The following cite establishes below that the government may not assert sovereign immunity to protect itself from acts that are outside the law.  It establishes why we should work hard to hold our public servants liable for violations of law in the illegal collection of federal income taxes.  :

“… the maxim that the King can do no wrong has no place in our system of government; yet it is also true, in respect to the State itself, that whatever wrong is attempted in its name is imputable to its government and not to the State, for, as it can speak and act only by law, whatever it does say and do must be lawful.  That which therefore is unlawful because made so by the supreme law, the Constitution of the United States, is not the word or deed of the State, but is the mere wrong and trespass of those individual persons who falsely spread and act in its name."

"This distinction is essential to the idea of constitutional government. To deny it or blot it out obliterates the line of demarcation that separates constitutional government from absolutism, free self- government based on the sovereignty of the people from that despotism, whether of the one or the many, which enables the agent of the state to declare and decree that he is the state; to say 'L'Etat, c'est moi.' Of what avail are written constitutions, whose bills of right, for the security of individual liberty, have been written too often with the blood of martyrs shed upon the battle-field and the scaffold, if their limitations and restraints upon power may be overpassed with impunity by the very agencies created and appointed to guard, defend, and enforce them; and that, too, with the sacred authority of law, not only compelling obedience, but entitled to respect? And how else can these principles of individual liberty and right be maintained, if, when violated, the judicial tribunals are forbidden to visit penalties upon individual offenders, who are the instruments of wrong, whenever they interpose the shield of the state? The doctrine is not to be tolerated. The whole frame and scheme of the political institutions of this country, state and federal, protest against it. Their continued existence is not compatible with it. It is the doctrine of absolutism, pure, simple, and naked, and of communism which is its twin, the double progeny of the same evil birth."
[Poindexter v. Greenhow, 114 U.S. 270; 5 S.Ct. 903 (1885)]

In order that we can have a basis to sue the government, our proceeding must proceed on the basis of equity and not law.  There is no legal basis in the Internal Revenue code that authorizes a “nontaxpayer” to sue, jail, or punish an agent for wrong doing.  Furthermore, if our greedy Congress wants to steal our money and exceed its jurisdiction, do you think it would pass a law to punish wrongdoers who try to collect taxes illegally?  We must therefore sue as a tort by suing the individual agent and not the state or government that he works for.  In doing so, we must show that the agent was acting outside the bounds of his delegated authority and outside the lawful bounds of his employment.  If the government proves that the agent was acting within his lawful authority, they will try to invoke what is called the Westfall Act, 28 U.S.C. §2679, and substitute themselves in place of the individual defendant under 28 U.S.C. §2679(d )(1), which makes the litigation against the government and not the agent.  This makes it far less likely that you will win because then you need permission from the government in order to sue and you will be litigating against an enemy with relatively unlimited resources compared to your own.

We must sue the individual IRS agent in equity jurisdiction and the state or government may not invoke sovereign immunity or the Eleventh Amendment and substitute itself for such a party, because the injuring party was acting outside the law and the authority of the state.  Here’s a cite from Poindexter v. Greenhow, 114 U.S. 270; 5 S.Ct. 903 (1885) confirming this:

“The second head of that classification is thus described: 'Another class of cases is where an individual is sued in tort for some act injurious to another in regard to person or property, to which his defense is that he has acted under the orders of the government. In these cases he is not sued as, or because he is, the officer of the government, but as an individual, and the court is not ousted of jurisdiction because he asserts authority as such officer. To make out his defense he must show that his authority was sufficient in law to protect him.' And in illustration of this principle reference was made to Mitchell v. Harmony, 13 How. 115; Bates v. Clark, 95 U.S. 204 ; Meigs v. McClung's Lessee, 9 Cranch, 11; Wilcox v. Jackson, 13 Pet. 498; Brown v. Huger, 21 How. 315; [114 U.S. 270, 288]   Grisar v. McDowell, 6 Wall. 363; and U. S. v Lee, 106 U.S. 196 ; S. C. 1 SUP. CT. REP. 240.”

Most of the remedies identified in the I.R.C. are for taxpayers, which most of us aren’t.  The most important exception to this rule is found in 26 U.S.C. §7426, which relates to Civil Actions by Persons Other than “Taxpayers”.  A person who is a "nontaxpayer", if he needs statutory standing to sue, should use 26 U.S.C. §7426 and may not use any section that refers to "taxpayers" as authority to sue in a civil action involving taxation.  The reasons for this is described in the article below:

Bouvier’s Law Dictionary, Vol. II, Third Revision, Eighth Edition, 1914, pp. 3230-3238 defines how to recover income taxes collected illegally and against a person under duress who is a nontaxpayer under the definition of “income tax”.

