INSTRUCTIONS: 5.1. Understand the Tax Litigation Process

“Better is the poor who walks in his integrity than one [a DOJ lawyer or IRS agent] who is perverse in his lips and is a fool.”
[Prov. 19:1, Bible, NKJV]

It is important that you thoroughly understand the process used to litigate a tax case long before you begin your tax litigation. One very good reason is that even if you know all the right arguments, are organized, and can write and present well to a jury, the government will attempt to try to defeat your case based on an obtuse technicality. In fact, they will use any excuse they can to avoid confronting the substantive issues of your claim or defense or putting themselves into the position where they have to argue against the merits of your arguments, because then their arguments will go on the court record for all to see if the judge decides to make your case published. The most common technicalities they try to destroy your case with are listed below, in descending order of frequency. The government will:

Claim that service of process on the government was insufficient so the case needs to be dismissed. That is why the Tax Fraud Prevention Manual tells you how to properly serve process upon the government in section 6.10.
Empty your assets and bank accounts out using a bogus Notice of Levy or Levy just before you go to trial so you can’t pay your lawyer. This is obviously grand theft, but it does happen. Sometimes, they will even steal your car while you are inside the courtroom. This happened to the client of one tax attorney we know. Thieves! The best way to guard against this is to protect all your assets before you launch your litigation so they can’t plunder your war chest.
Move to dismiss your case on the basis that it “fails to state a claim under which relief can be granted”. Section 6.8.1 of the Tax Fraud Prevention Manual describes in detail how to develop a claim upon which relief can be granted so you can avoid this pitfall.
Try to claim your arguments are frivolous and threaten you with a sanction for frivolous pleadings. At the same time, they will fail to specifically identify their meaning of frivolous, which incidentally is a violation of due process, and will refuse to specify exactly why your arguments are frivolous. We tell you in section ‎2.4.3 how to prevent charges of being “frivolous” and how to defend yourself against such charges.
Try to strike your motion (have it nullified and removed from the court record) because it is frivolous or incomplete or prejudices their case.
Delay resolution of the case by requesting continuances from the judge and dragging their feet during discovery and setting a trial date. This is designed to increase your legal expenses and test your patience and endurance in hopes that you will run out of money before the case goes to trial. The DOJ typically has sixty days to respond to your initial petition. If they don’t know how to respond because you petition is especially damning, they will file repeated applications with the court to extend their time to respond and they will do it every 60 days to delay things indefinitely.
Just before your case goes to trial if you are the plaintiff, they might try to indict you on criminal charges so your attention is diverted away from completing the case while you are in jail. That way, by the time you get out of jail, the statute of limitations will have run out and they won’t have to confront your issues. This very tactic was the one used against Lynne Meredith, author of one of the books we recommend called Vultures in Eagle’s Clothing and a famous tax freedom fighter. Lynne was raided illegally by the IRS in 1999 and filed a civil suit against the IRS for damages. She then depositioned 40 different IRS agents acting in pro per and had a very good chance of winning according to the judge, so much so that the IRS used the evidence they had stolen illegally from her during the raid and used it to try to convict her, getting her thrown in jail on criminal charges just before her civil case went to trial in 2002. The government conveniently gave the criminal case to a prejudiced judge who was on the IRS’ side and who said he wouldn’t grant her bail unless she shut down her business and her marketing efforts and her website, which cut off the cash flow she needed to defend herself.
The court or the opposing DOJ counsel might conveniently lose your pleadings for the case. They will wait until the trial or hearing and then use this as an excuse to keep delaying or continuing the trial or hearing. For this reason, every pleading that you file, you should keep TWO stamped and signed copies of everything so that you can produce another copy of the pleading for the judge. You should also ensure that the copies that you serve on opposing counsel do NOT have the court stamp or your signature. Instead put “/s/” where your signature goes on the copy of the pleading going to opposing counsel so that the judge can’t use their copy of your pleading. Opposing counsel like to doctor the pleadings you submit to prejudice your case by giving the doctored pleadings to the judge when he loses his. If you don’t sign or stamp copies you give to the opposing counsel, then the judge can’t use them and he has to use yours!
The judge may try to “pigeonhole” your case by refusing to rule properly on your case because it would or damage the government. After you have a trial or hearing, he has a certain amount of time to file a signed judgment which is called the “term of court”, and what typically happens to pigeonholed cases is that he will allow the term of court to expire, and then file an annotation on the minutes of the case saying what the judgment was, but not filing an actual judgment. Without an actual judgment, you can’t appeal and if he files a judgment late, and beyond the term of court, then the judgment is a void (null, without effect) judgment that you can challenge. Judges certainly know their judgments are void when filed beyond the term of court but they will be hoping that you don’t know this and that you will honor the void judgment anyway. They will then put ridiculous terms in the void judgment that will be especially burdensome or damaging for you.
Instead of signing the final judgment, the judge will use a rubber stamp to sign it or have his clerk sign it by direction or using the stamp, in which case it is a void judgment. He will do this to escape culpability for the judgment if he knows it is wrong or could subject him to personal liability. That way, if he is later sued for the injurious and illegal judgment, he can claim he didn’t sign it.
If the judge knows that his judgment would be obviously wrong or unjust or if it violates precedent or stare decisis, he may make the case unpublished so that it isn’t allowed to be referenced or cited as precedent for subsequent cases and so that his illegal handling of the case may be protected from disclosure. This is an obvious and illegal obstruction of justice and the judge could be sued for such acts, but it frequently happens anyway. Some courts are waking up to this injustice. For instance, the eighth circuit court of federal appeals recently declared unpublished opinions unconstitutional.
The judge may order you not to file any pleadings in the court any longer, and subject you to fines if you do. This technique is used to damage your right of free speech. The judge typically does this if you are a frequent or “vexatious” litigant who raises issues that are especially embarrassing or damaging for the government. The government did this to Rodney Stich so they could prevent being publicly embarrassed by his very damning evidence. Rodney Stich wrote an expose book on the FAA called Unfriendly Skies and was persecuted because he litigated to end corruption in the government that was exposed in the book.

