Why No One is Required to File Tax Returns...
...and what you
can do about it
by Bill Conklin
Copyright (c) 1996 by William (Bill) Conklin; 3296 Raleigh St., Denver,
(303) 455-0837; FAX (303) 480-1799;
e-mail: willieco@aol.com; webpage: www2.vivid.net/~ammond/conklin.html
Warning: The information in this book is not legal advice. It is for
PROLOGUE
to successfully challenge the hated income tax system. He has been
enforcement agency since 1979. Initially, I felt somewhat alone; even the
conscience in what another author once described very succinctly as The
financial dealings that one can never have with a bank account (since
IRS launched a criminal investigation of me and in 1987 I was indicted
looking for an effective way to challenge and change the tax laws in
friendships with the wonderful hard-working patriots I've met, and the
understanding of the rights given to each of us by our Creator, and an
special interests stuck us with the federal income tax over eighty years
beginning, it was unneeded. The original taxing provisions of the
requested of Congress by President Taft in 1909. A few years earlier, in
Taft first acknowledged the Justices' decision and then immediately
still is, but now more income tax money is extracted from the aggregate
years, been given the power to probe, audit, summons, levy, lien, seize
Dan Schaefer (R-CO) and Billy Tauzin (D-LA) are supporting a proposal
our muscle to their effort. Communicating with your Representative and
some day to boast to my grandchildren that I participated, along with
America. Dick took personal action after he became aware of the issues
Contents
Introduction:
1. My story: How It All Began
2. The Fifth Amendment
3. The Tax Return and the Privacy Act Notice
4. What the Attorneys Say!
5. My $50,000.00 Reward
6. My 10th Circuit Case
7. The Tenth Circuit Proves--
8. The Internal Revenue Code
9. The IRS and Criminal Prosecutions
10. The IRS: A Modern Gestapo
11. The Summons Power of the IRS
12. What You Can Personally Do About the Problem
13. What Will Uncle do?
14. Empower Yourself
15. Questions and Answers.
16. Conclusions
protected rights.
protected rights.
become absurd because it has become complicated beyond belief. The system
file 1040 returns, in order to keep the pressure on the rest of the
time. I'll expose for you the most incredible scam ever perpetrated on
the income tax. Individuals only become liable to pay the income tax when
filing of tax returns, such a statute would be unconstitutional under the
information on 1040 returns from individuals--that is why the IRS
1
My Story:
How it All Began for Me
Declaration of Independence. During that year, there was a lot of
everything they could to shut me up and destroy me emotionally and
court decisions in the cases that I have won. There is no doubt that in
published wins in the law books, too. The challenges I've made are not
to the IRS. In 1977, I set up a church to promote my religious beliefs,
and told me they would pull the exempt status of the Church if I didn't
intimidated, the IRS backtracked a bit and issued a summons, as
filed a motion to suppress the information that the IRS had obtained from
church issue, the IRS decided to lay on me a statutory Notice of
Appeals upheld a Tax Court judge's opinion revoking the tax exempt status
learned so much about the IRS and the courts in the process. I have
v. United States, 32 F.3d 1423 (10th Cir., 1994). Although the IRS thinks
protections of my rights, and the intricacies of IRS procedures and the
me that the Fifth Amendment was the reason I had never been able to find
protected rights?
income tax?
several famous attorneys have applied for it, none of their answers have
unsigned return with a cover letter pointing out that I had discussed
signature I was filing a frivolous tax return and was thus subject to
filing tax returns is not required, or compelled. Said yet another way,
elation I felt about the outcome. I thought it was great! As the judge
ruling against the written, professional opinions of six attorneys whom I
or the Fifth Amendment does not apply because filing returns is
2
The Fifth Amendment
Article V: United States Constitution
crime, unless on the presentment or indictment of a Grand Jury, except in
people expressed concern that it gave too much power to a central
against that individual in a criminal case, they are supposed to first
cannot be required to testify against himself. The government must have
3
The Tax Return and the
Privacy Act Notice
penalties for not obeying the law under the Privacy Act. The following
legal right to ask for the information, why we are asking for it, and how
return. It also applies to any questions we need to ask you so we can
Federal agencies, as provided by law. We may also give it to cities,
give false information, you may be charged penalties and you may be
for other information. If you have questions about the rules for filing
Income Tax Form and the rest of the forms in the 1040 family. Each year,
millions. Millions of individuals blindly and unthinkingly commit the
any information given to them on a 1040 Form. They are also aware that
confusing situation. After all, they want you to think that you are
voluntary!
continually refers to the income tax as a "voluntary tax." They also say
Revenue Service to encourage and achieve the highest possible degree of
Service is to promote voluntary compliance through education and
31(1)(f) that... "returns are voluntarily submitted by taxpayers."
Manual states: "securing a valid voluntary income tax return from the
"The purpose of criminal tax investigations is to enforce the tax laws
indicates he/she will voluntarily comply but requests that he/she be
states that the IRS may file returns under 6020(b) if the returns are...
following:
one's own free will; freely chosen or undertaken; arising in the mind
Department of Justice is to investigate and prosecute crimes. If it did,
give the warning that information may be given to the Department of
tax returns, in order to keep a degree of fear alive in the general
4
What Do the Attorneys Say?
has extensively studied the issues discussed in this book, has the
regarding the voluntary nature of filing an income tax return, I am
plus pages of the Internal Revenue Code. It is so vague, confusing and
impossible to understand (for the average citizen). The President said in
the information in a return is, for Fifth Amendment analysis, the
stated in their Publication 21, you must make this decision.
would be "criminal," that is, in violation of section 7203 depends on
even if mistaken. See U.S. vs. Barker, 546 F.2d 940 (1976), District of
defense to a prosecution...when (b) he acts in reasonable reliance
what the law requires. The Supreme Court in Gregory vs. Helvering, 293
otherwise would be his taxes or altogether avoid them by means which the
If you have any questions, please don't hesitate to call me.
5
My $50,000.00 Reward
that the government has a severe conflict with it and their alleged
the Fifth Amendment, and
an income tax.
attorney Melvin Belli applied for the reward. He even threatened to sue
the name of the individual who was represented by the return. The
file in this manner in order to still preserve my rights, I was pleased
the IRS tried to prosecute me criminally for "willful failure to file
Cohan, next applied for the reward. He explained that he felt one could
Charles Ostman, sued me in Federal Court in Seattle, Washington with an
impossible for me or anyone else to file a tax return without waiving
liable to pay an income tax. There are only two ways that an individual
6
My Tenth Circuit Case
Fifth Amendment as it relates to the income tax to become absolutely
schizophrenic in their interpretation of this Fifth Amendment problem. I
classified me as an illegal tax protester. I sued the IRS under the
circa 1982) with his opinion from U.S. vs. Amon, 669 F.2d 1351 (1981)
extend well beyond the manifestly permissible policy of using admissions
selective is two-pronged. To support a selective prosecution claim a
select and silence outspoken 'tax protesters.' Thus, both the fact of
had found this defendant to have been selected for prosecution because he
low as possible. Everybody does so, rich or poor, and all do right, for
compels the conclusion that it found that this defendant had been
reaches us on appeal involves a person who has allegedly violated some
because it detests or fears the citizen's spreading of ideas relating to
supports a finding that tax protests present a clear and present danger
of unconstitutional discrimination be drawn at least where the hapless
the most cherished traditions of this nation than protest focusing on
application of the first prong of the test, this case should be remanded
the IRS, nor at least the other two Tenth Circuit judges on the panel
as an illegal tax protester is a project of their Criminal Investigation
explained my concerns of wishing to comply with the filing law if I must,
time prevent the IRS from using criminally any of the information that I
same manner as I had done the previous year, for 1986. However, this time
to sue them (15%), and filed suit in federal court. Judge Nottingham, a
district court in Denver, (Case No. 89 N 1514):
overlooking--I won't say it is fatal, although it appears to me it may be
because it would overturn the federal tax system. Of course, that was the
After thinking about the case for five years(!), he decided to rule
Supreme Court in Garner vs. U.S., supra. Remember, the Garner Court took
Amendment position, even though I certainly had not done that. In fact, I
Circuit upheld the lower Court and thus also took a position exactly
against someone who is challenging the incongruities of our income tax
IRS continually refers to the filing of tax returns as voluntary? They
have a formal education which I have used professionally. Therefore,
litigation efforts in the 10th circuit of the federal courts.
morpho-syntax of English. I have a Master's Degree from the University of
(district) court and the appeals (circuit) court ruled against my
"compelled testimonial communication." The court stated:
Conklin's argument that his refusal to sign his 1987 Form 1040 on the
who has been classified as an illegal tax protester has a valid concern
Amendment does not apply to the income tax because the income tax is not
used in constitutional right to be free from being compelled in a
"compel" as follows:
about by force. 3. To force to submit; subdue. 4. To overpower.
means to force or to require someone to do something. A compelled action
position that individuals are required to give the government information
related to the income tax, I suggest that you order my opinion letter on
opinion from the Tenth Circuit Court of Appeals (in Denver) so that you
Circuit, 1823 Stout Street, Denver, Colorado 80257. Ask for a copy of the
position in this particular case that providing information on income tax
Opinion. His analysis follows:
decisions in William T. Conklin vs. IRS, Civil action No. 89 N 1514 filed
"compelled testimonial communication". This implies that an individual is
absurd to penalize a person for not signing a return that is not
is compelled, i.e., that the individual is required to give it, but
Garner v. United States, 424 U.S. 648 (1975) ruling that the information
return is, for purposes of Fifth Amendment analysis, the testimony of a
(1985), the Supreme Court held that the act of producing subpoenaed
privilege applies to written as well as oral compelled testimony that may
took a general Fifth Amendment objection since he did provide specific
this issue at an administrative level with the I.R.S. Mr. Conklin's good
Conklin waived his Fifth Amendment protected rights as to the information
ruling in Betz v. United States, 753 F.2d 834 10th Cir. 1985) cited by
signing the tax return, and would have authenticated information could
attorney for over thirty years and admitted and currently in good
to as "Conklin," was classified as an illegal tax protester by the IRS
waive his rights, filed a return with payment and the necessary
Conklin paid the fine and filed a claim for a refund. The IRS denied the
was justified, and the Tenth Circuit affirmed the opinion on September
Amendment Privilege. It protects against compelled testimonial
example, the appearance of a "witness" before a grand jury. (p. 652).
tax return is, for purposes of Fifth Amendment analysis, the testimony of
because testimony on a tax return IS NOT compelled. The Supreme Court in
though he relied on counsel. In sanctioning Conklin, the Court held
Fifth Amendment even though he completed a tax return and provided copies
that information on a tax return is "compelled testimony;" the District
process to Conklin and sanctioned him on an issue of first impression in
litigants, is unconstitutional because it allows the Circuit Court to
CONCLUSIONS
Petition for a Writ of Certiorari.
