313-14 (1978); Alphin vs. United States 809 F 2d 236 (4th Cir. 1987). The IRS may establish its prima facie case by an affidavit of the investigating agent averring the four elements from Powell. Alphin v. United States, 809 F.2d 236 (4th Cir. 1987); In re Newton, 718 F.2d 1015, 1019 (11th Cir. 1983); United States v. Davis, 636 F.2d 1028 (5th Cir. 1981). The affidavit of agent Bell establishes a prima facie case for enforcement. Since a prima facie case is established, the burden shifts to the Henderson's to show that the summonses should not be enforced.

The Henderson's assert that all of the administrative steps required by the Internal Revenue Code were not followed. The I-Henderson's contend that the IRS did not serve "attested' copies of the original summonses. A summons issued by the IRS "shall be served by the Secretary, by an attested copy delivered in hand to the person to whom it is directed, or left at his last and usual place of abode…7 26 U.S.C. § 7603. Mimick v. United States, 91-1 USTC p. 50,070 (D.Neb. 1991)' appears to be the only reported case that has interpreted what is an "attested copy for purposes of 26 U.S.C. § 7603. As the district court in Nebraska did, this court looks to Black's Law Dictionary to define the term "attested

5 This case is not reported in the Federal Supplement. It also may be located at 1991 WL 34445 and 1991 U.S. Dist. Lexis 1329.

copy. "[A]n attested' copy of a document is one which has been examined and compared with the original, with a certification or memorandum of its correctness, signed by the person who examined it. Black's Law Dictionary 117 (5th ed. 1979). Therefore, an attested copy must have a written and signed certification that it is a correct copy.

The copies of the summonses that are part of the record in this case have no written and signed certification that they are true copies of the original on them or attached to them. The IRS does not contest the fact that the summonses that were served did not have such a written and signed certification The IRS contends that the statute does not require such a certification. This court disagrees. This court finds that to be an attested copy, the summons must have a written and signed certification or memorandum that the copy is a true and correct copy of the original. Therefore, the IRS failed to follow the administrative steps required by the Internal Revenue Cede.

The Henderson's have shown that the IRS failed to establish an element required under Powell for the enforcement of a summons. The district court can deny enforcement of a summons if it finds that the IRS has fallen short of establishing the four elements from Powell. United States v. Michaud, 907 F.2d 750, 752 (7th Cir. l990)(en banc); Cf. Hintze v. Internal Revenue Service, 879 F.2d 121 (4th Cir. 1989); United States v. White, 853 F.2d 107 (2d Cir. 1988); United States v. John G. Mutschler & Assoc.. Inc., 734 F.2d 363, 367 (8th Cir. 1984).

The IRS contends that any failure to comply with the administrative procedures was a minor flaw which should not preclude enforcement of the summonses.' This court does not agree. Congress specifically provided that a summons issued by the IRS "shall be served by the Secretary, by an attested copy…" 26 U.S.C. ~7603 (emphasis added). The word shall in a statute is generally used to show that a certain action is mandatory.' Therefore, the service of an attested copy in mandated by the Internal Revenue Code.

It seems clear that a valid purpose for this mandate is to assure the person receiving the summons that what he received was in fact a true copy of the original summons. The failure to serve an "attested copy deprives the person receiving the summons of this assurance which Congress expressly granted. This court finds that under the facts of this case, the failure to follow the requirement of the Internal Revenue Code to serve an attested copy precludes the enforcement of the summonses.

This court finds that it lacks subject matter jurisdiction to decide the petition to quash as it relates to the summonses to Interstate Johnson Lane Corp. and C&S Bank. The petition must be dismissed in such parts as relate to these two summonses. This court further finds

The IRS cites three cases for the proposition that a minor flaw will not preclude enforcement: United States v. Bank of Moulton, 614 F.2d 1063 (5th Cir. 1980)(IRS's obtaining information prematurely did not preclude enforcement because the violation was minor, and there was no harm caused by the conduct); United States v. Texas Heart Institute, 755 F.2d 469 (5th Cir. 1985)(Even though notice requirement was not met, summons was enforceable because the taxpayer had actual notice and received every benefit of the administrative procedure), overruled on other .grounds by United States v. Barrett, 837 F.2d 1341 (5th Cir. 1988); and United States v. Gilbert C. Swanson Foundation. Inc., 772 F.2d

440 (8th Cir. 1985)(Failure to adhere to IRS internal operating order did not preclude enforcement of a summons).

Black's Law Dictionary 1233 (5th ed. 1979); and 39 Words and Phrases, "Shall-In Statutes 122-30 (1953).

That the remaining three summons should be quashed becasue the IRS failed to serve an attested copy of the summonses. For this same reason, the court finds that the IRS is not entitled to enforcement of any summones.

Based on the forgoing, it is

ORDERED that the motion of the IRS to dismiss the petition is granted in part and denied in part. It is further

ORDERED that the petition to quash the summonses is dismissed in part and granted in part. It is further

ORDERED that the petition for enforcement is denied.

IT IS SO ORDERED.

________________________
Henry M. Herlong, Jr.
United States District Judge

Greenville, South Carolina
November 27, 1991

posted December 01, 2013 01:00 PM            

STATE of Georgia

V.
}
HIGGINS.
No. 11782.

Supreme Court of Georgia.

March 5, 1985.

Defendant demurred to accusations of failure to paying state income taxes and failure to timely file a state income tax return. The Fulton State Court, Charles Carnes, J., sustained demurrers, and the State appealed. The Supreme Court, Marshall, PJ., held that:

(1) statute making failure to pay any tax a misdemeanor offense violates constitutional provision prohibiting imprisonment for debts, and

(2) trial court did not err in sustaining demurrer to charge of failure to make timely return.

