Tag Archives: IRS

Motion to Dismiss – IRS False-Return Scheme

IRS FALSE-RETURN SCHEME

On Friday, July 31, 2015, three Defense Attorneys for Dr. William Bailey filed a Motion to Dismiss (MTD) the Government’s tax evasion case against him. The Motion is based upon the claim that the Indictment and the Prosecution were based upon false evidence, deliberately fabricated by the IRS in its deficiency procedures.

This MTD challenges the process which the IRS used to determine an income-tax deficiency on the Defendant for a year in which he did not file a Form 1040 income-tax return.

     Sample quotes from the Motion:

Following extensive discovery proceedings, Dr. Bailey now alleges herein that the government deliberately fabricated false evidence critical to the prosecution of this case and that the government’s conduct was so outrageous that due process principles now bar the government from using this Honorable Court to obtain a conviction.

At the onset in 1998, the government first contacted Dr. Bailey via a civil audit; it then manufactured entries into the IRS computer system to make it appear that Dr. Bailey had filed tax returns and had tax deficiencies when the IRS had created a substitute for return (SFR) under IRC § 6020(b) which, in actual fact, the Commissioner’s safeguard procedures will not permit without the use of an override function which produced the false-return scheme. The Internal Revenue Manual, itself, notes that an SFR is not, in actual fact, a return under § 6020(b). “An SFR, in and of itself, does not constitute a return under IRC 6020(b).” IRM 4.4.9.6 (05-08-2012) Substitute for Return. LINK

The Motion has an Appendix attached to it titled

IRS COMPUTER PROCEDURES AND THEIR STRICT RULES

Here is a quote from that fascinating Appendix:

This Appendix seeks to unravel the information encoded in computer language in these transcripts so that this Court can discern how the Commissioner actually implements his Congressional mandate primarily by execution of “strict rules” in the IRS computer systems.

Again:

If an evidentiary hearing validates this finding, the inescapable conclusion would be that the IRS never actually created an SFR for 1998 and that the transcripts that reflect that an SFR was created have been intentionally falsified as part of a false-return scheme.

Some of my friends have been following this case since Dr. Bailey was indicted in August 2013.  It appears to be coming to a crucial point.

I have never seen a tax evasion prosecution with the kind of issues raised in this Motion to Dismiss.

I obtained a copy of the actual Motion filed in Court. It is available on a donation basis by clicking on the button below.

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Update on Discovery Hearing

Update on Discovery Hearing

The first actual hearing on discovery in the tax evasion case was held on Thursday, March 26, 2015. I spoke with an individual who attended the hearing, and here is what I gleaned from that conversation:

  • The hearing was mostly about discovery of the Master File Source Code, which the judge denied, at this stage of the proceedings;
  • The judge left the door open to additional specific discovery requests based on the discovery which the Defense has already received, including those items provided by the Government at the hearing;
  • The Government provided some additional items of discovery;
  • The Government offered to set up an appointment with the Defense to go over all the discovery which it has already provided, in order to help the Defense locate specific items which the Defense claims not to have received; and
  • A status hearing was scheduled for May 29, 2015.

Discovery Briefs

I have combined the last four discovery briefs of both the Government and the Defense into a single file, a total of 119 pages. The Government actually included a copy of some of the materials on this website in its latest brief with the court.

In its last brief, the Government included, as an Exhibit, a picture of this very website and informed the Court that many of us were watching this case very closely.

The Sixth Amendment reads, in part: “In all criminal prosecutions, the accused shall enjoy the right to a speedy and public trial.” In today’s electronic world, many people choose to follow such “public trials” via the Internet. I shall do my best to keep you informed of the proceedings in this trial, as it appears to be following a course of events which I have never seen before in any criminal tax prosecution.

The briefs are available directly from the court for electronic download if you have a PACER account. I think the rate is 10 cents per page.

You may also download all 119 pages on a DONATION basis, by clicking on the button below.

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Supplemental Discovery Motion – Tax Evasion Case

The Supplemental Discovery Motion for the Tax Evasion Case in San Diego, was filed on Saturday, February 14, 2015.

The main focus of this Motion was to identify to the Court, in easily-understood concepts and language, why the Court should ORDER the IRS to produce the source code (computer program) used to generate the Individual Master File and TXMODA transcripts used by the IRS to generate deficiency proceedings which lead to assessment and collection of income taxes.

For those familiar with the work of John Benson and Michael Ellis, you will see how the research of both men contributed so importantly to the essence of the Motion.

If the Court orders the Government to produce the source code and its accompanying system documentation, the Defense will be afforded a view into the actual computerized means by which the IRS uses false and fictional entries into its Master File computers to make it appear to the courts, the legal profession and the public that those who do not file returns actually did file returns.

The Combined Discovery Motions are available on a DONATION basis by clicking on the button below.

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Testimony of Dwight E. Davis, Head of Alcohol & Tobacco Tax Division, IRS

Testimony of Dwight E. Avis, Head of the Alcohol and Tobacco Tax Division of the Bureau of Internal Revenue

“Income Tax is 100% Voluntary”

Given before a Subcommittee of the Committee on Ways and Means, House of Representatives, Internal Revenue Investigation, dated Tuesday, February 3, 1953, page 13:

Let me point this out now. Your income tax is 100 percent voluntary tax, and your liquor tax is 100 percent enforced tax. Now the situation is as different as day and night. Consequently, your same rules just will not apply.

Dwight Avis Testimony

(click to view) (see p. 13, first statement by Mr. Avis)

Reply to IRS Claim: You Are Required to File Form 1040

IRS Claims that Most Americans

are required to file Form 1040.

