It seems that many individuals who end up in court facing criminal charges for alleged violations of the revenue laws arrive in court without being aware of the primary essential elements of the crimes which the government must prove. This issue of the newsletter seems to be a good opportunity to list the primary essential elements the governments must prove when an individual is charged with allegedly violating sections 7201, 7203, or 7205 of the Internal Revenue Code. (Remembering, of course, that these statutes merely list the penalties for supposedly violating other sections of the Code which are often times never identified.) Nevertheless, here you have, in one handy place, the primary essential elements of the most common charges brought under the Internal Revenue Code, with court citations to back up the information provided.
7201. - "Attempted Tax Evasion"
The government must prove:
- Existence of a tax deficiency;
- An affirmative act constituting an evasion or attempted evasion; and
Sansone v. US. 380 US 343, 351 (1965)
In Sansone, the U.S. Supreme Court puts "willfulness" in first place. But I submit that "willfulness" is a moot issue if the first and/or second elements listed above do not exist and/or are not proved. If one is not liable for a tax, one cannot possibly have a tax deficiency. If one is simply hiding his property from thieves, extortion artists or even protecting it from what he believes to be unstable banking practices, this is not the same thing as evading a tax. Thus, I place "willfulness" in third place.
7203 - "Willful Failure To File"
The government must prove:
- The taxpayer was required to file a return;
- He failed to file a return; and
- His failure to file was willful.
U.S. v. Brodie, 858 F.2d 492, 497 (9th Cir. 1988).
As you probably know, jury instructions using the term "taxpayer" should be objected to unless and until the government proves the defendant is a "taxpayer" as defined.
7205 - "False & Fraudulent W-4 Form".
The government must prove:
- The Defendant was required to complete and file the Internal Revenue Service form W4 with his employer, certifying certain information as to entitlement [to] withholding allowances;
- That the Defendant did complete and file such a W-4 form;
- That the information supplied by the Defendant to his employer as required under the W-4 forms was false or fraudulent as charged; and
- That the Defendant's conduct in supplying false or fraudulent information to his employer was done willfully.
U.S. v. Bass, 784 F.2d 1282, 1284 (5th Cir. 1986).
Keep This List Of Primary Essential Elements Handy For Easy Reference.
Don't Get Too Cocky.
With the U. S. Supreme Court ruling so favorably for patriots in the John Cheek case regarding a defendant's good-faith belief that the tax laws do not apply to him, one could reasonably expect the government prosecutors to look for a way to overcome such "good-faith misunderstanding of the law" defenses. Well, they have managed to do just that, especially in cases where the defense attorney merely assumes that the defendant actually violated the law, and the best defense put forward is based on the hope they can convince a jury that the individual "misunderstood" the law.
To put it another way, the defense does not force the Government prosecutors to prove each and every essential element of the crime charged, but only forces the government to try to prove the last primary essential element of willfulness. "Shucks, folks, my client just didn't understand that he was required to file." Usually, no attempt whatsoever is made to force the government to prove that the defendant was subject to or liable for any internal revenue tax, or to prove that the defendant was a required to file. With the exception of the element of "willfulness", all the other essential elements of the alleged crime are allowed to be assumed.
While such defenses (which I consider to be totally inadequate) have been the norm in the vast majority of cases over the years (which have resulted in a far greater number of convictions than acquittals), with the recent John Cheek decision, public defenders and other defense attorneys seem to be relying heavily, and solely, on the Cheek case, and the supposed "good-faith misunderstanding of the law" defense.
Without getting too fervent, I submit that the far majority of these "defenders" could not tell you how the U.S. Supreme Court ruled in Brushaber, Stanton, or Flint. I submit they could not tell you what the U.S. Supreme court said the 16th Amendment did, and more importantly-, did not do. I submit they could not (without looking it up) give you the definition of the terms "taxpayer", "taxable year", "taxable income" or "adjusted gross income". I submit they could not even tell you if the U.S. Supreme Court ruled that the power of income taxation was in its nature an excise, or a direct tax.
I submit that they go through the hullabaloo of the trials knowing next to nothing about the constitutional principles of taxation. Yet, they set up the basic defense on the assumption that the defendant is the one who misunderstood the revenue laws. With all of the conflicting and confusing "information" which has floated around the patriot community for many years, it is quite possible for a defendant to have a misunderstanding of the revenue laws, but I submit he will not be any more misinformed than most of the participants in the trial.
The case demonstrates two major points. First, the tool used by the government prosecutors to overcome the "good-faith misunderstanding of the law" defense, and second, the danger of relying solely on such a defense.
Deliberate Ignorance Instruction
The [jury] instruction stated:
"The element of knowledge may be satisfied by inferences drawn from proof that a defendant deliberately closed his eyes to what would otherwise have been obvious to him. A finding beyond a reasonable doubt of a conscious purpose to avoid enlightenment would permit an inference of knowledge. Stated another way, a defendant's knowledge of a fact may be inferred from willful blindness to the existence of the fact.
"It is entirely up to you as to whether you find any deliberate closing of eyes, and the inference to be drawn from any such evidence. A showing of negligence or mistake is not sufficient to support a finding of willfulness or knowledge.
"The required knowledge is established if the accused is aware of a high probability of the existence of the fact in question unless he actually believes it does not exist."
The deliberate ignorance instructions may be given when the evidence before the jury supports a finding of intentional avoidance of knowledge. [Citations omitted.] In assessing the propriety of the instruction, we must view the evidence in the light most favorable to the government. [Citations omitted.]
The record supports a finding that Fingado was aware of a high probability that his understanding of the tax laws was erroneous and consciously avoided obtaining actual' knowledge of his obligations. Fingado admitted that during the time at issue, he never consulted with an attorney or an accountant to verify his understanding of the tax laws. Instead, he bolstered his beliefs by attending seminars on tax Avoidance and speaking with others who asserted that they were not required to file. He admitted that he knew his interpretation differed from that of the IRS and millions of American citizens.
U.S. v. Fingado, 934 F.2d 1163, 1166-1167. (10th Cir. 6-4-91)
The defendant testified about books and documents he relied upon in forming his belief that he was not required to file, to support his defense that he had a good-faith misunderstanding of the law.
We can be fairly certain that the jury walked into the court room believing that if a person earned enough money he would be required to file. Since the report of the case does not mention any attempt on the part of the defense to force the government to prove that the defendant was required to file, we can again be fairly certain the jury convicted the defendant based on the belief they had when they entered the court room.
Without having any information on this case other than what I see in the report of the case, I am going to "reconstruct" what I believe took place prior to and during the trial. This is based on what I have learned from other cases.
The defendant was probably appointed a public defender to represent him. The public defender probably assumed he was required to file, and while maintaining this belief, took charge of the case. From the report of the 10th circuit Court of Appeals, it appears the only defense presented to the jury was a "good-faith misunderstanding of the law" defense.
Since he was convicted, it is obvious he did not convince the jury that he had a good-faith misunderstanding of the law. Along with the jury instruction regarding "deliberate ignorance" and the jury's prior belief that "everyone should know if you earn enough. money you are required to file" and the evidence admitted that he had filed prior to 1974, the defendant was also saddled with the fact that the government was only forced to prove the third essential element of the crime. There is no doubt in my mind why defendants get convicted under such circumstances.
Admission of Evidence Of Failure To File In Prior Years
Another point from the above case that should be brought out is the fact that failure to file in years prior to the years for which the charges are brought can be used as evidence against the defendant. This is the reason a patriots needs to be prepared to give well explained reasons why he, originally decided he was not required to file.
Here is what the appellate court said.
Fingado argues that the magistrate erred in admitting evidence that he had failed to file tax returns in the years prior to those for which he was charged. We disagree.
The government introduced evidence relating to Fingado's failure to file tax returns under Fed.R.Evid. 404(b) which allows the admission of evidence of prior bad acts to prove "motive, opportunity intent, preparation, plan, knowledge, identity, or absence of mistake or accident.".......