7
More Cases Where the
Tenth Circuit Proves That
Anyone Who Files a 1040 Return
Waives the Fifth Amendment
Protections of His Rights
1423, 1428-30 (10th Cir. 1994). The IRS was happy because they won this
criminal case that involves a family member or friend. That means the
broad. See United States vs. Barcelon, 833 F.2d 894, 897 and n.5 (10th
obtained her income information from her tax return, the information
cannot be disclosed in third party litigation. The Tenth Circuit ruled
determined unanimously that oral argument would not materially assist the
status of the Church of World Peace (CWP). The CWP then asked for a
Section 7431. He claims that the introduction of his tax returns violated
evidence under 26 U.S.C. Section 6103(h)(4)(B) That section states:
judicial proceeding pertaining to tax administration but only...(B) if
"issue in the proceeding" or that the information was not "directly
vs. Independent Ins. Agents, 113 S. Ct. 2173, 2182 (1993). "If the
even if only one part of the return is relevant. The statute gives the
plaintiff's entire tax return, and the district court properly entered
information in any criminal case involving a friend or family member and
8
The Internal Revenue Code
composed of hundreds of complex statutes and it is written in very
the following:
equals or exceeds the exemption amount...
he following..."
make any return required by any internal revenue law or regulation made
Secretary shall be prima facie good and sufficient for all legal
compulsion, obligation, or necessity in the second and third persons;
imperative or mandatory... In common ordinary parlance, and in its
statute that allegedly requires the filing of tax returns. However, the
does require individuals to file, even though they are not first made
Congress so that Congress cannot be accused of requiring individuals to
"shall." When the government files returns for individuals under 6020(b),
records as having been filed because I did not sign it. Remember, I was
9
The IRS and Criminal Prosecutions
against anyone. In their criminal cases, the IRS may use any information
Internal Revenue scam, individuals began to file "exempt" on the W-4 form
defendants is their use of the W-4. The moment an individual files an
even participate in many criminal tax trials. I am convinced that the
and adequate jury instructions relative to "willfulness" up to the
10
The IRS: A Modern American Gestapo
has given to the IRS. When we are students in school, we are taught the
very important if you decide to take on the IRS that you have pre-paid
that you should not ignore any correspondence from them and you should be
by the IRS, which were reported to allow them to come into your home in
don't attend an audit, the IRS has two choices: they may send you a
11
The Summons Power of the IRS
that the IRS may send you a summons if they wish to talk with you (for an
summons in District Court just to require an individual to show up,
for enforcement because they think that you are afraid to respond,
hundred. I remember one recently who, like a few before him, made the IRS
answer the IRS' questions in response to a summons, and, in fact, rule
that can be used in any criminal case at any time. Do I say "sneakily"
banks. That means that any information you give to a bank you are making
to assert the Fifth Amendment as long as you do not admit the existence
district court judge because he had been summonsed by the IRS and had
12
What Can You Personally
Do About the Problem?
(and they certainly require only a modicum of concentration), you have
Amendment protections of their inherent rights.
protections of their rights.
individuals to file tax returns.
and the courts are not ready to admit this problem to the general public
for your rights, and if you wish to quit voluntarily waiving your Fifth
consult with a few tax professionals and get opinion letters from them.
judgment-proof because you have assets and work for a regular paycheck,
your rights is to instruct your employer to continue to withhold so that
IRS explaining to them that you have become aware that filing a return
Refund. Now, pursuant to IR Code section 6532(a)(1) which states:
recovery of any internal revenue tax, penalty, or other sum, shall be
...unless the agency can inform you of a way you may file a return within
jurors, and an embarrassing one for the IRS. Perhaps the IRS will scurry
essentially the procedure outlined above, except that the "withholding"
along with his own letter to the IRS requesting an extension of time and
but it currently suffers from many severe problems and it is now so huge
fault or perhaps I haven't given enough credit to the IRS' propaganda and
"
send you your refund; in either case, you have still set up your own
Refund letter. Since the IRS knows they cannot require individuals to
Colorado 80212;
general information purposes only. If you wish specific legal advice on
the issues covered in this book, please consult a competent attorney.
working on it only slightly longer than I have, and for less time than
some others, but he has unarguably identified its fatal weakness.
brave fellow Americans I had recently served with in Vietnam were
reluctant to join me when I jumped into this particular battle. I studied
and fought hard, on my own. Later, I shared what I had learned with a few
brave souls and eventually conducted classes on the IRS Code. Since then
I've corresponded with congressmen; debated with agents and tax
accountants on radio and TV; and informed countless citizens as to their
power as jurors to nullify bad laws (such as returning "not guilty"
verdicts in income tax cases). I gave up a lucrative real estate career
in my native Hawaii in order to devote more hours to studying
sovereignty, common law, statutory law, codes and regulations; in short,
to finding the Achilles heel of this monster that was created 83 years
ago.
Tax Scam. I stopped filing returns and stopped paying the income tax.
Subsequently, of course, I had to then break myself of the banking habit
in order to reduce my exposure to IRS seizure. For the same reason, I've
had to (temporarily, I hoped) give up my job, my way of life and my
American dreams of owning a home, new car and a yacht.
1970, federal laws have required that your and my banking records be
maintained essentially forever and made available to government snoops at
any time). I've learned to deal in silver and gold coin and to barter
directly, or with scrip.
for willful failure to file. A federal trial jury in Honolulu acquitted
me of one of the three counts, but out of their very real fear of IRS
retaliation, the poor jurors convicted me on the other two identical
counts! This costly battle became costlier as I was forced to come to the
mainland to file and argue an appeal in order to continue my defense.
Happily, the guilty verdicts were overturned, and I was spared further
expense and anguish when the prosecutor missed the re-trial deadline.
1979, neither I nor dozens of other intrepid Americans fighting for tax
reform would have had to undergo our trials and tribulations. I would
likely still be selling pieces of Hawaiian paradise, or maybe even
retired by now and worrying only about how much time to take away from my
scuba diving off Maui to go snow skiing in Colorado.
education I've received in the workings of our government, our laws and
our courts which I would have missed if I had failed to become involved
and chosen to travel any other road.
appreciation of our forefathers' concern for those rights when they
provided the protections they did in the Constitution. From here on,
anyone taking the small amount of time required to read and apply Bill's
approach can safely join the ranks of those of us who have wrestled with
the gargantuan tax bogeyman. Without having to give up their present
lifestyle or take any of the risks that those of us have taken who have
gone before, anyone joining the cause today is guaranteed the enjoyment
in the near future of looking back on their participation in a movement
that produced the grassroots pressure necessary to restore every
American's freedoms from the un-American income tax and the hated IRS.
ago. Incredibly, we've been saddled with this tax for so long that many
of the current generation believe that it has always been a part of the
American fabric--even that it was provided for by the nation's founders
when they drafted the Constitution.
constitution proved more than ample to fund the new government. In fact,
there were several years prior to the implementation of the income tax
when Congress' biggest concern was what to do about an embarrassing,
growing surplus monster! Since the income tax was put into place,
however, Congress has not had such embarrassment. Since that time, the
deficit monster has reigned.
1895, the Supreme Court of the United States struck down an attempted
income tax, ruling in the Pollock case that such a direct tax was
unconstitutional.
proposed that an amendment be made to the constitution. Once the
amendment was in place, he opined, it would be constitutional to levy
such a direct tax. He proposed levying the tax on the incomes of
corporations and joint stock companies. He didn't say anything about
levying the new tax on individuals, and in the ensuing debates the
Congress reiterated that the new tax was not to be exacted from the wages
of the laborer or even the professional man, only from corporations and
joint stock companies.
middle class wage earners and self-employed than from the corporations.
Although there is undeniable proof that the amendment to the constitution
was never ratified, many new additions to the income tax laws and
regulations have been passed every year, until they have become
strangling. A few years ago, President Reagan called on his audience to
assist him in making sweeping changes: "Our federal tax system is, in
short, utterly impossible, utterly unjust and completely
counterproductive. It has earned a rebellion. And it's time we
rebelled."
and sell, and even recommend criminal prosecution in order to collect.
They have also become a feared government agency (shame on us
self-governing, "free and brave" Americans for allowing our government to
get to that point). However, the pendulum has now begun to swing hard
against their abuses of power, and Americans are rebelling as President
Reagan suggested they should. Individuals in increasing numbers are
resisting the IRS by refusing to file or pay altogether. Many have paid
the price for such rebellion by stiff fines and even jail sentences.
Neither the author of this book nor I wish to see more stiff fines or
imprisonment. But we can still rebel effectively, without such risk, and
that is what this book is about. Properly utilizing the constitutional
tool the author has identified, a few thousand of us can add significant
grassroots pressure to the legislative efforts of Congressmen Archer,
Schaefer and Tauzin, and kill the income tax.
which would abolish the income tax and the IRS. Their proposal would
replace the income tax with a national sales tax. With our help, I am of
the opinion that such a proposal could actually become popular in
Congress and become law in the near future. On the 17th of January, 1996
Senate Majority Leader Dole (R-KS) and Speaker of the House Newt Gingrich
(R-GA) voiced their personal support on national television (CNN) when
they stated that the IRS must go.
Senator to win their support is a good place to start. Following the
suggestions of the author of this book is another. Unlike those who have
gone before and suggested that Americans simply stop paying the tax man,
author Bill Conklin is suggesting a grassroots protest activity that is
safe and sane, even fun. I believe that if a few thousand Americans were
to follow his suggestions, not only would the IRS and the Department of
Justice be unable to threaten anyone with criminal charges and
prosecution in an effort to put down the rebellion, but the IRS
themselves might wind up pleading with Congress to change the tax laws!
several thousand other Americans, in challenges that ultimately
eliminated the income tax and the IRS, and initiated the restoration of
many related freedoms that Americans have lost over the years.
outlined in this book. Dick was singled out, prosecuted and convicted for
having the temerity to stand up and tell the public the truth. His only
failing was that he had, like others who had gone before, faith in the
legal system. He felt that the system would see the truth once it was
properly presented; he did not foresee that the legal system would
ignore the Constitution and the many related rulings by the Supreme Court
in order to protect the federal tax system.
is so complicated that the average person must spend hundreds of dollars
each year for professional help or on computer software in order to
attempt to comply with the system. Individuals feel compelled to sign
documents, under the penalty of perjury, that they do not understand. The
IRS misleadingly refers to the tax system as "voluntary." They do so
because they know that requiring individuals to provide information on
1040 returns--information which may be used to criminally prosecute the
provider--would create a severe constitutional problem.
public to continue to volunteer. Criminal prosecutions, unsubstantiated
and arbitrary Notices of Deficiency, garnishments, outrageous penalties
and illegal searches and seizures, are all tools the IRS employs to force
"voluntary" compliance with the present tax laws. The IRS is an agency
out of control. It has little respect for the right to due process, or
the many other rights of the citizens of this country which are protected
by the Constitution. It is time for a change and this book will tell you,
in plain and simple language, how you personally can become a catalyst
for making change.
the American public: the federal income tax system.
they voluntarily file a tax return, or when the IRS follows its
assessment procedures as outlined in the Internal Revenue Code.
present income tax system to the extent that it would require individuals
to give the government information which could be used against them
criminally.
continually refers to the income tax as "voluntary."
interest in the Constitution and its influence on modern society. One day
in early June of 1976, I was walking to get a bit of exercise after a
hard day spent as an elementary school teacher, when I noticed a sign on
the front of an old building which read: "National Tax Strike." My
generally strong curiosity led me to enter, and the subsequent meetings
and conversations I had with the folks I met inside that building started
me on the twenty year voyage that eventually led to the writing of this
book. Inside the building, I met several gentlemen whose ideas at first
seemed completely loony to me. However, they did get my attention with
their views on the tax laws, and gave me enough incentive to begin my own
research. After several months in a law library, I realized they had some
valid concerns, and I too "went public" with my new-found knowledge. A
local newspaper in the Denver area published an article quoting my
comments about the tax system.
financially. During the extensive litigation that followed over the
years, however, I defeated the IRS six times! My wins in the federal
Tenth Circuit Court of Appeals are published in the Federal Reporters
found in the law libraries.
over twenty years of litigation involving these cases, the IRS has spent
hundreds of thousands, if not millions of dollars fighting me, a little
guy! It is a shame that the IRS wasted so much money with their frivolous
litigation--not just once, but six times!
difficult to make, nor do you have to have formal legal training to
understand. However, the implications of repeated losses for the IRS are
significant. If more of us forced such losses, the laws would have to be
changed by Congress. The only reason the present tax system continues to
exist is because not enough people take time to challenge it. In fact,
they continue to voluntarily waive their rights (rights which the Fifth
Amendment was designed to protect) every time they file 1040 returns;
they do everything they can to avoid litigation with the IRS when the
agency challenges them.
and take advantage of the tax laws relative to churches. (I also started
exercising my First Amendment protected rights by telling others about my
beliefs, and sharing with them the concepts for setting up their own
church. The IRS became extremely upset with me because in establishing
these churches I made sure that all of the rules set out in the law were
strictly followed and thereby forced the IRS to let the small churches
take advantage of the tax breaks which the law allows all churches.) When
followed to the letter, the laws passed by Congress pertaining to all
churches, large and small, allow literally billions of dollars of church
assets and income to escape taxation--church organizations are exempted
from the tax laws by the IRS. Of course, if there were true separation of
church and state, churches would actually be immune from government
regulation and taxation and thus wouldn't even have to ask the IRS for
exemption, but I won't sidetrack on that issue here.
answer some additional questions to their satisfaction. We went to court
over their efforts to force my answers. In my first case, Church of World
Peace, Inc. v. IRS, 715 F.2d 492, the Tenth Circuit ruled that the IRS
couldn't pull the tax exempt status they had previously granted me,
without following all the procedures to the letter, including first
issuing me a summons.
instructed. I filed a court action challenging the summons, but the
district court ordered it enforced, so in order not to be held in
contempt of court, I had to appear and answer some of the IRS' questions.
