Are you saying too that this here source:www.loc.gov/item/uscode1988-001000002/ is bullshit? Cause this is where Meador got his information from and embellished upon it on his own website. The reason why I mention this link is because in one of my post on this thread, I had mentioned that if you desire to change the laws, you start with the removal of the fringed flag that sits in the courtroom. I referenced a link concerning that. You see, in our society, we don't use words as much as we do symbols. And in a courtroom setting a fringed flag is a specific symbol which tells us everything we should know before crossing the bar in that room. It has no business being in any courtroom setting at all nor a church or school. However, to my dismay I have witnessed this flag in just about every indoor setting. Meador mentioned this in his essay of flag etiquette and law.
Are you saying too that this here source: www.loc.gov/item/uscode1988-001000002/ is bullshit? Cause this is where Meador got his information from and embellished upon it on his own website. The reason why I mention this link is because in one of my post on this thread, I had mentioned that if you desire to change the laws, you start with the removal of the fringed flag that sits in the courtroom. I I referenced a link concerning that. You see, in our society, we don't use words as much as we do symbols. And in a courtroom setting a fringed flag is a specific symbol which tells us everything we should know before crossing the bar in that room. It has no business being in any courtroom setting at all nor a church or school. However, to my dismay I have witnessed this flag in just about every indoor setting. Meador mentioned this in his essay of flag etiquette and law.
Yes, convicted felon Meador and your link to convicted felon Meador are bullshit. Meador was not only a tax fraud, he was enshrined in the Quatloos Hall of Shame for his shameful efforts. He reached the pinnacle of achievement at being an asshole.
I quoted the U.S. Supreme Court stating, The Federal tax system is basically one of self-assessment," whereby each taxpayer computes the tax due and then files the appropriate form of return along with the requisite payment. 26 CFR § 601.103(a) (2003). They do not seem overly impressed with Meador's bullshit about 26 CFR § 601.103(a). I also provided you a quote of the whole section. You have proceeded to make no legal point, just harumph.
The cited flag law does not prohibit a fringe and contains no penalty for anything. An official opinion of the Attorney General and multiple court opinions have upheld the use of the gold fringe.
If the flag of the United States that is in the courtroom has a gold fringe, then the court is operating under martial law.
There is actually some interesting history behind this nonsense.
There is a federal statute that defines the American flag as thirteen horizontal stripes, alternate red and white, with a “union” of a blue field with one white star for each state. 4 U.S.C. §§ 1 and 2. The statutory definition says nothing about any kind of fringe of the kind often used on ceremonial flags displayed indoors, and at some point someone in the military wondered whether a flag with a fringe was “legal.” In 1925, the Attorney General issued an opinion that a fringe “does not appear to be regarded as an integral part of the Flag, and its presence cannot be said to constitute an unauthorized addition to the design prescribed by statute,” concluding that “The presence, therefore, of a fringe on military colors and standards does not violate any existing Act of Congress. Its use or disuse is a matter of practical policy, to be determined, in the absence of statute, by the Commander in Chief....” 34 Op. Atty. Gen. 483 (May 15, 1925).
Perhaps you can see where this is going? Because the Attorney General expressed the opinion that the President as Commander-in-Chief can put a fringe on military flags, tax protesters have leapt to the conclusion that all flags with fringes are military flags. This idea has been flatly rejected in numerous court decisions. See, e.g., McCann v. Greenway, 952 F. Supp. 647 (W.D. Mo. 1997); United States v. Greenstreet, 912 F.Supp. 224, 229 (N.D.Tex.1996) (“To think that a fringed flag adorning the courtroom somehow limits this Court’s jurisdiction is frivolous.”); Vella v. McCammon, 671 F.Supp. 1128, 1129 (S.D.Tex.1987) (rejecting argument that a federal court lacks jurisdiction to impose penalties for civil and criminal contempt because its flag is fringed); Commonwealth v. Appel, 438 Pa.Super. 214, 652 A.2d 341, 343 (1994) (rejecting argument that a fringed flag in a state courtroom conferred on the court admiralty or maritime jurisdiction).
In Leverenz v. Torluemlu, 1996 WL 272538, at *1 & n. 3 (N.D.Ill. May 20, 1996), the court noted that the complaint named as defendants a judge, a state attorney general, a doctor, several police officers from different communities, and 600 unnamed John and Jane Does and that “[s]ome idea of what is to come is provided by this legend that Leverenz attaches to his ‘Complaint’ heading: “This case is under the jurisdiction of the American flag of peace of the United States of America. No flags of war will serve this case jurisdiction.” (In National Auto. Dealers & Assocs. Retirement Trust v. Arbeitman, 89 F.3d 496, 502 (8th Cir.1996), a later motion in the Leverenz case was described as “bizarre.”)
Dan Evans nailed it on the fringed flag. And that fringed flag is the unspoken symbol putting all on notice who walk into any courtroom. This flag needs to be replaced with a lawful banner (or flag) that represents the republic of the united States of America.
As for Dan Meador's works, I still stand with what he has relayed to the public. Many people have elected to judge him for his literal works just as they did Irwin Schiff in his works, The Federal Mafia.
I find it interesting that in one of your threads you had posted about the recent ruling by the Fifth Circuit Court of Appeals (this may not be your link you posted) www.texastribune.org/2019...idual-mandate-obamacare/, that the IRS, had been collecting penalty fees all this time knowing this was indeed unconstitutional. This truly exposes the scam both from the United States government in their unlawful mandates but also makes the IRS vulnerable to a lawsuit as well. And it confirms why I posted that link from the Library of Congress concerning the lawful nature of the Title 50 Table of Contents and which are positive law and others that are not.
As for Dan Meador's works, I still stand with what he has relayed to the public. Many people have elected to judge him for his literal works just as they did Irwin Schiff in his works, The Federal Mafia.
I find it interesting that in one of your threads you had posted about the recent ruling by the Fifth Circuit Court of Appeals (this may not be your link you posted) www.texastribune.org/2019...idual-mandate-obamacare/, that the IRS, had been collecting penalty fees all this time knowing this was indeed unconstitutional. This truly exposes the scam both from the United States government in their unlawful mandates but also makes the IRS vulnerable to a lawsuit as well. And it confirms why I posted that link from the Library of Congress concerning the lawful nature of the Title 50 Table of Contents and which are positive law and others that are not.
Do you have any legal experts who are not convicted felons, or is that all you've got?
When cornered for being the rat bastard that he was, Irwin Schiff attempted to plead mental ilness, a delusional disorder. For shoveling this Shiff shit on this board, do you also claim your behavior is the result of your delusional disorder, or do you have a different excuse?
Dr. Ortega hospitalized him in October 2003 for depression and “high risk for suicide.” Dr. Ortega’s professional opinion was as follows:
“In my professional opinion I felt that the patient did not pay taxes because he was convinced that the law does not require him to do so. I think this is a delusional disorder.
[...]
His mental illness makes it “almost impossible… to persuade him he is wrong.” His opinions and thus his conduct is “driven by his mental illness.” Hayes Report, P. 6-7. According to Dr. Ortega he suffers from a “delusional disorder” which has convinced him “that the law does not require him to pay taxes.” Ortega Report, P. 4. Dr. Barry states that Schiff’s “belief system is not under voluntary control.” He has “little or no ability to alter his beliefs.” “Mr. Schiff’s behavior is not rational.” His conduct “is the product of a Delusional Personality Disorder.” Barry Report, P. 2.
Todd M. Leventhal 600 South Third Street Las Vegas, Nevada 89101 702 384 1990
Michael B. Nash 53 West Jackson Blvd. Suite 620 Chicago, Illinois 312 236 8788 Counsel for Defendant Irwin A. Schiff
UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEVADA
UNITED STATES OF AMERICA v. IRWIN A. SCHIFF
CR-S-04-119-KJD(LRL)
SCHIFF’S MOTION FOR DOWNWARD DEPARTURE
Defendant Irwin A. Schiff respectfully moves this Court for a downward departure pursuant to U.S.S.G. § 5K2.13. It states as follows:
“A downward departure may be warranted if (1) the defendant committed the offense while suffering from a b>significantly reduced mental capacity[/b]; and (2) the significantly reduced mental capacity contributed substantially to the commission of the offense. Similarly, if a departure is warranted under this police statement, the extent of the departure should reflect the extent to which the reduced mental capacity contributed to the commission of the offense.”
The Application Note defines “significantly reduced mental capacity.”
