TAX, if you dont know read this
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TAX, if you dont know read this
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http://www.ajc.com/news/content/news...3notaxpay.html
Pilot acquitted of tax evasion after IRS doesn't answer letters
The Associated Press
MEMPHIS, Tenn. -- A woman who said she refused to pay federal income taxes because the IRS didn't respond to her inquiries about tax law has been acquitted of tax evasion.
Vernice Kuglin, a 58-year-old FedEx pilot, had been charged with six counts of tax evasion. Had she been convicted by the federal court jury, she would have faced up to 30 years in prison and $1.5 million in fines.
"I feel justified," she said after Friday's verdict.
Kuglin said she began to question the federal tax system about 10 years ago and wrote the Internal Revenue Service twice in 1995 with questions about what law required her to pay taxes. She said she didn't get a response. On Dec. 30, 1995, she filed a withholding statement directing that no taxes be withheld from her pay.
The government accused Kuglin of filing false W4 forms from 1996 to 2001, during which time she earned $920,000 in income. Normal withholding would have been about $250,000.
Federal prosecutor Joe Murphy said during closing arguments that Kuglin did have an opportunity to sit down and discuss her situation with the IRS, "and she didn't."
The five-day trial did not resolve whether she must make the tax payment.
"I think it is safe to assume the IRS will attempt civil collection, but she is not guilty of tax evasion," said defense attorney Robert Bernhoft of Milwaukee.
Larry Becraft, another defense attorney from Huntsville, Ala., said after the verdict that the federal tax code is confusing and "at best is a walking due process violation."
Becraft, who helped win acquittals for 17 defendants in another Memphis tax trial 12 years ago, said the letters from his client to the IRS showed a lack of criminal intent to evade tax laws and that she sincerely believed her conduct was proper.
"The whole thing could have been resolved if the government had simply answered her questions," Becraft said. "It didn't happen. I made an argument to the jury that an American has a right to ask the government for answers."
IRS spokeswoman Nancy Mathis was unable to state agency policy on responding to letters asking it to specify the law that makes people liable for income taxes.
She said the IRS had posted various items on its Web site and issued news releases stating that taxes are mandatory. The first words of the Internal Revenue Code are "a tax is hereby imposed."
When asked if she planned to start paying federal income taxes again, Kuglin said: "I will pay all the taxes for which I am liable."
She said she believes the 16th amendment to the Constitution -- giving Congress the power to collect income taxes -- and the Internal Revenue Code are constitutional, "but I also feel there is a gross misapplication of the individual income tax laws by the IRS."
Kuglin said she hopes to resume flying for the Memphis-based cargo airline as soon as the government returns her passport, which was seized after her indictment this year.
*********************************************
http://www.sierratimes.com/03/08/10/...vs._KUGLIN.htm
IRS vs. KUGLIN
By Carl F. Worden
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
want to learn more? http://www.861.info/
THE FEDERAL INCOME TAX DECEPTION
Government lawyers at the Treasury Department, DOJ, White House, and many other federal agencies are desperately trying to prevent the public from seeing the evidence in the law that proves that most Americans (those whose income is derived only from domestic commerce) do NOT owe federal income taxes.
The TRUTH is hidden in convoluted (but correctly written) REGULATIONS under Subchapter N, Section 861. This critical part of the law proves that if an American does not have income derived from engaging in INTERNATIONAL commerce, then their income is NOT TAXED under federal law.
The written law does not lie and the evidence in over 80 years of the law that comes to the same conclusions will not go away.
In order for someone to determine his federal income tax liability (if any), he must first determine his taxable income, using the sections of the law that exist for that purpose. The federal income tax is imposed on the "taxable income" of individuals, not all income. To get "taxable income," deductions are taken from "gross income," which is generally defined in 26 USC § 61.
BUT there is nothing in the 26 USC § 61 statute or the related regulations (26 CFR §§ 1.61-1, 2) that tells the reader WHO is receiving the income or WHERE it comes from. In other words, this general part of the law does NOT contain the specific details that will allow the reader to determine if their income is taxable or not. To find that out, they have to go thousands of pages deeper into the law to Subchapter N, which is entitled, "Tax Based on Income From Sources Within or Without the United States."
The specific legal language that is critical for the reader to determine WHEN income becomes "gross income" is found deep in the regulations under Section 861. 26 CFR §§ 1.861-1, 1.861-8(a)(1) and 1.863-1(c) of those regulations require every person to use Section 861 and its regulations to determine taxable domestic income. These regulations specifically say that a person's taxable income, "from sources within or without the United States" shall be determined under the rules of 26 CFR § 1.861-8 and following, making it mandatory that these regulations be used to do so.