"Income tax:  In order to invoke the powers of a court of equity to restrain the collection of illegal taxes, the case must be brought within the well recognized foundations of equitable jurisdiction [* * *] and it must clearly appear not only that the tax is illegal, but that the property owner has no adequate remedy at law, and that there are special circumstances bringing the case under some recognized head of equity jurisdiction…” [Cites omitted.]”

As we pointed out in section 2.1, people who hold public office or work for the government are recipients of the public trust and must maintain the highest ethical and moral standards in all their dealings with the public as “public servants”.  In the legal field, this kind of responsibility is referred to as “fiduciary duty”.  Fiduciary duty is defined as follows:

Fiduciary duty:  A duty to act for someone else’s benefit, while subordinating one’s personal interests to that of the other person.  It is the highest standard of duty implied by law (e.g. trustee, guardian).
[(Black’s Law Dictionary, Sixth Edition, page 625)]

Fiduciary or confidential relation:   A very broad term embracing both technical and fiduciary relations and those informal relations which exist wherever one person trusts in or relies upon another.  One founded on trust or confidence reposed by one person in the integrity and fidelity of another.  Such relationship arises whenever confidence is reposed on one side, and domination and influence result on the other; the relation can be legal, social, domestic, or merely personal.  Heilman’s Estate, Matter of, 37 Ill.App.3d 390, 345 N.E.2d 536, 540.

A relation subsisting between two persons in regard to a business, contract, or piece of property, or in regard to the general business or estate of one of them, of such a character that each must repose trust and confidence in the other and must exercise a corresponding degree of fairness and good faith.  Out of such a relation, the law raises the rule that neither party may exert influence or pressure upon the other, take selfish advantage of his trust, or deal with the subject-matter of the trust in such a way as to benefit himself or prejudice the other except in the exercise of the utmost good faith and with the full knowledge and consent of that other, business shrewdness, hard bargaining, and astuteness to take advantage of the forgetfulness or negligence of another being totally prohibited as between persons standing in such a relation to each other.  Examples of fiduciary relations are those existing between attorney and client, guardian and ward, principal and agent, executor and heir, trustee and cestui que trust, landlord and tenant, etc.
[Black’s Law Dictionary, Sixth Edition, page 625]

Examples of persons who must act in a fiduciary capacity are all those persons who work at financial institutions, spouses, attorneys, government employees, and elected or appointed political officials.  If you attempt to prosecute an IRS employee for malfeasance, fraud, or illegal taking of taxes, it will be much easier to get a conviction with the jury if you focus on the fiduciary duty and high moral standard of care they have to the public at large.  These fiduciary duties give rise to a "contract" or "implied contract" cognizable under the Tucker Act, 28 U.S.C. §1491.  The contract is the Constitution, and the obligation to obey the contract arises out of the oath of public office taken by "public officers" pursuant to 5 U.S.C. §3331.  Remember item X in the Code of Ethics for Government Service, part of Public Law 96-303, which we talked about earlier in section 2.1 of the Great IRS Hoax.

“X.  Uphold these principles, ever conscious that public office is a public trust.”

Also remember the content of Executive Order 12731, Part 1, Section 101, item (a) in that same section:

   "(a) Public service is a public trust, requiring employees to place loyalty to the Constitution, the laws, and ethical principles above private gain.”

The federal courts agree with the above conclusions.  Below is one significant example of that:

The right to sue a tax collector to recover back taxes illegally exacted is derived from the common-law and does not depend on statute.  The rule is this.  If the payment is made voluntarily, there can be no recovery.  But if the payment is made under compulsion and with protest, sufficient to notify the collector that he will be sued to recover it back, he is personally liable whether he has covered the money into the treasury or not.

There is no statute of the United States expressly giving the right to sue a tax collector to recover back taxes illegally exacted, but the common law has been greatly modified by various statutes in this respect.  These statutes recognize the right and by necessary implication grant it as to suits against federal tax collectors.

