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CITIZENS OF THE DELUSIONAL CONSTITUTION FOUNDATION

November 22, 2006

A reader forwarded a link to a page by "Citizens of the American Constitution" trumpeting a "1040 Checkmate." The page discusses an Illinois case where the government dropped criminal charges against a Robert Lawrence, a tax protester. To read their version, the government ran away with its tail between its legs:

The DOJ knew that it stood a significant chance of losing the case, and if that happened, the press and others would quickly spread the word, and leave only fools to ever file a 1040 again. Oscar Stilley’s pleadings and documents made these points quite clear:

* IRS Form 1040 violates the federal Paperwork Reduction Act (PRA) and is therefore a legally invalid form.

* Under the Public Protection clause of the PRA, no person can be penalized for failing to file a 1040 if the IRS fails to fully comply with the PRA.



* The PRA statutes explicitly provide that a PRA challenge is a complete defense and can be raised in any administrative or judicial proceeding.



* The IRS Individual Form 1040 has not and cannot comply with the requirements of the PRA because no existing statute authorizes the IRS to impose or collect the federal income tax from individuals. That lack of bona fide authority makes it impossible for IRS to avoid violating the PRA.

We The People Foundation has researched the facts, law and circumstances surrounding this case, and has determined that:

* A public trial would have opened a “Pandora’s Box” of legal evidence and government testimony under oath that would establish the IRS 1040 form as both fraudulent and counterfeit.

* Oscar Stilley’s PRA defense “checkmated” the DOJ and IRS

* The Office of Management and Budget (OMB) appears to have been complicit with IRS in deceiving the public and in helping perpetuate the 1040 fraud by promulgating federal regulations that negate the plain language of the PRA laws passed by Congress and by allowing the IRS to continually skirt the explicit requirements of those statutes

My reader asked if there was anything to this. A little digging shows the story isn't quite what the tax protest crowd would have you believe.

The real story is laid out in an order in the U.S District Court of Illinois, Central Division, on a motion to compel the government to pay Mr. Lawrence's attorneys fees. The government moved that the case be dismissed a few days before trial when the judge wouldn't permit them to correct calculation errors in the taxes allegedly evaded by Mr. Lawrence.

Mr. Lawrence said he should be reimbursed his legal fees because the government "knew" his argument -- that the Paperwork Reduction Act makes him immune from the income tax -- was unassailable. The judge disagreed (emphasis mine):

Lawrence’s main argument in support of this motion is that the Government’s prosecution was vexatious, frivolous, and in bad faith because the Government knew that the PRA provided Lawrence with a full defense to liability for failing to file income taxes. However, Lawrence fails to recognize that the posture of the instant motion does not permit the Court to address the merits of the PRA defense. In this Motion for Attorney’s Fees, the only question before the Court is whether the Government’s prosecution of Lawrence was vexatious, frivolous, or in bad faith and the Court finds that it was not. In light of the cases that had addressed the PRA of 1980, as of the time that Lawrence was prosecuted, the Government had good reason to believe that the PRA defense (even based on the amended PRA of 1995) would not provide someone who failed to pay income taxes with a valid defense. Lawrence spends numerous pages of his brief addressing the merits of the PRA defense and arguing that even though the Seventh Circuit found that the PRA of 1980 was not a valid defense to the allegations in Lawrence’s indictment, that the PRA of 1995 would provide Lawrence with that defense. However, Lawrence has failed to cite any cases that support his argument. He claims that the law is clear on this point; however, not one court has held that the PRA of 1995 is a complete defense to a prosecution for a failure to file income taxes. Accordingly, Lawrence cannot argue that the government’s indictment of Lawrence was frivolous or vexatious.

Even if a defendant like Lawrence is eventually successful at convincing a court that the PRA of 1995 provides individuals like Lawrence with a valid defense for failing to pay taxes, something that appears unlikely in light of the cases addressing the PRA of 1980 defense, Lawrence’s argument that the Government should have known that this was the law at the time that Lawrence was prosecuted is ridiculous.

The "Tax Honesty Movement," as tax protesters like to call themselves, have a habit of trumpeting any court victory as a vindication of their deluded legal theories. Whenever a tax protester is acquitted by a jury, or has the criminal charges dismissed, they say it "proves" their theories. Of course, by their logic O.J.'s acquittal "proves" that multiple homicides are legal in Brentwood. The "Tax Honesty" folks' honesty runs out before they point out that no court has ever ruled that their theories actually work to avoid taxes.

Link: The Tax Protester FAQ, explaining why the "Tax Honesty" theories don't work.

UPDATE:: The Tax Honesty folks in full regalia! (via LGF). A question for these folks: if this stuff works, why do you have to wear those silly masks?

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