First, the' evidence was offered for a proper purpose-to establish Fingado's willfulness in failing to file his tax returns.
Second, the evidence was relevant to resolving a material issue in controversy whether Fingado knew of his duty to file and willfully failed to do so. Evidence of failure to file in prior years is relevant to the issue of willfulness. [Citation omitted.] US. v. Fingado, supra, at 1165.
The government always presents evidence of the defendant having filed in prior years, and evidence that he has not filed in subsequent years including those years prior to the years for which the charges are brought. For the reasons given by the court, this evidence is admissible, and I think Fingado's attorney should have known that it is admissible. I'll bet the government never proved the defendant was required to file for any of the years, and I'll bet everyone was allowed to assume his so-called failure to file was a "bad act".
Going back to the primary essential elements the government must prove in a 7203 case, the alleged "failure to file" presupposes the first element of a requirement to file. Failing to do something is not the same things as simply not doing something that one is not required to do in the first place.
Hopefully this discussion will encourage potential defendants to make an extra effort to force the government to prove any alleged requirement to file, along with a well prepared reason for having decided that he was not a person required to file prior to the time he first did not file. Even if your reasons at the time were based on flawed information, at least be able to explain your reasoning in a way that will be understandable to the jury. Also, check out the letters that you have sent to an employer or the IRS which will probably be used against you. Good planning is important to success.
After giving this discussion some serious thought you will see that, due to the "deliberate ignorance" instructions which can be given to the jury, a defense based solely upon a "Shucks, folks, my client just didn't understand that he was required to file" type of defense is simply not going to be enough, in many cases, to overcome the "deliberate ignorance" instructions in order to obtain a not guilty verdict. It is going to take a fervent and tenacious determination to force the government to prove, if it can, that the defendant was a person required to file.
Turning the Tables
Perhaps at some time in the future we can turn the tables on the judges and prosecutors who have falsely claimed that the 16th Amendment authorized a direct tax. Perhaps, at some point, we can use the "deliberate ignorance" principle against them. Have they exhibited a deliberate closing of the eyes to a landmark U.S. Supreme Court decision?
(B)y the previous ruling [Brushaber] it was settled that the provisions of the Sixteenth Amendment conferred no new power of taxation but simply prohibited the previous complete and plenary power of income taxation possessed by Congress from the beginning from being taken out of the category of indirect taxation to which it inherently belonged.... Stanton v. Baltic Mining Co., 2419 U S 103 (1916).
Also see terms such as "culpable ignorance" and voluntary ignorance
What Does The Term "Return" Mean?
What does the term "return" mean when courts or statutes speak of an income tax return or a return of income? There has, for many years, been confusion within the patriot community regarding the term "return". The word "return" means an official or formal report, such as an, election return. If you will check any good dictionary you will find that the word "return" has many definitions, but one of the definitions will be an official or formal report.
Unfortunately, the very false notion that an income tax return or return of income means to give something back is again being perpetrated throughout the patriot community. Please do yourself a favor and don't let anyone sell you on this false notion.
The U.S. Supreme Court stated that Springer had returned a certain amount of income. Springer indeed reported (returned) a certain amount of income, but he did not pay. A levy was then placed on his real estate which was subsequently sold for the amount of the tax. Had he paid, there would have been no reason for the levy.
If after you consider that an election return does not mean giving something back, but rather it means an official or formal report of the votes, it should be easy to see that an income tax return or a return of income means a report of that income, rather than sending the income back. If you are still not sure, consider the following.
The Code of Federal Regulations at 26 CFR 1.6017-1 (a)(1) discusses the self-employment tax returns.
Every individual, other than a. nonresident alien, having net earnings from self-employment, as defined in section 1402, of $400 or more for the taxable year shall make return of such earnings. 26 CFR 1. 6017-1(a)(1).
Setting aside the "taxpayer", nontaxpayer and "taxable year" issues, if one would view the term "return" to mean sending back the net earnings, then the regulation would be requiring a "taxpayer" to send back all of his net earnings. A much more sensible interpretation of the regulation would be that the "taxpayer" is required to make a report of (not return) such earnings. This latter interpretation will square with the definition showing that a return means an official or formal report, such as a tax return or an election return.
The false notion that the term "return" means to send something back is a very old and frivolous argument, but is now being perpetrated by a new group of people.
The two recent court cases discussed below (9th Circuit) provide a practical example of the importance of having a correct understanding of the term "return".
The Expanded Definition Of The Term "Includes"
I would not add this next bit of information except for the fact that if I don't, I will get mail arguing with me about the definition of the term "return" shown above.
Now please don't write to me and tell me that the so-called "income" tax applies only to government employees and that they are the ones who are to send back (return) a portion of their earnings. To take that position is to overlook (or disregard) the expanded definition of the term "includes" as it applies to other definitions within the Internal Revenue Code (Title 26 U S C).
First, the definition of the term "employee".
Employee. - For purposes of this chapter, the term "employee" includes an officer, employee, or elected official of the United States, a State, or any political subdivision thereof, or the District of Columbia, or any agency or instrumentality of any one or more of the foregoing. The term employee also includes an officer of a corporation. 26 U S C 3401(c).
Under normal usage, the term "includes" would restrict the definition of the term "employee" to just those people identified within the definition. The Code, however, has its own expanded definition for the term "includes" which applies only for purposes of the Code. This is perfectly O.K. The lawmakers can expand or restrict a definition of a word in order to give it a statutory definition for the purposes of that particular statute or group of statutes. Such statutory definitions will not effect the meaning the word anywhere outside the scope of the particular statutes involved.
Includes And Including.- The terms "includes" and "including" when used in a definition contained in this title shall not be deemed to exclude other things otherwise within the meaning of the term defined. 26 USC 7701 (c).
In other words, the terms "includes" and "including" when used in a definition (such as the definition of the term "employee") contained in this title (the Internal Revenue Code) shall not be, deemed to exclude other things (such as other persons) otherwise within the meaning (common/dictionary meaning) of the term ("employee") defined.
The same applies to such terms as "State", "United States" and "Person" when such terms are defined in the Internal Revenue Code. When the term "includes" is used in any of these definitions, it will not be judged to exclude other things that would normally be a state, or the United States, or a person.
Since there is so much material floating around the patriot community which totally ignores the expanded definition of the term "includes", it seems prudent to once again bring the information to the attention of the readers.
I might add that the argument that a person is not an "employee" as defined is also a very -old, and equally flawed argument. It is not a new argument within the patriot community, and age has not improved it one bit.
If you combine the incorrect understanding of the term "return" regarding a tax return with the flawed argument that it is only the government employee that is to send something back, you will have been led down one more primrose pat . And we don't need any more flawed arguments in our battle against the taking of property under the guise, pretext, sham and subterfuge of supposedly collecting taxes. Simply put, winning is tough enough without flawed arguments.
Is The Report (Return) To Be On A Certain Form?
Some time back I read a court transcript of a 7-25-90 pre-trial motion hearing before Judge Wexler of New York. The defendant was attempting to argue the OMB number and Paperwork reduction Act issues. At this hearing, the Assistant U S Attorney, Douglas Burns, made some interesting comments. He stated, "The most salient things about these federal income tax forms, of course, are that you can file a return on a roll of toilet paper if you want, I'm not trying to be glib. The point is the form is provided by the government to enable people to fill them out."
Well, is Mr. Burns correct? Can a "taxpayer" file a return on just anything? (Can a "taxpayer" make a report of his income on just anything?) yellow pad? Roll of toilet paper? Etched on a tombstone? Or is there a certain form that a "taxpayer" is required to use?
If a "taxpayer" can make a report of his income on just anything, then the current "silver bullet" argument about the 1040 instruction booklet and regulations not displaying an OMB numbers on them in accordance with the Paperwork reduction Act will not have any practical effect in cases where defendant is merely charged with failing to make a report. The 1040 argument becomes a non-issue.