Affirmed.

Weltner, J., filed a concurring opinion.

1. Constitutional Law 83(3) Taxation 952
Income tax is a "debt"; therefore, statute making failure to pay any tax a misdemeanor offense violates constitutional provision prohibiting imprisonment for debts to the extent that statute authorizes imprisonment for mere nonpayment of income taxes. O.C.G.A. §~ 48-7-2, 48-7-2(a(l). See publication Words and Phrases For other judicial constructions and definitions.

2. Constitutional Law 82(6) Taxation 952, 1103
There is no constitutional inhibition against criminalizing failure to make in- come return and trial court should not have sustained demurrer to that accusation on constitutional grounds; however, accusation charged defendant with failure to make "timely return," and since statute made it unlawful merely to fail to make return, trial court did not err in sustaining demurrer on the basis of that variance. O.C.G.A. § 48-722.

Donald C. English. Asst. Sol. Gen., Atlanta. for State of Ga.

Michael J. Bowers, Atty. Gen., Jeffrey L.
Listeen, amicus cunae.
Denmark Groover, Macon, for Robert F. Higgins.

MARSHALL, Presiding Justice.

Two criminal accusations were returned against the appellee. One was for failure to pay state income taxes, and the other was for failure to timely file a state income tax return. The offenses were alleged in the accusations to have occurred in separate years from 1978 through 1983. Under OCGA § 48-7-2, the failure to pay any tax and the failure to make any return are made misdemeanor offenses. The appellee demurred to the accusations on various grounds, one of which being that the foregoing statute violates the provision of our state Constitution prohibiting imprisonment for debt. Art. I. Sec. I, Par. XXIII of the Georgia Constitution of 1983. The state court sustained the demurrers. The state appeals.

1. The Georgia Constitution's prohibition against imprisonment for debt has undergone gradual modification throughout our state's history.

This constitutional provision first appeared in the Georgia Constitution of 1798 as Art IV, Sec. VII. It provided as follows: "The person of a debtor, where there is not a strong presumption of fraud, shall not be detained in prison after delivering up, bona fide, all his estate, real and personal, for the use of his creditors, in such manner as shall be hereinafter regulated by law." See McElreath, Constitution of Georgia, § 408, p. 265. This provision was modified in the Georgia Constitution of 1861, Art. I, Sec. XXVI, to provide the following: "The person of a debtor shall not be detained in prison after delivering bona fide all his estate for the use of his creditors." McElreath, supra, at § 465, p. 283.

Four years later in the Georgia Constitution of 1865, Art. I, Sec. XIX, this constitutional provision was again changed to provide: "The person of a debtor shall not be detained in prison, after delivery, for the benefit of his creditors, of all his estate not expressly exempted by law from levy and sale." Id. at 567, p. 300. Three years after that, in the Georgia Constitution of 1868, Art. I, Sec. XVIII, this provision was once again changed to succinctly provide: "There shall be no imprisonment for debt." This language from the Georgia Constitution of 1868 has been carried forward in identical form in the Georgia Constitutions of 1877, 1945, 1976, and 1983.

As stated in Messenger v. State, 209 Ga. 340, 341, 72 S.E.2d 460 (1952), "The inhibition of the Constitution applies to any and all imprisonment for debt, irrespective of the period of its duration or the means whereby it is accomplished."

2. Most state constitutions contain provisions which, in one form or another, prohibit imprisonment for debt. 48 A.L.R.3d1324, Anno., Constitutional Provision Against Imprisonment for Debt as Applicable to Nonpayment of Tax. The parties dispute the interpretation of the cases contained in this ALR Annotation. The interpretation of these cases is summarized in 2 of the Annotation at pp. 1326-4327; and this summary, which we cite immediately below, sustains the interpretation advocated by the appellee:

Upon the theory that constitutional guaranties against imprisonment for debt have as their purpose the prevention of the useless and often cruel imprisonment of persons who, having honestly become indebted to another. are unable to pay as they undertook and promised, the courts in some cases have apparently taken the general view that unpaid taxes are not ordinarily debts' within the contemplation of the constitutional provision. A broader rationale has been relied upon in some cases in which it was said that debt under the provision refers only to contractual obligations. and where the prohibition expressly omits debts to those founded upon. or arising out of contract, it has been held that taxes clearly are not included. And upon the view that the penalty of imprisonment for nonpayment of taxes or license fees upon occupations, privileges, and similar activities is imposed, not for refusal or inability to pay the tax but for violation of a duty imposed upon the taxpayer by the law, the courts in many cases have held that statutes, ordinances, and other regulations imposing such taxes or license fees may lawfully authorize the imprisonment of those who fail to pay. A distinction, however, has been drawn between those cases involving taxes on occupation or excise taxes and those dealing with income taxes, and it has been held that "debt" as used in the constitutional prohibition includes income taxes and other taxes not imposed for the pursuit of an occupation or the exercise of a privilege.

While the constitutional prohibition may sometimes be regarded as including taxes within the term "debt," some provisions allowing imprisonment in case of fraud have been interpreted to exempt from their general prohibition willful refusal to pay occupation and other taxes.

In summary, it must be emphasized that under all the various particular constitutional provisions applicable in certain circumstances stated, it has been held in the overwhelming majority of cases that imprisonment for nonpayment of taxes, or at least for the exercise of the occupation or privilege conditioned upon their payment, or for the nonpayment of penalties associated with the initial failure to pay, does not come within the prohibition of the constitutional provision against imprisonment for debt. The outstanding exception has been imprisonment for mere nonpayment of income taxes. (Emphasis supplied: footnotes omitted.)