“‘Significantly reduced mental capacity’ means the defendant, although convicted, has a significantly impaired ability to (A) understand the wrongfulness of the behavior comprising the offense or to exercise the power of reason; or (B) control behavior that the defendant knows is wrongful” U.S.S.G § 5K2.13, Application Note 1
The burden is on the defendant to establish that he committed the offense while suffering from a reduced mental capacity, and that it contributed substantially to the commission of the offense. This is not a “but for” test. “(T)he policy statement rejects such a broad basis for departure by explicitly requiring that the defendant‘s reduced capacity merely ‘contribute to’ the offense.” United States v. Leandre, 132 F.3 796,803 (D.C. Cir. 1998). In United States v. Cantu, 12 F.3d 1506, 1515 (9th Cir. 1993) the Ninth Circuit noted that the other circuits which had addressed this issue were “unanimous in holding that the disorder need be only a contributing cause, not a but-for cause or sole cause” and it, therefore, “adopt(ed) this commonsense holding.”
There are two issues to examine. The first is whether defendant suffered from a significantly reduced mental capacity. The second is whether that reduced mental capacity contributed substantially to the commission of the offense. The answers to both questions are contained in the reports of Dr. Daniel S. Hayes, Ph.D., L.L.C. Clinical Psychologist, 2199 Ironwood Center Drive, Coeur d’Alene, ID 83814, Dr. Cynthia Barry, Ph.D. Licensed Psychologist PSY 10826, 1066 Saratoga Avenue Ste 100, San Jose, California 95129 and Dr. Luis Carlos Ortega, MD, Valley Hospital and Medical Center, 620 Shadow Lane, Las Vegas, NV 89106, which have previously been supplied to the Court.
Dr. Ortega hospitalized him in October 2003 for depression and “high risk for suicide.” Dr. Ortega’s professional opinion was as follows:
“In my professional opinion I felt that the patient did not pay taxes because he was convinced that the law does not require him to do so. I think this is a delusional disorder. He has this thing for a long time but no medication seems to make him believe otherwise.” Ortega Report, P.4.
Dr. Barry examined Schiff on January 6, 2004 at the request of his then attorney William A. Cohen. Her diagnosis was that Dr. Ortega was correct in concluding that Schiff suffered from Bipolar Disorder. She also stated that he suffered from Delusional Personality Disorder and an “Axis II personality disorder.” Her professional opinion was as follows:
“In my opinion, and in the history detailed above, Mr. Schiff’s distorted beliefs appear to have grown out of the stress of his business failures and his first, undiagnosed manic episode. However, once developed, these delusional beliefs have carried forward quite separate from the state of his bipolar mood swings and the impact of psychiatric medication. With very high probability they will continue unabated in the future. There is a significant element of paranoia in his MMPI protocol; however, he is extremely constricted emotionally so that underlying anger does not surface. His pseudo-rational belief system is confined to one area and this is no disorganization of thought. Further, it does not appear to originate from anti-social tendencies. However, the belief system is not under voluntary control. Individuals suffering from Delusional Disorder have little or no ability to alter their beliefs. Mr. Schiff acknowledges that even his two sons have advised him to pay his taxes and avoid the negative consequences. However, he states that he cannot do so because ‘I cannot pay what I do not owe.’ This despite the fact, that he recently experienced a suicidal depression serious enough to require hospitalization (related in part to recognition of a probable prison sentence if he is found guilty of the current charges.) In short, Mr. Schiff’s behavior is not rational. It is likely the product of a Delusional Personality Disorder that is not amenable to treatment and is unlikely to remit.” Barry Report, P. 2
Dr. Hayes examined Schiff on February 18, 2005 for six (6) hours at the request of Magistrate Judge Lawrence R. Leavitt, District of Nevada. The examination was “to provide an opinion regarding his (Schiff’s) competency to stand trial and desire to represent himself during that trial.” Hayes Report, P. 1. Dr. Hayes’ report gives a brief history of Schiff’s mental health history and Schiff’s version of his history with the Internal Revenue Service. Dr. Hayes concluded his narrative quoting Schiff as follows: “‘If I lose now, I’ll spend the rest of my life in jail.’
He is absolutely sure and confident that he will win this time because he will not ‘make the same mistakes… I know the law. I don’t need it interpreted to me. Why would I mislead my family and everyone else?.... I know I have a tiger by that tail and I have to beat them at this point…. I can’t pretend I don’t know this. It’s not right what they’re doing to the American people.” Hayes Report, P. 3.
Although Dr. Hayes noted that it was not within the scope of his evaluation “to formally assess Mr. Schiff’s cognitive capacity,” he noted that Schiff’s “cognitive functioning appeared to be impacted by what appeared to be a mood disorder, affecting his ability to attend and sustain concentration and focus outside his areas of preoccupation.” Hayes Report, P. 4.
Dr. Hayes’ report clearly established that Schiff suffered from a “significantly reduced mental capacity” and that it contributed substantially to these offenses. He reviewed Dr. Ortega’s and Dr Barry’s diagnosis and concluded that Schiff suffers from “Bipolar II Disorder, with recurrent major episodes and hypomanic episodes, without full inter-episode recovery.” Hayes Report, P. 7. In reaching this conclusion Dr. Hayes stated that Schiff’s beliefs regarding taxation set him “apart from the average individual” and that to a certain degree “Mr. Schiff’s focus on this topic (is) being driven by his mental illness.” Hayes Report, P. 7. The basis for Dr. Hayes’ conclusion are “the years he (Schiff) has devoted to this subject area, the research and documentation he believes to be in support of his beliefs, and the commitment and passion with which he hold his beliefs to be true.” Hayes Report, P. 6.
“He appears to have extremely rigid, fixed, inflexible, doggedly determined opinions and beliefs that cannot be changed by others’ reasoning. And, in his case, even punishment has not had a corrective impact in his thinking or behaviors. He appears impervious to any suggestions that he reconsider his conclusions or his actions, in part because of the thorough research he has conducted which has yielded evidence and facts to support his conclusions, coupled with the fact that he considers himself to be an “expert” with knowledge that supersedes that of any other individual claiming to have expertise in this subject area. Most people have beliefs that have a greater degree of flexibility and openness to change that does Mr. Schiff. Although some may have beliefs that parallel Mr. Schiff’s, they differ from him in that they are unwilling to jeopardize their freedom and suffer the consequences of their beliefs to the degree that Mr. Schiff has. As a result, it would be almost impossible at this point in his life to persuade him that he is wrong, particularly since he feels that there are few, if any, individuals who could match the breadth and depth of knowledge he appears to have as a result of the time, effort, focus, and intellect he has devoted to the subject. Any arguments against him are likely to be seen by him as naïve and sophomoric, and he is likely to dismantle any such arguments quickly and handily by quick reference to materials his opponent is unlikely to have at the ready for consideration and rebuttal.” Hayes Report, P. 6-7.
The purpose of 5K2.13 is to treat with “lenity” a defendant whose mental illness contributes to his offense. “The defendant’s mental condition and the circumstances of the offense must be undertaken ‘with a view of lenity, as section 5K2.13 implicitly recommends.’” United States v. Cantu, 12 F.3d 1506, 1511 (9th Cir. 1993), quoting United States v. Chapman, 986 F.2 1446 1454 (D.C. Cir. 1993). Cantu stated that lenity is appropriate because the purpose of 5K2.13 is to treat with “compassion” those with a reduced mental capacity which contributed to their offense. United States v. Cantu, at 1511. See also United States v. Leandre, at 804-805. According to Judge Orlofsky in United States v. Checoura, 176 F Supp 310, 315, (D.C. N.J., 2005) 5K2.13 is an “encouraged departure.” The lynchpin is a defendant’s ability to reason and process information and to voluntarily form the intent to act in a criminal manner. United States v. Withers, 100 F.3 1142, 1148 (4th Cir. 1996). The basis for 5K2.13 is the inability of an individual to fully understand ordinary concepts which others are able to grasp. It is a lack of “full intellectual functioning” or the ability to make “reasoned judgments.” United States v. Cantu, at 1512-1513.