“A statute will not be construed as taking away a common-law right existing at the date of its enactment, unless that result is imperatively required.” Texas & Pacific R. Co. v. Abilene Cotton Oil Co., 204 U.S. 426, 27 S.Ct. 350, 354, 51 L.Ed. 553, 9 Ann. Cas. 1075.  “All laws should receive a sensible construction.  General terms should be so limited to their application as not to lead to injustice, oppression, or an absurd consequence.  It will always, therefore, be presumed that the legislature intended exceptions to its language, which would avoid results of this character.”  U.S. v. Kirby, 7 Wall. 482, 486, 19 L.Ed. 278; Lau Ow Bew v. U.S., 144 U.S. 47, 12 S.Ct. 517, 36 L.Ed. 340; Jacobson v. Mass., 197 U.S. 11,  26 S.Ct. 358, 49 L.Ed. 643, 3 Ann.Cas. 765.”
[White v. Hopkins, 41 F.2d 159 (1931)]

It is quite common for IRS revenue agents to hide behind a cloak of secrecy and anonymity in order to evade being prosecuted for their misconduct.  For instance, IRS agents you will talk to on the phone will refuse to give their real last name, and refer to themselves only by number.  They do this because this makes them more difficult to prosecute for wrongdoing or bad advice.  These same agents also have a habit of putting fictitious names on the correspondence they sign for the same reason.  If you decide to prosecute one of these anonymous agents and find it difficult to track him or her down, be advised that an easier approach may be to just prosecute his supervisor, who is easier to identify.  For instance, you might prosecute the Commissioner of the Internal Revenue Service, for instance.  However, there must be a causal relationship between the wrongdoing committed by an IRS employee and his supervisor.  One such causal relationship, for instance, could be that the employee was not properly trained or supervised and therefore was either negligent or malicious.  Below is what one federal court said about this subject:

The Defendants, as IRS agents, are not prosecutors, nor are the cases granting absolute immunity to prosecutors helpful to them.  Rather, their duties are merely investigative.  They gather facts and refer cases to prosecutors, who then decide whether or not to prosecute.  Considering these duties, an IRS agent is analogous to a complaining witness at common law—both are detached from the judicial process by the interposition of the prosecutor.  For this reason, a complaining witness was not entitled to absolute immunity at common law. [Cites omitted.]  It follows that the Defendants, IRS agents, should not be entitled to absolute immunity on the same basis.

Accordingly, we find that when IRS agents investigate and refer cases for criminal investigations, they do not enjoy absolute immunity for their actions.  Accord, Cameron v. I.R.S., 773 F.2d 126, 128 (7^th Cir. 1985) (IRS agents are not entitled to absolute immunity).

A supervisor can be held liable for civil rights violations where his “conduct is causally related to constitutional violation committed by his subordinate.”  Greason v. Kemp, 891 F.2d 836 (citing, Wilson v. Attaway, 757 F.2d 1227, 1241 (11^th Cir. 1985)) (personal participation is not required to impose liability for a civil rights deprivation.  There must be some causal connection between the actions of the superior and the alleged deprivation);  see also Rizzo v. Goode, 423 U.S. 362, 375-76, 96 S.Ct. 598, 606 L.Ed.2d 561, 572 (1976) (for liability under §1983, supervisory officials have direct responsibility for actions of officials who had engaged in misconduct).
[Heller v. Plave, 743 F.Supp. 1553 (1990)]

When the IRS prosecutes individuals for tax evasion, they use the following criteria, right from their Internal Revenue Manual Part 9, Chapter 1, Section 3 found at http://www.irs.gov/irm/part9/ch01s03.html:

9.1.3.3.2.2  (08-11-2003)
IRC §7201—
Elements of the Offense

1. The elements of the offense of willfully attempting in any manner to evade or defeat any tax or the payment of any tax are the same, but the courts have interpreted the terms differently in some instances. The differences are noted in the explanation. The elements of the offense are:

   1. Additional tax due and owing.

   2. An attempt in any manner to evade or defeat any tax.

   3. Willfulness.

9.1.3.3.2.2.2  (08-11-2003)
Attempt to Evade or Defeat Any Tax

1. The substance of the offense under IRC 7201 is the term "attempt in any manner" . The statute does not define attempt, nor does it limit or define the means or methods by which the attempt to evade or defeat any tax may be accomplished.

2. However, it has been judicially determined that the term "attempt" implies some affirmative action or the commission of some overt act. The actual filing of a false or fraudulent return is not requisite for the commission of the offense though the filing of such a return is the usual attempt to evade or defeat the tax. A false statement made to Treasury agents for the purpose of concealing unreported income has also been judicially determined to be an attempt to evade or defeat the tax.

