IRS vs. KUGLIN (IRS Loses in Memphis: Is Income Tax History?)

Sierra Times ^ | August 10, 2003 | Carl Worden

[ninenot]

Forget the war in Iraq, Afghanistan and our excellent adventure in Liberia. Forget about Kobe, Arnold, Arriana, Scott and Laci. The biggest news of the entire week is that on August 8, 2003, the IRS was unable to convince a jury in Memphis, Tennessee that the Federal Tax Code requires the citizens to pay individual income taxes. I kid you not.

I watched as many Sunday news programs as I could possibly stand, and I didn't hear a single mention of the IRS' debacle in Memphis. If you ever had doubts about the mainstream media being controlled by the federal government, doubt no more.

For those not already aware, FedEx Pilot Vernice Kuglin began studying the IRS Code some years ago, and was simply unable to find anywhere in the code that she was required to pay federal income taxes.

And here's the most remarkable part: Back in 1995, Kuglin wrote letters in good faith to the IRS, asking them to show her where the Tax Code requires individual citizens to pay federal income taxes. Incredibly, the IRS never answered a single one of her letters!

As she studied the facts, laws and related documents more, Kuglin became convinced that, regardless of the IRS' failure to respond one way or the other, she was exempt from paying federal income taxes. So, Kuglin filled out W-4 forms showing 99 exemptions, and turned them in to her employer. Doing that meant Kuglin got to take home almost all of her paycheck each payday, instead of what was left after the feds ravaged it.

The IRS went after Kuglin for six counts of tax evasion on $920,000.00 income, and for filing "false" W-4 forms, charges that could have put the 58 year-old Kuglin in federal prison for up to 30 years and cost her 1.5 million in fines.

Apparently, things didn't go quite the slam-dunk way federal prosecutor Joe Murphy thought they would. My money says the IRS wishes they had never gone after Kuglin at all. In fact, after the jury returned not guilty verdicts on all counts, Murphy is reported to have demanded that the judge order Kuglin to file her forms, pay her taxes and "obey the law". The judge reportedly replied, "Sir, I don't work for the IRS."

Now pinch yourself and review this astonishing turn of events: A highly trained and educated federal prosecutor in Memphis was unable to convince 12 American citizens that Vernice Kuglin was required to pay federal income taxes. He was clearly unable to produce a single section of the Tax Code to that end, and the jury was unanimous in clearing Kuglin of all charges against her. If the foregoing was not so, Kuglin would have been convicted.

Jurors tend not to be very sympathetic with tax scofflaws, since each one of them is also a taxpayer and they understandably feel resentment towards anyone not paying "their fair share". So in order for this federal jury to completely vindicate Kuglin, the government's failure to prove their case against her had to have been clear and unequivocal!

I haven't read the trial transcript yet, but I must assume the federal prosecutor at least tried to twist some vague and ambiguous section of the Tax Code to make it look like it applied to Kuglin. I don't know that, but I'll bet he tried. What else could he use to prosecute her with?

Thanks to the IRS' arrogance and stupidity, and Kuglin's refusal to plead to lesser charges, Kuglin accomplished what Bob Schultz and the other "tax protesters" had been denied all along: To force the IRS into a public debate and to answer the question of whether or not the Tax Code requires an individual to pay personal income taxes. Kuglin and her two attorneys, Larry Becraft and Robert Bernhoft, have unequivocally forced the IRS to show its hand, and 12 judges hearing that debate ruled the answer to be "NO".

I think it's time for everyone reading this to send a very polite letter to the IRS, telling them they read about the case in Memphis, and is it true that there is no section in the U.S. Tax Code that requires an individual citizen to pay federal income taxes?

Don't be threatening in any way, or announce that you plan to stop paying federal income taxes. This request is for your personal edification, and you just simply want to know the truth.

Like Kuglin, you probably won't get an answer back, but just to prove you sent the letter and that they received it, be certain to send the letter via certified U.S. Mail, with a return receipt requested. When you get that receipt back, staple it to a copy of the letter you sent the IRS, and put it somewhere real secure, like a personal safe or bank deposit box.

I don't have to explain why, now do I?

Now, how many calls to FOX' Bill O'Reilly will it take to convince him we know he's doing a spin in the No-Spin Zone by sitting on this story? Start e-mailing O'Reilly at oreilly@foxnews.com, and be sure to give him your city and state. He's gonna love me.

Carl F. Worden

[Veracious Poet]

"Just twelve people who saw that there is nothing in the law that made this lady liable for any taxes to the government."

Actually, I don't think that the jury found her not liable for taxes, just innocent of tax-evasion charges...

She did make every attempt to allow the IRS to show where she was liable for taxes, but the irS dropped the ball.

Moreover, I have a feeling the juries verdict will be over-turned on appeal.

[StolarStorm]

Thanks. The fair tax proposal sounds great to me. My only point was, that its pretty damn scummy for someone to avoid paying their taxes when the rest of us are paying. I hope this pilot is sued into the poor house. She's just trying to game the system... even though it is admittedly a bad system.

[null and void]

OTOH Maybe she can save us all.

Would be nice to have a new LEGAL tax system that was fair, even and concise.

Or do you think the solution is even more tax codes, that we are all expected to be intimately familiar with...

[ninenot]

Not really. There will be other cases in other Districts; but the facts and circumstances are what prevails, not precedent, until you get a Court of Appeals ruling that is generalized. That CofA ruling applies to the ENTIRE District. Only SCOTUS establishes national precedent.

[ninenot]

Well--it only took them 10 days to organize Dealy Plaza, eh?