I wasn't done, though. I appealed. In my appeal, United States v. Church
of World Peace, 775 F.2d 265, the Tenth Circuit Court of Appeals
essentially ruled in favor of my argument, and quashed the lower court's
enforcement order! Even though I won this round, I wasn't refunded any
court filing fees or granted any monetary relief for the costs I had
incurred. However, in reading over the rules and the law, I noticed that
since this was a summons issue, I could at least apply for a small
witness fee, which I did. Their own code says they must pay it since I
appeared in answer to the summons. However, the IRS refused to pay me
(probably because they didn't get all the answers they had wanted), so I
sued them again, this time in order to collect the meager witness fee!
Again, the lower court seemed only too anxious to help the
government--they sanctioned me $1,000 for filing what they called a
frivolous lawsuit. But again I stuck to my guns, and again I prevailed.
In the case of Conklin v. United States, 812 F.2d 1318, the Tenth Circuit
reversed the lower court. (Additionally, they chastised the Department of
Justice for misrepresenting the facts in their responses to my
lawsuit!)
my forced response. Since the information had already been obtained by
the IRS, the court held that my motion issue was "moot." (See U.S. vs.
Church of World Peace, 878 F.2d 1281.) However, some years later, the
Church of Scientology took the exact same concern up to the U.S. Supreme
Court. (See Church of Scientology of California v. United States of
America 113 S.Ct, 447; 121 L.Ed.2d 313.) In the Scientology case, the
Supreme Court reversed the earlier ruling that the Tenth Circuit had made
in my case, and even pointed to my case as an example of "bad" law. They
ruled that my issue had not been moot and that relief should have been
granted. With this encouragement, I subsequently re-litigated my case and
I won that case, too!
Deficiency for tens of thousands of dollars that I didn't owe. In this
personal attack on me, their true colors and incipient tyrannical
tendencies showed up. Without going into the details of this case,
suffice it to say that the Tenth Circuit ultimately reversed everything
the IRS argued. (See Conklin v. C.I.R., 897 F.2d 1032 and Tavery v.
United States, 897 F.2d 1027.) For those readers who may wish to check
all this out in the law library, you'll note that the IRS finally settled
the financial part of this battle in a case titled Tavery v. United
States, Civ. No. 87-Z-180, USDC Colorado. I think they did so because
they knew they would otherwise have to defend their outrageous actions to
a jury, if the case were to have gone to trial.
of the Church of World Peace--for doing the same things that other
churches do. The Tenth Circuit ignored its previous rulings (where they
had decided in my favor), and they ignored the decision by the Supremes
in the Scientology case. Interestingly, they chose to mark the last
Church of World Peace case, "not for publication."
learned that knowledge of the law is only one small part of the issue.
The "big picture" issue is realizing and understanding how the courts and
the government bend the law if it is in their best interest, that is, if
they feel it necessary in order to defeat a perceived threat to the
sacrosanct tax system. I'm not saying such things because I'm a poor
loser, but because that's just the reality of it. I certainly have no
regrets about the final outcome, because I have gained invaluable
insights into the methods and madness of the courts and the government in
general. I have learned how to litigate and obtain justice in spite of
that terrible reality.
they won this case, they don't really understand the implications of the
Tenth Circuit decision. The Tenth Circuit ruled that information may be
entered from tax returns into criminal cases involving third parties if
the individual who filed the return is either a friend, spouse or
relative of the defendant. That means that if the IRS is prosecuting a
friend of yours they can, according to the Tenth Circuit, use information
in that friend's case which came from your personal finances, if they
think that you might have been able to provide financial help for the
friend. If the courts take the position that information from your return
may be inserted into third party cases, it becomes clear that every time
you file a return, you waive not only your rights to privacy (protected
by the Fourth Amendment) but also your rights to not witness against
yourself (protected by the Fifth Amendment). If that doesn't bother you,
you may as well put this book down now; I'm wasting your time. The IRS
insists that you waive many of your rights when they insist that you file
a tax return; they deceitfully tell you that you are voluntarily filing
because they and the courts both know that the government simply cannot
require you to waive any rights protected by the Constitution. They're
worse than sneaky; they know that as long as you voluntarily provide
information, you haven't a legal leg to object on if they later decide to
use the volunteered information against you.
federal court system, I eventually realized that I was on to something
big. I saw the IRS' use of return information in criminal cases directly
colliding with the Fifth Amendment. I realized that the Achilles heel of
the federal income tax code was in the Bill of Rights to the United
States Constitution, specifically the Fifth Amendment.
a specific statute requiring me to file an income tax return! I began
publishing an offer for a reward of $50,000.00 to anyone who could
satisfactorily answer the following questions:
really qualified them for it.
with several attorneys my perceptions of the Fifth Amendment conflict
with the requirement of filing returns, and none of them had been able to
show me how I could file a return without waiving my rights. I enclosed
photocopies of their written opinions to that effect. I gave the IRS the
power of attorney to sign the return for me if they could do so without
waiving the Fifth Amendment protections of my rights.
their $500 penalty for filing a frivolous return. Far from giving up my
habits of challenging their rulings, I filed a suit to argue the issue.
During five years of wrestling with the issue, Judge Nottingham, a
federal judge in Denver, Colorado told me that if he were to rule in my
favor, he was afraid that he would overturn the federal tax system.
Finally he ruled against me, but he took the position that the Fifth
Amendment does not apply to the federal tax system because the Fifth
Amendment only applies to "compelled testimony." I appealed the case and
the Court of Appeals (the Tenth Circuit again, in Denver) upheld Judge
Nottingham's contention that tax returns are not the compelled testimony
spoken of in the Fifth Amendment, and that therefore the Fifth Amendment
does not apply to the income tax system. (See more on this case in
Chapter Six.)
the courts had just ruled that filing returns was truly voluntary!
Perhaps the government realized that significance of the ruling, too,
because they lost no time in trying to put a damper on my celebration of
what the ruling truly signified; they immediately asked the court to
order me to pay them $6,000 for the valuable time it had taken their
attorneys to prepare arguments and motions to defend against my
"frivolous" contention. Permit me to also state this another way: the
government wanted the court to fine me for taking the position that the
filing of income tax returns was compelled or required!
had mused out loud earlier during one of our hearings, either way he
ruled, I win! For example, if he were to have ruled that the $500 fine be
abated, he would have had to decide that the unsigned return and my
concerns were not frivolous. But he couldn't do that, because then other
folks might start submitting unsigned returns. That would pull the IRS'
teeth--they could no longer fine folks for submitting a "frivolous"
return, but more importantly, how then could the IRS use anyone's return
information against them criminally if they hadn't signed it "...under
the pains and penalties of perjury"?
was relying on, and would underscore the uncomfortable fact that their
opinions brought into sharp focus; namely, that the IRS could use the
club of a fine to force me to sign and submit a return, forcing me to
waive my rights not to be a witness against myself.
voluntary. Of course, if the Fifth Amendment applies, then my argument is
far from frivolous, and if the Fifth Amendment doesn't apply, I have
proven my point that filing is not required. In any event, the only way
that justice can prevail, in the face of a judicial system that will
declare words to mean their opposites in true Orwellian fashion (or Alice
in Wonderland, whichever prose you prefer), is for the American public as
a whole to become aware of the terrible deceit that has been perpetrated
on them regarding the federal income tax, and to make their own
challenges. The IRS, in an obvious attempt to deal with the problem,
continually refers to the income tax system as voluntary. This book will
tell you that I believe the IRS is right; as long as we have the Fifth
Amendment to protect our rights, filing returns must indeed be voluntary.
And I believe we can shove such words right back down their throats until
they, too, go with us to the Congress and demand that the law be
changed!
cases arising in the land or naval forces, or in the Militia, when in
actual service in time of War or public danger; nor shall any person be
subject for the same offense to be twice put in jeopardy of life or limb;
nor shall be compelled in any criminal case to be a witness against
himself, nor be deprived of life, liberty, or property, without due
process of law; nor shall private property be taken for public use
without just compensation. (emphasis added)
government. To calm such concerns, eventually a Bill of Rights was
proposed and adopted which listed several prohibitions to the new
government--certain individual rights which the government was to
understand from the beginning that they could not infringe upon. The
Fifth Amendment is part of the Bill of Rights and it holds that
individuals cannot be required to give the government information which
may be used against them in criminal cases. Subsequent case law has
applied the Fifth Amendment in civil cases, too, when there is the
possibility that the information in question may be used criminally. (Of
course, there is always the possibility that information may be used for
criminal prosecution in a system like our present tax system--where civil
enforcement is used by an agency to gather information that the very same
agency may utilize for criminal prosecution.)
read him a "Miranda" warning to advise him of many of his rights (from
Miranda vs. Arizona, 384 U.S. 436; 1966). After such warning, every time
that individual does answer a question, he is voluntarily waiving the
Fifth Amendment protection of his rights; he cannot later object when the
answers he volunteered are used in his criminal prosecution.
enough information before the indictment to convict the individual
without his own testimony. The Fifth Amendment protections we all enjoy
are thus extremely important to protect us against government prosecution
and persecution, but as you will see from the rest of the information in
this book, the government ignores the Fifth Amendment in the collection
of income taxes. Since the population is generally ignorant as to the
nature of their rights and their constitutional protections, the federal
government continues to get away with the biggest scam in United States
history; they've done so for over eighty years. The government of the
United States of America, through its agency the Internal Revenue
Service, supported by a court system that deliberately ignores the law in
tax cases, is requiring individuals to waive their Fifth Amendment
protected rights to provide information on April 15, that may be used
against the individual criminally. Such a situation makes a complete
mockery of the Fifth Amendment. Through the IRS and the Department of
Justice the government, by carefully orchestrated trials and outrageous
fines and criminal penalties, instills fear and thus perpetuates a tax
system which is not only un-American in that it taxes an individual's
industriousness and productivity, but unconstitutional in that Americans
must waive their constitutionally protected rights in order to comply
with it. In this manner, they essentially beat confessions out of 100
million Americans each year, and make a mockery of our Bill of Rights. It
is time for us to wake up, assert our rights again, and reveal the truth
to others.
statement is the IRS' Privacy Act Notice as it appears in the 1040
Instruction Booklet.
it will be used. We must also tell you what could happen if we do not
receive the information and whether your response is voluntary, needed
for a benefit, or mandatory under the law.
complete, correct, or process your return; figure your tax; and collect
the tax, interest, or penalties. Internal Revenue Code Sections 6001,
6011, and 6012(a) say that you must file a return for any tax for which
you are liable. Your response is mandatory under these sections. Code
section 6109 says that you must show your social security number on what
you file, so we know who you are and can process your return and other
papers. You must fill in all parts of the tax form that apply to you.