In essence, the Paperwork reduction Act of 1980 provides that no person shall be subject to any penalty for failing to provide information to any agency if the information collection request involved does not display a current OMB control number. The current argument from the patriot community is that 1040 forms, 1040 instruction booklets, and applicable regulations are all information collection requests, and therefore must all display a current OMB control number and an, expiration date, when appropriate. (OMB = Office of Management and Budget.)
1040 forms presently display the OMB number, but the 1040 instruction booklet does not, and while the applicable regulations have been assigned OMB numbers, these numbers are not in or on the particular regulations, but rather are displayed in other sections of the Code of Federal Regulations. (e.g. 26 CFR 602.101)
The Federal Register Act also comes into play in this issue, but for simplification, I will call it the OMB/PRA issue.
It is important to note that unless you are very careful with the OMB/PRA issue, it is easy to end up talking as if you are a "taxpayer" as defined.
Now keep in mind, I am very grateful for all the effort and research that has gone into the OMB/PRA issue. It is great knowledge to have in order to keep errant federal agencies in check. If understood and carefully used, it can even be used by a nontaxpayer to challenge information requests from the IRS. But like any other good information we have, it must be used in the proper way and at the proper time.
9th Circuit Cases
A number of federal appellate courts have had the OMB/PRA issue presented to them with varying degrees of expertise. With sort of a learn-as-you-go- approach, improvements had been made in the method of presenting the issue. With the use of such improved methods, great hopes and expectations had been placed on two cases presented to the 9th Circuit Court of Appeals, namely US. v Hicks and US. v Bentson. Both are Arizona cases.
U.S. v. Hicks
Robert Hicks was charged and convicted of four counts of willful failure to file. Before trial, he represented himself, but retained court-appointed counsel at trial.
The 9th Circuit explains that Hicks filed a pretrial motion regarding 6103(h)(5) and a pretrial motion regarding venue.
At the close of the prosecution's case in chief. Hicks filed motions for judgment of acquittal, arguing, as he does here, that the IRS violated the Paperwork reduction Act by its failure to display OMB control numbers and expiration dates on Form 1040 and associated instructions booklets and regulations, and that the IRS violated the Administrative Procedures Act by failing to publish the Form 1040 and associated instruction booklets and regulations in the Federal Register. The district court denied these motions.
The jury found Hicks guilty on all four counts. The court sentenced Hicks to three consecutive one-year sentences for the first three counts, followed by five years probation for the fourth count. The court also levied a $10,000 fine for each count.
On appeal, Hicks does not contend the finding that he did not file personal income tax returns for the years in question. However, he renews the legal arguments he raised in his motions, and asserts that he should be acquitted as a matter of law, or, alternatively, that his case should be reversed and remanded for a new trial.
9th Circuit's Analysis.
A. Form 1040: Compliance with the Paperwork reduction Act (PRA)
The 9th Circuit Court of Appeals goes on to explain that the public protection provision of the Paperwork reduction Act of 1980 states: "Notwithstanding any other provisions of law, no person shall be subject to any penalty for failing to ... provide information to any agency if the information collection request involved ... does not display a current [OMB] control number......" The PRA regulations promulgated under the PRA require that Federal government agency information collection requests display OMB control numbers and when appropriate, expiration dates. Hicks argues that the IRS failed to comply with the PRA by not putting control numbers on the regulations associated with tax return Form 1040 in 1983. He argues further that the public protection provision of the PRA should be read together with OMB regulations to require that expiration dates as well as-control numbers be displayed and points out that Form 1040 and its associated regulations and instruction booklets for 1983 through 1986 bore no such expiration dates. Therefore, Hicks believes that while he may be made to pay his back taxes, he cannot be fined or imprisoned for his violations.
Editor's note. Wow!! Look at that last sentence. Talk about talking like a "taxpayer" as defined. I'll bet that last "belief' was a contrivance of an attorney, and neither a statement made by nor the belief of the defendant/appellant.
The appellate court did not agree with the defendant/appellant. It continues with its analysis and states that the IRS, like any federal agency, must comply with the PRA and, in particular, must display OMB control numbers on its tax return forms and on its regulations. But even assuming without deciding that the IRS failed to comply with the PRA here, its failure does not prevent Hicks from being penalized.
Editor's note. Now don't come unglued. Wait until you see the court's reasoning.
The 9th Circuit explains that the legislative history of the PRA and its structure as a whole lead us to conclude that it was aimed at reining in agency activity. Where an agency fails to follow the PRA in regard to an information collection request that the agency promulgates via regulation, at its own discretion, and without express prior mandate from Congress, a citizen may indeed escape penalties for failing to comply with the agency's request. But where Congress sets forth an explicit statutory requirement that the citizen provide information, and provides statutory criminal penalties for failure to comply with the request, that is another matter. This is a legislative command, not an administrative request. The PRA was not meant to provide criminals with an all-purpose escape hatch. Referring to US. v. Wunder, 919 F.2d 34, 38 (6th Cir. 1991), the court pointed out that "The defendant was not convicted of violating a regulation but of violating a statute which required him to file an income tax return." [What does "return" mean?]
Editor's note. Now, don't you think it is important to understand that the word "return" means a report?
Moreover, the provision of the tax code under which Hicks was convicted predates the PRA by over 25 years. If, in enacting the PRA, Congress had intended to repeal 26 U S C 7203, it could have done so explicitly. Repeals by implication are not favored. Congress enacted the PRA to keep agencies, including the IRS, from deluging the public with needless paperwork. It did not do so to create a loophole in the tax code.
We hold that the public protection provision of the PRA, 44 U S C 3512, constitutes no defense to prosecution under 26 U S C 7203. To hold otherwise-to interpret the PRA without reference to Congress' purpose-would be to elevate form over substance.
B. Form 1040: Compliance with the Administrative Procedures Act (APA)
The 9th Circuit continues to explain that Hicks argues that IRS Form 1040 is a "rule" under the APA, and must, therefore, be published in the Federal Register according to, 5 U S C 552(a)(1). The IRS's failure to publish, he argues, eliminates any legal duty that might have required him to file income tax returns. Further, because the IRS did not promulgate Form 1040 according to the APA notice and comment procedures, 5 U S C 553, the "rule" is invalid and there is no duty for any taxpayer to file a tax return.
Editor's note. My, Oh my" Don't you just love "taxpayer" arguments?
The 9th Circuit continues. Hicks's argument is merit less. It confuses law with regulations with respect to such law. It is the tax code itself, without reference to regulations that imposes the duty to file a tax return. However, even if we suppose that the duty to file tax returns can be understood only with reference to regulations, the IRS has duly promulgated sufficient regulations, e.g. 26 CFR 1.6011-1, 1.6012-1, to make that duty clear. The meaning of "willful failure to make a tax return" is apparent without reference to the contents of Form 1040 or its instructions. Hicks cannot complain that he did not know what was expected of him. He had a duty to make a tax return, and chose to ignore that duty.
Editor's note. But was 6001, 6011, 6012, or regulations pursuant thereto, stated in the indictment? Was the defendant apprised of any statute or regulation he had supposedly violated? I submit that most (if not all) indictments merely name 7201 and/or 7203, which are the statutes that, state the penalty for violating some other section or sections of the Code. But neither section 7201 nor 7203 name any statute violated. 7203 applies to "any person required under this title ... to make a return", but it does not name the section of Title 26 that requires any person (whoever that may be) who is required to make a return. The Norm Vroman pleadings which were reported in earlier issues of this newsletter lay this issue out quite well. At any rate, I think if you look at the whole picture, you will always find holes in the government's arguments and pleadings.
Editor's note. Law v. Regulation. There will be folks in the patriot community who believe that the 9th Circuit should consider that regulations are also law. This is not quite correct. When the court uses the term "law", it is referring to a statute such as 26 U S C 7203 or 6012. These sections are verbatim restatements of actual acts of Congress, or portions thereof. Treasury regulations, on the other hand, are issued by the Treasury Department.
