Your Citizenship and the IRS
Tuesday, August 28, 2007
According to the IRS, a taxpayer can be "out of compliance" for any number of reasons: checking the wrong box, taking a disputed deduction, misinterpreting a regulation, etc. Tax experts cannot agree among themselves what actions are "in" or "out of" compliance. Indeed, the IRS code is the most compli-cated and convoluted tax legislation in the world. Do you have reason to believe that you are "out of com-pliance with the law" from either a civil or criminal standpoint? Most of us are not tax experts and, there-fore, few of us would presumably be able to determine whether or not we are "in compliance" anyway.
Nevertheless, let's take notice of four recent cases where non-filers were found to be innocent of charges brought against them by the IRS: (1) on June 27, 2005, former IRS special agent Joseph Banister, CPA was acquitted by a jury in U.S. District Court in Sacramento (Case No. S-04-435, E.D. Calif.) of charges surrounding conspiracy to defraud and assisting with the improper filing of income tax returns-note: Joe Banister does not file an income tax return, (2) on August 8, 2003, Federal Express pilot Vernice Kuglin was acquitted by a jury in U.S. District Court in Memphis for willful failure to file a tax return (Case No. 03-20111, W.D. Tenn.), (3) on July 9, 2007, Tom Cryer of Shreveport was found not guilty for "willful failure to file an income tax return" by a 12-0 jury decision in U.S. District Court (Case No. 06-C-2176, W.D. La.), and (4) on May 12, 2006, the U.S. Attorney filed an emergency motion in U.S. Dis-trict Court in Peoria to drop the charges of failure to file and tax evasion against Robert Lawrence-just three days before his trial was to start (Case No. 06-CR-10019, C.D. Ill.). Isn't it curious that important verdicts like these are not widely reported in the standard reporters like the Federal Reporter (F.2d)? Nevertheless, the news media has picked them up, as a simple Google search will show. Take a look!
One term of interest for non-filers is the meaning of "United States Citizen". Here are a couple of key questions that we might all ask ourselves: (a) "Do you know of a statute that requires that all United States citizens who earn an income must file an Income Tax Return with the IRS?" and (b) "How do you contemplate the term "United States Citizen" as used in the Internal Revenue Code?"
That term was a source of significant controversy, resulting in the U.S. Supreme Court ruling In Re the Slaughterhouse Cases (1872), 83 U.S. 36 (Wall.) and many similar rulings afterwards. The Four-teenth Amendment (1868) had granted-rather than recognized-rights to life, liberty and property to certain people, mainly blacks and perhaps Chinese Coolies, who while having been born in one of the several States were not citizens and had no fundamental rights. They had been slaves-the property of other men. On the other hand, while white Americans born prior to passage of that Amendment were con-sidered citizens merely as a matter of being born in one of the States. Black people were not. That legal doctrine was one of the more repugnant and widely-known aspects of the famous decision Dred Scott v. Sandford (1857), 60 U.S. 393. The Fourteenth Amendment did not confer or grant upon white Americans any new right of citizenship or any fundamental right. White people already held such rights "naturally". That Amendment conferred citizenship and rights on recently freed slaves.
Let us recall that such racial issues (which strike us as so repulsive today) were commonplace in caselaw during the eighteenth and nineteenth centuries. For instance, all southern states had myriad cases and decisions on how much "black blood" a man could have and yet still be considered "white" (usually one-sixteenth). Like it or not, such decisions form a part of southern heritage.
The regulations for the U.S. tax code refer to United States citizens and imply the meaning of the term as contemplated in the Fourteenth Amendment. For example, it is interesting to note that in trying to interpret who owes the income tax under Title 26, the Code of Federal Regulations 1.1-1(c) states: "Who is a citizen. Every person born or naturalized in the United States and subject to its jurisdiction is a citi-zen." Compare that statement to the Fourteenth Amendment to the U.S. Constitution: "All persons born or naturalized in the United States, and subject to the jurisdiction thereof, are citizens of the United States and of the State wherein they reside." Do you think it is fair to say that the CFR is effectively quoting (or at least paraphrasing) the Fourteenth Amendment in its definition of a citizen of the United States? Do you think that CFR 1.1-1(c) thus implies the meaning of that term as interpreted by the U.S. Supreme Court in The Slaughterhouse Cases-which ruling has never been overturned? Is it fair to say, therefore, that having a rudimentary understanding of citizenship is important for a primary understanding who must file a tax return?
Considerations of citizenship should give all of us some food for thought. And they might even change the way you file your taxes.