You must expect that the government will be very devious, unfair, dishonest, evasive of the truth, and underhanded. That is the only way they have been able to perpetuate the fraud of the income tax and fool so many innocent Americans for so long. If they had told the truth consistently and in their publications, after all, the fraud of the income tax would have been exposed long ago and imploded on itself as it rightfully deserves. The IRS therefore has two faces that are completely opposite of each other in the most hypocritical show in existence. You must completely understand and more importantly respect both of these faces if you will defeat this beast:

The pleasant and cooperative one they show the media and Congress during hearings. They will brag, for instance, about how many phone calls they have answered in their “helpful” 800 line, how they are giving tax credits to the victims of 9-11, unclaimed refunds, and other such propaganda. They won’t even mention that their phone agents cannot be held liable for giving downright wrong advice, and that they refuse to identify themselves so you can’t sue them.
An evil, criminal, covetous, lying, good old boy network which behind the scenes is nothing but a gangster/Racketeer Influenced Corrupt Organization (RICO) ring that will do anything to keep the truth from coming out. They will scare the public by saying they “are hiring thousands”, as they did during 2001 on their website. Their number one mission is to keep sheep/people afraid and compliant so the extortion payments continue coming. They maintain the fear through automated anonymous threatening mail that constitutes stalking, harassment, and mailing of threatening communications in violation of 18 U.S.C. §876. They hide behind a cloak of anonymity and refuse to identify the names of their employees. They refuse to respond to FOIA requests about the persons handling your case so you can sue them for criminal wrongdoing. They silence and penalize and harass the whistleblowers and freedom fighters. They will put a spin on the story they release to the media about the persecution to deflect public ridicule for their misdeeds. They will wrongfully accuse and prosecute people for things that aren’t even crimes and which are outside of their territorial or subject matter jurisdiction, and most of the time they will win because the victims they choose very carefully will either be ignorant of the law and their rights, or have an ignorant counsel who is on the take and who volunteers to rig the case in order to avoid his next audit with the IRS behind the scenes. They will falsify and doctor a person’s IMF file to make it appear as though they have a legitimate liability and cover it up by refusing FOIA requests for the record. And they will try to make the person out as a “taxpayer” to shift the burden of disproving their liability in order to escape this fraud. This is why we show you how to request and decode your IMF file in section 3.4.5 .