As noted by Dr. Hayes, Schiff’s conduct was a result of extremely rigid, fixed, inflexible doggedly determined opinions and beliefs that cannot be changed by others’ reasoning.” He is “impervious to any suggestions.” His mental illness makes it “almost impossible… to persuade him he is wrong.” His opinions and thus his conduct is “driven by his mental illness.” Hayes Report, P. 6-7. According to Dr. Ortega he suffers from a “delusional disorder” which has convinced him “that the law does not require him to pay taxes.” Ortega Report, P. 4. Dr. Barry states that Schiff’s “belief system is not under voluntary control.” He has “little or no ability to alter his beliefs.” “Mr. Schiff’s behavior is not rational.” His conduct “is the product of a Delusional Personality Disorder.” Barry Report, P. 2. In United States v. Weedle, 30 F.3 532, 540 (4th Cir. 1994) the Fourth Circuit stated explicitly that “U.S.S.G § 5K2.13 is intended to create lenity for those who cannot control their actions but are not actually dangerous.” In United States v. Leandre, the court spoke of “the obligation to treat with lenity defendants who suffer significantly reduced mental capacity.” United States v. Leandre, at 804. In doing so the Leandre court cited United States v. Cantu, a Ninth Circuit case, in which the court stated “(t)he goal of the guideline is lenity toward defendants whose ability to make reasoned decisions is impaired.” United States v. Cantu, at 1511.
There is a very practical side of this section of the Guidelines. Judge Easterbrook in his dissenting opinion in United States v. Poff, 926 F.2d 588, 595 (7th Cir. 1991) noted that legal sanctions are ineffective in dealing with persons suffering from mental illness. When “a disturbed person’s conduct is non-violent… incapacitation incarceration is less important.” United States v. Poff, at 595. In other words, “the power of specific deterence has little hold over an individual defendant whose conduct is somewhat involuntary.” United States v. Cheroura, at 314.
Schiff’s mental illness is significant and clearly contributed to his commission of the offenses here. Three reputable doctors have stated so unequivocally, one of whom was engaged by the Court. A downward departure is not only appropriate here; to do otherwise is to ignore the mandate of the guidelines.
Respectfully Submitted,
s/Michael B. Nash
Michael B. Nash 53 West Jackson Blvd. Suite 620 Chicago, IL 60604 (312) 236-8788
As for Dan Meador's works, I still stand with what he has relayed to the public. Many people have elected to judge him for his literal works just as they did Irwin Schiff in his works, The Federal Mafia.
Irwin Schiff, another convicted felon dirtbag enshrined in the Quatloos Hall of Shame.
Irwin A SCHIFF v United States, 919 F2d 830 (2nd Cir, 1990)
Irwin A. Schiff, Appellant, v. United States of America, Appellee, 919 F.2d 830 (2d Cir. 1990)
US Court of Appeals for the Second Circuit - 919 F.2d 830 (2d Cir. 1990)
Argued Nov. 13, 1990. Decided Nov. 21, 1990
Irwin A. Schiff, New York City, pro se.
Joel A. Rabinovitz, Dept. of Justice, Washington, D.C. (Stanley A. Twardy, Jr., U.S. Atty., Hartford, Conn., Shirley D. Peterson, Asst. Atty. Gen., Gary A. Allen, and Ann B. Durney, Dept. of Justice, Washington, D.C., on the brief), for appellee U.S.
Before FEINBERG, TIMBERS and MINER, Circuit Judges.
PER CURIAM:
Appellant Irwin A. Schiff appeals from a summary judgment entered September 13, 1989, in the District of Connecticut, Warren W. Eginton, District Judge, in favor of appellee United States in an action commenced by Schiff challenging the assessment and collection of income tax deficiencies owed for the years 1976 through 1978 and penalties imposed.
On appeal, Schiff contends that (1) the tax was collected in violation of the taxing and due process clauses of the Constitution; (2) the tax deficiencies were not properly assessed and collected; (3) the district court erred in granting summary judgment on the issue of civil fraud penalties; and (4) the district judge erred in failing to recuse himself since he ruled against Schiff in a previous case. The government seeks costs and damages for a frivolous appeal.
For the reasons that follow, since we agree with the district court that there is no genuine issue of material fact, we affirm the summary judgment of the district court and impose sanctions on Schiff for bringing a frivolous appeal.
We shall summarize only those facts and prior proceedings believed necessary to an understanding of the issues raised on appeal.
Schiff is no stranger to this court. This is another in a series of cases involving Schiff's refusal to pay income taxes.E.g., United States v. Schiff, 876 F.2d 272 (2 Cir. 1989); United States v. Schiff, 801 F.2d 108 (2 Cir. 1986), cert. denied, 480 U.S. 945 (1987); Schiff v. Simon & Schuster, Inc., 780 F.2d 210 (2 Cir. 1985); Schiff v. Simon & Schuster, Inc., 766 F.2d 61 (2 Cir. 1985) (per curiam); Schiff v. Commissioner, 751 F.2d 116 (2 Cir. 1984) (per curiam); United States v. Schiff, 647 F.2d 163 (2 Cir.), cert. denied, 454 U.S. 835 (1981); United States v. Schiff, 612 F.2d 73 (2 Cir. 1979). The instant appeal arises from Schiff's failure to pay income taxes for the years 1976 through 1978.
Schiff filed no tax returns at all for the years 1977 and 1978. In April 1977, Schiff did file a Form 1040 with the Internal Revenue Service (IRS) for the year 1976. That form set forth his name, address and social security number. He did not provide financial information in the relevant portions of the return, but instead placed asterisks in the columns and typed in the margin "I DO NOT UNDERSTAND THIS RETURN NOR THE LAWS THAT MAY APPLY TO ME. THIS MEANS THAT I TAKE SPECIFIC OBJECTION UNDER THE 4th or 5th AMENDMENTS OF THE U.S. CONSTITUTION TO THE SPECIFIC QUESTION." On page two of the return, Schiff also placed asterisks in the columns and typed at the bottom "THIS MEANS THAT SPECIFIC OBJECTION IS TAKEN TO THE SPECIFIC QUESTION ON THE GROUNDS OF THE 4th AND 5th AMENDMENTS OF THE UNITED STATES CONSTITUTION."
Schiff attached a letter to his Form 1040 addressed to the District Director of the IRS. That letter stated that Schiff had received federal reserve notes in 1976, which he distinguished from taxable dollars. Schiff concluded that federal reserve notes were worthless since he could exchange them only for other federal reserve notes, but not for gold or silver. In support of his contention that federal reserve notes are not dollars, Schiff attached a letter from Russell L. Munk, Assistant General Counsel of the Department of the Treasury, that so stated. That letter also stated that the fact that federal reserve notes could not be exchanged for gold or silver did not render them worthless. The letter concluded by warning Schiff that "there is no legal basis for an arguement [sic] that a taxpayer need not file a return of his income, expressed in dollars, on the ground that Federal Reserve Notes are not 'dollars'...."
On December 2, 1982, the IRS sent Schiff a notice of deficiency with explanations for the years 1976 through 1978. Although the notice informed Schiff of his right of review, Schiff did not challenge those determinations in the Tax Court. Accordingly, on April 1, 1983, the IRS assessed deficiencies in tax plus interest and penalties for failure to pay estimated taxes and for fraud for the years 1976 through 1978. Schiff was notified of the assessments by IRS Form 3552. He was assessed a total of $41,837.35 for 1976, $39,760.99 for 1977, and $110,247.89 for 1978. The form notified Schiff that payment was due within ten days. On April 18, 1983, having received no response from Schiff, the IRS sent him a final notice stating that enforcement action would be taken if he did not make payment within ten days.
Schiff did not satisfy the tax deficiency. The IRS therefore levied on royalties owed to him by Simon & Schuster, the publisher of a book he wrote entitled "How Anyone Can Stop Paying Income Taxes." Schiff's attempt to stop the IRS collection effort failed. Schiff v. Simon & Schuster, Inc., 780 F.2d 210 (2 Cir. 1985).
On May 11, 1985, Schiff filed claims for refunds of the amounts the IRS had collected for the years 1976 through 1978. The IRS denied those claims. Schiff commenced the instant action on October 9, 1986, seeking refunds for the years in question. On April 20, 1989, Schiff moved for summary judgment. The government filed a cross-motion for summary judgment on June 12, 1989. On September 6, 1989, the district court granted the government's cross-motion for summary judgment. Judgment was entered on September 13, 1989. Schiff filed two subsequent motions for reconsideration. Both were denied.
This appeal followed.
We review the district court's grant of summary judgment de novo. EAD Metallurgical, Inc. v. Aetna Cas. & Sur. Co., 905 F.2d 8, 10 (2 Cir. 1990). Summary judgment is proper when "there is no genuine issue as to any material fact and ... the moving party is entitled to a judgment as a matter of law." Fed. R. Civ. P. 56(c). Since summary judgment was granted in favor of the government, we consider the evidence in the light most favorable to Schiff. E.g., EAD Metallurgical, supra, 905 F.2d at 10.