However, you do not have to check the boxes for the Presidential Election
Campaign.
states, the District of Columbia, U. S. Commonwealths or possessions, and
certain foreign governments to carry out their tax laws.
subject to criminal prosecution. We may also have to disallow the
exemptions, exclusions, credits, deductions, or adjustments shown on your
tax return. This could make the tax higher or delay any refund. Interest
may also be charged.
and giving information, please call or visit any Internal Revenue Service
office. (emphasis added)
approximately 100 million people rush to the post office (many at the
last minute!) to give the government complete information on their
financial lives. Amazingly, thousands, perhaps even millions of these
individuals file their returns without any real understanding of the form
or the information placed on it. Their lack of understanding is why they
use CPAs and computer programs to prepare the documents for them. But
think on this: they then sign the forms they don't understand, oftentimes
prepared entirely by others, and swear to their accuracy "...under the
pains and penalties of perjury!"
federal crime of perjury each year because they file income tax returns
that they do not understand and that they thus could not explain or
defend. (Perjury is a serious felony punishable by a fine of up to $2,000
and a jail term of up to five years, or both--see Title 18, United States
Code, Section 1621.)
the Privacy Act requires all government agencies to inform the public
about the law and to tell the public what they might do with the
information requested, as well as advise them of the consequences for
disobeying the law. That is why the IRS warns us that information on tax
returns may be given to the Department of Justice.
required to file a return and at the same time warn you that you are
giving them information that they can use in a criminal case (yours!).
The Privacy Act Notice also states that individuals are required to file
a return "...for any tax for which you are liable." You are referred to
IRS Code Sections 6001, 6002 and 6012. Get a copy of the IRS Code in the
law library and read those sections. Do you see where they make you
liable to file a return? These sections don't make you liable, they
simply state that if you are liable, then you must file. Discuss these
sections with your attorney. They will have to conclude that in and of
themselves, the language of these sections do not make you liable to pay
an income tax. (The lawmakers didn't simply misspeak here. Contrast these
sections with Section 5005, for example. This section very clearly
specifies that if you distill or import distilled spirits, such action
makes you liable for the tax.) Your attorney will likely further conclude
that you are not liable for the tax unless and until you voluntarily file
a return. Such action is what assesses or bills you; by signing the bill,
you are making a promise to pay. Again, there is no section in the
Internal Revenue Code that generally makes individuals liable to pay an
income tax.
that millions of individuals voluntarily file returns. Several years ago,
I searched through the entire Internal Revenue Manual and I found
numerous instances of the IRS' use of the word "voluntary" in relation to
the filing of income tax returns.
voluntary compliance with the tax laws..."
assistance to taxpayers."
taxpayer..."
and to encourage voluntary compliance."
served..."
"not filed voluntarily.")
without external constraint; spontaneous; in law, (a) action done without
compulsion or persuasion.
more folks might pause and ask why the IRS would be alerting them to the
possible sharing of their individual return information with that
prosecutorial agency. I think this is deceitful: the IRS doesn't really
want you to know that you are providing information that they can use
against you. However, they know that they must have something in print to
point to in the event you later try to claim you were never told that you
were waiving the Fifth Amendment protections of your rights by
"volunteering" the information. Note that the Fifth Amendment states that
you cannot be compelled to witness against yourself; and note further
that its protections don't apply if you can be tricked into voluntarily
witnessing against yourself. Doesn't this make you just a teensy bit
mad?
Justice unless they were allowed to use information on tax returns in
criminal cases. So when we read the Privacy Act Notice, we should know
beyond a doubt that filing returns is indeed "voluntary" because the IRS
is warning us that they can give the information to the Department of
Justice. To say it one more time: when you send in a tax return, you have
been forewarned how the information may be used. Since, in spite of that
warning, you have voluntarily given the information on the return to the
government, you cannot later object if they decide to use it against you
in a criminal prosecution.
public and keep them volunteering. Although the IRS refers to the filing
of returns as voluntary, they have both criminal and civil penalties for
those individuals who do not volunteer. That is why any challenge or
stand you make for the truth and the Bill of Rights is serious business,
and why you must know what you are doing. You are dealing with a corrupt
government agency and a major judicial conspiracy to protect the income
tax. The actions of both the IRS and the courts have the blessing of our
elected representatives. That is why this situation can only be changed
by the people themselves.
following to say about the federal tax system and its filing
"requirements". Mr. Curtis put his legal opinion in writing in 1985:
generally in agreement with Mr. Rendelman's excellent analysis of the
income tax laws. Regarding my own qualifications and experience, I have
served as an elected prosecuting attorney for over twenty years. In
addition, I have handled a number of criminal tax trials in federal
courts as defense attorney.
impossible to understand that even Commissioner Roscoe Egger, Jr.,
I.R.S., told an audience on November 30, 1984, in Baltimore that: Any tax
practitioner, any tax administrator, any taxpayer who has worked with the
Internal Revenue Code knows that it is probably the biggest "mishmash" of
statutes imaginable. Congress, various Administrations and all the
special interest groups have tinkered with it over the years, and now a
huge assortment of special interest and pet economic theories have been
woven into the great hodgepodge that is today's Internal Revenue Code.
IR-84-123, 11-30-84.
a 1984 Associated Press (AP) Release: The government has the nerve to
tell the people of the country, 'you figure out how much you owe us - and
we can't help you because our people don't understand it either - and if
you make a mistake, we'll make you pay a penalty for making the
mistake.'
testimony of a witness. Therefore, since no citizen can be compelled to
be a "witness" against himself, any statute that attempted to require a
citizen to file a return which could be so used would be
unconstitutional.
Service and the Federal Courts have taken positions that are in conflict
with the opinion in this letter. However, in IRS Publication #17, the IRS
says that where there is a conflict in the Court decisions, the IRS will
favor the position of the government, not the taxpayer, even though this
policy is a blatant violation of the well established legal principle
that in case of any ambiguity of statutory construction, the doubt should
be resolved in favor of the taxpayer, not the government. See Greyhound
Corp. vs. U.S., 495 F.2d 863 (1974).
your "intent." Merely proving that you filed to file a return is not
enough. The government must also prove beyond a reasonable doubt that
your failure to file was "willful." Failing to file a tax return is not a
crime. As stated by Mr. Rendelman, if you reasonably believe in good
faith that you are not required under the law to file a return, then your
action cannot be considered to be "willful" or in "bad faith," even if
you're wrong. By virtue of the fact that you have sought, accepted and
relied upon a professional opinion, your actions ought to be construed as
"reasonable" and "in good faith," not "willful" or in "bad faith."
Rendelman's letter, the United States Supreme Court said that any person
who relies upon a prior decision of that Court cannot be "willful".
Consequently, any person relying upon the decision of Flora vs. U.S.
which stated that our tax system is voluntary, cannot be considered to be
acting with "willful" or "evil" intent as formulated in the Bishop case.
The Supreme Court in the Bishop case said, "it is not the purpose of the
law to penalize frank differences of opinion." If the government were to
prosecute you without evidence of willfulness, it would be the same thing
as prosecuting you for murder without having a witness, or even a body.
Columbia. In this case, the Federal Court of Appeals cites the Model
Penal Code which states the defense as follows:
upon...a judicial decision,... or... an official interpretation of the
public officer charged by law for the administration or enforcement of
the law." Sec. 204 (3)(b).
U.S. 465 said it in plain words:
law permits, cannot be doubted."
filing requirement. I am completely convinced that the government is
abusing the Fifth Amendment severely every time it indicts an individual
or civilly penalizes an individual for not filing a return. It saddens me
to think that our government resorts to skullduggery to get away with
such abuse, but unfortunately it is true. Once I understood the problem,
I tried to think up a way that I could call attention to the situation
and at the same time, convince people that I am right. I decided at that
point to offer a $50,000 reward to anyone who could show me:
me if I did not send him the $50,000 immediately. Mr. Belli said that the
way I could file a tax return without waiving my rights would be to do it
through an attorney such as himself. He suggested that I give to the
attorney my power of attorney to file returns for me, and also that I
give him the money for my taxes, which would be placed in the attorney's
trust account. The attorney would then file the return and pay the IRS
out of his trust fund. The attorney would, however, file the return with
a code number on it known only to me and to him. He would not put my name
and address on the tax return, but simply sign the return as the
preparer, using my power of attorney.
attorney would stand on attorney-client privilege and refuse to identify
me, thereby preserving my Fifth Amendment protected rights!
with Mr. Belli's answer to my question because he was so creative. I
informed him that he had basically proven my point: there is definitely a
Fifth Amendment problem if filing tax returns is required.
returns" (Section 7203 of the IR Code), or if the IRS proceeded civilly
against me, in my defense I would ultimately have to put the attorney on
the courtroom stand as my witness and have him testify that he had filed
a return for me. Of course, if I had to have him so testify in order to
defend myself, the IRS would be forcing me to waive my rights supposedly
protected by the Fifth Amendment in order for the IRS to consider my
return as filed. I encouraged Mr. Belli to sue me for the money in order
to publicize my point, but he chose not to.
file a return without waiving his Fifth Amendment protected rights by
filing two returns. The first return would contain financial information
only--no identifying information. The second return would contain the
name and other identifying information, but indicate Fifth Amendment
objections on each and every specific question concerning income and
deductions. I agreed with Mr. Cohen that this approach would not require
me to waive my Fifth Amendment protected rights when I mailed the
returns, but if the IRS proceeded against me, I would have to testify in
my defense that I had mailed returns containing, in toto, all the
information required, and I would have to identify them and at that point
I would be waiving my rights.
absurd theory of law, but the judge decided the case in my favor and even
granted me my costs. See Ostman vs. Conklin, Civ. #C92-1371C; USDC
Seattle, 1992. (The judge also referenced contract law in order to set
aside Mr. Ostman's objection to me being the proper arbiter of the reward
I offered.)
Fifth Amendment protected rights; and there simply is no statute or
provision in the Internal Revenue Code that makes an individual liable to
pay the income tax.
may be made liable and therefore legally owe an income tax. First, an
individual may become liable by voluntarily filing a tax return; or an
individual may become liable if the IRS files a return for him. However,
law requires the IRS to follow definite and involved procedures if they
decide to file a return for an individual who has not filed; if a
knowledgeable person decides he wants to fight such action by the IRS, he
can force the agency to expend a lot of time and energy following through
with their assessment.
convinced that the government has no legal way around the Fifth Amendment
conflict with their alleged requirement to file 1040 tax returns. If
Americans were more concerned about waiving their Fifth Amendment
protected rights, the IRS would no longer be able to routinely use
information on tax returns in criminal tax cases; nor would they be able
to proceed civilly against individuals and later turn the case into one
of criminal prosecution once they obtained enough information civilly to
determine that the case might have criminal potential. As we have seen,
law requires the IRS to warn the public that the agency may use the
information criminally whenever they wish to, but most of us overlook
this warning--strangely, the compliant individual is at much more risk in
our convoluted system than the individual who stands on the
constitutional protections of his rights. The only reason that the
present hated tax system continues to work is because individuals
continue to voluntarily waive their rights and file tax returns.
became bound and determined to figure out a way to raise the Fifth
Amendment issue and to put the court in a position where it would have to
come up with a decision that would make my point.
Privacy Act to get the classification removed. I lost in the Tenth
Circuit Court of Appeals, but one judge did rule in my favor with an
eloquent opinion that really put the IRS in its place. Nonetheless I was,
by a vote of 2 to 1 of the Appeals Court panel, branded an illegal tax
protester for the rest of my life. This was primarily because I had dared
to criticize an agency that deserves criticizing.
which follows:
of a crime against the criminal, to the suspect policy of punishing
political protesters--or in other words, of punishing citizens for
exercising a right which is front and center to the First Amendment.