A Treasury regulation is not law, per se, but will have full force and effect of law, and be as binding as a statute only if it is (1) within the granted powers (that is, pursuant to the statute under which it was written), (2) issued pursuant to proper procedure, and (3) reasonable. See Saltzman, IRS Practice and Procedure 3-9 (1981).
In order for a regulation to have the full force and effect of law, it must be within the scope of the statute (law) under which it is written.
This should help you understand the distinction made by the 9th Circuit between law and regulations when it' says that Hicks confuses law (statute) with regulation].
The 9th Circuit continues. Hicks reliance on US v. Reinis, 794 F.2d 506, is misplaced. As the Fourth Circuit noted in Bowers Reinis involved unpublished rules (specifically, instructions for a Currency Transaction Report Form) that imposed "substantive obligations beyond those created by, statute. Only by publication could the obligation become known. The 1040 form, by contrast, did not add to Hicks's basic substantive obligation. That obligation is to comply with the applicable provisions of the Internal Revenue Code. The code requires that persons such as Hicks make a return. 26 U S C 6012. While it is true that the regulations state that filing a Form 1040 is the preferred manner of making a return, it is by no means the only manner of filing. 26 CFR 1.6012-1(a)(6). Knowing the code and the regulations, and no more, is enough to enable Hicks to attempt to comply with the obligation to file a return. He did not need to consult a 1040 form or its instructions. See also 26 CFR 1.6011-(b) (taxpayer is not penalized for filing a makeshift return pending the filing of a proper return). It follows that Form 1040 is not a "rule" subject to complicated publication, notice, and comment requirements of the APA.
Editor's note. The 9th Circuit claims that the Form 1040 is not a "rule" within the APA requirements of the APA. For the purposes of this discussion, that issue is not of great importance.
Editor's comments on Hicks's OMB/PRA issue.
Probably the most important points to be derived from the Hicks case are:
1. Hicks was convicted for violating a statute, not for violating a regulation. I do not have Hicks's indictment, but it probably only named 7203, which is the penalty statute, and not 6001, 6011 or 6012, which are statutes that require a "taxpayer" to make a return. And one cannot violate a statute that simply describes the penalty. Keep in mind here, that according to the report of this 9th Circuit case, neither Hicks nor his attorney addressed this issue. According to the 9th Circuit, "On appeal, Hicks does not contend the finding that he did not file personal income tax returns for the years in question." This case was argued as if Hicks failed to file (as opposed to not being one who was required to file).
2. Since he had (supposedly) violated a statute, even if IRS had failed to comply with the PRA, such failure on the part of IRS does not prevent Hicks from being penalized. In other words, a "taxpayer" as defined is required by statute to make a report of his income. Any regulation that has to do with any particular form of report is simply not an issue, because the government never claimed in the indictment (to the best of my knowledge) that Hicks was required to complete any particular form for reporting his income. And Hick's does not claim that he made any attempt to report his income. Do you see the hole in the current "silver bullet" OMB/PRA argument?
3. The 9th Circuit did not make a decision as to whether IRS failed to comply with the OMB/PRA requirements. It didn't have to because Hicks was not charged or convicted for failing to complete a particular form' that may have been required by rule or regulation, but simply for failing to report his income as required by statute (6012).
4. As the work progressed on the OMB/PRA arguments and legal briefs were being submitted and argued, I saw what I considered to be a hole in the arguments. As I discussed the issue with various people across the country, I continued to say, "Wait a minute. Has anyone ever decided what a return is? Has the government, in any of these cases, claimed that the 1040 form is the only thing that could be considered a return? Isn't assuming that it is the 1040 form' that satisfies the definition of a "return" getting the cart before the horse? Has the government, in any of these cases, ever claimed that the defendant reported his income, but just failed to put it on the proper form, and therefore is guilty of failure to make a (proper) return?"
Was Mr. Burns (mentioned above) correct when he said a person could make a report of income on a roll of toilet paper?
Since the HICKS case was handled as a "taxpayer's" case, (and, as much as I hate to do it) it seems it must be addressed as if we are dealing with a "taxpayer" as defined.
Let's go back and look at the sections of the Code that supposedly require a person to file returns. Sections 6001 and 6011 apply to any person liable or made liable. Both of these sections refer to regulations.
Every person liable for any tax impose by this title, or for the collection thereof, shall keep such records, render such statements, make such returns, and comply with such rules and regulations as the Secretary may from time to time prescribe. 26 U S C 6001, in part.
When required by regulations prescribed by the Secretary any person made liable for any tax imposed by this title, or for the collection thereof, shall make a return or statement according to the forms and regulations prescribed by the Secretary. Every person required to make a return or statement shall include therein the information required by such forms or regulations. 26 U S C 6011(a).
If 6001 and 6011 were the only sections of the Code to which the court could have referred regarding a requirement to make a return, then Mr. Hicks would have had a stronger case, because these sections definitely refer to regulations.
However, the court referred to Section 6012, which absolutely does not mention regulations.
Returns with respect to income taxes under subtitle A shall be made by the following: (1)(A) Every individual having for the taxable year gross income which equals or exceeds the exemption amount, 26 U S C 6012, in part.
Therefore, even without a regulation, the "taxpayer" would have a statutory requirement under Section 6012 to make a report "with respect to income taxes under subtitle A", and the published Statutes at, Large, among other things, would certainly have given the "taxpayer" sufficient notice.
Given the above, you can imagine how "thrilled" I am to see attorneys, while representing the patriots, state, or even imply, such things as, "Therefore, Hicks believes that while he may be made to pay his back taxes, he cannot be fined or imprisoned for his violations."
If Hicks believes he has back taxes, he must believe that he is a "taxpayer"; that is, one who is subject to the applicable revenue laws. If he believes this, he has certainly had adequate notice.
But, you might say that Hicks would not know, from reading Section 6012, what kind of report is required. That is true. From 6012 alone, he would not know if a particular kind of report is required. But the point is, the "taxpayer" does have adequate notice that a report is required.
Note: This does not take away from the argument that an indictment does not state any statute that was supposedly violated.
Hicks's argument might have had merit if he had sent the IRS a piece of paper for each of the years in question stating, "This is my return." And preferably shown some amount to indicate his earnings or income. Such a piece of paper might have at least demonstrated an attempt to fulfill the statutory requirement. But apparently no such attempt was made.
Please Note That I Am Not suggesting a nontaxpayer make any such attempt. If a nontaxpayer were to do so, it would imply that he was subject to the tax.
The 9th Circuit explains that the regulation for Section 6012 (CFR 1.6012-1) has been promulgated (published to make known).
Take a look at the regulations referred to by the court. First, part of CFR 1.6012-1(a)(6). Then CFR 1.6011-1 (b) .
Form of return. Form 1040 is prescribed for general use in making the return required under this paragraph. Form 1040A is an optional short form which, in accordance with paragraph (a)(7) of this section, may be used by certain taxpayers. CFR. 1.6012-1 (a) (6), in part.
Use of prescribed forms. Copies of the prescribed return forms will so far as possible be furnished taxpayers by district directors. A taxpayer will not be excused from making a return, however, by the fact that no return form has been furnished him. Taxpayers not supplied with the proper forms should make application therefore to the district director in ample time to have their returns prepared, verified, and filed on or before the due date with the internal revenue office where such returns are required to be filed. Each taxpayer should carefully prepare his return and set forth fully and clearly the information required to be included therein. Returns which have not been so prepared will not be accepted as meeting the requirements of the Code. In the absence of a prescribed form, a statement made by a taxpayer disclosing his gross income and the deductions therefrom may be accepted as a tentative return, and, if filed within the prescribed time, the statement so made will relieve the taxpayer from liability for the addition to tax imposed for the delinquent filing of the return, provided that without unnecessary delay such a tentative return is supplemented by a return made on the proper form. 26 CFR 1.6011-1(B).
Now, let's put everything into perspective.