[Veracious Poet]

You wrote:
- Well--it only took them 10 days to organize Dealy Plaza, eh?

Actually, the real threat started six months before, when JFK started the process of taking the power away from the Federal Reserve (BTW, which is a privately owned entity).

"He moved in this area on June 4, 1963, by signing Executive Order 11,110 which called for the issuance of $4,292,893,815 (4.3 trillion) in United States Notes through the U.S. treasury rather than the traditional Federal Reserve System. That same day, Kennedy signed a bill changing the backing of one and two-dollar bills from silver to gold, adding strength to the weakened U.S. currency."

"Kennedy’s comptroller of the currency, James J. Saxon, had been at odds with the powerful Federal Reserve Board for some time, encouraging broader investment and lending powers for banks that were not part of the Federal Reserve system. Saxon also had decided that non-Reserve banks could underwrite state and local general obligation bonds again weakening the dominant Federal Reserve banks."

[Fledermaus]

No, the jury in the O.J. case just proved they were morons.

[null and void]

"He moved in this area on June 4, 1963, by signing Executive Order 11,110 which called for the issuance of $4,292,893,815 (4.3 trillion) in United States Notes

I remember them. Red treasury seal and serial numbers...

[Fledermaus]

You are correct Tauzero. The case didn't mention the fact she paid her FICA taxes, pays sales taxes, pays gasoline taxes, excise taxes, etc.

Now, while I don't think she's correct on the actual paying of income taxes, the IRS doesn't really have the authority to force us to WITHHOLD those taxes on their basis. The case revolved around her filing a W-4 and claiming enough exemptions to stop the FIT withholding. In theory, the IRS says you have to have 90-92% of your tax liabilty "withheld" on the pay basis (weekly, semi-monthly, etc.). But they don't have legal authority, or the true enforcement capability to audit all W-4 filings which are not sent to any government agency and not enforced and held only by employers for tax table purposes.

Thus, they created the 90% "rule" to try and force people into withholding. Since they can't audit all the W-4's, which is nothing but another useless government waste of time like the I-9 form, they randomly check the amount you withhold against what your liability.

When someone like this pilot shows up as paying their liabilty completely by April 15th of the next year, they will flag you. But she never paid anything.

So to have the IRS lose on the issue of a W-4 makes me think they just argued the wrong case. Those that pay nothing don't normally win. So I think either the IRS messed up or the news reporting on this story is horribly uneducated.

One reason is I heard on a talk show today that her defense also used an argument that corporate income taxes are based on net profit and not income and she claimed she had "no profit" either since she spent most all of what she made.

I'm still looking into this, but it doesn't seem like a traditional 16th amendment case.

Of course, all the IRS has to do is threaten FedEx simply because, through the use of the W-4 (and the I-9 and other forms) are semi-responsible for it's enforcment. Thus, they should have known a pilot with her income couldn't declare enough exemptions to stop the FIT withholding. If they are brought into the case on appeal, they could just tell her to pay up are lose her job.

This is just based on the law and not the principle. I hate withholding and forcing business to police for the government. But I'd rather not the IRS go from a tax collecting agency to an accounts receivable agency. You think they are brutal now?

[ovrtaxt]

She's just trying to game the system... even though it is admittedly a bad system.

On the contrary, I think she's putting her neck on the line as a guinea pig, so to speak. Her lawyer, Larry Becraft, is an anti income-tax crusader from way back. This didn't just happen by accident. They are trying to dismantle the 'legality' of the tax code. We are all the beneficiaries of her actions.

If you like the fairtax, write your congressman a letter (not email) and tell him to consider becoming a cosponsor, joining with Tom Delay and 32 other representatives. With enough support, it is doable.

[Natural Law]

I think I can smell the tea being dumped in the harbor. I hope that she sets a precedent for all of us. Like most I have no objections paying taxes for legitimate government expenditures, but I resent a confiscatory taxation policy to support spending on unnecessary or unconstitutional programs. Maybe, just maybe this will help to make the government live within its means and budget the taxes it does collect for essential functions.

[Phaedrus]

bump

[meatloaf]

Do you really believe the IRS wouldn't have already gone after everything the woman has? FWIW, the woman never "voluntarily" accessed herself by filing a tax return. That doesn't mean that the IRS can't file a return for her which they probably did to determine her liability.

The point remains why didn't the IRS lien her before the trial? There's something to this that doesn't make sense. Since she's not guilty of tax evasion that leaves what she did as tax avoidance ... which is legal.

[des]

It does sound like jury nullification.

[HiTech RedNeck]

Moreover, I have a feeling the juries verdict will be over-turned on appeal.

An appellate court can't overturn an acquittal, unless something went wrong with how the case was presented.

[tame]

Beautiful. Thanks for posting this!

[Baseballguy]

I think I will go into Law this stuff is soo cool.

[webstersII]

"Do you really believe the IRS wouldn't have already gone after everything the woman has?"

Interesting question. But I don't believe they will leave her alone after losing this battle, either.

"Since she's not guilty of tax evasion that leaves what she did as tax avoidance ... which is legal."

Tax avoidance applies to legally minimizing the tax that you owe, not stating that you don't owe any, which is what she did. The avoidance issue applies to people who file a 1040 form, which she did not.

The real question is whether or not she has any tax liability. If the IRS can't show a law which proves that she has tax liability, then maybe she will win the final round. But I think that has been tried before, people saying that wages are not income, for example. But wages have been considered income all the way back to when the first income tax was collected, so there is alot of history and precedent here.

[tdadams]

This is hardly a sober, authoritative source.

I know the old grey lady ain't as credible as she used to be, but I don't know of anyone who's yet calling it a tabloid.