3. OCGA § 48-7-2 provides, in full: '(a) It shall be unlawful for any person who is required under this chapter to pay any tax, make any return, keep any records, supply any information, or exhibit any books or records for the purpose of computation, assessment, or collection of any tax imposed by this chapter to fail to:

(1) Pay the tax;

(2) Make the return;

(3) Keep the records; or

(4) When requested to do so by the commissioner:

(A) Supply the information; or

(B) Exhibit the books or records.

(b) In addition to other penalties provided by law, any person who violates subsection (a) of this Code section shall be guilty of a misdemeanor." (Code 1933, § 92-3217, enacted by Ga.L.1937. p. 109, § 17; Code 1933, § 91A-9930, enacted by Ga.L.1978, p. 309, § 2.)

[1] 4. We hold that an income tax is a debt-albeit a public debt, as opposed to a private, contractual debt. It is, however, a debt nonetheless. Therefore, we agree that § 48-7-2(a){1) is unconstitutional on state law grounds to the extent that it authorizes imprisonment for mere nonpayment of income taxes. The state court did not err in sustaining the demurrer to the accusation for nonpayment of state income taxes on this ground.

[2] 5. However, we perceive no constitutional inhibition against criminalizing the failure to make an income tax return. Consequently, the trial court should not have sustained the demurrer to that accusation on constitutional grounds. But, that accusation charges the appellee with failure to make a "timely return," whereas the statute makes it unlawful merely to fail to make a return. We cannot say that the trial court erred in sustaining the demurrer because of that variance.

Judgment affirmed

All the Justices concur.

WELTNER, Justice, concurring.

I write only to suggest that, in my opinion, this case (and particularly Division 4) should not be considered as a proscription of all possible criminal sanctions for failure to pay taxes.

The provisions of OCGA § 48-7-2(a)(1) make criminal the failure to pay income taxes-for any reason. Thus, included within its gamut is the citizen trapped within the toils of honest poverty, who, even through the exertion of the greatest of effort and good faith is unable to pay the tax.

posted December 01, 2013 01:07 PM            

John L. CHEEK, Petitioner,
V.
UNITED STATES.

No. 89-658.
Argued Oct. 3, 1990.

Decided , Jan. 8, 1991.

Defendant was convicted in the United States District Court for the Northern District of Illinois, Paul E. Plunkett, J., of attempting to evade income taxes and failing to file income tax returns, and he appealed. The Court of Appeals for the Seventh Circuit affirmed, 882 F.2d 1263. The United States Supreme Court, ,Justice White, held that:

(1) defendant was not entitled to acquittal based on good-faith belief that income tax law was unconstitutional as applied to him and thus did not legally impose any duty on him, but

(2) defendant's good-faith belief that the tax laws did not impose any duty on him did not have to be objectively reasonable in order to be considered by the jury.

Vacated and remanded.

Justice Scalia, filed an opinion concurring in the judgment.

Justice Blackmun filed a dissenting opinion in which Justice Marshall joined.

Justice Souter did not participate.

Opinion on remand, 931 F.2d 1206.

1. Criminal Law ~313

Based on the notion that the law is definite and knowable, common law presumed that every person knew the law.

2. Internal Revenue ~5263.35

"Willfulness" for purposes of criminal tax laws requires the Government to prove that the law imposed a duty on the defendant, that the defendant knew of the duty, and that he voluntarily anti intentionally violated that duty. 26 U.S.C.A. §~ 7201, 7208. Sec publication Words and Phrases [or other judicial constructions and definitions].

3. Criminal Law ~20

Where issue is whether defendant knew of duty purportedly imposed by statute or regulation he is accused of violating, if Government proves actual knowledge of the pertinent legal duty, the prosecution without more, has satisfied the knowledge component of the willfulness requirement.

4. Internal Revenue 5300

Government has not proved that defendant was aware of the duty imposed by the tax law which he is accused of willfully disobeying if the jury credits a good-faith misunderstanding and belief submission, whether or not the claimed belief or misunderstanding is objectively reasonable. 21; U.S.C.A.§~ 7201, 7203.

5. Internal Revenue 5263.35

Defendant's good-faith belief need not be objectively reasonable in order for it to negate Government's evidence purporting to show defendant's awareness of his duties under the tax laws. 26 U.S.C.A. 7201, 7203.

6. Constitutional Law 38

Where possible, court interprets congressional enactments so as to avoid raising serious constitutional questions.

7. Internal Revenue 5317

It was error to instruct the jury to disregard evidence of defendant's understanding that, within meaning of the tax laws, he was not person required to file a return or to pay income taxes and that wages are not taxable income, as incredible as those misunderstandings of and beliefs about the tax law might be. 26 U.S.C.A. §~ 7201, 7203.

8. Internal Revenue 5263.35

Defendant's good-faith belief that income tax law was unconstitutional as applied to him did not provide defense to charges of willfully attempting to evade income taxes and failing to file income tax returns, not-withstanding claim that, because of his belief in the unconstitutionality of the tax laws as applied to him, the income tax laws could not legally impose any duty upon him of which he should have been aware. 26 U.S.C.A. 7201, 7203. 605

Syllabus

Petitioner Cheek was charged with six counts of willfully failing to file a federal income tax return in violation of 7203 of the Internal Revenue code (code) and three counts of willfully attempting to evade his income taxes in violation of 7201.

Although admitting that he had not filed his returns, he testified that he had not acted willfully because he sincerely believed, based on his indoctrination by a group believing that the Federal Tax system is unconstitutional and his own study, that the tax laws were being unconstitutionally enforced and that his actions were lawful.