Is that necessarily the truth?

In December 2013, an individual, we’ll call him Joe, received a CP59 Notice or Letter from the IRS asking him why he had not filed a tax return for the year 2012.

Joe sent an answer to the IRS Chief Counsel, copy to the local Revenue Officer. The Revenue Officer replied, stating, in relevant part, the following:

This letter is sent in response to your letter to me dated 12/31/2013 titled “request for Determination of Tax-Filing Status for the year 2012.” In the letter you state several times you would like to know if you are required to file a Form 1040 tax return for the year 2012 given that you earned in excess of $ __________ during that year. To answer your question, yes you are required to file a Form 1040 for the tax year 2012 and pay any tax due as a consequence of the earned income. If you do not file a return for this, or any other year where you had taxable income, IRS may file a return on your behalf.

Joe then sent a letter in response to the Revenue Officer. Here is what Joe said about the letter which he (Joe) sent back to the Revenue Officer:

I can’t tell you the kind of satisfaction I feel when mailing such a response to these criminal dolts.

It’s what I tried to do w/every past letter.

Unfortunately, I’m not any good at the power-game.

Here is what I wrote back to Joe:

1. You’re agreeing to follow his advice, with reasonable, court-required conditions;

2. You’re polite in your language, so as not to stoke his ire;

3. You do not employ any frivolous issues;

4. You return your answer timely;

5. You invite a reasonable reply from him;

6. You ask for information required by the Merrill Court;

7. You ask for information which he is required to produce;

8. yet will not be able to produce;

9. You have a very nice paper-trail for a judge and a jury, should it come to that, which will appear to them as reasonable;

10. Information which, if not produced now and will not be able to be produced at trial, will weigh powerfully in your favor;

11. All w/o arguing the law in any way, except, of course, for your good-faith attempt to comply with the Merrill Court’s admonition.

For any who receive a CP59 Notice/Letter from the IRS or a response, such as Joe received, you may want to look at the reply Joe sent to the Revenue Officer.

As always, Donate if you choose to, or edit the suggested price to anything you like, up or down, zero to the moon, after you click on the “add to cart button”. We want everyone to have access to all our research.

All proceeds go toward furthering John Benson’s life’s work.

John W. Benson (1934-2014) My Mentor and Best Friend for 23 years. Passed into the Eternities on July 4, 2014, the same day on which Thomas Jefferson and John Adams passed! 

Rest in Peace, my Great, Good and Innocent Friend! I will see you again!

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Motion to Compel Discovery – Tax Evasion Case

I (Glenn) have not posted anything for some time, because the attorney have been consulting with Dr. Bailey intensely, and I did not want to post anything which might in any way prejudice his case.

I have not felt free to post most of the drafts so as to respect the right of the defendant to private deliberation and consultation with his counsel so necessary in such matters.

However, the Motion to Compel Discovery has now been filed and posted on the court’s public docket, so I feel I can now post it on this blog for you all to view, if you are so inclined.

You will note that the attorneys are bringing to the court’s attention many issues which should be familiar to those of you who have read much of the materials posted on this website. Some of those materials are similar to issues John Benson raised in his eBook, based upon the 40-some years of his research and summarized in his eBook, Taxation by Misrepresentation.

The attorneys have, of course, framed the issues in more modern-day court lingo in order to present their issues in a manner easily comprehended by the government, the defendant, the court, and, ultimately, by the jury.

The most interesting aspect of the case, at this stage, is the presence of several unusual features in a criminal tax defense:

  • A defendant who appears to be familiar with John’s research and who is willing to pursue it in the case;
  • Attorneys who are willing to advocate the defendant’s issues; and
  • The presence of highly technical materials from IRS records and transcripts which are woven into the fabric of the case and which, the defendant believes, will demonstrate that the IRS procedures themselves will show that he is innocent; and

This is an excellent case in which to observe how competent attorneys go about melding the computerized IRS processes with the modern IRS Internal Revenue Manual and fashion a motion under today’s rules of court and thereby frame a very powerful defense.

The Motion to Compel Discovery, as with all materials on this site, is available on a DONATION basis. All donations go directly to John and are used to rebuild his health. I do not partake of any of the donations.

On that topic, I will tell you that John is doing better, although he is not back to the condition he was in several months ago, before he spent a week in the VA hospital for what we thought might have been another heart attack. Turns out he was suffering from acute dehydration, apparently a common malady of folks who suffer from congestive heart failure.

He is doing better, and he has asked me to thank all those who have so generously supported him in the past.

Click the button below and adjust the suggested price to whatever amount you like, including zero, update the cart, then check out.

John W. Benson (1934-2014) My Mentor and Great Friend for 23 years, passed into the Eternities on July 4, 2014, the same day on which Thomas Jefferson and John Adams passed! 

Rest in Peace, my Great, Good and Innocent Friend! I will see you again, John!

All proceeds will go toward furthering John’s great research!

March 28, 2015, UPDATE: I have combined the four (4) latest discovery briefs of both the Defendant and the Government into one file (119 pages). It is available by clicking on the button below.

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Where Are the Constitutional Limitations on the Taxing Powers of Congress Located, Today?

Where Are the Constitutional Limitations on the Taxing Powers of Congress Located, Today?

If you were to go into court, today, and raise the issue that the IRS had used its computer systems and tax codes, tax transaction codes, and other hard-to-understand processes, the result of which was the imposition of tax liabilities and filing duties that you believe are unconstitutional, would you want to be able to explain these issues in language that the court is familiar with and thereby demonstrate that your right to due process had been violated?

If so, read

Where Are the Constitutional Limitations on the Taxing Powers of Congress to be Found, Today?

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