3. The willful omission of a duty or the willful failure to perform a duty imposed by statute does not per se constitute an attempt to evade or defeat. However, a willful omission or failure (such as a willful failure to make and file a return) when coupled with affirmative acts or conduct from which an attempt may be inferred would constitute an attempt. In the case of Spies v. United States , the Supreme Court gave certain illustrations of acts or conduct, which may infer "the attempt to evade or defeat any tax" ; such as:

   1. Keeping a double set of books.

   2. Making false entries, alterations, invoices, or documents.

   3. Destroying books or records.

   4. Concealing assets or covering up sources of income .

   5. Handling one's affairs to avoid making the records usual in transactions of the kind.

   6. Any conduct, the likely effect of which would be to mislead or to conceal.

4. Attempt does not mean that one whose efforts are successful cannot commit the crime of willful attempt. The crime is complete when the attempt is made and nothing is added to its criminality by success or consummation, as would be the case with respect to attempted murder. It has been held that "attempts cover both successful and unsuccessful endeavors or efforts." As the courts have stated, "The real character of the offense lies, not in the failure to file a return or in the filing of a false return, but rather in the attempt" to evade any tax.

5. It is well settled that a separate offense may be committed with respect to each year. Therefore, an attempt for 1 year is a separate offense from an attempt for a different year.

6. There may also be more than one violation in one year resulting from the same acts such as the willful attempt to evade the payment of tax and the willful attempt to evade tax. Likewise, there may be charged a willful attempt to evade tax and a willful failure to file a return for the same year.

7. In an attempt to evade or defeat the payment of any tax, the mere failure or willful failure to pay any tax does not constitute an attempt to evade or defeat the payment of any tax. The comments set out above with respect to attempts also apply to this offense. The attempt implies some affirmative action or the commission of some overt act. Examples of such action or conduct relating to the attempted evasion of the payment of the tax are found in the Giglio case. These are:

   1. Concealing assets.

   2. Reporting income through others.

   3. Misappropriating, converting, and diverting corporate assets.

   4. Filing late returns.

   5. Failing to withhold taxes as required by law.

   6. Filing false declarations of estimated taxes.

   7. Filing false tentative corporate returns.

9.1.3.3.2.2.3  (07-29-1998)
Willfulness

1. The attempt in any manner to evade or defeat any tax must be willful. Willfulness has been defined as an act or conduct done with a bad or evil purpose. Mere understatement of income and the filing of an incorrect return does not in itself constitute willful attempted tax evasion. The offense is made out when conduct such as exemplified in the Spies case (supra) is present.

2. Courts have held that disbursement of available funds to creditors other than the government , or to corporate stockholders is not of itself an attempt to evade or defeat payment of taxes.

3. This definition of willfulness applies to all Title 26 offenses where willfulness is an element, unless stated otherwise.

Why is this relevant when applied to prosecuting the IRS and revenue officers?  Because we can apply the same standards for concealment and fraud against the IRS when prosecuting them for breach of fiduciary duty.  We can then focus on “extortion under the color of office” and “theft” in front of the jury and apply nearly the same standards.  We therefore summarize the elements that would make up a good claim of breach of fiduciary duty:

Elements of “extortion under the color of office”:

1.   A refund was due and owing or a lack of liability should have been disclosed but wasn’t.

2.   There was an attempt to evade or defeat the refund or disclosure of the laws and lack of liability that would facilitate the refund or lack of liability to file.

3.    Willfulness.

Attempt to evade or defeat the truth about lack of liability:

1.  A false statement made by Treasury agents for the purpose of concealing lack of liability or lawful authority is a clear attempt evade or defeat the truth.

2.  The willful omission of a duty or the willful failure to perform a duty imposed by the fiduciary relations ships does not per se constitute an attempt to evade or defeat the truth about nonliability. However, a willful omission or failure (such as a willful failure to make or respond to a disclosure of the truth about nonliability) when coupled with affirmative acts or conduct from which an attempt may be inferred would constitute an attempt.

A.  Making false entries, alterations, invoices, or documents.

B.  Destroying books or records.

C.  Concealing laws or covering up their implementing regulations or lack thereof.

D.  Handling one's affairs to avoid making the records usual in transactions of the kind.

E.  Any conduct, the likely effect of which would be to mislead or to conceal.

3.  Attempt does not mean that one whose efforts are successful cannot commit the crime of willful attempt. The crime is complete when the attempt is made and nothing is added to its criminality by success or consummation, as would be the case with respect to attempted murder. It has been held that "attempts cover both successful and unsuccessful endeavors or efforts." As the courts have stated, "The real character of the offense lies, not in the failure to disclose the truth, but rather in the attempt" to evade disclosing lack of liability for any tax or provide the refund requested.