With the foregoing in mind, we turn to the merits of Schiff's appeal. We hold that all of his claims are completely lacking in merit.
Initially, Schiff's contentions that the imposition of a validly enacted income tax by Congress violates the taxing clauses of the Constitution have been rejected previously. E.g., Brushaber v. Union Pacific R.R. Co., 240 U.S. 1, 19-20 (1916); Schiff v. Commissioner, supra, 751 F.2d at 117; Ficalora v. Commissioner, 751 F.2d 85, 87 (2 Cir. 1984), cert. denied, 471 U.S. 1005 (1985).
Schiff's due process claim likewise is frivolous. He contends that the assessments amounted to a taking of property without due process. The notice of deficiency sent to Schiff clearly informed him of his right to appeal to the Tax Court. Such an appeal would have provided Schiff with an opportunity to be heard and to contest the IRS' calculations. Schiff chose not to avail himself of that opportunity.
We turn next to Schiff's claims regarding the propriety of the IRS' assessments. First, Schiff contends that since 26 U.S.C. § 6201(a) (1) (1988) requires that assessments be made from returns or lists, the IRS must prepare a substitute return pursuant to 26 U.S.C. § 6020(b) (1988) prior to assessing deficient taxes. It is clear, however, that when a taxpayer does not file a tax return, it is as if he filed a return showing a zero amount for purposes of assessing a deficiency. There is no requirement that the IRS complete a substitute return. Roat v. Commissioner, 847 F.2d 1379, 1381 (9 Cir. 1988); 26 C.F.R. Sec. 301.6211-1(a) (1990); see also Laing v. United States, 423 U.S. 161, 174 (1976) ("Where there has been no tax return filed, the deficiency is the amount of tax due").
Schiff also contends that the IRS must use Form 17 to provide notice of a deficiency and make a demand for payment. The Secretary of the Treasury is required to provide notice of a deficiency and make a demand for payment within 60 days of an assessment. 26 U.S.C. § 6303(a) (1988). In the instant case, the IRS gave timely notice to Schiff, using Form 3552. That form clearly stated the amount due and that payment must be made within 10 days. There is no requirement that the Secretary use a specific form to provide notice of a deficiency to a taxpayer. Planned Inv., Inc. v. United States, 881 F.2d 340, 343-44 (6 Cir. 1989).
Schiff further contends that the assessment against him for taxes owed for the year 1976 was barred by the statute of limitations. Generally, an assessment must be made within three years of the filing of a tax return. 26 U.S.C. § 6501(a) (1988). When no return is filed, however, an assessment may be made at any time. 26 U.S.C. § 6501(c) (3) (1988). Schiff's tax return for 1976 set forth no financial information at all. For statute of limitations purposes, such a return is treated as if no return was filed. Morgan v. Commissioner, 807 F.2d 81, 82 (6 Cir. 1986).
In short, we find no merit whatsoever in any of Schiff's claims with respect to the propriety of the IRS' assessments and their collection.
We turn next to Schiff's contention that the district court erred in granting summary judgment with respect to the imposition of civil fraud penalties. He contends that the imposition of such a penalty cannot be based solely on his failure to file a tax return. Stoltzfus v. United States, 398 F.2d 1002, 1005 (3 Cir. 1968), cert. denied, 393 U.S. 1020 (1969).
The fraud penalty can be imposed if the Commissioner proves "by clear and convincing evidence that taxpayers acted with an intent to evade paying taxes." Douge v. Commissioner, 899 F.2d 164, 168 (2 Cir. 1990). Fraud can be proved by circumstantial evidence. Id. "Such evidence may include (1) consistent and substantial understatement of income, (2) failure to maintain adequate records, (3) failure to cooperate with an IRS investigation, (4) inconsistent or implausible explanations of behavior and (5) awareness of the obligation to file returns, report income and pay taxes." Id.
The frivolous nature of this appeal is perhaps best illustrated by our conclusion that Schiff is precisely the sort of taxpayer upon whom a fraud penalty for failure to pay income taxes should be imposed. It is an understatement to say that Schiff has consistently and substantially under reported his income. The fact is that "he has not filed tax returns since 1973." Schiff v. Simon & Schuster, Inc., supra, 780 F.2d at 211.
A brief review of Schiff's history in this court provides substantial support for our holding that his failure to file tax returns for the years 1976 through 1978 was a fraudulent attempt to evade taxes. He was convicted of willfully failing to file tax returns for the years 1974 and 1975. We affirmed that conviction without opinion, United States v. Schiff, supra, 647 F.2d 163, and the Supreme Court denied certiorari. 454 U.S. 835. In addition, tax deficiencies and civil penalties were assessed against Schiff for his failure to file tax returns for those years. Schiff v. Commissioner, supra, 751 F.2d at 117. Schiff also was convicted of attempted tax evasion for the years 1980 through 1982 and for failing to file a corporate income tax return for the year 1981, United States v. Schiff, supra, 801 F.2d 108, and again the Supreme Court denied certiorari. 480 U.S. 945. Moreover, Schiff's background makes it inconceivable that he was unaware of his obligation to file returns and pay taxes. In light of Schiff's repeated attempts to evade his obligation to pay income taxes, we hold that summary judgment was justified on the issue of whether civil fraud penalties were properly assessed because of his failure to file returns for the years 1976 through 1978.
We hold that there was no genuine issue of material fact to preclude the district court from granting summary judgment in favor of the government.
This brings us to Schiff's contention that the district judge erred in failing to recuse himself. Schiff contends that the judge should have recused himself since he ruled against Schiff in Schiff's attempt to prevent Simon & Schuster from cooperating in the IRS attachment proceeding. This contention is totally lacking in merit. Prior adverse rulings "without more, ... do not provide a reasonable basis for questioning a judge's impartiality." United States v. Wolfson, 558 F.2d 59, 64 (2 Cir. 1977). There is nothing in the record to suggest that the judge was unable to render an unbiased decision. Indeed, were we to adopt the bright line rule that Schiff suggests, litigious individuals might run out of judges before whom their cases could be heard.
We hold that the district judge did not err in deciding not to recuse himself.
Having held that Schiff's contentions are frivolous, we turn now to the matter of sanctions. We do not undertake lightly a decision to impose sanctions pursuant to Fed. R. App. P. 38. However, " [r]eady as we are to protect and enforce [a litigant's] rights, we must be equally willing to employ lawful sanctions as a means of preventing needless waste of the court's time and resources." Acevedo v. INS, 538 F.2d 918, 920 (2 Cir. 1976) (per curiam).
As demonstrated above, we repeatedly have rejected Schiff's attacks on the tax system, which he has raised in this Court on numerous occasions. Indeed, we imposed sanctions on Schiff for asserting, on his appeal from the assessment of tax deficiencies resulting from his failure to pay income taxes for the years 1974 and 1975, issues very similar to the ones raised on the instant appeal. Schiff v. Commissioner, supra, 751 F.2d at 117. Moreover, we previously have described Schiff as "an extremist who reserve [s] the right to interpret the decisions of the Supreme Court as he read [s] them from his layman's point of view regardless of and oblivious to the interpretations of the judiciary." United States v. Schiff, supra, 612 F.2d at 75.
We conclude that the instant appeal is yet another in a series of frivolous appeals brought by Schiff "to make public his radical views on tax reform." Schiff v. Commissioner, supra, 751 F.2d at 117. We cannot countenance Schiff's continued resort to this Court to "rehash ... his basic thesis: [that] he does not have to pay taxes." United States v. Schiff, supra, 876 F.2d at 275. "The payment of income taxes is not optional ... and the average citizen knows that the payment of income taxes is legally required." Id. (citations omitted).
The imposition of sanctions against litigants who continuously abuse the appellate process is justified. E.g., In re Hartford Textile Corp., 681 F.2d 895, 897 (2 Cir. 1982) (per curiam), cert. denied, 459 U.S. 1206 (1983); In re Hartford Textile Corp., 659 F.2d 299, 303-06 (2 Cir. 1981) (per curiam), cert. denied, 455 U.S. 1018 (1982); Browning Debenture Holders' Comm. v. DASA Corp., 605 F.2d 35, 40 n. 5 (2 Cir. 1979). We hold that " 'the situation here is one of those "highly unusual" instances which permit the imposition of sanctions under Rule 38 because of "a clear showing of bad faith".' " In re Hartford Textile Corp., supra, 659 F.2d at 305 (citation omitted). We order that double costs in this Court and $5,000 damages be awarded against Schiff, to be paid to the United States.
