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."
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
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”.
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:
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)]
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,
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
“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 (7th 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 (11th 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:
Elements of the Offense
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:
Additional tax due and owing.
An attempt in any manner
to evade or defeat any tax.
Attempt to Evade or Defeat Any Tax
The substance of the offense
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
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.
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
Keeping a double set of books.
entries, alterations, invoices, or documents.
Destroying books or records.
or covering up sources of income .
Handling one's affairs to
avoid making the records usual in transactions of the kind.
Any conduct, the
likely effect of which would be to mislead or to conceal.
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.
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.
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.
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.
Reporting income through
and diverting corporate assets.
Filing late returns.
Failing to withhold taxes
as required by law.
Filing false declarations
of estimated taxes.
Filing false tentative
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.
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.
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.
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:
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.
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.
5 USCS §
§ 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.
§ 1361 (2002)
§ 1361. Action to compel an officer of the United States to perform
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. 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
(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
(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
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: