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USA - Taxation: U.S. District Court, Western District of Tennessee (Memphis) #03
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Aug 10, 2003 14:06 PDT
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IRS Loses a Big OneFrom: Bob Schulz (DO NOT REPLY - Unmonitored Mailbox)
Sent: Saturday, August 09, 2003 11:50 AM
Subject: [We The People] IRS Loses A Big One
If you can't read this, visit http://www.givemeliberty.org/mailroom to see
the message.
8-9-03
IRS Loses A Big One
Memphis Pilot Acquitted of Tax Evasion
Charged With Filing "False" W-4s
On Friday, a Memphis federal jury acquitted FedEx pilot Vernice Kuglin of
six counts of felony Tax Evasion and Willful Failure to File tax returns.
Ms. Kuglin's attorneys, Tax Honesty Movement barristers Larry Becraft and
Robert G. Bernhoft, told reporters that Kuglin was indicted seven months ago
and had refused to plead the case out for a lesser sentence. During her
testimony Kuglin testified that since 1995, she had sent numerous letters to
the IRS requesting that they inform her of what law required her to pay the
Individual Income Tax. To this day, she has not received an answer.
At 1:30 Friday afternoon, the jury returned not guilty verdicts on all
counts.
After the jury had been excused the U.S. Attorney reportedly demanded that
the Judge order the defendant to file her forms, pay her taxes and obey the
law. The Judge reportedly replied "Sir, I don't work for the IRS."
The case is: U.S. District Court, Western District of Tennessee (Memphis) #
03-CR-20111, USA v. Kuglin.
The news story below comes from the August 9th edition of the Memphis daily
newspaper, The Commercial Appeal:
Jury acquits pilot, who questioned IRS, of tax-evasion counts
By Shirley Downing
down-@gomemphis.com
August 9, 2003
A federal jury Friday found FedEx pilot Vernice Kuglin not guilty of evading
income taxes on $920,000.
The question of tax payment was unresolved at the end of the five-day trial.
"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.
"I feel justified," a grinning Kuglin said after the verdict was returned at
mid--afternoon. She stood outside the federal building, chatting with
supporters and jurors.
Federal prosecutor Joe Murphy was not available for comment.
Kuglin, 58, was charged with six counts of tax evasion that could have meant
up to 30 years in prison and $1.5 million in fines.
The government accused Kuglin of filing false W4 forms for the period from
1996 to 2001.
Kuglin, a pilot for FedEx since 1985, said she had paid taxes like anyone
else for most of her life. But about 10 or 11 years ago, she began to
question the federal tax system. She began to read court documents, legal
opinions and the federal tax code.
She said she found what she felt were contradictions. She wanted to know
where in the federal tax code it said she was liable for taxes.
Kuglin wrote the Internal Revenue Service twice in 1995 with questions but
said she didn't get a response.
Murphy, in closing arguments on Thursday, said Kuglin did have an
opportunity to discuss her situation with the IRS, to learn what she owed
and what documents she was required to file "and she didn't."
Defense attorney Larry Becraft of Huntsville, Ala., said Kuglin decided
mandatory payment of income taxes "did not apply to her."
After the verdict Friday, Becraft said the federal tax code is a confusing
conglomeration that "at best is a walking due process violation."
He said the average American simply doesn't understand the tax code.
Juror Barbara Snodgras of Memphis said the jury did not convict because "we
all felt that the prosecution didn't prove its case."
When asked if she planned to start paying federal income taxes again, Kuglin
replied: "I will pay all the taxes for which I am liable."
====================
Article #2:
----- Original Message -----
From: "Tee" <eag-@chipshot.net>
Sent: Saturday, August 09, 2003 12:55 PM
Subject: Jury acquits pilot, who questioned IRS, of tax-evasion counts
http://www.gomemphis.com/mca/local_news/article/0,1426,MCA_437_2169609,00.ht
ml
http://www.tnwd.uscourts.gov/attorneys/Calendars/August/4.html
---------------------------------------------------------------
http://www.gomemphis.com/mca/local_news/article/0,1426,MCA_437_2161228,00.ht
ml
Lawyer: Pilot believed she was tax exempt
Pilot Vernice Kuglin did not file income tax returns on $920,000 in earnings
because she believed the federal tax code did not apply to her, her lawyer
told federal court jurors Tuesday.
Kuglin, 58, is charged with six counts of tax evasion, and with filing false
W-4 forms for the period 1996 to 2001. Conviction carries up to 30 years in
prison and $1.5 million in fines.
Federal prosecutor Joe Murphy said Kuglin "had a lot of income" during that
time, but she "claimed to be exempt from paying withholding tax.''
In opening arguments Tuesday before U.S. Dist. Judge Jon McCalla, defense
attorney Larry Becraft told jurors they must decide if Kuglin acted with
criminal intent.
Kuglin has lived in Memphis since 1985 when she was hired as a pilot for
FedEx.
She testified she is now on a personal leave.
Kuglin testified she questioned whether payment of taxes is "voluntary" or
"voluntary compliance" as indicated on some federal documents she read aloud
in court.
- Shirley Downing
==================
Article #3:
From: dandmc
Sent: Saturday, August 09, 2003 12:10 PM
Subject: [DanMeador] WHAT TAX AM I LIABLE FOR?
Robert Raymond, an affiliate of Wisconsin attorney Robert Bernhoft, composed
the article I've pasted in below.
Bernhoft and Alabama attorney Larry Becraft defended Vernice B. Kuglin
(Vernie) on tax evasion and willful failure to file charges; the jury
returned not guilty verdicts on all six counts.
Since approximately 1995, Ms. Kuglin has regularly asked the Internal
Revenue Service what tax she is liable for. IRS has never told her.
I don't know anything more about the Kuglin case than what Robert wrote in
the short post, but the trial outcome obviously hinged on the question,
"What tax is Ms. Kuglin liable for?"
No doubt Ms. Kuglin had copies of her inquiries. IRS didn't answer her
direct inquiries, and none of the government witnesses gave definitive
answers at the trial. When the trail was over, the jury was just as
mystified as Ms. Kuglin was in 1995: "What tax is Ms. Kuglin liable for?"
To one degree or another, both Bernhoft and Becraft have participated in the
closed internet research group I established in October 2000. Becraft
previously had numerous significant wins such as the Long case; Bernhoft,
who is a longtime "patriot" who completed his undergraduate degree and law
school after years of frustration with government, was fighting an up-hill
battle to be admitted to the Wisconsin Bar Association at about the time we
launched the internet research group. Those of us who are non-attorney
researchers have learned from them, and hopefully they have learned
something from the overall group effort. At any rate, congratulations to
both.
The point of the Kuglin case is that she had a defensible position: "What
tax am I liable for?"
With all due respect to Larken Rose and others who have pretty well nailed
proper application of Subtitle A income taxes through the Subchapter N
source rules; what is commonly known as the "861 source" position, advancing
affirmative positions with respect to who is or isn't liable for federal
taxes in administrative and judicial forums isn't strategically sound.
The affirmative argument has its place; don't get me wrong. We need to know
the proper application of income and employment taxes. But utilization of
that knowledge is the issue.
I currently have a memorandum on income and employment tax schemes on my web
page. It can be downloaded at
http://www.lawresearch-registry.org/lrrserch.htm
The memorandum takes the 861 source position beyond the point where
researchers who have focused on the actual 861 regulations normally quit as
I've examined the subject from other perspectives that arrive at and support
the Subchapter N conclusion. However, as a rule we don't use the memorandum
in administrative or judicial forums because we don't want to assume the
burden of proof that rightfully belongs to the government. If you take a
fixed position with respect to who is and who isn't liable for income taxes,
as a rule IRS or the Department of Justice will dredge up what appear to be
conflicting authorities then successfully prosecute the case on what is
politely described as "everybody knows doctrine."
I knew in advance that a federal probation officer was going to attend one
of the monthly meetings Gail and I have with the group in Tulsa. Because I
knew Brad was going to be there, I decided to have some fun with him. To set
the stage, I included 26 CFR § 31.6001-1 in the handout package. When we got
to the point where we were to address who is required to file returns, I
asked Brad, "Do you and your wife regularly file federal income tax
returns?"
Of course they did.
"Would you read 26 CFR § 31.6001-1(d)?"
What does the regulation say? It says that an "employee" isn't required to
keep books and records unless he or she intends to file a refund claim. We
then went through several of the 26 CFR Part 31 regulations that follow.
When you read those regulations, you find that if an employee has a claim
for refund of income taxes, he is supposed to file it with his employer, not
IRS.
After going through relevant regulations, I asked Brad, "Who told you that
you and your wife are required to file Form 1040 returns?"
At a loss for any other answer, he said, "Our accountant."
Bob Miles schedules the Tulsa meetings; he has been an accountant throughout
his professional life, and that particular evening Bob was sitting on the
front row in the left section where Brad was on the second row on the right.
"Right here is a prime example," I told Brad. "Bob has been an accountant
for years -- he made his living by filling out tax returns for people just
like you. Given what you've read, do you supposed you can believe anything
he says?"
As the garden club reporter routinely said, "A good time was had by all."
I haven't seen any of Ms. Kuglin's paperwork so I don't know if she ever
took an affirmative approach or not, but whatever her position was, she
didn't muddy the water sufficiently to shift the burden of proof to herself.
Becraft and Bernhoft were able to focus the jury on the real issue: "What
tax is Ms. Kuglin liable for?"
The Kuglin acquittal serves as an excellent object lesson. Congratulations
to Bob, Larry and Ms. Kuglin.
Dan Meador
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