"To make the sanction effective and thereby protect the processes of a court from abuse, a litigant against whom Rule 38 sanctions have been imposed must comply with those sanctions before being permitted to pursue new matters in that court." Schiff v. Simon & Schuster, Inc., supra, 766 F.2d at 62 (footnote omitted). Accordingly, we further order that the clerk of this Court shall not accept any more papers from Schiff for filing except upon proof of payment of the above sanction. E.g., In re Martin-Trigona, 795 F.2d 9, 12 (2 Cir. 1986) (per curiam); Johl v. Johl, 788 F.2d 75, 76 (2 Cir.) (per curiam), cert. denied, 479 U.S. 858 (1986); Schiff v. Simon & Schuster, Inc., supra, 766 F.2d at 62; In re Hartford Textile Corp., supra, 681 F.2d at 897-98. This prohibition against further filings does not apply to any petition for rehearing, petition for rehearing en banc, or petition for certiorari—in this case.
We order that the mandate issue forthwith; that the judgment of this Court include the provisions for double costs and damages as ordered above; that execution on the judgment of this Court for damages issue forthwith; and that execution on the judgment of this Court for costs issue within ten days of the date of the taxation of costs according to law.In re Hartford Textile Corp., supra, 659 F.2d at 305-06.
To summarize:
We hold that there was no genuine issue of material fact to preclude the district court from granting summary judgment in favor of the government. We further hold that the district judge did not err in declining to recuse himself. In light of the frivolous nature of this appeal and Schiff's pattern of bringing such appeals, we order that double costs in this Court and $5,000 damages be awarded against Schiff, to be paid to the United States. We further order that the clerk of this Court shall not accept any more papers for filing from Schiff except upon proof of payment of the above sanction.
Affirmed with double costs and $5,000 damages against Schiff.
As for Dan Meador's works, I still stand with what he has relayed to the public. Many people have elected to judge him for his literal works just as they did Irwin Schiff in his works, The Federal Mafia.
Irwin Schiff, another convicted felon dirtbag enshrined in the Quatloos Hall of Shame.
FOR IMMEDIATE RELEASE MONDAY, OCTOBER 24, 2005 WWW.USDOJ.GOV TAX (202) 514-2007 TDD (202) 514-1888
PROFESSIONAL TAX RESISTER IRWIN SCHIFF AND TWO ASSOCIATES CONVICTED IN LAS VEGAS TAX SCAM
WASHINGTON, D.C. - A federal jury in Las Vegas, Nevada convicted Irwin Schiff and two associates, Cynthia Neun and Lawrence Cohen, of aiding and assisting in the preparation of false income tax returns filed by other taxpayers in connection with a tax scam, and convicted Schiff and Neun of conspiring to defraud the United States, the Department of Justice and the Internal Revenue Service (IRS) announced today. Schiff was convicted on all counts, including income tax evasion and of filing false income tax returns for the years 1997 through 2002, and Neun was convicted of willfully failing to file federal income tax returns, Social Security disability fraud, and theft of government property in connection with Neun’s improper receipt of Social Security disability benefits.
According to the indictment and the evidence introduced at trial, beginning in 1995, the defendants directed thousands of taxpayers to file false federal income tax returns with the IRS that reported zero taxable income in spite of the taxpayers earning large amounts of reportable income. The defendants operated the scam through Freedom Books-a business owned by Schiff-that sold books, tapes, and packets encouraging customers not to pay income tax. According to a government witness who testified at trial, between 1997 and 2002 Freedom Books sold more than $4.2 million in products that promoted Schiff’s “anti-tax” scheme.
“People who evade their tax obligations, or encourage or enable others to do so, are cheating all law-abiding taxpayers,” said Eileen J. O’Connor, Assistant Attorney General for the Justice Department’s Tax Division. “The Department of Justice will prosecute these crimes, and juries will convict the offenders.”
The Justice Department filed a civil suit in the same court against Schiff, Neun, and Cohen in March 2003, and the court granted a temporary restraining order barring them from advertising or selling Schiff’s “zero-income tax return” plan; preparing tax returns for others; and assisting others to violate the tax law, including by “selling services, books or other materials that provide direction about how to fill out fraudulent or false tax forms. . . .” The preliminary injunction was affirmed after the defendants’ appeal to the U.S. Court of Appeals for the Ninth Circuit. The U.S. Supreme Court this month declined to hear Schiff’s challenge to the Ninth Circuit decision. The Justice Department will ask the district court to convert the preliminary injunction into a permanent one. More information about the injunction may be found on the Tax Division website at http://www.usdoj.gov/tax/txdv03357.htm, and http://www.usdoj.gov/tax/txdv03167.htm.
Evidence presented at trial proved that Schiff evaded the payment of more than $2 million in taxes he owed the IRS from 1979 through 1985. Schiff concealed income he earned from Freedom Books, in part by using offshore bank accounts and conducting financial transactions through secret “warehouse” banking services. The evidence also showed that Schiff used debit cards issued by offshore banks to obtain funds he transferred offshore, that he opened bank accounts using multiple tax identification numbers, and that he titled his ownership of a car in the name of a Pennsylvania corporation.
That marked the third time Schiff had been convicted of tax offenses. “Paying taxes is the price of citizenship. After three strikes, I would hope that even Mr. Schiff realizes that he has struck out,” said IRS Commissioner Mark W. Everson.
Mr. Schiff faced a maximum sentence of 43 years in prison and $3.25 million in fines andwas remanded to the custody of the U.S. Marshals Service.
FOR IMMEDIATE RELEASE FRIDAY, FEBRUARY 24, 2006 WWW.USDOJ.GOV TAX (202) 514-2007 TDD (202) 514-1888
PROFESSIONAL TAX RESISTER SENTENCED TO MORE THAN 12 YEARS IN PRISON FOR TAX FRAUD
WASHINGTON, D.C. - Longtime tax protestor Irwin Schiff was sentenced in federal district court in Las Vegas to total of 163 months in prison—151 months for tax fraud and an additional 12 months for contempt of court—the Department of Justice and the Internal Revenue Service (IRS) announced today. In addition, Schiff was ordered to pay more than $4.2 million in restitution and to serve three years of supervised release.
In October 2005, Schiff was convicted of conspiring to defraud the United States, aiding and assisting in the preparation of false income tax returns, filing his own false tax returns, and evading the payment of millions of dollars in back taxes owed. This marks the third time Schiff has been convicted for committing federal tax offenses. Schiff previously has spent more than four years in jail for his tax crimes. Two associates of Schiff, Cynthia Neun and Lawrence Cohen, were also convicted of aiding and assisting other taxpayers in the filing of false tax returns. On February 3, 2006, Cohen was sentenced to 33 months in prison. Neun was sentenced yesterday to 68 months in prison and ordered to pay $1.1 million in restitution.
“Last October, a jury of his peers found Mr. Schiff guilty of serious tax crimes related not only to his own tax evasion, but also to his encouraging and enabling others to file false returns. The prison sentence handed down today reflects the seriousness of those crimes,” said Eileen J. O’Connor, Assistant Attorney General for the Justice Department’s Tax Division. “The Department of Justice is working vigorously to vindicate the interests of law-abiding Americans who file returns and pay the taxes the law requires.”
“Mr. Schiff earned this sentence,” said IRS Commissioner Mark Everson. “For years he has preyed on others by holding out false hope that they need not pay their taxes.”
According to the indictment and the evidence introduced at trial, beginning in 1995, Schiff aided thousands of taxpayers in the filing of false federal income tax returns with the IRS that reported zero taxable income in spite of the taxpayers earning reportable income. Schiff owned and operated Freedom Books, a business that sold books, tapes, and informational packages encouraging customers not to pay income tax. According to a government witness who testified at trial, between 1997 and 2002, Freedom Books sold more than $4.2 million of these products.
The evidence presented at trial also proved that Schiff evaded the payment of more than $2 million in taxes he owed the IRS from 1979 through 1985. Schiff concealed income he earned from Freedom Books, in part, by using offshore bank accounts and conducting financial transactions through secret “warehouse” banking services. The evidence also showed that Schiff used debit cards issued by offshore banks to obtain funds he transferred offshore, that he opened bank accounts using multiple tax identification numbers and that he concealed his wealth by hiding his assets through the use of nominees.