The IRS chief counsel and the DOJ lawyers he works with in prosecuting tax crimes will do anything to win and the end justifies the means for these crooks. They will implement their legal oppression of your rights more successfully because you helped them win. How? They have a big war chest full of YOUR money which they STOLE to use against you, which prejudiced your rights in the process because you don’t have enough money to hire a lawyer to defend yourself against their extortion and legal and courtroom harassment. It’s a very vicious assault on your rights and your liberties and they hit you right in the weak spot you created by being a gullible citizen and volunteering to pay the very income tax that made you unable to afford a lawyer to later defend your right to stop paying it.

This section will therefore attempt to briefly summarize the tax litigation sequence and give you some succinct and helpful tips on where to focus your litigation efforts and more importantly, where NOT to focus your efforts so that you will have a better chance of winning. The content of this section was derived in part from a fascinating book entitled Tax Fraud & Evasion: The War Stories , written by a seasoned tax attorney and personal friend of ours, Donald Macpherson, who we affectionately refer to as “Capt Mac” in this section. His website is located at:

http://www.beatirs.com/

Capt Mac says in his fascinating book that the IRS fights with the same dirty guerilla tactics as those of the North Vietnamese Army (NVA) that he fought against during an 18 month stint in the Army in Vietnam as a Green Beret. His book is peppered with anecdotes of his war years that he effectively uses as metaphors to describe his tactics and battles against the IRS. The part of Mac’s book that talks about the trial sequence is pages 51 through 52. You can learn more about the sequence below by reading the Federal Rules of Civil Procedure, which we mention in the following section. Another helpful source to understand this process is found in the local rules for the specific court you will be litigating in, which we mention subsequently in section ‎2.5.5.5. If you would like to know more about the fundamentals of federal tax litigation, we refer you to a much more complete treatment found in chapter 11 of this book. The column entitled “Applicable Court Rule(s)” comes from either the Federal Rules of Civil Procedure (FRCP) or the court rules for the Ninth Circuit, California Southern District Court, in San Diego, Calif, which you can view on the web at:

http://www.casd.uscourts.gov/casd/Documents.nsf/Local+Rules?OpenView

Below is the typical process involved in litigating a criminal tax trial:

An effective weapon in tax cases is a jury trial, and especially if you have lots of evidence to show the jury from your administrative record on file with the IRS. If you followed our recommendations when you filed with the IRS, you will have plenty of evidence that is prejudicial to the government to talk about with the jury that the judge simply can’t keep out of evidence no matter how badly he wants to because it is part of your official IRS administrative record. 28 U.S.C. §2402 indicates as follows:

Subject to chapter 179 of this title, any action against the United States under section 1346 shall be tried by the court without a jury, except that any action against the United States under section 1346(a)(1) shall, at the request of either party to such action, be tried by the court with a jury

(a) The district courts shall have original jurisdiction, concurrent with the United States Court of Federal Claims, of:

(1) Any civil action against the United States for the recovery of any internal-revenue tax alleged to have been erroneously or illegally assessed or collected, or any penalty claimed to have been collected without authority or any sum alleged to have been excessive or in any manner wrongfully collected under the internal-revenue laws;

Therefore, if you are suing the government for wrongful assessment or collection of taxes, then you will get a jury trial if you specifically request one. You cannot sue the U.S. government without its permission, and that government will seldom give its permission to be sued. Instead, it is always best to sue the IRS agent who injured you by violating the tax laws. This conclusion is based on the theory that agents of the government can only act under the authority of law and when they violate the law, they become personally liable because they were acting outside their authority and committing illegal acts. See section 3.5.5.12 later for details on this. Not only is it dangerous, but it is also illegal to request a declaratory judgment from a judge in the case of a federal tax trial, according to 28 U.S.C. §2201(a). Therefore, you must either have a jury trial or you cannot litigate at all if you are litigating against the U.S. government.

One good trick you can use against just about any judge is to file an affidavit with the court indicating bias or prejudice of the judge against your case if your case involves income tax issues. This approach is described in 28 U.S.C. §144 as follows:

Whenever a party to any proceeding in a district court makes and files a timely and sufficient affidavit that the judge before whom the matter is pending has a personal bias or prejudice either against him or in favor of any adverse party, such judge shall proceed no further therein, but another judge shall be assigned to hear such proceeding.

