COMMON LAW AND THE INCOME TAX

 

 

          There are two kinds of law: Statutory and Common Law. The statutory law is the law as it is written in the law books.  The common law is that law that the public accepts by common usage and belief.

 

 

          One of the most popular concepts that has been thrown around the Freedom Movement for years, is the concept of the common law.  It has been used to defend the right to drive and other patriot concepts of interest.  Actually, it is the common law that is keeping the income tax system in place.  The Freedom Movement has shown quite conclusively that the IRS cannot require the filing of a tax return because the government uses the tax returns in criminal tax cases.  The government cannot, under the Bill of Rights, require individuals to give information to them that can be used in criminal tax cases or, for that matter, in any kind of criminal case.

 

          The IRS admits on the Privacy Act Notice that they are going to use the information against individuals criminally and they refer to the tax system as a "voluntary" system in their publications. Through government double speak, they have developed a common law mentality that makes everyone believe that they are required to file and that the government can use the information against individuals in criminal cases.  Isn't our government smart?  They have the people believing they are required to file returns and that they are filing the returns voluntarily so that the information on tax returns can be used against them in criminal cases.

 

          But that is not the half of it.  Juries continually convict individuals for the crime of "willfulness" in criminal tax cases.  An important concept to remember is that the crimes listed under Title 26 require an element of willfulness.  It is my contention that the "common law" has negated the concept that "willfulness" is required for a crime.  There is no doubt in my mind that the juries are convicting individuals for the crime of "not filing returns" and they have totally ignored the element of willfulness.

 

          Patriots, on the other hand, understand the statutory requirements of the law and they know that they are innocent of willfulness.  It is for this reason that so many patriots go to trial and lose.  They think that if they get up on the stand and tell their story, the people will believe them.  The point of fact is that it doesn't matter what the jury believes; as long as they are controlled by the common law.   If an individual didn't file a return, he is guilty of not filing a return, no matter what the statutory law says; or no matter what he believes.

 

          Let's face it, the average American believes he is required to file a tax return.  We live in the most powerful country in the world.  It is akin to a fascist state and it has the most powerful propaganda in the world. The IRS is the most powerful agency in the most powerful country in the world.  Therefore it is the most powerful agency in the world.  Its command of double-speak is not only persuasive, it is masterful.

 

          In conclusion, therefore, my message to the patriot community is that the common law is working against them.  The common law has destroyed the statutory law.  Quite frankly, for all practical purposes, the government currently has their cake and they are eating it too.  They are requiring individuals to give them information that will be used against them in criminal tax cases in violation of the Fifth Amendment.

 

          Of course all is not hopeless.  When you attack the tax system, you must do it in such a way that the court is put in a bind.  You must invent ways to attack in such a way that whether you win or lose a case, you gain a tactical advantage.  As we get the courts to contradict themselves more and more, we will make inroads into the defeat of the current common law belief.

 

          In the meantime, in order to lessen both civil and criminal attacks against patriots I suggest the following precautions:

 

          1.  All individuals on the front lines must not have any property whatsoever.  The use of trusts is not practical, because you must hire an attorney to defend a trust.  If you can't defend yourself, you don't belong on the front lines.  If you transfer property to other individuals after your fight has begun, the IRS may get away with an allegation of fraudulent transfer.  Therefore, all transfers must be made in advance of entry onto the front lines of the movement.

 

          2.  All individuals who have filed exempt W-4 Forms, should back down and file all past returns, negotiate a payment plan with the IRS and file bankruptcy if necessary.  If you have a job, you are not judgment proof, and the IRS can take all your wages except for a few hundred a month.  The IRS can get a search warrant, come into your house and take almost everything you own.  They can tow your cars, away, etc. and they don't need to have any court order to do it.

 

     3.  Individuals who have not filed exempt W-4's, who are judgment proof, who have been advised by competent counsel that they are not required to file returns, and who are willing to spend some time in a federal camp, can stay on the front lines.  They are the only ones that belong there.  These individuals should also have a strong support group in terms of friends and spouses who are filing returns.

 

     4.  Individuals who are employed, should not file W-4 Forms, as they are waiving their Fifth Amendment Rights, and then they must be careful about filing tax returns if they have been classified as "illegal tax protesters." these individuals should also have the advice of counsel if they do not file returns.

 

     It is time patriots quit taking a beating from the common law.  It is time for them to fight back in a smart fashion.  If you don't want to be on the front lines, that is OK.  You are probably better off on the rear lines anyway.  We only need to a few hundred people on the front  lines, and quite frankly, we only need to win a few of the  right cases.  Individuals who insist on martyrdom, on losing their homes to the government, on working for  $80.00 a week and giving everything else to Uncle Sam are simply NOT helping the cause.  Let's hope the movement wises up soon.

 

 

The Bodwell Case

      Most of the readers of my newsletter know that I believe the strongest argument that we have against the Income Tax is the Fifth Amendment.   The IRS not only has a Fifth Amendment problem but the problem is getting worse for them. Another case in our arsenal is United States of America v. Ronald L. Bodwell,  95 C.D.O.S. 7359 (9th Circuit, June 17, 1995). 

      Bodwell appeared at the summons meeting but he failed to assert the Fifth Amendment because the IRS cancelled the meeting. The Court ruled that the case was remanded back so that Bodwell could assert his Fifth Amendment claim on a question-by-question basis.  The Court went on to say:

The Fifth Amendment "can be asserted in any proceeding, civil or criminal, administrative or judicial, investigatory or adjudicatory; and it protects against any disclosures which the witness reasonably believes could be used in a criminal prosecution or could lead to other evidence that might be so used."  Kastinger v. United States, 406 U.S. 441, 444-45 (1972).  A reasonable belief that information might be used to establish criminal failure to file a tax return can support a claim of Fifth Amendment privilege.  See United States v. Rendahl, 746 F.2d 553, 555-56 (9th Cir. 1984). 