Assistant Attorney General O’Connor thanked Tax Division Trial Attorneys Jeffrey A. Neiman, David J. Ignall, and Melissa Schraibman, who prosecuted the case. She also thanked Criminal Investigation Special Agents David Holland, Adam Steiner, and Autumn Woodard of the IRS, and the U.S. Attorney’s Office for the District of Nevada, whose assistance was essential to the successful investigation and prosecution of the case.
And the obvious answer to all of it is to place all of Mr. Schiff's possesions and property, and income, in the possession of a legal guardian, who will properly file Mr. Schiff's income taxes, and will properly liquidate his property, as necessary, to pay for such back taxes, fees and penalties he owes.
The idea that gold fringe on a flag, outside of the military, has ANY legal or regulatory significance whatsoever, is belief in witchcraft and magic.
Nah, when Irwin Schiff had to 'splain hisself, he resorted to a claim of Delusional Personality Disorder. The claim failed. Irwin Schiff died in prison. There is nothing like a tax protester who idolizes a convicted tax fraudster who claimed to a court that “a ‘delusional disorder’ [] has convinced him ‘that the law does not require him to pay taxes.’”
Dr. Ortega hospitalized him in October 2003 for depression and “high risk for suicide.” Dr. Ortega’s professional opinion was as follows:
“In my professional opinion I felt that the patient did not pay taxes because he was convinced that the law does not require him to do so. I think this is a delusional disorder.
[...]
His mental illness makes it “almost impossible… to persuade him he is wrong.” His opinions and thus his conduct is “driven by his mental illness.” Hayes Report, P. 6-7. According to Dr. Ortega he suffers from a “delusional disorder” which has convinced him “that the law does not require him to pay taxes.” Ortega Report, P. 4. Dr. Barry states that Schiff’s “belief system is not under voluntary control.” He has “little or no ability to alter his beliefs.” “Mr. Schiff’s behavior is not rational.” His conduct “is the product of a Delusional Personality Disorder.” Barry Report, P. 2.
This crazy claim about gold fringe goes back at least 25 years that I know of.
It was debunked at least 23 years ago, in Greenstreet.
United States v. Greenstreet, 912 F. Supp. 224 (N.D. Tex. 1996)
US District Court for the Northern District of Texas - 912 F. Supp. 224 (N.D. Tex. 1996)
January 18, 1996
912 F. Supp. 224 (1996)
UNITED STATES of America, Plaintiff, v. Gale E. GREENSTREET, LuAnn Taylor, County Clerk of Dallam County, Texas, and LeRoy Hutton, County Clerk of Randall County, Texas, Defendants.
No. 2:95-CV-119-J.
United States District Court, N.D. Texas, Amarillo Division.
January 18, 1996.
*225 Nancy Koenig, Assistant U.S. Attorney, Lubbock, TX, Gordon Bryant, Asst. U.S. Attorney, Amarillo, TX, for plaintiff.
Gale Greenstreet, Dalhart, TX, pro se.
Thomas B. Jones, III, Randall Co. Asst. Dist. Atty., Canyon, TX, William Hunter, Greg Oelke, Hunter & Oelke, Dalhart, TX, for defendants.
ORDER
MARY LOU ROBINSON, District Judge.
Before the Court is Plaintiff United States of America's "Motion for Summary Judgment," filed October 31, 1995. For the following reasons, Plaintiff's motion is GRANTED.
I. BACKGROUND
This case stems from the filing of five UCC-1 financing statements against three U.S. Department of Agriculture employees named as "debtors."[1] The financing statements were filed in Dallam and Randall counties by Defendant Greenstreet and Lawrence Wayne Garth, deceased. None of the federal employees named in the statements were, or ever had been, indebted to either Greenstreet or Garth.
On June 22, 1995, the United States of America, by and through the United States Attorney for the Northern District of Texas, filed its Complaint in this action. The Complaint seeks declaratory and injunctive relief. The Plaintiff desires that the financing statements at issue be declared void ab initio by the Court. The United States also seeks injunctive relief authorizing and directing the Defendant County Clerks to remove and expunge from the county records the fraudulent financing statements submitted for filing by Garth and Greenstreet. Further, the Complaint requests relief permanently enjoining Defendant Greenstreet from presenting similar financing statements for filing in the future.
It appears that as a form of retribution, retaliation, or harassment, Defendant Greenstreet and Mr. Garth caused financing statements to be filed against specific Farmers Home Administration (FmHA) employees. Both Greenstreet and Garth had financed property through the FmHA in the past. Greenstreet defaulted on a promissory note; therefore, his land was foreclosed upon and subsequently sold. Garth was convicted of conversion of property pledged to the FmHA. He was sentenced by this Court in 1985 to serve two years in a federal correctional institution.
Defendant Greenstreet has filed several documents with the Court since this matter was initiated against him. The filings have routinely been voluminous and difficult to comprehend. Apparently, Mr. Greenstreet is of the opinion that "Our One Supreme *226 Court, Republic of Texas, in and for Dallam County" maintains exclusive jurisdiction over the case. He has challenged the Court's jurisdiction and venue, and moved the Court to dismiss the case against him. Mr. Greenstreet's requests were denied.
On October 31, 1995, the United States of America moved that this Court grant it summary judgment. Defendant Greenstreet responded by filing a document entitled "Notice of No Venue to This Statutory, Admiralty Court." Parsing the Response's imprecise, vague, argumentative, conclusory, and sometimes unintelligible prose, this Court gleans that Mr. Greenstreet objects to the Government's position on the following grounds. First, Greenstreet reasserts that this Court lacks jurisdiction over his case and that venue is improper. Further, he maintains that since no one filed a claim of any right, title, or interest in the property he formerly owned in accordance with an Order from "Our One Supreme Court" for the Republic of Texas, he should thus prevail by default. Additionally, Greenstreet argues that since all relevant issues have already been adjudicated by a court of "superior and competent jurisdiction" (common law court for the Republic of Texas), any action now brought by the Plaintiff should be barred by the doctrine of res judicata. Finally, Greenstreet contends that Plaintiff's motion should be dismissed as contemptuous, as it is in violation of prior court orders issued by Our One Supreme Court for the Republic of Texas. To support his position, Defendant Greenstreet filed findings of fact signed by 12 "jurors" which resulted from his action to quiet title before a court of common law venue.
II. SUMMARY JUDGMENT STANDARD
The United States Court of Appeals for the Fifth Circuit set forth the standard for summary judgment in Hibernia Nat'l Bank v. Carner, 997 F.2d 94 (5th Cir. 1993). In reviewing a motion for summary judgment, the Court must ask whether,
the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue of material fact and that the moving party is entitled to a judgment as a matter of law. FED. R.CIV.P. 56(c). In making this determination, we view all of the evidence in the light most favorable to the party opposing the motion for summary judgment. Reid v. State Farm Mutual Insurance Co., 784 F.2d 577, 578 (5th Cir.1986).
To defeat a motion for summary judgment, Rule 56(e) of the Federal Rules of Civil Procedure requires the non-moving party to set forth specific facts sufficient to establish that there is a genuine issue for trial. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250, 106 S. Ct. 2505, 2511, 91 L. Ed. 2d 202 (1986). While the mere allegation of the existence of a dispute over material facts is not sufficient to defeat a motion for summary judgment, if the evidence shows that a reasonable jury could return a verdict for the non-moving party, the dispute is genuine. Id. at 247-48, 106 S. Ct. at 2510.
On the other hand, if a rational trier of fact, based upon the record as a whole, could not find for the non-moving party, there is no genuine issue for trial. Amoco Production Co. v. Horwell Energy, Inc., 969 F.2d 146, 147-48 (5th Cir.1992). Such a finding may be supported by the absence of evidence necessary to establish an essential element of the non-moving party's case. See Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S. Ct. 2548, 2552, 91 L. Ed. 2d 265 (1986); Topalian v. Ehrman, 954 F.2d 1125, 1131 (5th Cir.), cert. denied, 506 U.S. 825, 113 S. Ct. 82, 121 L. Ed. 2d 46 (1992); International Ass'n of Machinists & Aerospace Workers, Lodge No. 2504 v. Intercontinental Mfg. Co., 812 F.2d 219, 222 (5th Cir.1987).