The affidavit shall state the facts and the reasons for the belief that bias or prejudice exists, and shall be filed not less than ten days before the beginning of the term at which the proceeding is to be heard, or good cause shall be shown for failure to file it within such time. A party may file only one such affidavit in any case. It shall be accompanied by a certificate of counsel of record stating that it is made in good faith

We have an article off the Federal Judicial Center (FJC) website in which the federal judiciary analyzes the effectiveness of this approach at the following address:

You might want to include the affidavit with your original pleading or response to make sure it ends up in the court record and can be raised during trial in front of the jury. Your affidavit claiming bias on the part of the judge should mention the following facts:

It ought to be abundantly evident from the above that it’s nearly impossible not to be biased as a federal judge in a tax trial, which clearly violates 28 U.S.C. §455. Therefore, you can file an affidavit within ten days before the start of the hearing, and this may result in getting a different judge, or it just might bias the case in your favor, because the only kind of judge they can appoint who doesn’t have a conflict of interest is one who doesn’t pay income taxes!

Capt Mac has a few very wise cardinal rules of tax litigation that you should be very aware of as follows:

1. The all-too-familiar adage “ignorance of the law is no excuse,” does not apply to tax crimes and other crimes which the courts regard as so complex that they defy common understanding. Ignorance of the law is an excuse, at least so far as it goes to the issue of intent or “willfulness”. In other words, a defendant can demonstrate his good faith misunderstanding of the law. As well, he can develop a defense of reliance upon advice of others, especially professionals trained to so advise him: accountants, CPAs and attorneys. Thus, one way to insulate oneself from criminal prosecution in the area of uncertain law is to seek out and rely upon specific advice of an independent, competent counselor. Of course, for the defense to be viable, you must disclose the full facts, and once advice is given, you must “follow it to a T.”[1]

2. Focus on truth and justice and stay away from money issues. Take the offensive and strike first:

“twice armed is he who hath a cause that’s just and thrice armed is he who gets his blow in first.”[2]

3. Frame your whole case as a Petition for Redress of Grievances protected by the First Amendment to the U.S. Constitution. Such a petition cannot be fined or sanctioned because it is a right protected by the Constitution. Focus on the fact that such a petition assures an accountable government of limited power, and that the purpose is to protect our liberties.[3]

4. “The wheel that squeaks always gets the grease.”[4] The government chooses their battles carefully and goes after the most visible and publicized cases that will get the most media visibility to scare the rest of the fearful sheeple (docile people) in line.

5. Prosecuting tax protesters is the least desirable activity for most employees of the Department of Justice (DOJ). Consequently, the government typically puts the least experienced counsel on such trials. This can be a big advantage as it increases your chances of winning and it increases the chances that the government prosecutor will make some serious mistakes during your trial. Take advantage of such inexperience whenever you can.[5]

6.1. When the government begins its criminal investigation, it will send two agents to your house on a fishing expedition to gather evidence to nail you with. When they show up on your property, they will try to positively identify you before they ask questions. When they do so, do not admit anything about who you are and don’t answer to the name of the person they are looking for, but challenge their authority by demanding that they produce the law that authorizes them to be trespassing on private property outside of their territorial jurisdiction and subpoenaing you as a witness. Ask them to produce any evidence they have to date that leads them to believe they have “probable cause” to investigate for violations of law.[6]

6.2. During the government’s investigation of tax protesters, they will frequently encounter resistance from hostile witnesses in the accused circle of friends and family who will not provide information to them. Their favorite tactic against these persons is to indict them under obstruction of justice charges. However, in order for an obstruction of justice charge to stand, there must be: 1. A, a suspect; 2. B, a federal investigator; and 3. C, a witness. The suspect and the witness cannot be one and the same, as declared by the Fifth Circuit in U.S. v. Cameron, 460 F.2d 1394 (5^th Cir. 1972). That means that if you are the accused and you don’t provide information they want or you are the spouse of the accused, then you are both the suspect and the witness, and therefore cannot be cited for obstruction of justice.[7]

6.3. Government agents, usually from the Criminal Investigative Division (CID) like to show up unannounced and in pairs armed with guns, which is not authorized by the I.R.C. They will do so at the least convenient time to catch the suspect off-guard, in hopes that he will say something stupid. For instance, they will show up during non-business hours at the suspect’s home and will not call first, because they don’t want a hostile witness who will avoid them. If they catch you off guard on a fishing expedition for rope to hang you with, don’t give them anything, and don’t even identify who you are to them. As the suspect, you aren’t obligated to incriminate yourself in any way, even if it is only a civil rather than criminal investigation, as we pointed out in section 2.8.13.7 of the Great IRS Hoax.