In instructing the jury, the court stated that an honest but unreasonable belief is not a defense and does not negate willfulness, and that Check's beliefs that wages are not income and that he was not a taxpayer within the meaning of the Code were not objectively reasonable. It also instructed the jury that a person's opinion that the tax laws violate his constitutional rights does not constitute a good-faith misunderstanding of the law. Cheek was convicted, and the Court of Appeals affirmed.

Held:

1. A good-faith understanding of the law or a good-faith belief that one is not violating the law negates willfulness, whether or not the claimed belief or misunderstanding is objectively reasonable. Statutory willfulness, which protects the average citizen from prosecution for innocent mistakes made due to the complexity of the tax laws. United States Vs. Murdock 290 U.S 389, 54 S. Ct. 223, 78 L. Ed. 381, is the voluntary intentional violation of a known legal duty. United States VS. Pomponio, 429 U.S 10 97 S.Ct 22, 50 L.Ed.2d 12. Thus, if the jury credited Cheek's assertion that he truly believed that the Code did not treat wages as income, the Government would not have carried its burden to prove willfulness, however unreasonable a court might deem such a belief. Characterizing a belief as objectively unreasonable transforms what is normally a factual inquiry into a legal one, thus preventing a jury from considering it.

And forbidding a jury to consider evidence that might negate willfulness would raise a serious question under the Sixth Amendment's jury trial provision, which this interpretation of the statute avoids. Of course, in deciding whether to credit Cheek's claim, the jury is free to consider any admissible evidence showing that he had knowledge of his legal duties. Pp. 609-612.

It was proper for the trial court to instruct the jury not to consider Cheek's claim that the tax laws are unconstitutional, since a defendant's views about the tax statutes' validity are irrelevant to the issue of willfulness and should not be heard by a jury. Unlike the claims in the Murdock—Pomponio line of cases, claims that Code provisions are unconstitutional do not arise from innocent mistakes caused by the Code's complexity. Rather, they reveal full knowledge of the provisions at issue and a studied conclusion that those provisions are invalid and unenforceable. Congress could not have contemplated that a taxpayer, without risking criminal prosecution, could ignore his duties under the Code and refuse to utilize the mechanisms Congress provided to present his invalidity claims to the courts anti to abide by their decisions. Cheek was free to pay the tax, file for a refund and, if, denied present his claims to the courts. Also, without paying the tax, he could have challenged claims of tax deficiencies in the Tax Court. Pp. 612-613.

Justice WHITE delivered the opinion of the Court.

Title 26, § 7201 of the United States Code provides that any person "who willfully attempts in any manner to evade or defeat any tax imposed by this title or the payment thereof" shall be guilty of a felony. Under 26 1T.SC. § 7203, [a]ny person required under this title... or by regulations made under authority thereof to make a return…who willfully fails to make such return" shall be guilty of a misdemeanor. This case turns on the meaning of the word "willfully" as used in

Petitioner John L. Cheek has been a pilot for American Airlines since 1973. He filed federal income tax returns through 1979 but thereafter ceased to file returns." He also claimed an increasing number of withholding allowances eventually claiming 60 allowances by mid-1980-and for the years 1981 to 1984 indicated on his W-4 forms that he was exempt from federal income taxes. In 1983, petitioner unsuccessfully sought a refund of all tax withheld by his employer in 1982. Petitioner's income during this period at all times far exceeded the minimum necessary to trigger the statutory filing requirement.

As a result of his activities, petitioner was for 10 violations of federal law. He was charged with six counts of willfully failing to file a federal income tax return for the years 1980, 1981, and 1983 through 1986, in violation of § 7203. He was further charged with three counts of willfully attempting to evade his income taxes for the years 1980, 1981, and 1983 in violation of 26 U.S.C. § 7201. In those years, American Airlines withheld substantially less than the amount of tax petitioner owed because of the numerous allowances and exempt status he claimed on his W-4 forms. The tax offenses with which petitioner was charged are specific
intent crimes that require the defendant to have acted willfully.

At trial, the evidence established that between 1982 and 1986, petitioner was involved in at least four civil cases that challenged various aspects of the federal income tax system. In all four of those cases, the plaintiffs were informed by the courts that many of their arguments, including that they were not taxpayers within the meaning of the tax laws, that wages are not income, that the Sixteenth Amendment does not authorize the imposition of an income tax on individuals, and that the Sixteenth Amendment is unenforceable, were frivolous or had been repeatedly rejected by the courts. During this time period, petitioner also attended at least two criminal trials of persons charged with tax offenses. In addition, there was evidence that in 1980 or 1981 an attorney had advised Cheek that the courts had rejected as frivolous the claim that wages are not income."

Cheek represented himself at trial and testified in his defense. He admitted that he had not filed personal income tax returns during the years in question. He testified that as early as 1978, he had begun attending seminars sponsored by, and following the advice of, a group that believes, among other things, that the federal tax system is unconstitutional. Some of the speakers-at these meetings were lawyers who purported to give professional opinions about the invalidity of the federal income tax laws. Cheek produce a letter from an attorney stating that the Sixteenth Amendment did not authorize a tax on wages and salaries but only on gain or profit. Petitioner's defense was that, based on the indoctrination he received from this group and from his own study, he sincerely believed that the tax laws were being unconstitutionally enforced and that his actions during the 1980-1986 period were lawful. He therefore argued that he had acted without the willfulness required for conviction of the various offenses with which he was charged.

In the course of its instruction, the trial court advised the jury that to prove "willfulness" the government must prove the voluntary and intentional violation of a known legal duty, a burden that could not be proved by showing mistake, ignorance, or negligence.

The court further advised the jury that an objectively reasonable good-faith misunderstanding of the law would negate willfulness. But mere disagreement with the law would not.