According to the IRS, a taxpayer can be "out of compliance" for any number of reasons: checking the wrong box, taking a disputed deduction, misinterpreting a regulation, etc. Tax experts cannot agree among themselves what actions are "in" or "out of" compliance. Indeed, the IRS code is the most compli-cated and convoluted tax legislation in the world. Do you have reason to believe that you are "out of com-pliance with the law" from either a civil or criminal standpoint? Most of us are not tax experts and, there-fore, few of us would presumably be able to determine whether or not we are "in compliance" anyway.
Nevertheless, let's take notice of four recent cases where non-filers were found to be innocent of charges brought against them by the IRS: (1) on June 27, 2005, former IRS special agent Joseph Banister, CPA was acquitted by a jury in U.S. District Court in Sacramento (Case No. S-04-435, E.D. Calif.) of charges surrounding conspiracy to defraud and assisting with the improper filing of income tax returns-note: Joe Banister does not file an income tax return, (2) on August 8, 2003, Federal Express pilot Vernice Kuglin was acquitted by a jury in U.S. District Court in Memphis for willful failure to file a tax return (Case No. 03-20111, W.D. Tenn.), (3) on July 9, 2007, Tom Cryer of Shreveport was found not guilty for "willful failure to file an income tax return" by a 12-0 jury decision in U.S. District Court (Case No. 06-C-2176, W.D. La.), and (4) on May 12, 2006, the U.S. Attorney filed an emergency motion in U.S. Dis-trict Court in Peoria to drop the charges of failure to file and tax evasion against Robert Lawrence-just three days before his trial was to start (Case No. 06-CR-10019, C.D. Ill.). Isn't it curious that important verdicts like these are not widely reported in the standard reporters like the Federal Reporter (F.2d)? Nevertheless, the news media has picked them up, as a simple Google search will show. Take a look!
One term of interest for non-filers is the meaning of "United States Citizen". Here are a couple of key questions that we might all ask ourselves: (a) "Do you know of a statute that requires that all United States citizens who earn an income must file an Income Tax Return with the IRS?" and (b) "How do you contemplate the term "United States Citizen" as used in the Internal Revenue Code?"
That term was a source of significant controversy, resulting in the U.S. Supreme Court ruling In Re the Slaughterhouse Cases (1872), 83 U.S. 36 (Wall.) and many similar rulings afterwards. The Four-teenth Amendment (1868) had granted-rather than recognized-rights to life, liberty and property to certain people, mainly blacks and perhaps Chinese Coolies, who while having been born in one of the several States were not citizens and had no fundamental rights. They had been slaves-the property of other men. On the other hand, while white Americans born prior to passage of that Amendment were con-sidered citizens merely as a matter of being born in one of the States. Black people were not. That legal doctrine was one of the more repugnant and widely-known aspects of the famous decision Dred Scott v. Sandford (1857), 60 U.S. 393. The Fourteenth Amendment did not confer or grant upon white Americans any new right of citizenship or any fundamental right. White people already held such rights "naturally". That Amendment conferred citizenship and rights on recently freed slaves.
Let us recall that such racial issues (which strike us as so repulsive today) were commonplace in caselaw during the eighteenth and nineteenth centuries. For instance, all southern states had myriad cases and decisions on how much "black blood" a man could have and yet still be considered "white" (usually one-sixteenth). Like it or not, such decisions form a part of southern heritage.
The regulations for the U.S. tax code refer to United States citizens and imply the meaning of the term as contemplated in the Fourteenth Amendment. For example, it is interesting to note that in trying to interpret who owes the income tax under Title 26, the Code of Federal Regulations 1.1-1(c) states: "Who is a citizen. Every person born or naturalized in the United States and subject to its jurisdiction is a citi-zen." Compare that statement to the Fourteenth Amendment to the U.S. Constitution: "All persons born or naturalized in the United States, and subject to the jurisdiction thereof, are citizens of the United States and of the State wherein they reside." Do you think it is fair to say that the CFR is effectively quoting (or at least paraphrasing) the Fourteenth Amendment in its definition of a citizen of the United States? Do you think that CFR 1.1-1(c) thus implies the meaning of that term as interpreted by the U.S. Supreme Court in The Slaughterhouse Cases-which ruling has never been overturned? Is it fair to say, therefore, that having a rudimentary understanding of citizenship is important for a primary understanding who must file a tax return?
Considerations of citizenship should give all of us some food for thought. And they might even change the way you file your taxes.
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