What SPECIFICALLY do those regulations say? They say that there are only THREE situations where a person can have "taxable income." Aside from rules about specific federal possessions, international and foreign sales corporations, and certain foreign tax credits, the taxable types of commerce from which "taxable income" must be derived (which are the SAME types of commerce that are specified in over 80 years of predecessor statutes and regulations):
1) Certain foreign income of U.S. citizens (26 CFR § 1.861-8(f)(1)(i)).
2) The domestic income of foreigners (26 CFR § 1.861-8(f)(1)(iv)).
3) Certain income related to federal possessions (26 CFR § 1.861-8(f)(1)(vi)(E)).
The problem between what the public has been "led to believe" (that all incomes are taxed) and what the law specifically says about who has taxable income becomes obvious. The type of taxation that everyone has "assumed" exists (or been told by the lying lawyers in the Treasury Department) is MISSING from the law.
Most Americans have income ONLY from DOMESTIC commerce (business transactions within or among the 50 states). The purely domestic income of Americans is not shown to be taxable; it is never mentioned in the law as being taxable. On the other hand, the income of Americans engaging in international commerce IS specifically shown to be taxable.
Subchapter N contains the critical and final part of the puzzle. For income to be taxable, there are TWO independent conditions that must be met; the income must be a taxable "item" (or "type" of income, see Subchapter B) AND the income must derive from a taxable activity or type of commerce (see the regulations under Subchapter N, Section 861).
Subchapter A Subchapter B Subchapter N, Section 861
Tax imposed on "Items" of income Determining the taxable
"taxable income." that may be taxed. "sources" of income.
In order for there to be taxable domestic income, all of the following must occur:
1) One must receive a taxable "item" of income (e.g. compensation, interest, rents) (per 26 USC § 61 and following (Subchapter B).
2) The "source rules" must categorize the income as domestic income
(per 26 USC § 861(a) and 26 CFR §§ 1.861-2 through 1.861-7).
3) The income must derive from a "specific source or activity" which is taxable (per 26 USC § 861(b) and 26 CFR § 1.861-8 and following).
The conclusion is irrefutable: The "specific sources or activities" that generate "taxable income" DO NOT include the domestically earned incomes of Americans or resident aliens.
http://www.ajc.com/news/content/news...3notaxpay.html
Pilot acquitted of tax evasion after IRS doesn't answer letters
The Associated Press
MEMPHIS, Tenn. -- A woman who said she refused to pay federal income taxes because the IRS didn't respond to her inquiries about tax law has been acquitted of tax evasion.
Vernice Kuglin, a 58-year-old FedEx pilot, had been charged with six counts of tax evasion. Had she been convicted by the federal court jury, she would have faced up to 30 years in prison and $1.5 million in fines.
"I feel justified," she said after Friday's verdict.
Kuglin said she began to question the federal tax system about 10 years ago and wrote the Internal Revenue Service twice in 1995 with questions about what law required her to pay taxes. She said she didn't get a response. On Dec. 30, 1995, she filed a withholding statement directing that no taxes be withheld from her pay.
The government accused Kuglin of filing false W4 forms from 1996 to 2001, during which time she earned $920,000 in income. Normal withholding would have been about $250,000.
Federal prosecutor Joe Murphy said during closing arguments that Kuglin did have an opportunity to sit down and discuss her situation with the IRS, "and she didn't."
The five-day trial did not resolve whether she must make the tax payment.
"I think it is safe to assume the IRS will attempt civil collection, but she is not guilty of tax evasion," said defense attorney Robert Bernhoft of Milwaukee.
Larry Becraft, another defense attorney from Huntsville, Ala., said after the verdict that the federal tax code is confusing and "at best is a walking due process violation."
Becraft, who helped win acquittals for 17 defendants in another Memphis tax trial 12 years ago, said the letters from his client to the IRS showed a lack of criminal intent to evade tax laws and that she sincerely believed her conduct was proper.
"The whole thing could have been resolved if the government had simply answered her questions," Becraft said. "It didn't happen. I made an argument to the jury that an American has a right to ask the government for answers."
IRS spokeswoman Nancy Mathis was unable to state agency policy on responding to letters asking it to specify the law that makes people liable for income taxes.
She said the IRS had posted various items on its Web site and issued news releases stating that taxes are mandatory. The first words of the Internal Revenue Code are "a tax is hereby imposed."
When asked if she planned to start paying federal income taxes again, Kuglin said: "I will pay all the taxes for which I am liable."
She said she believes the 16th amendment to the Constitution -- giving Congress the power to collect income taxes -- and the Internal Revenue Code are constitutional, "but I also feel there is a gross misapplication of the individual income tax laws by the IRS."
Kuglin said she hopes to resume flying for the Memphis-based cargo airline as soon as the government returns her passport, which was seized after her indictment this year.