Hicks was convicted of failing to make a report, not for violating a regulation. Therefore, even though the regulation states that a Form 1040 (or in certain cases a Form 1040A) is the required form, Hicks was not convicted of failing to submit any particular form or failing to supply certain information. He was convicted of simply failing to make a report.
Section 6012 requires the making of a report. That is all. Since we know in other cases that an IRS employee testifies that he/she looked for, but didn't find any return (report) for the years in question, we can assume the same thing happened in Hicks's case. Had Hicks shown any evidence that he "made a report" to rebut the circumstantial evidence that they looked for a report and could not find one, something would have had to come to light as to what is a valid "required" report. Then the regulations would have come into play, and maybe Hicks's legal arguments would have had merit.
But remember, up front the 9th Circuit stated that, "On appeal, Hicks does not contest the finding that he did not file a personal income tax return for the years in question." On appeal, Hicks only raised legal arguments. We have no idea what he used as a defense at trial, nor do we have any idea of what facts were presented at trial. It is quite possible (if not probable) that neither Section 6001, 6011 nor 6012 were even mentioned at trial.
It is extremely probable that the trial judge gave the jury his own version of Section 6012, without naming the section, when he gave his instructions to the jury. It was probably similar to the jury instructions shown at page 80 of The Defendant: "If a married individual had received $1000 or more in gross income for the years in question he was required to file." If neither 6001, 6011 or 6012 was even mentioned at the trial then the government was relieved of the duty of proving even a statute that would require a "taxpayer" to file. Such jury instructions would constitute an unlawful directed verdict.
Hicks's appeal essentially starts out in the middle of nowhere (or close to it) with the mere assumption that Hicks was convicted of failing to make a report on a Form 1040. It is doubtful that the government produced any evidence at the trial to prove that Hicks was even required to file a Form 1040.
If Hicks's trial was handled in the usual manner, it is doubtful that the government even produced any evidence that Hicks was required to file. It is very likely that the government was relieved of the duty of proving the first primary essential element of the offense charged.
Now, was the previously mentioned Mr Bums correct when he said you can file a return on a roll of toilet paper? Yes & No. He is correct as far as the statutory requirements of a "taxpayer" under Section 6012. He is not correct as far as the regulatory requirements of a "taxpayer" under Regulation 26 CFR 1.6012-1(a)(6). And Hicks was not convicted for failing to make a report on a 1040 form; but simply for failing to make a report.
Unless, and until, the government alleges and proves that the defendant was required to file a Form 1040, why would a defendant bother to argue the OMBIPRA issue as it relates to a Form 1040?
Hicks's pretrial motions.
Lets first discuss the 6103(h)(5) motion, which is in regard to the disclosure of juror information. Any party to such judicial proceedings has the right to inquire and get a response from the Secretary of Treasury or his delegate as to whether prospective juror has been the subject of any audit or other tax investigation.
The way this is supposed to work is, that upon the request (motion) of any party to the proceeding, the judge is to order a list of the prospective jurors (along with their social security numbers) to be provided to the party who so requests such list. The party can then request of the Secretary of Treasure or his delegate to provide yes or no answers regarding each prospective juror as to whether he/she has been the subject or any audit or other investigation.
However, the way it is normally handled when the defendant requests the list of prospective jurors for purposes of 6103(h)(5), the judge orders the list to be provided to the prosecutor, who then makes the request, receives the yes or no answers on each of the prospective jurors, and then gives a copy of the response to the defendant. Under these circumstances, in my opinion, there is too much opportunity for chicanery. I feel certain that all too often the defendant does not timely or adequately object to the way the judge has set up the plan.
In Hicks's case, the judge took it upon himself to request the information, and then provided copies of the response to the defendant and prosecutor.
The 9th Circuit explains in the Hicks case that Hicks argues that it was improper for the trial court, rather than a party, to issue the request for juror tax information to the IRS. He argues further that the trial court improperly limited the scope of its request to a term of years, citing in support US. v. Sinigaglio, 925 F.2D 339 (Holding that trial court, erred when it limited audit history to last six years).
This court has recognized that the trial court may need to issue a section 6103 request to assure the IRS that the request is legitimate. See US v. Hashimoto, 878 U S 1126, 1132 (9th Cir. 1989). As long as each side receives the prospective list with the relevant answers in a timely manner, there is no error.
Editor's note: Well, there still seems to me an opportunity for chicanery, and after the fact, it is impossible to prove. I don't know if it has ever been done, but if a defendant objected to the judge getting the response to pass on to the defendant, rather than the defendant getting a response to his own personal inquiry, as is allowed by statute, the defendant might have an appealable issue. The basis for the objection could be that the defendant does not trust the judge or the prosecutor, and he has no way to be sure that the list or the answers will not be tampered with unless he has the original list of prospective jurors in order to make his own independent inquiry and personally receives the response from the IRS. Furthermore, if either the judge or the prosecutor were to tamper with the list or answers, the defendant would have no way to prove it after the fact. This is just a thought.
The 9th Circuit continues to explain that Hicks is correct in his assertion that the trial court improperly limited the scope of its request. However, Hicks failed to allege any prejudice arising from the trial court's decision, and cannot demonstrate that he was prejudiced in any way. In contrast to the situation in Sinigaglio, no serious discrepancy arose between the information received from the IRS and the information elicited in voir dire. We find that any error by, the trial court was harmless. US. v. Hardy, Nos 90-1053535, 91-10181, slip op. at 10493 (9th Cir. Aug. 7, 1991) (adopting a harmless error analysis for this type of case).
Editor's comments on Hicks's 6103(h)(5) issue.
In Sinigaglio, the list went back only six years. During voir dire, jurors were asked in open -court if they had ever been audited or investigated by the IRS. Eight said they had been, and this was new information that was not on the list of answers supplied by the IRS. Sinigaglio had no way to verify the accuracy of this new information. The 9th Circuit concluded that while the voir dire did elicit additional information, it did not negate the significance of the risk of prejudice, and since the trial court had denied a motion for a continuance, it did not constitute a harmless error, but rather a reversible error. The conviction was reversed and the case remanded for a new trial.
In the Hicks case, however, "Hicks failed to alleged prejudice and cannot demonstrate that he was prejudiced in any way."
It seems that the trial and appellate courts are dancing around this issue the best they can. It seems that the defendants need to continue to demand the list of prospective jurors directly from the court so that they can make their own independent inquiry as - is allowed by statute. Time will tell.
Venue. Hicks's motion regarding venue requires only a brief discussion.
The 9th Circuit explains that Hicks asserts that his motion regarding improper venue were erroneously denied. He argues that as an Arizona resident, he was required to file his tax returns with the IRS service center in Ogden, Utah, and that therefore the site of his offenses was Utah. Because he is entitled to be prosecuted in the district where his offenses were committed, he says, venue properly lay in Utah, not Arizona. The 9th Circuit found this argument meritless.
But enough already. Good grief! Why would a make such arguments? Why would a nontaxpayer allow an attorney to make such arguments?
In my opinion, the venue argument is not only a waste of time which is desperately needed to properly prepare for trial, it inevitably ends up with the defendant arguing as a "taxpayer" as defined.
Why argue that you are "entitled" to be tried in a certain place (many miles from home)? Why argue that you are "entitled" to be tried at all? It seems to me that a nontaxpayer (that is one who does not possess the requisites of a "taxpayer") should argue that the court has no authority to try him at all. If the court still forces him to trial, then his effort and energy should be put to the task of forcing the government to prove each and every essential element of the crime.
I, for one, am very glad the courts have ruled against the venue argument. If the argument was held to be valid, the government, would be prosecuting cases in the district in which the respective IRS service center is located, which, in most cases, is many miles from the defendants homes. Future defendants would then have to travel greater distances for the court appearances which would be more expensive and burdensome to them. Yes, I'm glad to see the courts shoot down this argument. Hopefully, individuals who are neither liable for nor subject to such taxes will stop wasting time arguing the venue issue.
U.S. v. Bentson.