Finally, where the non-moving party has presented evidence to support the essential elements of its claims but that evidence is merely colorable, or is not significantly probative, summary judgement may be granted. Anderson, 477 U.S. at 249-50, 106 S. Ct. at 2510-11 (citations omitted). A summary judgment assertion made in an affidavit is simply not enough evidence to raise a genuine issue of material fact. See *227 Lechuga v. Southern Pacific Transp. Co., 949 F.2d 790, 798 (5th Cir.1992) (noting that conclusory statements in an affidavit do not provide facts that will counter summary judgment evidence, and testimony based on conjecture alone is insufficient to raise an issue to defeat summary judgment.); Galindo v. Precision American Corp., 754 F.2d 1212, 1216 (5th Cir.1985) ([A]ffidavits setting forth ultimate or conclusory facts ... are insufficient to either support or defeat a motion for summary judgment....) (citations omitted). Similarly, it is insufficient for the non-movant to argue in the abstract that the legal theory involved in the case encompasses factual questions. See Pennington v. Vistron Corp., 876 F.2d 414, 426 (5th Cir. 1989).
Hibernia Nat'l Bank v. Carner, 997 F.2d 94, 97-98 (5th Cir.1993).
III. DISCUSSION
Because the purported financing statements fail to comply with the requisites of law, they are void and of no legal consequence. As a preliminary matter, the federal employees burdened by the financing statements at issue do not fall within Texas' Uniform Commercial Code's definition of a "debtor." TEX.BUS. & COM.CODE ANN. § 9.105(a) (4) (Vernon 1991).[2] There is no evidence before the Court that the federal employees, burdened by the fraudulently filed UCC-1 statements, owed payment or other performance to Defendant Greenstreet or Mr. Garth for any obligation secured.
Furthermore, the federal employees named in the financing statements never signed the documents filed against them. Generally, a debtor's signature is necessary for a financing statement to be valid. The law is well settled that a financing statement is sufficient if it: (1) provides the names of the debtor and the secured party, (2) provides the address for the debtor and secured party, (3) contains a statement describing or indicating the type of collateral, and (4) is signed by the debtor. TEX.BUS. & COM.CODE ANN. § 9.402(a) (Vernon Supp.1995). The Fifth Circuit has recognized the importance of the signature requirement. See Sommers v. Int'l Business Machines, 640 F.2d 686, 689-92 (5th Cir.1981). The situation presently before the Court is precisely the type of problem sought to be avoided by the Code draftsmen in requiring the signature of the debtor on the financing statement. The presence of a debtor's signature provides an indispensable concession to authenticity and a deterrent to inaccurate or malicious filings. As a result, the financing statements at issue are without legal effect and should be removed from the county clerks' records.
Apparently, in an attempt to circumvent the signature requirement, Defendant Greenstreet and Mr. Garth attached to the UCC-1 statements the signature page of letters or other documents previously signed by the alleged debtors. The UCC-1 financing statements in this case do not even purport to contain the signatures of the alleged debtors; instead, the signature box on the UCC-1 statements contain a typed reference to UCC § 3-415[3] and is signed by either Garth or Greenstreet. The addition of documents evincing the signature of the alleged debtors amounts to a crude compliance attempt at best and a forgery at worst.
Basically, there is absolutely no evidence to support the belief that a security agreement exists between the federal employees named in the financing statements and either Mr. Garth or Mr. Greenstreet. To the contrary, all of the subject federal employees signed sworn declarations that they were not and never have been indebted to Defendant Greenstreet or Lawrence Wayne Garth. Absent a valid security agreement, a financing statement by itself does not create an enforceable security interest. In re Wes Dor, Inc., 996 F.2d 237, 239 *228 n. 2 (10th Cir.1993); see generally Sommers, 640 F.2d at 689-90; In re E.A. Fretz Co., Inc., 565 F.2d 366, 370-73 (5th Cir.1978); Mosley v. Dallas Entertainment Co., Inc., 496 S.W.2d 237, 240 (Tex.Civ.App.Tyler 1973, writ dism'd) (stating "The code makes no provision for a naked financing statement to be enforced as a security agreement."). Put differently, a UCC-1 financing statement in and of itself, which does not contain any evidence of an agreement, does not create a security interest or security agreement. Mosley, 496 S.W.2d at 240; cf. In re Maddox, 92 B.R. 707, 709-12 (Bankr.W.D.Tex. 1988). A financing statement exists to perfect an existing security interest and protect it from competing third party claims. Obviously, absent an existing security agreement in some form or fashion, a financing statement, without more, has no legal import or effect. Thus, even if the financing statements at issue were technically sufficient, which they are not, they would still be insufficient to represent enforceable security interests under the circumstances.
Messrs. Greenstreet and Garth's conduct illustrates a disregard for the legal system and should be considered reprehensible. They abused the system by filing fraudulent documents. Mr. Greenstreet compounded the abuse by subsequently flooding the Court with frivolous pleadings. Their actions were costly and inconvenient to many. Although there is little federal case law precisely addressing the specific conduct Greenstreet engaged in before this Court, his tactics are unfortunately not uncommon. As a consequence, more attention to Greenstreet's activity is warranted.
Greenstreet argues that he is of "Freeman Character" and "of the White Preamble Citizenship and not one of the 14th Amendment legislated enfranchised De Facto colored races." He further claims that he is a "white Preamble natural sovereign Common Law De Jure Citizen of the Republic/State of Texas." As a result, he concludes that he is a sovereign, not subject to the jurisdiction of this Court. Greenstreet's argument is entirely frivolous. Except for documents allegedly issued from the common law court Greenstreet claims is superior to this Court, no support for his position exists. Greenstreet provides no acceptable authority or cogent analysis to support his contention that this Court lacks personal jurisdiction over him. See generally United States v. Masat, 948 F.2d 923, 934 (5th Cir.1991), cert. denied, 506 U.S. 835, 113 S. Ct. 108, 121 L. Ed. 2d 66 (1992); United States v. Schmitt, 784 F.2d 880, 882 (8th Cir.1986), habeas corpus proceeding, 752 F. Supp. 306 (D.Minn. 1990), aff'd, 938 F.2d 189 (8th Cir.1991), cert. denied, 502 U.S. 985, 112 S. Ct. 592, 116 L. Ed. 2d 616 (1991) (describing appellants' argument that district court lacked personal jurisdiction over them because they were "natural freemen" as frivolous). Accordingly, this Court finds Greenstreet's argument lacking in justification.
Likewise, Greenstreet failed to support his position that this Court lacks subject matter jurisdiction. As the Government correctly notes, this Court has subject matter jurisdiction pursuant to Title 28 of the United States Code, §§ 1331 and 1345. In addition, venue is proper in this district under 28 U.S.C. § 1391(b) because all of the Defendants reside within this district, and the acts giving rise to the Plaintiffs claim for relief occurred within this district. Mr. Greenstreet's contentions to the contrary are simply misstatements of the law. Greenstreet "removed" this case to Our One Supreme Court for the Republic of Texas. Thus, he argues, this Court lacks concurrent subject matter jurisdiction in "Common Law Venue." His position is without merit. In 1992, the Austin Court of Appeals determined that the "Common Law Court for the Republic of Texas" did not exist. Kimmell v. Burnet County Appraisal District, 835 S.W.2d 108, 109 (Tex.App.Austin 1992, writ dism'd w.o.j.) (stating "We hold that the Common Law Court for the Republic of Texas, if it ever existed, has ceased to exist since February 16, 1846."). That court went on to observe in a footnote that the Republic of Texas adopted the English common law effective March 16, 1840, and the state government was organized on February 16, 1846. Id. at n. 2. The Common Law Court for the Republic of Texas could therefore have only existed between these two dates. By analogy *229 and for the same reasons, this Court holds that the mythical judiciary described as Our One Supreme Court for the Republic of Texas does not exist. As a result, this Court rejects Defendant Greenstreet's subject matter jurisdictional arguments.
Accordingly, this Court also rejects Greenstreet's attempt to defeat the Plaintiff's motion for summary judgment based on rulings or orders from the mythical common law court he feels is superior to this Court. Thus, Greenstreet is not entitled to a default judgment because of Plaintiff's non-compliance with orders from a fictitious court. Similarly, Greenstreet will not benefit from a res judicata defense or from his attempt to prove that the Plaintiff's motion is contemptuous. On balance, the authority Greenstreet relies upon has absolutely no legal value.