      As you can see, the Ninth Circuit Court of Appeals takes the position that the Fifth Amendment can be asserted in civil as well as criminal proceedings and that it can clearly be asserted in response to an IRS Summons.  It is clear that the IRS cannot require individuals to answer questions over their Fifth Amendment objection in response to a summons.  So, ask yourselves, how can the IRS require the answers to questions on a tax return without issuing a summons?  Does it make any sense?

Some Important Tax  Cases

      Tax law is so complicated that no one can know it all.  It is a good idea, however, if you are involved in a fight with the IRS to have knowledge of some cases. The following cases will give you some basic knowledge of what the courts think on some basic issues.  The word "CIR" stands for the Commissioner of Internal Revenue.

      In US v. Edgerton, 734 F2d 913 (2nd Cir. 1984), the taxpayer could NOT be held in contempt of court for refusal to answer questions in regards to the whereabouts of tax records. In Stokowitz v. US, 831 F2d 893 (9th Cir. 1987), the court ruled that a taxpayer who alleged unlawful seizure and use of his information could pursue remedy through a Bivens or appropriate tort action.  In U.S. v. Commercial Nat. Bank of Peoria, 874 F2d 1165 (7th Cir. 1989), the court ruled that the government bears the burden of proof if they file an action to recover an erroneous refund.  In Conklin v CIR, 897 F2d 1027 (10th Cir. 1990), the court ruled that although the IRS can issue separate deficiency notices against husband and wife taxpayers who file joint returns, payment by one individual wipes out the liability of both. In Jones v. CIR, 903 F2d 1301 (10th Cir. 1990), the court ruled that if the taxpayer does not keep records, the CIR can reconstruct his gross receipts to arrive at an assessment.  In Ward v. CIR, 907 F2d 517 (5th Cir. 1990), the court ruled that a deficiency notice is ineffective if it is mailed to an improper address if the taxpayer has provided clear notice to the IRS about the address change.  In Olsen v. US, 952 F2d 236 (8th Cir. 1991), the court ruled that if an employer withholds social security and income taxes but does not turn them over to the government, the employee is still credited with the payment.

      In Resolution Trust Corp. v. Gill. 960 F2d 336 (3rd Cir. 1992), the court ruled that a properly executed levy does not automatically entitle the government to the taxpayer's property.  In Geisinger Health Plan v. C. I. R., 985 F2d 1210 (3rd Cir. 1993), the court determined that the courts are to give weight to IRS revenue rulings, but they may disregard them if they conflict with the statute they purport to interpret or its legislative history, or of they are otherwise unreasonable.  In Security Bank of Minnesota v. CIR, 994 F2d 432 (8th cir.1993), the court ruled that if there is a reasonable doubt about the meaning of a revenue statute, the doubt is resolved in favor of those taxed. 

      In Continental Illinois Corp. v. CIR, 998 F2d  513 (7th Cir. 1993, the court ruled that not every receipt is income.

       An objectively reasonable good-faith misunderstanding of the law negates willfulness and the government must show awareness of a legal duty in order to show willfulness.   U. S. v. Cheek, 882 F2d 1263 (7th Cir. 1989 and U.S. v. Hilgeford, 7 F3d 1340 (7th Cir. 1993).  The government must show three elements in the offense of failure to file a return.  The government must show that the defendant was required to file a tax return, that he failed to file a return and that he acted willfully.  See U. S. v. Nichols, 9 F3d 1420 (9th Cir. 1993). IRS Rulings do not have the force of law and are merely authority, Constantino v. TRW, Inc. 13 F3d 969 (6th Cir. 1994).  Once the IRS makes a proper assessment, the taxpayer must pay the tax and file a claim for a refund.  Hempel v. U.S. 14 F3d 572 (11th Cir. 1994. 

      The IRS cannot use its summons authority if its only purpose is to gather evidence for a criminal investigation.  U.S. v. Grunewad, 987 F2d 531 (8th Cir. 1993).  A tax levy reaches only property possessed and obligations existing at the time of the levy.  See U.S. v. Hemmen, 51 F3d 883 (9th Cir. 1995).

      The innocent spouse provision is remedial in nature.  It should be applied liberally in favor of the person claiming the benefits. See Friedman v. CIR, 53 F3d 523 (2nd Cir. 1995).  Federal tax liens do not automatically go in front of all other liens.  The first lien in time is the first lien in right. See Monica Fuel, Inc. v. IRS, 56 F3d 508 (3rd Cir. 1995). 

      Reasonable reliance on an expert opinion asserted in good faith can shield the taxpayer from penalties.  See Durrett v. CIR, 71 F3d 515 (5th Cir. 1996 and McMurray v. CIR, 985 F2d 36 (1st Cir. 1993).  Pro se litigants are given latitude in handling their cases in tax court, Moretti v. CIR, 77 F3d 637 (2d Cir 1996). 

     

      In a prosecution for tax evasion the government must prove the existence of a tax deficiency, an affirmative act or attempt to evade or defeat payment of the tax and willfulness.  See U. S. v. Voigt, 89 F3d 1050 (3rd Cir. 1996).  Internal Revenue Service Rulings do not have a binding affect on the Court of Appeals.  B.F. Goodrich Co. v. U.S., 94 F3d 1545 (Fed. Cir. 1996)