Tax Crime Trial Disappointment

My Disappointment Over a Tax Crime Trial

Copyright © 14 October 2014 by Bob Hurt. All rights reserved.

Last week I attended the last 3 days of a 5-day tax crime trial that began 6 October 2014. The Federal Grand Jury indicted the defendant for 5 counts of tax evasion and 5 counts of willful failure to file. The parties’ lawyers selected the jurors, discussed a prosecution’s motion in limine to suppress discussion of the law (including Constitution), made opening statements, and began examining witnesses on Monday.

The Government (prosecution, Assistant US Attorney, Department of Justice) called 9 witnesses, during the balance of 3 days. The Defense and Government agreed on jury instructions with the judge, and then examined the Defense’s only witness, the defendant, on Thursday. On Friday the Defense redirected examination of the Defendant, the attorneys made closing statements, the Judge charged the jury, and sent them to deliberate at lunch time.

Allowing time for lunch, the Jury returned a verdict about an hour later: guilty on all 10 counts. The judge allowed bond and sent the defendant and counsel to the US Marshal to deal with the bond and fit the defendant with an ankle bracelet, and ordered the parties to appear for sentencing in January.

The judge allowed presentation of only two laws during the trial, through a reading of the indictment – 26 USC 7201 (tax evasion) and 7203 (willful failure to file a tax return). The Government presented, and Court admitted into evidence a huge pile of documents – tax returns, investigation reports. The Defense presented a couple dozen appellate court opinions, a cover of the 1040 booklet that showed “voluntary self-assessment” or “voluntary compliance,” a statement the defendant had attached to a tax return, and one other document.

The court refused to admit the Defense’s appellate opinions and sent the jury out of the room twice to scold the Defense for allowing the defendant to mention what the law or a court opinion says, and to threaten the defendant with contempt charges for trying to discuss the law or its meaning. The court allowed the defendant only to express belief about the law, so as to show state of mind. Otherwise, the judge declared that he would instruct the jury as to the law.

The Defense attorney pursued the strategy of convincing the jury that the defendant had no criminal intent and honestly believed the law does not require the defendant to file tax returns or pay income tax. Clearly, the jury did not believe the defendant.

The Government masterfully presented the case, and in cross and closing tied everything in the case together so that nobody with common sense could believe the defendant innocent.

As I watched the defendant’s nightmare unfold, I wondered what feat of logic possessed the judge to think it possible that a defendant who committed alleged crimes because of belief about the meaning or applicability of the law could possibly defend against the accusations without fully discussing the source of the belief that the law did not apply to the defendant.

After all, a trial over whether someone committed a violent murder seldom has to do with confusion over the law or its meaning. Rather, it has to do with the facts. But when the issue has first to do with the meaning and application of the law, shouldn’t the court allow the parties to present their related arguments?

Yes, I muse over the apparent injustice of a conviction in a court that allowed no discussion of the law or whether it applies or does not apply. Do not mistake my musing as confusion. I have absolutely NO confusion about one reality. If the defendant in a case like this cannot prove reliance on some authority (like written advice of a lawyer or CPA) suggesting that the defendant does not have to file a return or pay income tax, the jury will convict the defendant.

If the patriot or tax protester communities of the USA ever hope to beat the IRS/DOJ in a tax issue like this, they really need to take a different approach.

Until that happens, it seems to me most sensible to make oneself judgment-proof, spend one’s energy making lot of money, and organize one’s affairs so as to pay the minimum taxes possible. It does not seem to make sense to evade taxes or fail to file returns.

Oh, sure, the Defendant will file an appeal, and has already decided to buy the transcripts for $3500. Maybe the Circuit will decide the Court made a huge mistake. It could happen. Then what? A new trial?

Meanwhile, just imagine the overall expense of a 5-day trial, an appeal, and legal representation, the wear and tear on your psyche, the cost to your loved ones of your absence during a lengthy stay in federal prison, and having your income pillaged for years by the IRS insistence on your paying the tax plus penalties and interest.

I feel chagrin and disappointment at the guilty verdict. And so I want to give a piece of my mind to the Pied Pipers of the tax protester / honesty movement, and their dupes.

If you teach some theory of the law or Constitution that leaves earners believing they need not file returns or pay tax, you are a scoundrel if you do not also teach a proven method of beating the IRS and DOJ in federal court when they come after your earner for willful failure to file or for tax evasion, etc.

You who listen to the advice of the Pied Pipers should think long and hard before you up and quit filing returns or paying taxes. If you fail to heed my warning, and a Grand Jury indicts you as a result, do not plan on winning your case because you won’t have the opportunity to present your law theories in court.

Also, do not plan on your family standing beside you while you rot in federal prison. They will probably despise you for causing them such trouble, and maybe they will move on to find companions to replace you, companions who behave with better common sense.

You see, the courts have ruled against the tax protester arguments so assiduously that you have to deny reality to think you can get away with flouting the courts’ obvious interpretations of the laws. That means the notion that you do not owe a tax return or taxes for your work-a-day wages or commissions has become a POLITICAL ISSUE. You will NOT win it in federal court in today’s legal climate.

But you can win it politically if you organize your community to CHANGE the law. It should become obvious, even to the IRS and DOJ, that normal Americans do not owe income or wage tax because they do not engage in revenue taxable activities, or because they don’t fit into the class of persons to whom the income and wage tax laws apply.

Or you might want to support an effort to raise related issues in State Court. But you will not win in Federal Judicial Court with tax protester arguments because the court will never allow those arguments to escape your lips, certainly not within earshot of the jury.

One more point for those of you who feel absolutely convinced the tax code does not apply to you. Attend one or more tax crime trials in a federal court near you. You need the education.

I feel so terribly disappointed that a marvelously hard working and successful fellow American most likely faces a long prison sentence, and could have avoided it by requiring Tax Protester gurus to show proof of success in federal court prior to following their advice.


Author: Bob Hurt

See Consumer advocate helping borrowers in foreclosure save their homes and obtain compensation for their injuries.

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s