Indeed, if the objective of the IRS were only to prosecute the more
serious or frequent violators of the tax laws, the word 'protester' would
be irrelevant. As the trial court found, the object of the selectivity is
to shut up the 'outspoken.'
defendant bears a heavy burden of establishing, at least prima facie (1)
that he has been singled out for prosecution, and (2) that the
selectivity for prosecution was invidious or in bad faith, and that it
was based on such impermissible considerations as race, religion, or the
desire to prevent or inhibit the exercise of such constitutional rights
as free speech...
selectivity and its motivation to silence the outspoken are proved by
direct evidence. I find it impossible to believe that the majority really
means what it is saying. Surely it does not mean that even though the
government declares its intent to select persons for prosecution in order
to silence them, the ensuing prosecution does not violate
constitutionally protected interests.
is black. Nor would there be any doubt if the trial court had found this
defendant had been selected for prosecution by the IRS because he is on
the President's political enemies list. Similarly, there can be no doubt
that this conviction would fall if the trial court had found this
defendant had been selected for prosecution because he protested in
writing that:
nobody owes any public duty to pay more than the law demands: taxes are
enforced exaction's, not voluntary contributions. To demand more in the
name of morals is mere cant. Commissioner vs. Newman, 159 F.2d 848
(1947), Judge Learned Hand, dissenting.
selected for prosecution because he was an 'outspoken protester.' To hold
that such selectivity is permissible would make the examples of
selectivity I have just set out equally permissible. For First Amendment
purpose, nothing distinguishes an 'outspoken protester' against existing
tax laws from one who protests as Judge Hand and Justice Frankfurter have
protested.
law. Nevertheless, the usual carte blanche of the prosecutor in seeking
the convictions of these persons is subject to the requirement that the
decision to prosecute not be motivated by factors by which the government
cannot constitutionally distinguish one violator from all others. If
administratively, the government has not the resources to prosecute every
violator, if the government therefore must pick and choose from among all
violators, it may not do so based on its desire to shut the taxpayer up.
However reprehensible may be citizens who object to paying the taxes
which make possible an acceptable degree of civilization, the First
Amendment protects the right to make those objections. If not, then the
constitutional guarantee for Free Speech is illusory. The right to
protest against government policies lies at the core of First Amendment
values....
effective self-government, the Constitution forbids the government action
unless the annunciation of those ideas amounts to such clear and present
danger to the security of the Republic that it falls outside the ambit of
otherwise protected political speech.
to the Republic, there is no argument before us that they do; no court
has so held; and it is doubtful that any court is prepared so to hold. Of
course there is a danger that illegal tax practices will become more
widespread if the government fails to strike swiftly and decisively in
gagging or at least intimidating the most outspoken tax protesters.
However, in a day in which even a computerized search is incapable of
tabulating the fractions of a citizen's conduct which the government
agents now have discretion to charge serially or cumulatively as alleged
violations of the law, the necessity of subjecting that discretion to
constitutional scrutiny is manifest and certain.
citizen can carry his heavy burden to show that he was singled out
because (to use the trial court's express language) 'he is an active and
outspoken protester.'
taxation. Certainly no form of protest is more American. (Furthermore,
tax protest is neither modern nor American in its origin. Many people
venerate one who commented on the publicans who collected the taxes in
his time.) It was, after all, protest against the Stamp Act which helped
set in motion that chain of events which won for this nation its
independence from a repressive King George and led to the enshrining in
the First Amendment of the right to protest.
to give the trial court an opportunity to reconsider the matter in light
of this clarification of the various means by which selectivity may be
proved. The possibility that the confusion may have affected the finding
that selectivity was motivated by a desire to suppress outspokenness
suggests that the trial court not be bound by that finding on remand but
rather be permitted to reconsider whether both selectivity and illegal
purpose were proved in this case. I would therefore reverse and remand
for reconsideration by the trial court."
with Judge McKay for this case, have much respect for the First Amendment
and its freedom of speech guarantee when the federal income tax is
involved. It is a shame there are not more judges like Judge McKay.
Division (CID), so I came up with a new idea. I believed it was a new
idea, because I couldn't find any evidence in my research that anyone
else had ever tried it. Here it is:
but not wanting to waive my rights in order to do it. All of the
professionals I talked with agreed that I had a definite dilemma: since
the IRS by officially classifying me as a tax protester had essentially
notified me that I was under scrutiny by the CID, I obviously had reason
to be concerned about witnessing against myself with anything I said or
submitted, so there was no way I could file a return without waiving my
Fifth Amendment protections. They put their opinions in writing, on their
letterheads.
might voluntarily give to them, I filed an unsigned return. I also
enclosed photocopies of the letters from the attorneys I had contacted,
and said in my cover letter that I was relying on their professional
evaluations. I attached an IRS Power of Attorney Form #2848 on which I
gave power of attorney to the IRS District Counsel to sign the returns
for me, if he could figure out how to do so without waiving my Fifth
Amendment protected rights. The attorneys in private practice couldn't
figure out how I could do it; maybe the attorneys working with the agency
could! The IRS accepted and processed my return and never said a word
about the manner in which I had mailed it to them.
the IRS fined me $500.00 for filing a frivolous return. (Apparently some
sharp-eyed return processor or agent figured my action was an excuse for
the agency to collect another 500 bucks from me and perhaps put me in my
place for doing what I did.) I didn't think they had any real basis for
the fine, because they hadn't objected the first time I did it, and in
the meantime I had come across several cases where it had been held that
a return was not really a return unless and until it had been signed. So
I had concluded that I was on relatively solid ground; if my unsigned
return was not even to be officially considered as a return, how could
they assess a frivolous return penalty? However, after I was hit with the
frivolous return penalty, I could only conclude that once again the IRS
was making law: an unsigned return was not a return when they didn't want
it to be, and it was a return when they wanted it to be--like when they
wanted to assess a fine!
federal district court judge in Denver, Colorado finally informed me
(after putting off his decision while he wrestled with my issue for a
couple of years) that he had a real problem ruling on my lawsuit. The
problem, he said, was that if he ruled in my favor, allowing me to file
without signing, he might overturn the federal tax system. He also
realized that if he ruled against me, he would be ruling against all of
the attorneys whose opinions stated that I would be forced to waive my
Fifth Amendment protected rights--he didn't want me to go on to the
Supreme Court which has ruled time and again that no one may be forced to
waive constitutional protections in order to comply with a law.
fatal--is when you don't sign a return, the reason that the tax
collection system is frustrated is because you're not signing under the
penalty of perjury. I mean, if everybody could do what you did, the tax
collection system would collapse, which you know I'm sure some people
would argue is not a bad result. But it's not one that I'm in a position
to bring about."
point of my lawsuit to begin with!
against me. He took the position that the Fifth Amendment does not apply
to tax returns because the Fifth Amendment applies only to "compelled
testimony." In other words, the Fifth Amendment only applies to
information that individuals are required to give to the government.
Since I had argued that the Fifth Amendment applies to tax returns
because I felt that their filing was compelled by the penal provisions of
the law, it is clear that Judge Nottingham took the position that
individuals are not required to give information to the government on
1040 returns (or, in other words, he was talking like the IRS talks and
saying "...it is voluntary"), and that is why the Fifth Amendment cannot
be applied.
the position that information on tax returns is "compelled testimony" for
purposes of the Fifth Amendment.
had completely filled out the return and provided the supporting
documentation and paid the tax that I voluntarily self-assessed. The
Supreme Court in U.S. vs. Doe, 104 S.Ct. 1237 (1984), took the position
that if an individual so much as even admits to having books and records,
he waives the Fifth Amendment protections of his rights because the Fifth
Amendment does not apply to documents, it only applies to testimony.
Judge Nottingham also ruled that "Plaintiff has wholly failed to persuade
me that truthful completion of the IRS Form 1040 or any related forms
would tend to incriminate him." Well, the judge answered a question that
I didn't ask. How could the judge know if a piece of information would
incriminate me? There is no way either of us could know that! But I
wasn't arguing that I might incriminate myself. I was arguing that I
couldn't be required to waive the Fifth Amendment protections of my
rights; and as a layman, there is no way I could be presumed to know if a
piece of information would be incriminating or not. His opinion duly
impressed me again as to how tricky the courts can be in their "Alice in
Wonderland" language.
opposite the one taken by the Supreme Court in the Garner case. The
circuit court judges held that information on a tax return is not
compelled, and they also accused me of taking a blanket Fifth Amendment
position even though I had answered all the questions. I couldn't believe
it; it was like they hadn't even looked at my return! Then they sent the
case back to the lower court for any further recommendations by Judge
Nottingham. The government seized the opportunity and asked Judge
Nottingham to order me to pay the amount they estimated it had cost them
in attorney time to respond to my complaint. I was amazed when they
submitted a bill for their time for $6,000! I was really flabbergasted
when Judge Nottingham assessed me the entire amount--this for raising the
frivolous argument of law that individuals are required to file tax
returns!
laws. Think about the contradictions in this scenario: The judge was
saying that this was an obviously frivolous issue--one that even I, a
layman, should immediately realize could be quickly defeated. Yet when
the government submitted a $6,000 bill for the time that it required of
two professional attorneys to defeat my position, the judge accepted
their bill and the many hours it represented without question, and
considered it appropriate to pass it along to me in entirety! I guess I
should have been grateful that the judge didn't add his time to my bill,
too; it took him five years to evaluate my
easily-understood-as-frivolous-even-by-a-layman argument! Of course, I
appealed once again, this time on the issue of the newly-imposed $6,000
worth of sanctions. Unfortunately, the Supreme Court was too busy with
other far more important issues; they decided to not even consider my
objection to the $6,000 sanction.
know that stating it is required to file tax returns would create a Fifth
Amendment confrontation, so they enforce the idea that tax returns are
indirectly required; they require you to volunteer, and then they punish
you if you chose not to volunteer. (Did I just hear you say that you feel
like Alice in Wonderland, trying to tie the Queen down to fixed
definitions for words?)
after all this, I decided to put my own understanding of the language of
the Tenth Circuit opinion into a written opinion. If you write me for a
copy of it, here is what it will say:
Colorado in Communications and I have over fourteen years of experience
teaching English and Communications at the elementary, junior-high, high
school, and college levels.
argument that individuals waive their Fifth Amendment protected rights
when they file tax returns. The courts took the position that my argument
was frivolous because the Fifth Amendment only applies to "compelled
testimonial communication."
grounds that his signature would violate his Fifth Amendment rights was
rejected in Betz vs. United States, 753 F.2d 834, 835 (10th Cir. 1985).
('It is well settled that the Fifth Amendment general objection to filing
a proper tax return is not a valid claim of the constitutional
privilege.') Conklin's contention that his classification by the IRS as
an illegal tax protester justifies invocation of the Fifth Amendment
privilege misunderstands the nature of the ...privilege... which protects
against compelled testimonial communications... (emphasis mine) and
Plaintiff has wholly failed to persuade me that truthful completion of
the IRS Form 1040 or any related forms would tend to incriminate him. (R.
Vol. II at p. 6).
about waiving his Fifth Amendment protected rights when he signs a
federal income tax return; and whether an individual who has been advised
by several attorneys that he will waive his Fifth Amendment protected
rights on a federal tax return should be penalized when he relied in good
faith on the advice of counsel. The government responds that the District
Court correctly held that Conklin was liable for the $500.00 frivolous
return penalty imposed under Section 6702. Further, the government urges
that we should impose sanctions against Conklin for bringing this
frivolous appeal. We agree."
a "compelled testimonial communication."
criminal case to be a witness against one's self means to be subjected to
some coercion, fear, terror, inducement, trickery or threat--either
physically or psychologically, blatantly or subtly; the hallmark of
compulsion is the presence of some operative force producing an
involuntary response. U.S. v. Escandar, C.A. Fla., 465 F.2d 438, 442.
would be an involuntary action. A compelled action is the opposite of a
voluntary action.
on 1040 Forms. The court has taken the position that providing
information to the government on 1040 forms is not "compelled." Thus,
from an English language standpoint, I can only conclude that if an
income tax form is not "compelled" or required, it must be voluntary.