After several hours of deliberation, the jury sent a note to the judge that stated in part:

We have a basic disagreement between some of us as to if Mr. Cheek "honestly and reasonably believed that he was not required to pay income taxes or to file tax returns," Page 32 [the relevant jury instruction] discusses good faith misunderstanding & disagreement. Is there any additional clarification you can give us on this point?'" Id., at 85.

The district Judge responded with a Supplemental instruction containing the following statements:

"[A] person's opinion that the tax laws violate his constitutional rights does not constitute a good-faith misunderstanding of the law. Furthermore, a person's disagreement with the governments tax collection systems and policies does not constitute it good faith misunderstanding of the law." Id. at 86.

At the end of the first day of deliberation, the jury sent out another note saying that it still could not reach a verdict because "'[w]e are divided (in the issue as to if Mr. Cheek honestly & reasonably believed that he was not required to pay income tax.'" Id, at 87.

When the jury resumed its deliberations, the district Judge gave the jury an additional instruction. This instruction stated in part that "[a]n honest but unreasonable belief is not a defense and does not negate willfulness," Id., at 88, and that "advice or research resulting in the conclusion that wages of a privately employed person are not income or that the tax laws are unconstitutional is not objectively reasonable and cannot serve as the basis for a good-faith misunderstanding of the law. Ibid. The court also instructed the jury that "persistent refusal to acknowledge the law does not constitute a good-faith misunderstanding of the law." Ibid. Approximately two hours later, the jury returned a verdict finding petitioner guilty on all counts.

Petitioner appealed his convictions, arguing that the District Court erred by instructing the jury that only an objectively reasonable misunderstanding of the law negates the statutory willfulness requirement. The United States Court of Appeals for the Seventh Circuit rejected that contention and affirmed the convictions. 882 F.2d 1263 (1989). In prior-cases, the Seventh Circuit had made clear that good-faith misunderstanding of the law negates willfulness only if the defendant's beliefs are objectively reasonable; in the Seventh Circuit, even actual ignorance is not a defense unless the defendant's ignorance was itself objectively reasonable. See, e.g., United States v. Buckner, 830 F.2d 102 (1987).

In its opinion in this case, the court noted that several specified beliefs, including the beliefs that the tax laws are unconstitutional and that wages are not income, would not be objectively reasonable. Because the Seventh Circuit's interpretation of "willfully" as used in these statutes conflicts with the decisions of several other Courts of Appeals, see, e.g., United States v. Whiteside, 810 F.2d 1306, 1310-1311 (CA5 1987); United States v. Phillips, 775 F.2d 262, 263-264 (CA1O 1985); United States v. Aitken, 755 F.2d 188, 191-193 (CAl 1985, we granted certiorari, 493 U.S. 1068, 110 S.Ct. 1108, 107 L.Ed.2d 1016 (1990).

II

The general rule that ignorance of the law or a mistake of law is no defense to criminal prosecution is deeply rooted in the American legal system. See, e.g., United States v. Smith, 5 Wheat. 153, 182, 5 LEd. 57(1820) (Livingston, J., dissenting); Barlow vs. United States, 7 Pet. 404, 411, 8 L.Ed. 728 (1833); Reynolds v. United States, 98 U.S. 145, 167, 25 L.Ed. 244 (1879); Shevlin-Carpenter Co. v. Minnesota, 218 U.S. 57, 68, 30 S.Ct. 663, 666, 54 L.Ed. 930 (1910); Lambert vs. California, 355 U.S. 225, 228, 78 S.Ct. 240, 242, 2 L.Ed.2d 228 (1957); Liparota v. United States, 471 U.S. 419, 441, 105 S.Ct. 2084, 2096, 85 L.Ed.2d 434 (1985) (WHITE, J., dissenting); 0. Holmes, The Common Law 47-48 (1881).

Based on the notion that the law is definite and knowable, the common law presumed that every person knew the law. This common-law rule has been applied by the Court in numerous cases construing criminal statutes. See, e.g., United States vs. International Minerals & Chemical Corp., 402 U.S. 558, 91 S.Ct. 1697, 29 L.Ed.2d 178 (1971); Hamling v. United States, 418 U.S. &, 119-124, 94 S.Ct. 2887, 2808-2911, 41 L.Ed.2d 590 (1974); Boyce Motor Lines, Inc. v. United States, 342 U.S. 337, 72 S.Ct. 329, 96 LEd. 367 (1952).

The proliferation of statutes and regulations has sometimes made it difficult for the average citizen to know and comprehend the extent of the duties and obligations imposed by the tax laws. Congress has accordingly soffened the impact of the common-law presumption by making specific intent to violate the law an element of certain federal criminal tax offenses. Thus, the Court almost 60 years ago interpreted the statutory term "willfully" as used in the federal criminal tax statutes as carving out an exception to the traditional rule. This special treatment of criminal tax offenses is largely due to the complexity of the tax laws. In United States v. Murdock, 290 U.S. 389, 54 S.Ct. 223, 78 LEd. 381 (1933), the Court recognizes that: "Congress did not intend that a person, by reason of a bona file misunderstanding as to his liability for the tax, as to his duty to make a return, or as to the adequacy of the records he maintained, should become a criminal by his mere failure to measure up to the prescribed standard of conduct." 1(1., at 396, 54 S.Ct., at 226.

The Court held that the defendant was entitled to an instruction with respect to whether he acted in good faith based on his actual belief. In Murdock. the court interpreted the term "willfully" as used in the criminal tax statutes generally to mean "an act alone with a bad purpose," Id., at 394. 54 S.Ct., at 225, or with "an evil motive" Id., at 395, 54 S.Ct., at 225.