Stephen W. Bentson was charged with three counts of willful failure to file tax returns, one for each of the years, 1982, 1983 and 1984. For the year 1982 he had filed a return providing his name, address, social security number, and signature. He filled the remaining blanks of his 1040 form with asterisks, and stated in an attachment that any requirement that he supply additional information violated his constitutional rights under the Fifth Amendment. No tax returns were located for the years 1983 and 1984.
A bench trial was held, which means that Bentson waived his right to a jury trial. This is certainly not the way I believe a patriot should approach these things.
Nevertheless, after the close of the government's case in chief, Bentson moved for judgment of acquittal, relying on the 9th Circuit's decision in U.S. v. Kimball, 896 F.2d 1218 (1990).
In the Kimball case, the 9th Circuit first determined on 2-26-90 that a return containing only asterisks in the blanks did constitute a return. On 2-19-91, the 9th Circuit changed its mind.
Nevertheless, the trial court granted Bentson'-s motion for acquittal for the year (1982) for which Bentson had filed a return with asterisks (based on the 9th Circuit's 2-26-90 decision in Kimball in which Kimball had filed returns containing the asterisks). It was after this trial court's ruling that the 9th Circuit changed its mind in U.S. v. Kimball, 925 F.2d 356 (2-19-91). So by happenstance, Bentson slipped though the cracks for the year of 1982. The trial court (no jury) found Bentson guilty for the years 1983 and 1984.
Bentson also filed a post-trial motion for a judgment of acquittal, arguing that the government had failed to offer evidence sufficient to prove beyond a reasonable doubt that he did not file protest returns. (Oh, boy! Where will it end?)
You might recall the previous discussions in this newsletter regarding various types of evidence such as presumptive evidence, prima facie evidence, etc.
The IRS witnesses look for, but do not find, any tax returns filed by the defendant. This is sufficient evidence from which the fact finder may draw an inference or presumption that no returns were filed. Now it is now up to the defendant to rebut the inference or presumption with contradicting evidence that returns were filed, if in fact they were.
What did Bentson's attorney say in his closing statement?
The defense is not suggesting that returns were filed for 1983 and 1984, which the Internal Revenue Service would consider to be valid documents. The defendant submits rather that the government's evidence fails show that protest documents were not filed for 1983 and 1984.
Bentson's attorney represented him. Therefore, the attorney's comments were the same as if Bentson had made them. What did the 9th Circuit have to say about this?
Our review of Bentson's closing statement convinces us that the language quoted above was a straightforward judicial admission, not merely a concession for the sake of argument. It was a binding concession that Bentson did not file valid returns for the years 1983 and 1984. [Citations omitted.] A judicial admission is binding before both the trial court and appellate courts. [Citation omitted.] Having stated in open court that he was not claiming that he filed valid tax returns, Bentson may not now claim that the government failed to prove he did not file valid returns.
Let's apply some common sense to this. First, it is impossible to prove a negative with positive evidence. A creditor cannot prove with positive evidence that the debtor did not pay. If the case goes 'to court, the creditor can only show the original credit agreement and claim that he had looked for, but could not find any record of having received payment from the debtor. While this evidence is not positive proof that the debtor did not pay, it can be accepted as true unless rebutted. It is now up to the debtor to provide, if he can, proof that he paid. That is the purpose of receipts and canceled checks.
Can you imagine a debtor telling a judge that he is not suggesting that he did pay the debt, but only claiming that the creditor had not proved he did not pay?
It seems to me that the same illogic was used by Bentson's attorney. Not only did the attorney's comments bolster the government's evidence (we looked, but did not find), his challenge (which was in effect that the government did not prove a negative with positive evidence) seems so illogical I can't believe time and money was wasted on such an issue.
The only reason I am spending time writing about it is that when a patriot is under indictment the pressure is so great he often grasps at such illogical straws, like a drowning man. Hopefully, this discussion might save a reader from wasting time on such an illogical argument.
This also gives me a chance to explain how I think such cases should be handled. If you go back to page one of the last issue, you will find that in failure to file cases, the government must prove (1) that the defendant was a person required to file, (2) that he failed to file and (3) that his failure to file was willful.
The second element of the crime presupposes that the first element has been proved. The third element presupposes that the second element has been proved. If you try to rebut the second element-, by making the jury or judge believe that maybe you did file returns, you will pretty well knock yourself out of an opportunity to logically force the government to prove that you were required to file, and the third element (providing the government was able to prove the first element) that would force the government to prove that any alleged failure to file was willful.
Since I do not like to give the adversary an inch, I think one should let the prosecution go through the trouble of testifying that they looked for returns for the years in question but could not find any for the defendant. So what? Why argue about it?
That second element is a real trap. When the government supposedly proves that you "failed" to file by proving (via circumstantial evidence) that you did not file, the defense, in effect, needs to be, "So what? "You have not yet proven that I am a person who is required to file." As simple as this might seem, defendants simply fail to present this type of defense.
The big question is whether they proved the first element? Did they prove that the defendant was a person required to make a return? Unless, and until, they prove the first element, the second element of the crime is immaterial; and so is the third.
Assume, for the moment, that the fact finder (much preferably a jury rather than a judge) believes that the government proved that the defendant was a person who was required to file. To the best of my knowledge this is only accomplished by way of an unlawful directed verdict from the judge. In this event, the next important element the government must prove is that the defendant's alleged failure to file was willful. (Let the government's testimony that they "looked and did not find" just slide by. I believe that is just a "so what" issue. Let it go. Don't try to argue that they didn't prove you didn't file a return.) Now the factors (or elements) discussed in the Cheek case become very important, because the government is now forced to prove that the defendant was willful in his alleged "failure to file". In order to prove this, the government must prove that the defendant's failure to file was a "voluntary, intentional violation of a known legal duty".
Now the defendant has the chance to testify, and tell the jury why and how he came to the conclusion that he was not a person required to file. I sincerely believe that an honest and sincere patriot will not be convicted if he adequately prepares to use this approach and also providing he is not side-tracked confusing illogical and frivolous arguments that can fuse a jury .
What is noticeably missing in the reports of both the Hicks and Bentson cases is the fact that there is no issue raised as to whether the government ever proved that the defendants were individuals who were required to file. In fact, there is nothing in these reports which indicates that either individual testified in his own behalf in order to show that his alleged failure to file was not willful. I believe they were both putting a lot of faith and hope on the current "silver bullet" OMB/PRA issue. And all failed to realize that a "return" simply means an official or formal report.
Bentson also argued the OMB/PRA issues as did Hicks. The Hicks and Bentson cases were both argued on 7-16-91, and both decided on - 10-16-91, with the decision in Hicks being made first. The 9th Circuit relied on its ruling in Hicks regarding the OMB/PRA issue, and thus, ruled against Bentson. Conviction Affirmed.
I suppose the bottom line here is to defend yourself, without waiving any of your constitutional rights, and rely on those 12 souls on the jury (in spite of their previous brain-washing) and hope they can make some common sense out of the best defense you can logically present.
I also believe that the more tenacious and adamant a defendant is in his efforts to force the government to prove, if they can, that he is a person required to file, the better chance of success he will have in convincing a jury that any alleged "failure" to file was not willful. In other words, don't just rely on a good-faith belief defense.
And Never, Never, refer to your good-faith belief as a "good-faith misunderstanding of the law". To do so would give a false concession that you misunderstood the law, when in fact, you might be the only one in the courtroom with a correct understanding of the revenue laws.
Adequate Notice v. Insufficient Indictment.
Don't get confused. The statutes, such as 26 U.S.C. 7203 and 6012, have been published in the United States Statutes at Large. The Treasury regulations are promulgated (made known) by being published in the Federal Register. Both the Statutes at Large and the Federal Register are deemed to be adequate notice to the public. The regulations, of course, must still meet the OMB/PRA requirements.
With such publications being deemed to be adequate public notice, you might wonder about any challenges to an indictment that merely names the penalty statutes, and not any statute that was supposedly violated. After all, the "taxpayer" was supposedly put on notice via the various publications that he was required to make a report. And the indictments are worded in such a way as to indicate the defendant had gross income in the sum of Sxxxxx.xx; and by reason of such gross income he was required by law to make an income tax return; and that well knowing and believing all of the forgoing, he did willfully fail to make an income tax return.
With all of this, how could anyone challenge the indictment just because it only named the penalty statutes and not any statute that was supposedly violated?
In the Steiner case, the defendants were charged with fraudulently importing and transporting certain birds contrary to law. The indictment failed to name which law was violated. In spite of the fact that the statutes are promulgated in the U.S. Statutes at Large, the important point here is that while there are many statutes promulgated, the indictment failed to state which statute was violated, and thus the defendants had no way of knowing what they must be prepared to meet when defending themselves against, the charges of the penalty statute. Their convictions on counts 8-11 were reversed.
The same applies to indictments which merely charge the penalty statutes of 7201 and/or 7203. While the public has been put on notice of the internal revenue statutes, a defendant would not know which statute or statutes he must be prepared to meet. I know of three statutes that require a "taxpayer" to file returns. (Actually, depending on the applicable revenue law, I also know of some others.) But which one or more of these statutes, if any, would, or could, the government claim at trial that I, or anyone else, had violated? I don't know. I can only guess.
If the government claims that the individual was required to file under sections 6001 or 6011, the defendant could force the government to prove that he was liable or made liable. "Liable" or "made liable" are what I call secondary essential elements of the crime.
If the government claimed that it was Section 6012 that required the defendant to file, then the government must prove that the individual had a "taxable year" as defined; another secondary, but still an essential element.
But how would one prepare for this trial if he really did not know which statute, if any, the government was going to claim was violated. He can only do it by the unsatisfactory method of "by guess and by golly", and that is not due process of law.
The Steiner defendants could have searched the relating to the "certain" birds, but which of these statutes would the government claim at trial that they had supposedly violated? There was no way for them to know, and absent this knowledge, the defendants were not apprised of what they must be prepared to meet. This principle is well discussed in Russell v. U S, 3 69 U.S. 749, (1972).
By the same principle, until the indictment names the statute or statutes that require the particular defendant to file a return, the indictment is insufficient. So just because the government has promulgated many, many statutes, a defendant still has to be apprised of which statute he has supposedly violated; and the penalty statutes of 7201 and 7203 simply do not say.
Perhaps the best ever simple, country boy common sense, challenge to an insufficient indictment was made by Tom Hauert. In essence, Tom told the judge that he could read Section 7203 but he could not see in that section where it identified him as one of those individuals who were required to file. If the government could just show him the section of the code that required him to file perhaps he could then understand the charges. Tom had written letters to the IRS, and therefore had set an administrative record which challenged the IRS's assumption that he was a person required to file. Tom's case was dismissed.
While Tom's approach was extremely simple, it had all the markings of a challenge to an insufficient indictment. He simply' had not been apprised of what he must be prepared to meet.
The IRS doesn't seem to have any problem naming statutes. In the Privacy Act and PRA Notice, it says, "Our legal right to ask for information is IRS Code sections 6001, 6011, and 6012 and their regulations. They say that you must file a return for any tax you are liable for." So why indictments are void of referring to these sections and regulations? Once the indictment names (alleges violations of) sections that could be violated, such as 6001, 6011 or 6012, (as opposed to just the sections that name the penalty) then every word in the stated section becomes an essential element the government must prove; such as "liable", "made liable" and "taxable year ": and those can be tough to prove.
In other words, if the indictment alleged that the defendant had violated Section 6001, then the government would clearly open itself up to being forced to prove that the defendant was "liable", because that is part of Section 6001. In the past, the government has been very successful in avoiding the naming of any actual section that requires anyone to file a return. And I think the prosecutors would like to keep it that way.
Norm Vroman got Judge Lynch to order the prosecutor to "file a brief to show him what you are going to charge him with." But when Norm asked the judge if he would be justified in relying on what the prosecutor says in the document, the 'judge quickly changed his mind and told the prosecutor not to file the brief. The judge, I'm sure, realized he was digging a hole for the prosecutor. And what did the prosecutor say? "Your honor, I prefer not to."
An additional point is that it is the indictment that is supposed to name the charges, and briefs filed later to the prosecutor do not satisfy the requirements of due process. There is good reasoning behind this principle. It is the grand jury which brings in the indictment against the defendant. If the indictment does not name the section or sections of the Code under which the defendant is being charged, then it has not been the grand jury that brought the charges against the defendant. And the prosecutor has no authority to take the place of the grand jury. It is really pretty simple when you think about it. Again, the case of Russell v. U S, 369 U.S. 749, lays this principle out quite well.
Motion for Bill Of Particulars.
At any rate, Norm's next move was to submit a motion for a bill of particulars. This move can only be described as a last ditch effort in an attempt to cover all possible bases, as Norm is quite aware that the U.S. Supreme Court stated in the Russell case:
But it is a settled rule that a bill of particulars cannot save an invalid indictment. Russell, supra, 770.
Personally, I may not have even bothered with a motion for a bill of particulars, mainly because the important issue here is the insufficient indictment, which cannot be saved by a bill of particulars. If I had chosen to use this tool, mine would have been quite different than Norm's.
I believe Norm's motion for a bill of particulars is from a "canned" motion, which is a previously prepared motion that can be pulled up out of the computer and then bits and pieces of the current defendants issues worked into the previously prepared motion. The "canned" motion covers some very important points of law so, if you separate the wheat from the chaff, it can be quite educational.
You will see where the OMB/PRA issue is working its way into Norm's case. Norm had driven to San Francisco and heard the reportedly very impressive oral arguments in the Hicks and Bentson cases presented to the 9th Circuit. Well, many in the patriot community thought this was going to be the "silver bullet", so why shouldn't Norm? After all, at that particular point in time there was a great deal of hoopla over the OMB/PRA issue. And believe me, I have lost track of the patriot defendants who, when facing criminal charges, had "friends" urge them on to use one or another not-so sound argument. In this respect, Norm's case is not unusual to say the least. So, at least we know he is human. Plus, he is truly a good individual with a beautiful family.
While Norm has been a judge, a prosecuting attorney and a criminal defense attorney, he had never before found himself in the role of a defendant. In spite of his background, he felt the pressures of being a defendant the same as you and I would.
So with the usual and unusual factors of this case, it provides us all with a special opportunity to learn.
Norm's Motion for Bill of Particulars.
Because the indictment in this matter is totally devoid of any reference to Title 26, IRC setting forth the statute, code or regulation imposing a requirement to file a return or imposing a tax liability upon the defendant, and because the defense in this case rests in a large part upon the Plaintiffs failure to comply with Title 44 U.S.C. 3501 et seq and Title 5 U.S.C. et seq, defendant Moves This Court for an order directing the prosecution to file and serve a written Bill of Particulars, stating the following so that the defendant may adequately prepare his defense:
1. Counts I - v. in the indictment allege that the defendant failed to make an income tax return to the Director or District Director of the Internal Revenue Service (IRS). With reference to each count the defendant requests the following information:
a. Cite the specific Return which the defendant is alleged to have failed to make;
b. Cite the specific and relevant authority that would authorize the Director or District Director of the IRS to require the defendant to make a return;
c. Cite the Office of Management and Budget (OMB) Clearance Number assigned to the Return form and instructions for completing said form as required by Title 44 USCA, sections 3501 - 3502 inclusive;
d. If the government is relying on IRC section 6012, cite the date of publication of the returns. statements and lists in the Federal Register as required by Title 5 USCA, section 522.
e. With respect to the Director or District Director of the Internal Revenue Service, state with-,particularity the Division to which said Director or District Director of the Internal Revenue are assigned;
2. Counts II - v. of the indictment allege that the defendant received "Gross Income." With reference to such counts, the defendant requests the following information:
a. State in concise and particular detail the taxable activity in which it is alleged that the defendant was engaged;
b. The cite to the specific federal tax Regulation that levies ' a tax upon the activities in which the defendant war engaged;
3. Counts II - v. of the indictment allege that the defendant was obligated to state specifically the items of his gross income and any deductions and credits to which he was entitled. With reference to each such count, the defendant requests the following information:
a. The cite of the federal tax Regulation that expressly entitles persons such as the defendant to earned income deductions and credits.
4. Counts I - v. of the indictment allege that the defendant was "required by law" to make a return. Cite the specific Code, Statute or Regulation that requires the making of such return.
5. Count 1 of the indictment alleges that the defendant falsely claimed that he was exempt from income tax withholding requirements. With reference to that allegation, defendant requests the following information:
a. Cite the Code, Statute or Regulation which imposed a income tax withholding requirement upon the defendant.
Wherefore the defendant moves the court to grant this motion. The defendant further respectfully requests the court, if and to the extent it exercises its discretion in denying any part or aspect of the foregoing requests, to indicate in terms that appear on the record, the basis and the reason or reasons for exercising its discretion in so denying said requests U.S. v. Wells (7th Cir., 1967) 387 F.2d 807.
Points And Authorities In Support of Motion For Bill Of Particulars.
I. - Defendant Will Be Unable To Adequately Defend Against The Instant Charges Without Further Particularizing Of Allegations.
Rule 7(f) of the Federal Rules of Criminal Procedure provides that the court may direct the filing of a Bill of Particulars upon a motion by the defendant. 'The functions of such motion are to provide a defendant with information about the details of the charges necessary to the preparation of the defense, avoid prejudicial surprise at trial, and protect against a second prosecution based upon the same set of facts. Yeargain v. U.S. 314 F.2d 881, 882 (9th Cir. 1963); US v. Bearden 423 F.2d 423 F.2d 805, 809 (5th Cir. 1970).
As originally promulgated, Rule 7(f) required a showing of cause before the amendment of 1966, which was expressly designed "to encourage a more liberal attitude by the courts toward bills of particulars." See Rule 7(f), Advisory Committee note to the 1966 amendment.
The granting, or refusal to grant, a Bill of Particulars is a matter within the discretion of the trial court. US. v. Dreitzler 572 F.2d 539, 533 (9th Cir. 1978) The test in ruling on such a motion is whether deprivation of the information sought will render the defendant unable to prepare a defense, avoid surprises, or avoid later risking double jeopardy. U.S. v. Addonizio 451 F.2d 49, 6'-64 (3rd Cir. 1971). A defendant should not be deprived of information needed to prepare a defense, simply because the information might be used by the government as evidence. U. S. v. Crisona 271 F.2d 156 (S.D.N.Y. 1967). [This might be 271 F.Supp. 156. Ed.].
Moreover, a motion for a Bill of Particulars cannot be denied on the theory a defendant "knows" what he or she "did." Such a ruling effectively stands the presumption of innocence on its head, in assuming the defendant has knowledge of his own acts, which were in fact "guilty." See, US. v. Tanner 297 F.Supp. 683 695-696 (D.Del. 1971).
Although a defendant may not use a Bill of Particulars to ascertain all of the evidence which the government intends to produce, a defendant is entitled to know the theory of the governments case as to each count. Yeargain v. U S, supra, 314 F.2d at 882. As noted in the Opinion of Judge Whittaker, cited with approval in the advisory committee note to the 1966 amendment to Rule 7(f):
It seems quite clear that where charges in an indictment are so general that they do not sufficiently advise the defendant of the specific acts with which he is charged, a bill of particulars should be ordered.
U.S. v. Smith 16 F.R.DI 372, 375 (W. D.Mo. 1954).
Moreover, because a Bill of Particulars has a fundamental connection to the Sixth Amendment right to defend, doubt must be resolved in favor of disclosure and the public interest in giving the accused the right to mount a defense. U.S. v. Tanner, supra, 279 F.Supp. at 474; US. v. Manetti, supra, at 696. Notably, prejudice to the defendant has been defined by Justice Rehnquist to be the "impairment of the ability to mount a defense." US v. Valenzuela-Bernal 458 U.S. 858, 869 (1982).
The instant Indictment contains the very form of generalized charges against which a Bill of Particulars is designed to protect. Without further particularization, defendant Vroman will not be able to fully exercise his Sixth Amendment rights to a fair trial.
II - The Indictment Herein Does Not Adequately Apprise The Defendant Of The Nature And Scope Of The -Charges Against Him.
The charges in the Indictment herein are glaringly void of requisite information concerning the specific acts involved. The charges in no way enable the preparation of a defense. All information requested herein is essential to remedy the Indictment's deficiencies in allowing defendant to, prepare a defense.
In evaluating any defendant's motion for a Bill of Particulars, the court is called upon to make a "particularized decision" which takes into account the amount of facts stated in the charging document before the court. US. v. Thevis 474 F.Supp. 117, 12') (N.D.Ga. 1979); US. v. Barket 380 F. Supp. 10 1 8, 1021 (W.D.Mo. 1974).
It is well-established that a defendant should not be deprive of a Bill of Particulars simply because he requests information which might be used by the government as evidence. US. v. Crisona, supra, 271 F.Supp. at 156.
III - The Sixth Amendment Mandates Disclosure Of The Factual Information Sought Herein.
A Bill of Particulars, unlike most criminal discovery devices, directly implicates the Sixth Amendment's guarantee of the right to make a vigorous and prepared defense in a criminal case. See, US. v. Tanner, supra, 279 F.Supp. at 473-74.
When the charging document lacks sufficient particularities to allow a defendant to prepare a defense, as here, the defendant's ability to confront adverse witnesses and to use compulsory process is seriously inhibited. Obviously, due process requires that an accused receive the opportunity to defend, including being able to examine witnesses, offer evidence in defense, and be represented by fully prepared trial counsel. See, In re Oliver 333 U.S. 257 1948). Denial of the right to defend is an error of constitutional magnitude, requiring of proof that the error involved was harmless beyond a reasonable doubt. Chapman v. California -86 U.S. 18, 23-24 (1967).
Therefore, any judicial doubt concerning defendant's request for Bill of Particulars must be resolved in favor of disclosure, due to the public interest in giving the accused a right to mount a defense. US. v. Manetti, supra, 323 F.Supp. at 696. Impairment of the ability to mount a defense constitutes prejudice. US. v. Valenzuelo-Bernal, supra, 458 U.S. 869.
Any attempt to defend against the charges in the Indictment without further particularization will result in manifest prejudice to defendant.
For the reason stated above, this court is respectfully requested to grant this motion for a Bill of Particulars in order to avoid that prejudice and violation of defendant's constitutional right to a fair trial.
Editor's comments on Motion for Bill of Particulars.
Relating to 1-a, c, d and 2-a, there were no allegations as to any specific return, nor violation of 6012, nor taxable activity. I think all of this is getting the cart before the horse. We need to make the opposition prove what it alleges.
Relating to 1-b, it is a statute, not the director that requires a return. Relating to 1-e, assignment of director is immaterial. Relating to 2-b, Treasury regulations do not levy or impose taxes; Congress does via statute. Relating to 3-a, the question should apply to the unnamed statute, not the regulation. Relating to 4, it's okay. Relating to 5-a, it's okay if you know how to handle a response. The withholding requirement is to reflect the provisions of Subtitle A. Norm's trial. He relied on the OMB/PRA issue that the IRS had not followed the rules as his defense. But if you go back to the elements the government is required to prove to convict on 7201 and 7203, you will find that the government does not have to prove that the IRS followed the OMB/PRA rules. Norm was convicted on the four counts of 7203, but found not guilty on the one count of 7201. The government never proved that he was a person required to file. As usual, the judge gave a directed verdict. This, along with the fact that the indictment never stated any statute that was violated, Norm has a very appealable case, as you can tell from his motion to dismiss and petition for writ of mandate.