This is also why the court ruled that the Fifth Amendment does not
apply.
the "Words and Phrases of the Internal Revenue Code."
will have your own official version of a case in which a circuit court
rules that the income tax form is not compelled (required).
Order and Judgment in Conklin vs. United States of America, No.
94-1213.
forms is voluntary, since this case is not published the holding by the
judges cannot be used as law. Nonetheless, if you are one of the many
individuals in the country who believe that the income tax is not
compelled, I think you should order and have on hand a copy of the
appellate decision so you can see for yourself that the Tenth Circuit
judges agree with you, even though they are not willing to let the world
know their thoughts on the issue.
May 2, 1994, in the U.S. District Court for the District of Colorado, and
the appellate decision in this same case by the Tenth Circuit Court of
Appeals, No. 94-1213 filed September 10, 1994, affirming the District
Court's opinion, these decisions can be interpreted in two ways:
not required to give return information to the IRS.
required. And it is doubly absurd to sanction him for appealing the issue
to the appellate court.
because it is not viewed as "testimonial communication' the Fifth
Amendment protections do not apply.
on a tax return is compelled testimonial communication.
witness."
documents would involve testimonial self-incrimination. Therefore
"testimonial' does not exclude everything except oral testimony.
have testimonial aspects and an incriminating effect.
personal information for assessing the tax with supporting
documentation.
faith attempt to properly resolve the 5th Amendment issue is evidenced by
the Power of Attorney he gave to the I.R.S., and the copies of legal
opinions he received from attorneys and tax consultants outlining the
Fifth Amendment dilemma.
given.
the District Court and the Tenth Circuit Court does not apply.
that be used in a criminal case (such as Doe and Garner, supra), his
concerns were not frivolous, particularly in view of Mr. Conklin's
classification by the I.R.S. as an "illegal tax protester."
standing to practice law in the State of Nebraska as well as in the 7th,
8th, 9th, and 10th U.S. Courts of Appeals, the U.S. District Courts for
Nebraska and Hawaii, and the U.S. Tax Court, and I have served as an
elected prosecuting attorney for over twenty years. In addition, I have
handled a number of criminal tax trials in federal courts as a defense
attorney.
constitutionality of the statute that allows the Court of Appeals to
sanction without any due process. The essence of my Supreme Court
argument is as follows:
for his involvement in the Church of World Peace. His case was set aside
for special scrutiny by the Internal Revenue Service Criminal
Investigation Division. There can be no question that he was confronted
with substantial and real hazards of incrimination by virtue of the
Criminal Investigation's interest in his case. He became concerned about
waiving his Fifth Amendment protected rights on a 1040 return after
speaking with several attorneys who advised him that he does waive his
rights when he signs a return.
assessment information. He did not sign the return, but instead he
provided a power of attorney form giving the IRS power of attorney to
sign the return if they could do so without waiving his rights.
claim and Conklin filed suit in 1989.
10, 1994 and sanctioned Conklin with attorney's fees and double costs.
The Tenth Circuit sent the case back to the District Court for its
recommendations and the District Court ruled on January 13, 1995 that
Conklin should be sanctioned approximately $6,000 plus double costs. The
District Court told Conklin that due process does not apply. Conklin
appealed and on June 6, 1995, the Tenth Circuit Court of Appeals ruled
that Conklin could not contest the fairness of the sanction at the remand
to District Court.
communications." (emphasis mine ) Conklin is a pro se and he naturally
has assumed in the past that the testimony on a tax return is a
"compelled testimonial communication" in view of the fact that the IRS
continually indicts individuals for willful failure to file tax returns
under 26 USC 7203. Since the general public believes that information on
a tax return is "compelled" and since the Supreme Court has ruled in
Garner v. United States, 424 U.S. 648 (1975) that information on a tax
return is compelled testimony for the purposes of the Fifth Amendment, it
is not unreasonable for a layman to conclude that giving information to
the government on a tax return is compelled and that it is testimonial.
a "witness." (p. 656).
Garner ruled that testimony on a tax return IS compelled and that it is
Fifth Amendment testimony.
Conklin to the standards of an attorney in direct violation of the law in
Haines v. Kerner, 404 U.S 519 (30 L.Ed 2d, 1972).
of his tax records to the IRS. In the case of United States v. Doe, 104
S. Ct., 1237 (1984), the Supreme Court ruled that an individual waives
his Fifth Amendment protected rights if he admits to having records.
Since by his filing Conklin admitted to having records, and since he
completed his tax return and sent it to the IRS lacking only a signature,
he could not have taken a blanket Fifth Amendment position.
Court for the District of Colorado and the Tenth Circuit have ruled that
information on a tax return is not "compelled testimony;" the lower
courts have held Conklin to the standards of an attorney in sanctioning
him; and the Court has taken the position that an individual takes a
blanket Fifth Amendment simply by withholding a signature in
contradiction of Doe, supra, this Court should correct the refusal of the
Court of Appeals to consider Supreme Court cases.
spite of the fact that the lower court ruled directly opposite the
Supreme Court. Such a position violates the Supreme Court law in Chambers
v. NASCO, Inc. 1991, 111 S. Ct. 2123, and McKnight v. General Motors
Corp., 114 S. Ct. 1826 (1994). It also takes a position opposite that
taken by the Seventh Circuit Court of Appeals in Brooks v. Allison Div.
of Gen. Motors Corp., 874 F.2d 489 (7th Cir. 1989) since the government
did nothing to mitigate the expenses. The Court of Appeals ruled that the
petitioner could not raise the issue of due process in the District Court
on remand. It is the petitioner's position that the issue of due process
could not be raised until a final determination of the amount of
sanctions had been made by the court. Since the Court of Appeals remanded
the case to the District Court for its recommendations, the issue of
sanctions was not arguable until the final determination as to the amount
of the sanction was made. Therefore, the instant appeal is the proper
time to raise due process and fairness issues.
sanction a litigant and does not allow any meaningful opportunity for the
litigant to contest the sanctions. Due process requires that before
sanctions are imposed, the offender be afforded fair notice and an
opportunity to be heard. Conklin had no reasonable notice that he would
be fined $6,000 and he had no reasonable opportunity to respond. Since
Rule 38 does not mandate due process for the offending litigant, it is
unconstitutional.
substantial question of law about the imposition of sanctions by the
Circuit Court of Appeals when there has been no determination that the
petitioner acted in bad faith and when the Circuit Court of appeals for
the Tenth Circuit has failed to consider the law in McKnight and
Chambers, supra. There is also a substantial question of law about
whether Rule 38 is constitutional when it allows the Court of Appeals to
sanction an offending litigant without an opportunity to be heard.
Furthermore, since the government did nothing to mitigate the damages,
the decision of the Tenth Circuit is in direct conflict with the ruling
in Brooks v. Allison Div. of Gen Motors Corp., supra.
battle, but actually they lost the war again since this case proves one
more way that individuals who file 1040 returns do waive the Fifth
Amendment protections of their rights. Since the government cannot
require individuals to waive their constitutional protection or their
rights in order to comply with any law, then this case stands for the
proposition that the filing of 1040 returns must be voluntary.
court has ruled that if you file a tax return, information may be
disclosed in virtually any criminal case involving some person that you
might happen to know.
Cir. 1987) detailing numerous factors to be considered, including "the
availability of income to the defendant from other sources such as a
spouse..." The factors to consider include money sent to the applicant by
his mother, Souder vs. McGuire, 516 F.2d 820, 821 (3rd Cir. 1975), and
transfers in trust. United States vs. Schmitz, 525 F.2d 793, 794 (9th
Cir. 1975) Opinion of Chambers, Chief Judge: "Financial inability
includes an inquiry into whether there is available to the defendant
funds for his defense from other sources such as family, friends, trusts,
estates, or defense funds." United States vs. Martinez-Torres, 556 F.
Supp. 1275, 1279 (S.D.N.Y. 1982). Under this broad test, we hold that the
district court correctly decided that Ms. Tavery's income and tax refunds
were relevant to the issue of Rev. Conklin's eligibility for appointment
of counsel, and that the government's disclosure of this information was
therefore permissible under Section 6103(h)(4)(B).
disclosure was an unlawful disclosure as she was not a party to the
proceeding. It is clear in this particular situation that Ms. Tavery
waived her Fifth Amendment protected rights when she filed the tax return
and disclosed the information that the government allowed into evidence.
Could the government have used Ms. Tavery's tax return information
against her if she had been compelled to submit it? Of course not, if the
Fifth Amendment means anything. So the court must have decided that she
had volunteered the information on the return. And of course the opinion
in Conklin vs. United States, supra, is consistent with this theory since
the Tenth Circuit took the position that information on tax returns is
not compelled by the government. Ms. Tavery voluntarily waived the Fifth
Amendment protections of her rights by filing her return and disclosing
information.
against me on July 31, 1995 in an unpublished decision: William T.
Conklin vs. United States, No. 95-1013 (Tenth Cir., July 31, 1995). Since
the Tenth Circuit declined to publish this decision, I will quote it here
in its entirety:
determination of this appeal. See Fed R. App. P. 34(a); 10th Cir. R.
34.1.9. The case is therefore ordered submitted without oral argument.
declaratory judgment regarding the revocation of its tax exempt status.
In the course of that case, the IRS introduced the tax returns of the
plaintiff, who was a central figure in the CWP organization.
26 U.S.C. Section 6103. Section 7431 allows civil suits against any
employee of the United States who knowingly or negligently discloses a
return or return information in violation of Section 6103. Id Section
7431(a)(1). The district court granted the government summary judgment
and denied plaintiff's summary judgment motion. Plaintiff now appeals. We
have jurisdiction pursuant to 28 U.S.C. Section 1291 and affirm.
the treatment of an item reflected on such return is directly related to
the resolution of an issue in the proceeding.
related" to the resolution of an issue, cf. Tavery vs. United States, 32
F.3d 1423, 1428-30 (10th Cir. 1994). Instead, he claims that only one
item on the return was relevant to the proceedings and, consequently, it
was error to introduce the entire return.
language is clear and unambiguous, then the plain meaning of the words
must be given effect." Resolution Trust Corp. vs. Love, 36 F.3d 972, 976
(10th Cir. 1994).
government an option. Once the predicate condition is met (i.e., an item
on a "return is directly related to the resolution of an issue in the
proceedings," 26 U.S.C. 6103(h)(4)(B)), then the "return or return
information may be disclosed," id. 6103(h)(4) (emphasis added.) Because
the statute is phrased in the disjunctive, the government may disclose
either the return or return information once it satisfies that one of
Section 6103(h)(4)'s predicate requirements is met.
summary judgment for the government. Accordingly, the judgment of the
district court is AFFIRMED.
the IRS may disclose your entire tax return in any litigation if only one
small part of the return is relevant. Doesn't this make it even more
clear that you waive your Fifth Amendment protected rights when you file
a tax return? Of course, that doesn't matter anyway, since the Tenth
Circuit has also ruled that the Fifth Amendment only applies to compelled
or required testimony or information. So, once again, either filing tax
returns is required and the government is requiring individuals to waive
their protections and their rights, in which case any statute that
requires the filing of tax returns would be unconstitutional; or, filing
tax returns is voluntary so that the Fifth Amendment doesn't apply.