Subsequent decisions have refined this proposition. In United States vs. Bishop, 412, U.S 346, 93 S. Ct. 2008, 36 L.Ed.2d 941 (1973), we described the term "willfully" as connoting "a voluntary, intentional violation of a known legal duty," id., at 360, 93 S. Ct., at 2017, and did so with specific reference to the "bad faith or evil intent" language employed in Murdock. Still later, United States v. Pomponio, 429 U.S. 10, 97 S.Ct. 22, 50 LEd.2d 12 (1976) (per curiam), addressed a situation in which several defendants had been charged with willfully filing false yax returns. The jury was given an instruction on willfulness similar to the standard set forth in Bishop. In addition, it was instructed that "'glood motive alone is never a defense where the act done or omitted is a crime.'" Id, at 11, 97 S.Ct., at 23. The defendants were convicted but the Court of Appeals reversed, concluding that the latter instruction was improper because the statute required a finding of bad purpose or evil motive.Ibid.

We reversed the Court of Appeals, stating that "the Court of Appeals incorrectly assumed that the reference to an 'evil motive in United States vs. Bishop. supra and prior cases,' ibid., "requires proof of any motive other than an intentional violation of a known legal duty." Id.. at 12, 97 S.Ct., at 23. As "the other Courts of Appeals that have considered the question have recognized, willfulness in this context simply means a voluntary, intentional violation of a known legal duty." Ibid. We concluded that after instructing the jury on willfulness, "an additional instruction on good faith was unnecessary." Id, at 13, 97 S.Ct., at. 24. Taken together, Bishop and Pomponio conclusively establish that the standard for the statutory willfulness requirement is the "voluntary, intentional violation of a known legal duty."

III

Cheek accepts the Pomponio definition of willfulness, Brief for Petitioner 5, and n. 4, 13, 36; Reply Brief for Petitioner 4, 6-7, 11, 13, but asserts that the District Court's instruction and the Court of Appeals' opinion departed from that definition. In particular, he challenges the ruling that a good-faith misunderstanding of the law or a good-faith belief that one is not violating the law, if it is to negate willfulness, roust be objectively reasonable. We agree that the Court of Appeals and the District in this respect.

A

Willfulness, as construed by our prior decisions tax cases, requires the Government to prove that the law imposed a duty on the defendant, that the defendant knew of this duty, and that he voluntarily and intentionally violated that duty. We deal first with the case where the issue is whether 'the defendant knew of the duty purportedly imposed by the provision of the statute or regulation he is accused of violating, a case in which there is no claim that the provision at issue is invalid. In such a case, if the Government proves actual knowledge of the pertinent legal duty, the prosecution, without more, has satisfied the knowledge component of the willfulness requirement. But carrying this burden requires negating a defendants claim of ignorance' of the law or a claim that because of a misunderstanding of the law, he had a good-faith belief that he was not violating any of the provisions of the tax laws.

This is so because one cannot be aware that the law imposes a duty upon him and yet be ignorant of it, misunderstand the law, or believe that the duty does not exist. In the end, the issue is whether, based on all the evidence, the Government has proved that the defendant was aware of the duty at issue, which cannot be true if the jury credits a good-faith misunderstanding and belief submission, whether or not the claimed belief or misunderstanding is objectively reasonable.

In this case, if Cheek asserted that he truly believed that the Internal Revenue Code did not purport to treat wages as income, and the jury believed him, the Government would not have carried its burden to prove willfulness, however unreasonable a court might seem such a belief. Of course, in deciding whether to credit Cheek's good-faith belief claim, the jury would be free to consider any admissible evidence from any source showing that Cheek was aware of his duty to file a return and to treat wages as income, including evidence showing his awareness of the relevant provisions of the Code or regulations, of court decisions rejecting his interpretation of the tax law, of authoritative rulings of the Internal Revenue Service, or of any contents of the personal Income tax return forms and accompanying instructions that made it plain that wages should be returned as income.

We thus disagree with the Court of Appeals' requirement that a claimed good-faith belief must be objectively reasonable if it is to be considered as possibly negating the Government's evidence purporting to show a defendant's awareness of the legal duty at issue. Knowledge and belief are characteristically questions for the fact finder, in this case the jury. Characterizing a particular belief as not objectively reasonable transforms the inquiry into a legal one and would prevent the jury from considering it. It would of course be proper to exclude evidence having no relevance or probative value with respect to willfulness; but it is not contrary to common sense, let alone impossible, for a defendant to be ignorant of his duty based on an irrational belief that he has no duty, and forbidding the jury to consider evidence that might negate willfulness would raise a serious question under the Six Ammendment's jury trial provisions. Cf. Francis vs. Franklin, 471 U.S. 307, 105 S.Ct. 1965, 85 L.Ed .2d 344 (1985); Sandstrom vs. Montana, 442 U.S. 510, 99 S.Ct 2450, 61 L.Ed.2d 39 (1979); Morissette v. United States, 342 U.S. 246, 72 S.Ct. 240, 96 LEd. 288 (1952).