7.1. “The cardinal rule of cross examination is: if you do not know the answer to the question, do not ask it!”[8]

7.2. “Anchor the witness before you lower the boom on him!” If you think a witness is lying or deceiving the jury, then use the following sequence:

7.2.4. Then after they say “no”, you provide or introduce evidence or testimony contradicting their testimony which you have carefully concealed.

7.2.5. After you have discredited a witness, go back to the government or its witnesses who you suspect knew of the lie and put them on the stand. As questions like:[9]

7.2.5.1. “Isn’t it true that if she testified falsely under oath, you didn’t as much as flinch?”

7.3. There are four types of witnesses the government’s DOJ attorneys will call at most tax trials: 1. Special Agents of the Criminal Investigation Division; 2. Revenue Agents from the Audit or Examination Division; 3. Revenue Officer from the Collection Division; 4. District Counsel, an IRS Attorney. Ask any of these witnesses the government calls how long they have been doing their job to gauge their experience level and credibility. Of the four types of witnesses, Special Agents and Revenue Agents will act as summary witnesses, summarizing for the jury the evidence and testifying that the total income was such and such amount, or the total tax due and owing was such and such amount. Most IRS personnel appear arrogant and haughty. Capt Mac refers to them as “pompous asses”. This is especially true of Special Agents who should be more confident, but hate finding the tables turned, and become paranoid. You can use this arrogance and paranoia to your advantage to discredit such witnesses by showing that their arrogance and selfishness creates at least a perception of conflict of interest and may lead them to exaggerate or falsify their testimony in the IRS’ favor.[10]

7.4. Government witnesses will frequently lie to advantage themselves by, for instance, saying that you said or did something that you didn’t, or distorting your words to deceive the jury. Therefore, it is always a good idea to tape record all discussions you have with government agents and have other witnesses present during questioning and to introduce the tapes and testimony of these witnesses into evidence if the government tries to distort or falsify your words to discredit or harm you.

8. A very good subject to focus on is “liability”. This term is very confusing and uncertain for the average American and even for most IRS employees. Try to apply the “void for vagueness” concept we introduced in section 5.11 of the Great IRS Hoax by telling the jury or judge that you believe the complexity and uncertainty surrounding the notion of “liability” is reason enough to negate the notion of “willfulness” in regards to charges of “willful failure to file” under 26 U.S.C. §7203 or “tax evasion” under 26 U.S.C. §7201.[11] Try to get a lot of mileage about the fact that this confusion, which exists even among seasoned veterans working at the IRS, is reason enough to negate the concept of willfulness. You can also focus on the lack of liability statutes that we mention in section 5.6.1 of the Great IRS Hoax. Point out that no IRS publication or form and no part of the thousands of pages in the Internal Revenue Manual defines what statute makes a person liable under Subtitle A of the Internal Revenue Code because there is no such liability! For instance, you can ask the government’s expert witnesses such questions as:

8.1. Point to the 1040 or 1040NR form and ask the witness where on the form it uses the term “liability”.

8.2. Ask: “Do you know of any Internal Revenue Service publication, form, regs or code which defines especially tax liability?”[12]

8.3. “Do you use the phrase ‘tax due’ and ‘tax liability’ interchangeably?” Then ask: “What is the difference between these terms?”