Either way, it is obvious that the IRS has a severe problem. Once this
cat fully gets out of the bag (i.e., once everyone understands these
concepts), I think the income tax is dead. What do you think?
complex and difficult to understand language. It is the law book that our
government uses as the basis of the income tax. I have looked through the
entire Internal Revenue Code over a period of almost twenty years now,
and I have not found any statute in the Code that makes an individual
liable to pay the income tax. There is a statute, Section 6020(b) that
says the government may file a return for an individual if the individual
does not file a return. However, the individual does not become liable to
pay the tax through any statute in the Code, he only becomes liable if
the government files a return for him, or if he personally voluntarily
files a return. Let's examine some of these code sections:
thereunder at the time prescribed therefor, or makes, willfully or
otherwise, a false or fraudulent return, the Secretary shall make such
return from his own knowledge and from such information as he can obtain
through testimony or otherwise.
purposes.
ordinary signification, the term "shall" is a word of command, and one
which has always or which must be given a compulsory meaning; as denoting
obligation. It has a peremptory meaning, and it is generally imperative
or mandatory. It has the invariable significance of excluding the idea of
discretion, and has the significance of operating to impose a duty which
may be enforced, particularly if public policy is in favor of this
meaning, or when addressed to public officials, or where a public
interest is involved, or where the public or persons have rights which
ought to be exercised or enforced, unless a contrary intent appears.
...But it may be construed as merely permissive or directory (as
equivalent to "may,") to carry out the legislative intention and in cases
where no right or benefit to anyone depends on its being taken in the
imperative sense, and where no public or private right is impaired by its
interpretation in the other sense... Also, as against the government, it
is to be construed as "may," unless a contrary intent is manifest.
IRS Privacy Act Notice states it a little differently; that the law
requires you to file a return for any tax you are liable for. Since there
is no statute that makes you liable, and since the IRS Privacy Act Notice
is supposed to tell you the requirements of the law; then Section 6012
can't apply until you are made liable.
liable. The problem with Section 6012 is that the word "shall" is used in
the statute. According to Black's Law Dictionary (above), we've seen that
the word "shall" is mandatory except when a mandatory interpretation
would create a rights or constitutional violation. Since an
interpretation of "mandatory" in this case would require individuals to
waive the Fifth Amendment protection of their rights, Section 6012 would
be unconstitutional if it really required individuals to waive such
protections. Therefore, the word "shall" in Section 6012 must be
interpreted to be permissive.
waive the constitutional protections of their rights. Exacerbating the
problem is the courts' consistent interpretation of Section 6012 as
requiring the filing of returns. I know of several cases in which
individuals have raised issues related to this contradiction in 6012; the
courts deliberately ignore the arguments and dismiss the cases without
comment. One criminal case went all the way to the Supreme Court and was
dismissed all the way up without comment. That case was the one involving
attorney Dick Viti, to whom I dedicated this book. The judges know they
have to stay away from this issue because if they meet it head on, they
will definitely overturn the federal income tax. We cannot legally have a
law that requires individuals to give the government information that can
be analyzed and used in criminal cases for violation of the very law that
requires the returns to be filed. Yes, something is rotten here, and I
maintain that it is up to us to take out such garbage and be sure that it
is properly buried. The IRS is requiring individuals to waive their
rights at the same time that it emphatically states in all of its
publications that we have a "voluntary" tax system.
they never sign the return. However, if an individual submits an unsigned
return, the IRS will not code the computer to show that a return has been
filed.
fined $500 for not signing it. Since then, I have also been fined $6,000
for arguing that since the IRS has not filed my return in their computer
system, I should be penalized for filing an unsigned return. The IRS
consistently, however, records the returns that they file in their
computer system when they do so under 6020(b), even though they never
sign the returns. I actually did the same thing that the IRS consistently
does when they file returns for individuals under Section 6020(b) of the
Internal Revenue Code, but I was fined a total of $6,500.00!
that has been given to them because individuals "voluntarily" file tax
returns. Section 7203 of the Internal Revenue Code is one of the IRS'
favorite sections for proceeding criminally. Section 7203 states that the
IRS may prosecute people who "willfully" don't file tax returns. Congress
was very careful to make the aspect of "willfulness" important for the
crime because the tax system is so complicated. Every year, the IRS
indicts a few hundred individuals for "willful" failure to file tax
returns and some of these people end up in federal penitentiaries. The
IRS indicts individuals in order to keep the rest of the population
"voluntarily" filing their tax returns.
they gave their employer, and then did not file returns. Over the last 20
years, the IRS has prosecuted hundreds of such individuals. In these
proceedings, the IRS has used tax returns that were previously filed by
the defendant to "prove" to the juries that the defendant knew all along
that he was required to file returns. Juries have bought that routine and
convicted many for not filing returns. The argument used by the
defendants - that they only filed returns previously because they were
unaware that they had been waiving their rights but now they wanted to
stop waiving them - was ridiculed by the prosecuting attorney.
exempt W-4 with his employer, he waives his Fifth Amendment protections.
In my view, it is inconsistent to file an Exempt W-4 and then not file a
tax return.
juries have convicted many people for not filing tax returns because they
have been led to completely ignore the "willfulness" requirement of the
statute. Juries convict individuals because the jurors are made to feel
jealousy about a defendant who did not "pay his fair share," while they
did. Prosecutors appeal to this emotion by pointing out such "fair share"
baloney with these very same words. An individual who is knowledgeable
about the tax system and the issues discussed in this book won't be taken
in by such rhetoric, but then he won't be allowed to be on a jury if the
prosecutor or the judge become aware of his knowledge during jury
selection. The IRS and the Court make sure that the individuals on juries
are uneducated as to tax and legal issues. They also appear to prefer
that jurors work as employees for someone else. Self-employed people tend
to be a little more original and independent in their thoughts and
actions; I have often seen them eliminated when juries are selected. The
government doesn't wish to chance such jurors identifying with the
defendant--the government might lose the case.
Supreme Court. The Supreme Court made it clear that the trial judge in
Cheek's case had not done a proper job of instructing the jury relative
to their consideration of the reasonableness of his defense. The Cheek
case is very important because, among other things, it stands for the
proposition that individuals who rely on attorneys and other
professionals in making their decisions about this complex tax system are
entitled to inform the jury as to the extent of their reliance. It also
stands for the proposition that the jury must be instructed to view the
defendant's actions subjectively, not objectively. In other words, the
juror has to put his own pre-conceived notions aside of whether or not
the juror believes everyone must file, and instead get inside the
defendant's head and try to determine if he really believed, based on the
defendant's own research and the advice of the attorneys he consulted,
that he acted in good faith, and truly believed that his research in toto
indicated that he was not required to file. When it can be shown that
one's actions were based on a good faith reliance on professional advice,
the element of "a willful violation of the law," essential for a
conviction, is conclusively eliminated. It is apparent to me that the
Cheek case destroyed the ability of the IRS to prosecute individuals for
"willful" failure to file who have followed the procedures outlined in
this book. In sum, if you stop waiving your rights on April 15 on
reliance of counsel, and if you are an employee and allow wage
withholding [or you are self-employed and you submit quarterly payments
against any tax that the IRS might assess you under Section 6020(b)], you
will virtually eliminate the ability of the IRS to victimize you for
relying on, and refusing to waive, your constitutional protections. In
Chapter 12, I'll show you how easy it is to consult with attorneys and
get them to provide you their legal opinions that will support your
decision to stop filing.
fundamental (and somewhat unique) American legal maxim that even though
the government may accuse someone of wrongdoing, that person must be
considered innocent unless and until the government can prove them
guilty. However, when it comes to civil tax cases and the IRS, the burden
of proof is placed on the accused. That means that the IRS can say
anything they want to say about how much money we owe them and we have to
prove that they are wrong. I know this first-hand, because years ago
after I criticized the IRS publicly, they assessed me a bogus deficiency
of upwards of $100,000. After years of litigation, when I finally signed
a stipulation, the IRS owed me $4,000. As this book is written, there is
a bill before Congress to shift the burden of proof back to the IRS. If
this bill passes, it will be a very important milestone in curtailing the
power of the IRS Gestapo. (It may not pass though; Ohio congressman
Traficant has introduced it repeatedly for the last ten years and it has
gone nowhere. However, it presently has the support of a majority of
congressmen, so it appears close to being passed.)
any liability that they might reasonably allege. If you do that, you will
be in the driver's seat. (I will be repeating my main points including
this one more than once in this book. Although I may seem redundant at
times, I think redundancy is necessary to be sure that everyone pays
attention. If you already think I am redundant, then you must be
understanding what I have been saying.) Sparring with the IRS when you
are in a defensive position is exhausting; but sparring with them when
you are in the driver's seat can be enjoyable indeed.
sure to challenge them with every procedure available to you. In the
interest of your constitutional guarantee of due process, the IRS is
required to follow specific procedures when they deal with us. If you
force them to toe the line and go through each procedure, they will
expend a lot of time and energy; but you will have lots of fun, and you
will be the one to come out on top.
their effort to verify your declared income against your lifestyle.
Before the idea of such invasive audits was scrapped, I talked with
people who were outright angry that a government agency would be allowed
to do that. Actually, there is nothing to worry about. Although many
Americans don't know it, the IRS must and always has had to have a search
warrant if they want to enter your house, just like any other law
enforcement agency. Just say "No!" If Americans just say "NO" to the IRS,
the IRS Gestapo will be forced to go back to their offices, prepare
affidavits to supports their request for a warrant, and then go to a
judge and submit their request for his consideration. If the IRS is
forced to go to court to get search warrants each time they want to do a
full-blown "life-style audit," there will be very few entries indeed.
summons, which you have every right to contest in federal court, or they
may invent a bogus assessment which you may choose to contest in either
their tax court or in federal court. You are only at the mercy of the IRS
if you don't know anything about your rights and the IRS' procedures.
With knowledge you have power.
audit, for example), and they can require you to show up. If you don't
show up and comply with the summons by either answering their questions,
or properly asserting the Fifth Amendment in answer to their questions,
the IRS can go to Federal Court and get a judge to order you to comply.
Only if you don't comply at that point can you be charged with say,
contempt. Up to this point, you have not violated any law. However, if
you are ultimately held in contempt of court, such a charge is based on a
violation of law and the judge could put you in jail or fine you, or
both.
clearly shows that the IRS cannot require you to give them the same
information on a tax return without a summons enforcement hearing.
Actually, if you do show up and you choose to take the Fifth Amendment in
response to specific questions of the IRS, you will prevail, providing
that you do not admit that you even have books and records. Contrary to
popular belief, the IRS cannot make you answer their questions! See U.S.
vs. Sharp, 920 F.2d 1167 (4th Cir. 1990), and U.S. vs. Argomaniz, 925
F.2d 1349 (11th Cir. 1991). These are two federal appeals court rulings
that deal with the issue of using the Fifth Amendment in IRS summons
cases. If you handle your summons correctly, the IRS will not be able to
enforce it and get information from you. However, if you handle the
summons incorrectly, you could end up in jail for either civil or
criminal contempt or both. Obviously, it is extremely important that you
know exactly what you are doing when you respond to a summons.
probably because you don't understand your position and probably don't
know your rights. Ninety-nine times out of a hundred they're probably
correct; it's certainly been my experience that people who ignore a first
party summons from the IRS don't know what they are doing.
agent wish he hadn't initiated efforts to make an assessment of liability
in the first place. When the IRS discovered that he had failed to file a
return, they issued a summons requiring him to appear for questioning.
The individual appeared but stood on the Fifth. The IRS went to court and
obtained a court order, ordering the individual to respond to their
questions. Again, he took the Fifth. The IRS tried to get him cited for
contempt, but the judge held that the individual had responded
satisfactorily and completely by invoking the Fifth in response to each
individual question. The individual and the judge were both aware that
any information he provided could become a link in the chain of evidence
that could be used for prosecution of a criminal violation of the tax
law. (See Sharp, supra.) The individual stuck to his position, and the
court ruled that he had fully complied with the summons and the court
order enforcing it, and did not hold him in contempt even though the IRS
agent obtained no information!
that they may properly take the Fifth to each question asked, how can the
government require individuals to answer the same questions on 1040
returns? They really cannot. Some might say that answering questions on a
1040 return form may not qualify as warranting the protections of the
Fifth Amendment, especially if no criminal accusation or proceeding has
been initiated. However, in Argomaniz, supra, the 11th Circuit Appeals
Court judges ruled that a taxpayer could take the Fifth Amendment in a
civil matter as well as criminal. The court stated: "There can exist a
legitimate fear of criminal prosecution while an IRS investigation
remains in the civil stage, before formal transfer to the criminal
division." Of course this is true any time, because the IRS can gather
all the information they wish to gather civilly and then switch the audit
to criminal at any point in time.
because they don't inform us of such intentions? No, I say sneakily
because they only make a quick statement to that effect in the Privacy
Act Notice section of the 1040 Instruction Manual--and nobody takes the
time to read that anyway. I wouldn't accuse them of sneakiness if they
put a big, bold WARNING! above that statement. If they did, I'd blame
individuals for being stupid to ignore it! But they don't emphasize that
they may use the information to criminally prosecute at a later date.
They just benignly state that they "...may give the information to other
agencies (including) the Department of Justice..." How many of you have
ever read that sentence, and if you have, have you pondered its
significance? Do you know that the Department of Justice only has one
mission, and that is to investigate and prosecute crime? The only thing
that the Department of Justice will do with your information will be to
use it against you, to convict you of a crime so you may be fined and/or
sent to jail. The IRS didn't point that out anywhere in the Notice, did
they? Are they sneaky, or what?
available to the IRS. The IRS may obtain anyone's bank records (there's
nothing private or secret about your checking or savings accounts--the
government has complete access to all the details anytime they want it,
thanks to a law passed by Congress in 1970 and sneakily mislabeled, "The
Bank Secrecy Act"), and although the law permits you to file a motion to
quash such a third party summons in a federal district court, it is
virtually impossible to beat the IRS on this issue. When you entrust
banks and other third parties with your records, once again you are
voluntarily giving up a constitutionally protected right--your right to
privacy.
of books or records. If you admit the existence of books and records, you
automatically waive the Fifth Amendment protections of your rights
because the Supreme Court has said that the Fifth Amendment applies to
testimony and not to books and records. See the Supreme Court case of
United States vs. Doe, 465 U.S. 605 (1985) [Of course, if you see things
like Judge Nottingham did in my case, you could say that even if someone
answered all of the questions asked, they've still taken a blanket Fifth
Amendment position(!); but of course you and I both know that any other
judge would rule that you had waived all Fifth Amendment protections by
providing all the answers.] If you use banks and other similarly
third-party entities for holding your money, the laws allow the IRS to
get all the information that you have entrusted to those entities.
Remember that the Fifth Amendment is still incredibly powerful in an IRS
summons enforcement. When it is used properly, the IRS is helpless before
the law. This is very important to keep in mind.
refused to show up. He again refused even after the IRS went to the judge
and obtained a summons enforcement order. On the order of the judge, a
United States Marshal then arrested him and brought him to court. He told
the federal judge that he didn't believe that the court had any
jurisdiction over him. As if to show him otherwise, the judge promptly
found him in contempt of his lawful order and jailed him. Later on, after
a little jail time, he wised up. After talking with a counselor, he went
in and apologized to the judge and took the stand as the court had
originally ordered. He then answered every one of the government's
questions by asserting the Fifth Amendment. The judge allowed him to
stand on the Fifth Amendment on all but a couple of real non-threatening
questions. ("What is your name?"; "Where do you live?", etc.) The IRS
agents and the Department of Justice attorneys were completely beside
themselves because they still couldn't get the answers they were seeking!
The power of the Fifth Amendment when used properly is astounding, and
when enough Americans wake up and quit waiving their Fifth Amendment
protections on April 15, the power of the Fifth Amendment will force
Congress to change our un-American federal tax system.
come to the following conclusions:
because if the general public knew that filing tax returns was truly
voluntary (as the IRS insists it is, so you won't complain of being
"compelled"), the tax system would fall apart. The present federal income
tax system depends completely on voluntary self-assessment.
Amendment protections each April 15, you have certain actions that you
can take which will not subject you to a defensive posture. For example,
if you are not judgment proof, you must either allow wage withholding or,
if you are self-employed, you must submit quarterly payments toward any
tax that you figure you might owe if you were to choose to file a tax
return at year end and voluntarily waive your rights. You are not
judgment proof if you own a car or a house or other "attractive
nuisances" that tend to entice IRS collection agents, or if you depend on
wages, or if you represent yourself as an independent contractor but you
are paid by only one or a few clients. Nor are you judgment proof if you
have any monetary assets such as a checking or savings account in a bank,
or an investment account with a stock broker. If the IRS insists that you
owe them something, they may proceed civilly against you in these areas,
and take such assets. Therefore, if you are not judgement proof, but you
choose to cease waiving your rights and cease filing returns, you must be
sure that the IRS has any money that they think you owe them, up-front.
Then, when the end of the year rolls around and you decide to file a
Claim for Refund instead of a 1040 return, you can go on the offensive to
effect your Claim, rather than be forced to go on the defensive like you
surely would have to if they were to decide to take your assets, or
charge you criminally.
You must be careful to have professional support in advance, advice that
you can rely on for deciding to stop voluntarily waiving your rights. To
work for reform in the laws, and force change from a powerful position,
make sure that you can show that your actions are based on legal advice,
otherwise you wind up becoming more grist for the IRS' enforcement
mill.
you can still assert your rights once you have consulted with and
obtained advice from tax professionals. Meet with a few attorneys who
bill themselves as tax experts and ask them to explain to you how you may
file a return without waiving the constitutional protections of your
rights. Show them the Fifth Amendment and the IRS' Privacy Act Notice.
Don't forget to take along copies of the Sharp and Argomaniz cases too,
in the event a sharper-than-average attorney insists that the language of
the Fifth Amendment means that it doesn't apply unless you are already
under criminal investigation or prosecution. At the conclusion of your
individual meetings with each tax attorney, after they have admitted to
you that they cannot advise you of any way you can file a return without
waiving the Fifth Amendment protections of your rights, ask them to put
their opinion in writing, on their letterhead. Now, you're ready for the
next step, and you have several strong options.
at the end of the year, were you to calculate a tax owed on a 1040 as you
used to do, it would come out that you would not owe any more than what
was withheld throughout the year. An even more solid position would be to
submit a W-4 early in the year that results in your employer withholding
even a little more by year-end than would be required, so that the IRS
owes you a little money at year-end.
requires you to waive your rights, which you no longer wish to do.
Explain further that you have consulted with several professionals and
none have been able to tell you how you can file a 1040 return without
waiving your rights. Be sure to enclose photocopies of their written
opinions. Ask the IRS for an extension of time to file, until they can
come up with a way for you to file without waiving your rights.
(Incidentally, at this time, if you feel that your withholding has not
quite been enough to cover what you have calculated would be owed if you
were to file a return, include a payment for the difference--you want to
eliminate any excuse that the IRS might use to seize any of your assets.)
Point out also that you have become aware that unless and until a return
is filed making you liable for a tax, you understand that the money that
has been withheld and sent in on your behalf just sits in a "pending"
file somewhere and cannot be used by anyone. (Your return is your
self-assessed tax bill; if you don't prepare it and bill yourself, you
cannot owe any tax.)
begun before the expiration of 6 months from the date of filing the claim
required under such section unless the Secretary renders a decision
thereon within that time, nor after the expiration of 2 years from the
date of mailing by certified mail or registered mail by the Secretary to
the taxpayer of a notice of the disallowance of the part of the claim to
which the suit or proceeding relates.
the next six months (without waiving your rights, of course), you are
entitled to sue them to enforce your Claim. When you sue, you are in the
driver's seat and the IRS will be on the defensive. To a jury, they will
have to try to explain why they haven't been able to respond to your
concerns for your rights, and the Achilles heel of the hated income tax
system will become apparent to twelve more Americans. Are we having fun
yet?
around prior to trial and file a return for you under their Section
6020(b) procedure, and then argue that your withheld moneys have been
applied to that return. They could do that because the procedures allow
for it, but they don't have the manpower to do it for thousands of folks
who will read this book and then take the IRS to court. Probably, the
worst thing that could happen to you would be that you would become
totally tongue-tied and completely fumble your argument and the jury
simply would not understand the issues and would not award you your
claimed refund. But how many cases like this filed in the courts do you
think it will take to thoroughly consume the agency and force the agency
itself to go to Congress and ask them to either correct the tax laws or
amend the constitution? Which do you think they will do?
would be his responsibility. He should be sure that he posts a bond
against any assessment the IRS might make, in other words, sends in his
estimated tax amounts quarterly as he has in the past. Then he can follow
the same procedure as the employee; file a combined extension of time and
informal Claim for Refund letter, follow up with a lawsuit to enforce his
Claim, and so forth. Remember, anyone who decides to quit filing tax
returns must only do so on the advice of attorneys and other
professionals; and, especially if he is not completely judgment proof, he
must be sure that any tax the IRS might assess under Section 6020(b) is
pre-paid.
also making an informal Claim for Refund, instead of waiving his rights
and submitting a tax return. After going through the first lawsuit or two
to pursue his Claims, I'd wager that he'd even find that it was an easier
thing to do than what he had done in the past; that is, try to get all of
his receipts sorted out, understand the latest changes in the tax laws,
figure out what amount goes on what line and where he fits in the tax
tables, ad nauseam. I'm certain that he'll find it to be a lot more
satisfying and a lot more fun!
and sluggish that making changes is quite difficult. However, if just a
few thousand responsible Americans became aware of and challenged the
severe constitutional problem with the income tax, I believe that the
system could be changed in just a couple of years. Remember that when you
file a tax return, you vote in favor of the income tax, and you also vote
in favor of the IRS' abuse of your rights and your Fifth Amendment
protections. If the government can require you to give them information
that they can decide at any time to use against you in a criminal tax
case, or in any kind of criminal case, then the Fifth Amendment has
become a nullity, a joke. As long as the American public remains unaware
of the situation, this horrible abuse will continue. If you are reading
this book, however, you have become aware, and I hope that you feel
confident enough with what you have learned to seriously consider joining
those who have decided to quit voting (filing) every year in favor of a
system that continues to ignore, and even trample on your rights.
fear-instilling program. Or perhaps you've been filing 1040 forms so long
that you just can't quite yet bring yourself to quit cold turkey this
year. As a suggestion for you to ease into the ranks of us erstwhile
reformers, let me suggest a slightly different twist that may feel more
comfortable. I call it the "substitute jurat" approach. Next year, go to
your CPA and have your return prepared, as usual. In preparation, take
the time this year to adjust your W-4 so that a little more than normal
is withheld; make sure the IRS will owe you a little money. When your CPA
presents your return to you for filing, file it but file it without
signing it. Instead, attach a statement that states something like this:
"I cannot sign this return under the penalty of perjury, as the
attestation requires, because I do not understand the document or its
contents. Obviously, if I did understand the return and the tax laws
governing its preparation, I would have prepared it myself. I am,
however, certifying with this statement under the penalty of perjury that
I told the truth about my income to the CPA who has prepared the return,
and who has signed as its preparer.
opportunity to challenge the Federal Income Tax in court at its very
roots. Here again, you are postured to file and follow through on a Claim
for Refund.
waive their rights, they are not going to accept or decline your request
for an extension of time. They will most likely ignore the request and
they will proceed under Section 6020(b). In order to proceed they will
have to follow very expensive and time-consuming procedures. There is no
possible way that the IRS could deal in this way with even half a million
people a year out of the 100 million who file. I am confident that less
than half a million people a year using this approach could completely
reform the existing tax system within two years. The existing system will
not work unless people voluntarily waive their rights on April 15.
Similarly, if the IRS doesn't send the refund to the individual who has
filed but who has signed his own jurat instead of the