4.  In an attempt to evade or defeat the payment of any tax, the mere failure or willful failure to pay any tax does not constitute an attempt to evade or defeat the payment of any tax. The comments set out above with respect to attempts also apply to this offense. The attempt implies some affirmative action or the commission of some overt act. Examples of such action or conduct relating to the attempted evasion of the payment of the tax are found in the Giglio case. These are:

A.   Concealing laws or regulations or discussing either.

B.  Reporting information or rendering assistance through agents who are not qualified or who do not know the truth about the law to prevent the subject of the law from coming up in interactions with a Citizen.

C.  Misappropriating, converting, and diverting private assets for personal gain or as illegal tax revenues (extortion under the color of office).

D.  Filing inadequate or incomplete responses to taxpayer inquiries about their lack of liability..

E.  Completely ignoring or not responding to taxpayer affidavits of fact about their lack of liability and not refuting such nonliability with quotes of the law.

F.  Failing to refund taxes not owed as required by law.

G.  Sending false or frivolous CP notices in response to legitimate inquiries by Citizens about their liability and in fulfillment of their rights to due process under the Administrative Procedures Act, 5 U.S.C. 556(d).

This is good stuff for stirring up mud on your favorite IRS agent when you drag his ass in court, folks!  We invite you to add to this.

Judicial jurisdiction over agency acts and omissions that adversely affective substantive and procedural due process rights are prescribed by 5 U.S.C. §702 and 28 U.S.C. §1361:

5 USCS § 702  (2002)

§  702.  Right of review

A person suffering legal wrong because of agency action, or adversely affected or aggrieved by agency action within the meaning of a relevant statute, is entitled to judicial review thereof. An action in a court of the United States seeking relief other than money damages and stating a claim that an agency or an officer or employee thereof acted or failed to act in an official capacity or under color of legal authority shall not be dismissed nor relief therein be denied on the ground that it is against the United States or that the United States is an indispensable party. The United States may be named as a defendant in any such action, and a judgment or decree may be entered against the United States: Provided, That any mandatory or injunctive decree shall specify the Federal officer or officers (by name or by title), and their successors in office, personally responsible for compliance. Nothing herein (1) affects other limitations on judicial review or the power or duty of the court to dismiss any action or deny relief on any other appropriate legal or equitable ground; or (2) confers authority to grant relief if any other statute that grants consent to suit expressly or impliedly forbids the relief which is sought.

---

28 USCS § 1361 (2002)

§ 1361. Action to compel an officer of the United States to perform his duty

The district courts shall have original jurisdiction of any action in the nature of mandamus to compel an officer or employee of the United States or any agency thereof to perform a duty owed to the plaintiff.

These two sections work together. Original jurisdiction for judicial review of agency actions under 5 U.S.C. §§ 701-706 is vested in circuit courts; the mandamus section at 28 U.S.C. § 1361 was enacted to expand jurisdiction to district courts. The scope of judicial authority is prescribed by 5 U.S.C. § 706:

5 USCS § 706 (2002)

§ 706. Scope of review

 

To the extent necessary to decision and when presented, the reviewing court shall decide all relevant questions of law, interpret constitutional and statutory provisions, and determine the meaning or applicability of the terms of an agency action. The reviewing court shall--

  (1) compel agency action unlawfully withheld or unreasonably delayed; and

  (2) hold unlawful and set aside agency action, findings, and conclusions found to be--

   (A) arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law;

   (B) contrary to constitutional right, power, privilege, or immunity;

   (C) in excess of statutory jurisdiction, authority, or limitations, or short of statutory right;

   (D) without observance of procedure required by law;

   (E) unsupported by substantial evidence in a case subject to sections 556 and 557 of this title or otherwise reviewed on the record of an agency hearing provided by statute; or

   (F) unwarranted by the facts to the extent that the facts are subject to trial de novo by the reviewing court.

In making the foregoing determinations, the court shall review the whole record or those parts of it cited by a party, and due account shall be taken of the rule of prejudicial error.

If you would like further information about how to the government and the IRS agent who trespassed on your rights, read the free book on our website entitled Secrets of the Legal Industry, by Richard Luke Cornforth at: