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Termyn8or -> RE: Pwning An IRS Lawyer (1/17/2011 4:19:59 AM)
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Well just so happens I had an extra 34 minutes.
It's obvious that he's going after the Constitutional right to face one's accusers. Not sure if it's been done before, or whether or not it'll work. However if the defendant filed a 1040 he just made all his income taxable and has already volunteered, or better put "pledged" to pay taxes on all income. In that case the only defense would be to claim that the payment(s) recieved were a loan or repayment of a loan. Once you sign on the bottom line you're through.
Now if he did not file a 1040, that's different. His chances are better because there are more arguments to present. In fact if he had used the proper procedure previously the case would never have been initiated. Tax court is not the place to assert that you are not a taxpayer. In court the judge will probably rule that the argument is frivolous, and while that may open the door for an appeal, it will not win the case except in some unusual circumstances. We cannot assume such circumstances exist from what I heard. If he wins, it is likely to be on appeal, which he will have to finance with his assets frozen - basically without money. I'm not saying it's fair. Not at all.
Not pulling a jury for the case, he is almost sure to lose the first round, that's a given. I've seen stronger arguments lose. With a jury, you could find people who simply want to stick it to the IRS, but that, as Ken said previously, is a crap shoot. Also, if the jury convicts, that puts him at a disadvantage in the appeal process. You can't expect a jury to know of the ambiguities in the tax code, or comprehend same. Look at all the people who call you a crackpot for demographic information about the odds of that.
It's just another approach really, and I don't have alot of confidence in it working. I'm not saying it's right or wrong. They never promised you a rose garden. We may assume all we want that we are in the right, that we have a strong defense, whatever else, but in the end what matters is how the court rules. A jury cannot dismiss the case, the judge can. Now there are two things that keep the judge in line, maybe three. One is the possibility of being overturned on appeal, and the other is embarrassment of the court by public scrutiny. The former hurts the judge's carreer, the latter puts the whole system in a bad light as far as the public is concerned. However the judge must also be concerned about making case law that can be used in subsequent trials, which is what can hurt the whole system.
Legal mumbo jumbo is an art, and some artists are more talented than others. And the judge is the chief critic. If he defendant can make a good enough case, the judge will have to acquit or dismiss. He knows damnwell the case will be published and used against the system, of which he is part. The case had better be very strong.
If I were the defendant I would never have let this conversation take place. It is in effect tipping your hand. I would've sprung that on them in court. Assuming for now he did not file, the basic argument would be that he does not have to. The income is verified, he wants to dispute if it is taxable, not the best strategy to say the least. Their evidence is gleaned from the tax returns of those who paid the defendant, and if this is a current case, it's not unreasonable that it took them eight years to get the information together.
What they're trying to do is to get the IRS to back down and not have a trial, at least from the conversation. That is not going to happen because it technically costs them nothing to bring the suit, contrary to what they may claim. If they lose they lose, they don't really care about the costs no matter what they say.
Now, it appears there could be two stages to this defense. First of all now that they are on notice that this case will be fought, and have some idea of the nature of the defense, they wil have time to find a convincing agent to testify. I'm assuming also that the prosecution doesn't know whether a jury demand will be exercised ot not. After testimony is given, and the court accepts that he is a taxpayer then comes the issue of whether the income is taxable or not. Once the former is established they will have to find the people who claim they paid the defendant and that it was not a loan or the repayment of a loan. They can do that, but at this point they don't know how these people will testify. They can guess that the testimony will be favorable to the prosecution because to do otherwise they are implicating themselves for tax fraud. If it was a loan or a repayment, it should not be on a 1040 either as income or an expenditure.
One ploy that could work is springing it on them in court, and letting the time run out. This has worked, but now they've completely eliminated that possibility. The IRS will no doubt find their witnesses. In fact the IRS lawyer seemed to know that, but didn't want to say it. In fact, the fact that this issue was brought up before the pretrial indicates that the defense intends to make case law. That means he is using his client as a guinea pig.
This gives the defendant an out, if he knows how to use it. He can then claim that he was misled, and that should provide a means to avoid penalties, but not the tax or likely the interest thereon. At least he might keep his ass out of jail once he pays up of course, or agrees to. Also part of that conversation indicates that the "lawyer" is not an LPA or a member of the bar - "I have power of attourney". If the defendant knows what he is doing this can work in his favor if the court rules against him.
The only way to get out of paying taxes is to already have been established as a non taxpayer. Even if the defendant wins, that does nothing for other years. They can keep hauling his ass into court ad infinitum. Who the hell wants to make a carreer of fighting in court, except a lawyer of course.
There is one other thing that may happen. The case may be marked "not to be cited or quoted". this cuts both ways. One, it cannot be used to establish case law, but on the other hand it is then impossible to enforce an assessment or penalty. This also doesn't help for other years, including future years. That means even if the defense is successful, he can spend alot of time and money fighting each case. How much is it worth ? How much does he have ?
What's more, if he wins consistently, which is doubtful, they will simply move the loopholes. If this gets out of hand, they will respond. Possibly congress will write a law that simply says everyone is subject to the IRS code and therefore taxation. I know why they don't, but the bottom line is money. If too many people beat them, they will analyse and adapt.
They would have to, because there would be no way to keep a lid on it. They would face the possibility of greatly reduced revenue. This is why I have admonished you not to bring this shit up all the time. You are going to wreck it for eveyone else. If you think the government will stand there and watch their revenue evaporte, you really are a crackpot.
For example, in the old days people like me impelled them to change DUI laws. I've had some extremely competent lawyers get me out of hot water quite a few times, and so have others. The government responded by changing the law and it is now almost to the point that if you have beer in the fridge and gas in a car they can convict you. I happen to know that something similar happened in Utah, the guy DID NOT DRIVE, and he WAS NOT DRUNK, or even drinking at the time. But because there was beer in the car and the boys (he and his brother) were going to spend the day drinking in the woods, the wilderness, it's called a precursor. Having a record, it bacame a felony. They did not catch him driving. They did not catch him drinking nor intoxicated. Yet they convicted him of a FELONY. Do you get it ? The system is unfair enough.
They same thing can happen with the feds. For example try threatening the President. Let's go futher and say Steven Hawkings threatened the President. Say Hawkings sent an email, "I'm going to kick your ass". Of course that is impossible due to his disability, but that does not matter. Just like in Utah, if the car sitting there would not start and run, it would still not be a valid defense. And that's only a state, this is the feds.
There is only one way to get out of paying taxes. In fact that only applies to federal taxes. I'm not sure what happens when it comes to state and local taxes. I presume that mostly those rates depend on line whatever of one's federal tax return. If there is no 1040, then they don't exist. The evidence does not exist because the federal tax form is the main source of evidence. The feds tell the state, the state tells the city or county, however it is in that venue. The trick is, once to get out of the grasp of the feds, the rest will generally leave you alone, whether or not the state for example might have explicit laws requiring the payment of income tax or not. Because the evidence comes from the feds.
The fact is, if the defendant has not already established himself as a non taxpayer, he stands very little chance of winning. The deck is stacked. So even if he wins, all he really did was not to lose one battle. There is only one way to win the war once and for all. And I will not reveal the details. I will not reveal them here in the open forum, nor to anyone who does not know how to use them. Who is not willing to learn how to use them. Who thinks they know it all. Who would spread it around so far and wide to invoke a reaction to the detriment of those who use the process.
I hope I didn't sound too offensive there, but really what it means is that I won't tell you. Of course you may not want to know, because you think you have it all under control. Time will tell.
T
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