It is common ground that this court, where possible, interprets congressional enactments so as to avoid raising serious constitutional questions. See, e.g., Edward J. J. DeBartolo Corp. vs. Florida Gulf Coast Building & constructions Trade Council, 485 U.S. 568, 575, 108 S.Ct. 1392, 1397, 99 L.Ed.2d 645 (1988); Crowell v. Benson, 285 U.S. 22, 62, and n. 30, 52 S.Ct. 285, 296, and n. 30, 76 L.Ed. 598 (1932); Public Citizen vs, Department of Justice, 491 U.S. 440, 465-466, 109 S.Ct. 2558, 2572-2573, 105 L.Ed.2d 377 (1989)

posted December 01, 2013 01:13 PM            

TrialLogs.com ^ | July 13, 2007 | By Gary Thomason

Posted on Thursday, July 26, 2007 12:33:01 PM by ovrtaxt

Early reports have been spreading, circulating around the tax honesty community that Shreveport, Louisiana lawyer, Tommy K. Cryer has been found NOT GUILTY of 'willful failure to file' charges by a 12-0 jury verdict in the Federal District Court for Western Louisiana, in Shreveport, LA. My friend it's TRUE and what follows is a summary of the trial leading up to the emotionally inspiring verdict including exclusive quotes courtesy of Mr. Tommy Cryer.

First, I want to thank each and everyone of you who attended the trial for your unwavering support and peaceful, respectful nature during every phase of this historical trial where Mr. Cryer, the truth AND the rule of law prevailed today, July 11, 2007 in the United States of America. Truth Attack had approximately 25 Truth Troopers (some from as far away as 1,200 miles!) attending the three-day proceedings topping the historical event off with a "victory for the rule of law" celebration after the unanimous not guilty verdict was read in open court.

Today, July 11, 2007 Mr. Tommy K. Cryer, a lawyer from Shreveport, Louisiana was found not guilty by a 12-0 verdict on two separate counts of violating Title 26 Section 7203, willful failure to file federal income tax returns for the "tax-years" 2000 and 2001 respectively, which carried a two-year prison sentence had the government prevailed.

The trial began July 9. 2007 at 8:30 AM at the United States District Court for Western Louisiana located at 300 Fannin Street in Shreveport, Louisiana. Judge Maurice Hicks presided over the trial, Earl Campbell represented the Internal Revenue Service by and through the U.S. Department of Justice and Mr. Larry Becraft represented Mr. Tommy K. Cryer as lead defense counsel, with Mr. George Harp assisting.

Day One: July 9, 2007
The first order of business was a government Motion To Dismiss two of the total four counts of the government's indictment. Originally, the indictment was brought with two counts of "tax evasion" and two counts of "willful failure to file" a federal income tax return. Mr. Cryer was facing 5 + 5 years in federal prison and with the government dropping its two counts of federal income tax evasion, Mr. Cryer's exposure to jail time had been reduced to two years.

After the government's Motion to Dismiss was granted, jury selection took place and the panel of 12 jurors and two alternates were seated and were listening to opening arguments of the parties by 4:00 PM. After opening arguments the Court recessed until 9:00AM Tuesday.

Day Two: July 10, 2007
Day Two started with the government presenting its case in the morning session and Tom taking the stand and offering his direct testimony until the close of yesterday's proceedings...

The government first brought an IRS supervisor to the stand... her testimony established the paperwork flow and indicated that Tommy filed "employer" documentation for his "employee" but did not file his individual returns.

Next was Tommy's secretary... she did not show up as a hostile witness towards the prosecution... but in the same breath, she did not give the government any help when she testified that she fills out all of her own IRS from required of the employer, and even writes and signs most of the checks!

The DOJ tried to get in a point in that area... and she said that Tommy gave her the option to file or not-- then he abruptly stopped her... then on another question... she added that it was her choice to file even after she found out that there was no law making he liable-- where of course, he cut her off again.

The CPA took the stand and testified to profit and loss statements related to Tommy's practice of law... he simply established the numbers but never stated with authority to the lawful and legal definition of income... Larry was able to establish that the CPA had only a very insignificant understanding of the IRC.

The government's final witness was an IRS "special agent" in the Criminal Investigation Division who testified to the 'audits' of Tom's business and on Larry's cross-exam made it clear that the 'Code" is enormous and he only knew small bits and pieces of some of it... The IRS used Section 61 of the IRC to prop up its claim of liability to file and pay income taxes... but failed to clarify the first three words of Section 61... which state, "Unless otherwise provided..."

After lunch Tom took the stand... There were some fireworks during Tom's testimony and the judge was clearly aggravated with the rule of law being presented in 'his' courtroom... and several times stopped Tom's testimony. One of those times the judge brought up the "Cheek" ruling where Larry and the judge went around and around on Tom's right to present his beliefs to the jury. The judge overruled and objection of the prosecutor on another occasion but also warned Larry about the "very narrow" path he's taking the case and will not allow Tom to argue that the IRS is unconstitutional... which of course Tom never intended to do and has not done in the least.

Day Two ended with the judge calling counsel into the judge's chamber and unloading... venting his frustration mainly aimed at Larry and Tom taking over the courtroom and plowing ahead with getting the Internal Revenue Code... the Code of Federal Regulations the Constitution and a plethora of Supreme Court cases in front of the jury. At the close of the preceding day’s hearing... the judge ordered Larry to turn over Tom's notes and research to the DOJ as the court believed that

Tom's notebook filled with law and supporting Supreme Court cases was "discovery" and therefore the DOJ was entitled to it, which is a crucial turning point that must be noted. Larry agreed with the court and the defense team looked forward to seeing more of it in the record and presented to the jury during cross-examination of Tom's beliefs.

The U.S. Department of Justice walked out of "Day Two" with years of Tommy Cryer's research that was condensed into a very well organized presentation, which proved that not only did Mr. Cryer believe what he had researched, but also proof that there is no law making him liable for any federal income tax on his right to earn a living.

Day three promises to be very interesting! The parties will meet prior to the start to discuss jury instructions before the jury is brought in and seated. The DOJ opens day three with cross-examination and Larry's re-direct may well occur before noon and closing arguments will surely take place before the close of today's proceedings...