*********************************************
http://www.sierratimes.com/03/08/10/...vs._KUGLIN.htm
IRS vs. KUGLIN
By Carl F. Worden
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
want to learn more? http://www.861.info/
THE FEDERAL INCOME TAX DECEPTION
Government lawyers at the Treasury Department, DOJ, White House, and many other federal agencies are desperately trying to prevent the public from seeing the evidence in the law that proves that most Americans (those whose income is derived only from domestic commerce) do NOT owe federal income taxes.
The TRUTH is hidden in convoluted (but correctly written) REGULATIONS under Subchapter N, Section 861. This critical part of the law proves that if an American does not have income derived from engaging in INTERNATIONAL commerce, then their income is NOT TAXED under federal law.
The written law does not lie and the evidence in over 80 years of the law that comes to the same conclusions will not go away.
In order for someone to determine his federal income tax liability (if any), he must first determine his taxable income, using the sections of the law that exist for that purpose. The federal income tax is imposed on the "taxable income" of individuals, not all income. To get "taxable income," deductions are taken from "gross income," which is generally defined in 26 USC § 61.
BUT there is nothing in the 26 USC § 61 statute or the related regulations (26 CFR §§ 1.61-1, 2) that tells the reader WHO is receiving the income or WHERE it comes from. In other words, this general part of the law does NOT contain the specific details that will allow the reader to determine if their income is taxable or not. To find that out, they have to go thousands of pages deeper into the law to Subchapter N, which is entitled, "Tax Based on Income From Sources Within or Without the United States."
The specific legal language that is critical for the reader to determine WHEN income becomes "gross income" is found deep in the regulations under Section 861. 26 CFR §§ 1.861-1, 1.861-8(a)(1) and 1.863-1(c) of those regulations require every person to use Section 861 and its regulations to determine taxable domestic income. These regulations specifically say that a person's taxable income, "from sources within or without the United States" shall be determined under the rules of 26 CFR § 1.861-8 and following, making it mandatory that these regulations be used to do so.
What SPECIFICALLY do those regulations say? They say that there are only THREE situations where a person can have "taxable income." Aside from rules about specific federal possessions, international and foreign sales corporations, and certain foreign tax credits, the taxable types of commerce from which "taxable income" must be derived (which are the SAME types of commerce that are specified in over 80 years of predecessor statutes and regulations):
1) Certain foreign income of U.S. citizens (26 CFR § 1.861-8(f)(1)(i)).
2) The domestic income of foreigners (26 CFR § 1.861-8(f)(1)(iv)).
3) Certain income related to federal possessions (26 CFR § 1.861-8(f)(1)(vi)(E)).
The problem between what the public has been "led to believe" (that all incomes are taxed) and what the law specifically says about who has taxable income becomes obvious. The type of taxation that everyone has "assumed" exists (or been told by the lying lawyers in the Treasury Department) is MISSING from the law.
Most Americans have income ONLY from DOMESTIC commerce (business transactions within or among the 50 states). The purely domestic income of Americans is not shown to be taxable; it is never mentioned in the law as being taxable. On the other hand, the income of Americans engaging in international commerce IS specifically shown to be taxable.
Subchapter N contains the critical and final part of the puzzle. For income to be taxable, there are TWO independent conditions that must be met; the income must be a taxable "item" (or "type" of income, see Subchapter B) AND the income must derive from a taxable activity or type of commerce (see the regulations under Subchapter N, Section 861).
Subchapter A Subchapter B Subchapter N, Section 861
Tax imposed on "Items" of income Determining the taxable
"taxable income." that may be taxed. "sources" of income.
In order for there to be taxable domestic income, all of the following must occur:
1) One must receive a taxable "item" of income (e.g. compensation, interest, rents) (per 26 USC § 61 and following (Subchapter B).
2) The "source rules" must categorize the income as domestic income
(per 26 USC § 861(a) and 26 CFR §§ 1.861-2 through 1.861-7).
3) The income must derive from a "specific source or activity" which is taxable (per 26 USC § 861(b) and 26 CFR § 1.861-8 and following).
The conclusion is irrefutable: The "specific sources or activities" that generate "taxable income" DO NOT include the domestically earned incomes of Americans or resident aliens.
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well this case has set a precendent. it's pretty impressive of her attorney to have convinced a jury not to find her guilty of tax evasion. it's pretty scary though that she's gotten away with this. this flagship case will convince every donald trump, martha stewart, and bill gates type to hire some lawyers to help them get out of paying millions of dollars in taxes.
Last edited by wrexxy; Nov 15, 2004 at 12:02 AM.
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You guys try it and lemme know if it works for you. If it does work, and you're not tied up in the courts over it, then I'll think about trying it out the next tax year. 
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