9.1. If you come to a court trial and your case is in the collection stage, take the bus or leave a attendant inside your car during the trial, because the IRS will try to stage a media event by seizing your car while you are in the courtroom, and call the media to film the event! For such a case, they can’t seize the vehicle if someone is inside.[13]

9.2. The government will try to make it look like you are a criminal by backing you into a corner so that you look like you won’t cooperate with them in providing information because you have some criminal act to hide. Their premise is that “Law abiding citizens do not hesitate to cooperate.”[14] Therefore, you should be as frank, open, and cooperative as you can. You can also use this rule in reverse against the government by grandstanding any instance of government cover-up, including protective orders by the judge, failure to answer questions during your deposition of IRS agents, failure to address issues during the administrative phase of your case, etc.

9.3. If you wish to ensure that your proposed jury instructions are accepted and used by the court, you should introduce into evidence at least one piece of evidence supporting the conclusions or premise of each of the instructions that you want to give.

9.4. If you are being prosecuted for tax evasion, one helpful cite is Gregory v. Helvering, 55 S.Ct. Rpt. 266 (1935), which says:[15]

The legal right “to decrease the amount of what otherwise would be his taxes or altogether avoid them by means which the law permits cannot be doubted.”

10. The role of an attorney representing the Citizen litigant is to be a “priest, a confidant, and bodyguard” and not a dictator or tyrant.[16].

In addition to Capt. Mac’s advice, we also recommend some additional precautions:

1. You cannot raise “diversity of citizenship” issues under 28 U.S.C. §1332(a)(3) if you don’t raise them in your initial pleadings or answer. This is very important! Therefore, your initial pleading or answer to the government’s motion should invoke constitutional “diversity of citizenship” Article III, Section 2 of the Constitution but not claim statutory diversity of citizenship pursuant to 28 U.S.C. §1332. Remember that the “State” defined in 28 U.S.C. §1332(d) is a federal territory or possession while the “State” contemplated in the Constitution are states of the Union: Two mutually exclusive things! You should provide an affidavit stating your citizenship, domicile, and tax status similar to that below and include your birth certificate and your “Certificate of non-citizen national status” obtained during the expatriation process we document earlier in section ‎2.5.3.13:

2. You should make a special appearance rather then an general appearance, and use the First Amendment Petition Clause as the basis for jurisdiction of the court over the wrongs of the government without subjecting yourself to the jurisdiction of the court. A safe way to do this and save time is to attach the free Federal Pleading Attachment found below to all of your pleadings and motions as an exhibit:

3. The best time to challenge jurisdiction is before you go do trial and in your initial pleading, but you can also do it during trial and in front of the jury.

4. You also might want to attach to your pleading a CD-ROM containing this book and the appropriate section of questions from our Tax Deposition area on our website, and get testimony from the U.S. Attorney and an IRS employee answering these questions in front of the jury. If you submitted this same CD-ROM with our book in the last filing you had with the IRS and demanded that it be added to your administrative record, then the judge cannot keep this very damning evidence out of evidence during the trial, because everything in your administrative record is always admissible as evidence.

5. When you file your pleadings, get TWO copies that are signed and stamped by the court in case either the judge or the opposing counsel lose theirs, which frequently happens. All copies of your pleadings that you serve on the opposing counsel should not have the court stamp or your signature. Instead, where your signature goes, you can put “/s/”. This will prevent the opposing counsel from doctoring your pleadings and giving them to the judge whenever the judge loses your pleadings. This is a devious method your opponent may use to prejudice your case.

6. During voir dire, or jury selection, you should take advantage of the opportunity to voir dire the judge as well. Ask him questions like the following:

6.5. “Do you think that disallowing persons who are not bar licensed attorneys from representing others does any of the following:”

6.5.1. “Adversely affects the supply of legal help and elevates the salaries of lawyers in general?”

6.5.3. “Creates a conflict of interest for lawyers who are licensed by making them fearful of having their license pulled if they don’t litigate in favor of the government?”

6.6. “If the ruling in this case would threaten your pay and benefits by setting a precedent that would be very damaging to the government or possibly even bankrupt the government, could you still objectively and justly handle this case and not suppress evidence or argument against the government?”

6.8. “Does Article III, Section 1 of the U.S. Constitution say that the salaries of judges may not be diminished while in office?”

6.10. “Does your payment of income taxes to the IRS subject you to control and manipulation by the executive branch and create a conflict of interest?”

[1] Tax Fraud & Evasion: The War Stores, Donald Macpherson, ISBN 0-9617124-6-5, p. 50.