Day Three: July 11
Tommy Cryer was seated at the witness stand and the U.S. Attorney opened his cross examination of Mr. Cryer with a series of questions establishing the fact pattern aimed at 'proving' that Mr. Cryer had 'income' and earned 'income' in the course of practicing law. Mr. Cryer had no effort to deny that he earned fees in exchange for his labor.

The line of questioning turned to finer points of the Internal Revenue Code related to Sections addressing the 'tax imposed' one 'income' from whatever source derived. Listening very carefully Mr. Cryer addressed the spin on commonly used terms and pointed out that certain terms in the law had application of strict construction as ruled consistently by the U.S. Supreme Court. An argument of sorts ensued between the U.S. Attorney and Mr. Cryer on these finer points and ultimately the judge stopped the exchange and commented that the court reporter was having difficulty making the record.

Stepping back, the U. S. Attorney turned to Mr. Cryer and engaged a line of questions that addressed two U.S. Court of Appeals cases and asked Mr. Cryer if he had any occasion to read the rulings in those cases. Mr. Cryer explained to the jury that one of the cases the U.S. Attorney quoted was in the form of a footnote, and the other had nothing to do with a 'willful failure to file' action to which was the matter before this court.

The U.S. Attorney read into the record the 'footnote' of the first case he had asked Mr. Cryer about, and Mr. Cryer leaned forward and noted for the record and the jury that the full statement the Court of Appeals issued in its footnote clearly stated that neither party briefed the issue on appeal and it had no bearing on the opinion of the Court.

It should be noted that (with Mr. Cryer's trial notes in hand) at this point the U.S. Government (the IRS and the DOJ) did not make any effort to contest any of the content of Mr. Cryer's testimonial notebook, which was organized in such a fashion that anyone with experience in legal research could follow the line of reasoning that Mr. Cryer had used in order to arrive at his heartfelt beliefs.

The U.S. Attorney held up Mr. Cryer's 108-page Memorandum and cited one phrase coined from a U.S. Supreme Court ruling that pointed out... that the income tax (Internal Revenue Code) is unconstitutional--expecting a "yes" or "no" answer.

Mr. Cryer kindly directed the U.S. Attorney back to the Memorandum and stated that HE didn't say that the Internal Revenue Code was unconstitutional... but that the U.S. Supreme Court had held that AS APPLIED the income tax WOULD BE UNCONSTITUTIONAL!

"No further questions your Honor."

Mr. Becraft approached Mr. Cryer and addressed each of the government's efforts to derail Mr. Cryer's beliefs. One after one, the defense closed each open gate espousing the government's contentions and ended the re-direct with Mr. Cryer confidently stating that he swore an oath to defend the rule of law and he had no other option when it came to his beliefs, which are today as they were yesterday and as they will be tomorrow, "There is NO LAW making me liable for the federal income tax."

Counsel delivered closing arguments with the government addressing the jury first and reserving time for rebuttal. The U.S. Attorney stressed his argument that there is a law and the law made Mr. Cryer Liable for the federal income tax system. Asking the jury to rule our willfulness and in due turn, convict Mr. Cryer of breaking the law and seeing to it that Mr. Cryer is found guilty of failing to do his duty of filing federal income taxes.

Mr. Becraft started his closing arguments by informing the jury that "today in this court room…" there are, in a sense, four branches of the United States Government. Mr. Becraft pointed to the federal law books and said that those books were written and the laws forged by the legislative branch of our government, Congress.

He continued by giving generous praise to the U.S. Attorney for doing a fine job representing the Executive branch of the federal government in the courtroom. Mr. Becraft gestured to the judge and remarked that the judicial branch of the government presided over this proceeding making certain that justice and the rule of law remained intact according to our Constitution.

Then, Mr. Becraft turned to the jury and said the fourth branch is the jury… the American people that our founding fathers believed to be the ultimate deciding factor as to whether justice is done.

Mr. Becraft’s eloquent summation of the jury’s duty to weigh the facts in this case were so very vital to this ensuring that our system of justice moved forward intact and secure. Mr. Becraft reviewed the flow of testimony reminding the jury that nowhere during this trial did Mr. Cryer deny or object the government as to advancing its intention to show that he had earnings.

He went on to say that the issue in this case is Mr. Cryer’s beliefs and the fact pattern that Mr. Cryer used as he presented his beliefs were so convincingly delivered that even if they did not fully understand the legal interpretations testified to, Mr. Cryer undoubtedly believed those conclusions.

The Judge Hicks recessed for a break and upon return read the jury instructions and the jury retired to the jury room. After a little more than two hours of deliberation the judge called the parties into the courtroom. There was a question as to jury instruction 17, which centered on reasonable doubt and to willfulness. The court reviewed the various jury instructions referencing those terms and after about 30 minutes of discussions and the approval of the parties, the court delivered a clarification to the jury.

By this time it was 4:30PM and the judge asked the jury if they wanted to recess for the day or continue? The reply was they wished to stay a little longer to deliberate. The judge informed the parties and the courtroom was cleared. Together, Mr. Cryer’s legal team and supporters returned to the first floor waiting area of the courthouse.

At 4:33PM the U.S. Marshal summonsed Mr. Becraft and company and announced that the jury had reached a verdict. Approximately at 4:35PM the jury returned to the courtroom and the customary tradition of the passing of the verdict to the judge for entry into the record and reading of it in open court took place.

posted December 02, 2013 07:10 PM            

I know Larry Becraft! Met him years ago when he was living in the South..Alabama, I believe.

One thing is certain after reading some of the usual suspect's posts here.

He doesn't understand the definition of "Voluntary" and the IRS pretends they don't either.

"Our tax system is based on individual self assessment and 'voluntary' compliance."