Perhaps the most bizarre basis for Greenstreet's position rests on the theory that the American system of currency is illegal and unconstitutional. Liberally construing the language of his pleadings before the Court, Greenstreet apparently believes that he has never been provided with funding (i.e. "lawful money") from the FmHA, under their contract, because it failed to give him money in silver or gold. Presumably, he therefore reasons that filing a UCC-1 is an appropriate remedy for him to pursue. Greenstreet contends that federal reserve notes are not legal tender, because they violate Article 1, Section 10, of the United States Constitution. Defendant Greenstreet's argument centers around his view that "the Congress of the United States of America declared a partial NATIONAL BANKRUPTCY on June 5, 1933, under H.J.R. 192 which abrogated the gold clause and deprived the American Citizens of their Constitutional Article 1, Section 10, lawful money" and that the "COINAGE ACT OF 1965 deprived the American Citizens of their required and mandated ... silver coinage." Thus, Greenstreet extrapolates, until he is given funds in silver or gold, he will not consider any past payment to have been acceptable or satisfactory. Attacking the legitimacy of federal reserve notes is not a novel argument. Others have asserted such claims; however, they have been summarily rejected. See, e.g., Rothacker v. Rockwall County Central Appraisal District, 703 S.W.2d 235 (Tex.App.Dallas 1985, writ ref'd n.r.e.) (citing state and federal authority declaring federal reserve notes to be legal tender). This Court will also reject Mr. Greenstreet's coinage arguments. The Court believes that Defendant's position is simply irrational.
Finally, Defendant Greenstreet's response to Plaintiff's motion for summary judgment identifies this Court as an "Admiralty Court" without further discussing his allegation. If his reference is to be construed as a jurisdictional challenge, his motion is denied. Others have attempted to persuade the judiciary that fringe on an American flag denotes a court of admiralty. In light of the fact that this Court has such a flag in its courtroom, the issue is addressed. The concept behind the theory the proponent asserts is that if a courtroom is adorned with a flag which happens to be fringed around the edges, such decor indicates that the court is one of admiralty jurisdiction exclusively. To think that a fringed flag adorning the courtroom somehow limits this Court's jurisdiction is frivolous.See Vella v. McCammon, 671 F. Supp. 1128, 1129 (S.D.Tex.1987) (describing petitioner's claim that court lacked jurisdiction because flag was fringed as "without merit" and "totally frivolous"). Unfortunately for Defendant Greenstreet, decor is not a determinant for jurisdiction.
The summary judgment evidence before the Court is clear. Viewing all factual questions in the light most favorable to Defendant Greenstreet, no genuine issue of material fact exists that would necessitate a trial in this case. The United States of America, as the moving party, has the burden of showing that there is no genuine issue of material fact and that it is entitled to judgment as a matter of law. It has satisfied its burden. Once the movant carries its burden, the burden shifts to the nonmovant to show that summary judgment should not be granted. Celotex, 477 U.S. at 323-26, 106 S. Ct. at 2553-54. Unsubstantiated or conclusory assertions that a fact issue exists will not suffice. See Krim v. BanTexas Group, Inc., 989 F.2d *230 1435, 1442 (5th Cir.1993). Only when "there is sufficient evidence favoring the nonmoving party for a jury to return a verdict for that party" is a full trial on the merits warranted. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249, 106 S. Ct. 2505, 2511, 91 L. Ed. 2d 202 (1986); see also Kelley v. Price-Macemon, Inc., 992 F.2d 1408, 1413 (5th Cir.1993), cert. denied, ___ U.S. ___, 114 S. Ct. 688, 126 L. Ed. 2d 656 (1994). Even under the most generous and liberal of interpretations, the summary judgment evidence provided by Defendant Greenstreet cannot be interpreted to provide a basis whereby a rational jury could return a verdict in his favor.
The evidence before the Court clearly demonstrates that the financing statements filed by Defendant Greenstreet and Mr. Garth are fraudulent. The UCC-1 statements at issue are deficient technically and substantively. Mr. Greenstreet came forward with no understandable evidence to defeat Plaintiff's properly supported motion for summary judgment. Accordingly, Plaintiff is entitled to relief in this matter.
Thus, the Court enters its judgment in favor of the Plaintiff and against the Defendants as follows:
(1) The financing statements caused to be filed in Dallam and Randall counties by Gale E. Greenstreet and Lawrence Wayne Garth against Mary E. Batenhorst, Neil J. Fleming, and August H. Hesse, III, are HEREBY DECLARED VOID AB INITIO;
(2) This Court FURTHER ORDERS that the County Clerks of Randall and Dallam counties remove and expunge the void financing statements and all of the related documents and filings from the Public Records of their respective counties;
(3) This Court FURTHER ORDERS that Gale E. Greenstreet be permanently enjoined from further similar filings against employees of the United States of America without approval from a United States District Court; and
(4) This Court FURTHER ORDERS that all costs incurred in this lawsuit be assessed against Defendant Greenstreet.
IV. CONCLUSION
Litigants such as Mr. Greenstreet should not be underestimated. They are often motivated and know how to work the system. Unfortunately, the honest taxpayer is victimized as a result. Tactics such as declaring oneself a sovereign, turning to common law courts, challenging the jurisdiction of state and federal trial courts, and contending that federal reserve notes are not legal tender are favorites among these litigants. Such arguments, however, are time consuming for courts to process and routinely futile.
Greenstreet's arguments in this case are fatally without merit. The UCC-1 statements he and Mr. Garth filed are fraudulent and wholly inadequate. They lack the formal requisites required by the law and were not filed in good faith. Thus, the statements enjoy no legal force or effect.
Mr. Greenstreet's improper tactics failed to overcome Plaintiff's properly supported motion for summary judgment. As a result, judgment is appropriately entered against the defendants. Furthermore, it is the expectation of this Court that the equitable relief and assessments granted will reflect the Court's frustration with the arguments and tactics employed by Defendant Greenstreet. Mr. Greenstreet is hereby cautioned that if he continues to take legal positions which are not supported by existing law, severe monetary sanctions may result, his pro se status notwithstanding. Hopefully, litigants like Mr. Greenstreet will be unwilling to pay to harass the government in the future.
It is SO ORDERED.
NOTES
[1] Three of the financing statements were filed against Mary E. Batenhorst. She is employed by the United States Department of Agriculture as a District Director for the Farmers Home Administration (FmHA). The other two financing statements were filed against Neal Fleming and August Hesse, III. Both men are employed as County Supervisors for the FmHA.
[2] Section 9.105(a) (4) defines "debtor" to mean "the person who owes payment or other performance of the obligation secured...."
[3] This Code section, entitled "Contract of Accommodation Party," has nothing to do with a person's ability to sign a financing statement for another. It concerns one party signing a negotiable instrument as a surety for someone already a party to the instrument. Even construed liberally, § 3-415 is simply not applicable under the circumstances.
Many people have elected to judge him for his literal works just as they did Irwin Schiff in his works, The Federal Mafia.
You really should have read the legal disclaimer in Schiff's book, The American Mafia. This was so the simpletons who paid for his book, and swallowed the crap that they didn't have to file or pay income taxes, couldn't sue him when they found themselves in deep legal doo-doo, facing legal fees, penalties, interest, and possibly prison.
This book is designed to provide the author’s findings and opinion, based on research and analysis of the subject matter covered. This information is not provided for purposes of rendering legal or otherwise professional services, which can only be provided by knowledgeable professionals on a fee basis.
Further, there is always an element of risk in standing up for one’s lawful rights in the face of an opressive taxing authority backed by a biased judiciary.
Therefore, the author and publisher disclaim any responsability for any liability of loss incurred as a consequence of the use and application, either directly or indirectly, of any advice or information presented herin.
Copyright 1990 by Irwin Schiff Revised Third Edition 1999 Revised Second Edition 1992 First Edition Published 1990 ISBN 0-930374-09-6 01 02 03 5432
That judge went out of his way to be polite in his opinion. Assessing costs was a good move, and should be done routinely in the FIRST instance with this sort of crap.
Actually, nolu chan, I used several of Schiff's statutes back in 2002 in a matter concerning threatening letters a friend of mine received from the IRS just because, although they filed their taxes, they invoked the fifth amendment and other of their lawful rights. Apparently, this upset the IRS so much that they decided to use extortion and other illegal tactics using the US mail service. When my friend received threatening letters from the IRS, it was then that I stepped in and pushed the IRS back by using their own statutes against them. After I fired back letters on my friend's behalf, they never received another threatening letter again. Never. If you had even bothered to read Schiff's book, you would probably have a better understanding of how to deal with these people lawfully. But no, you choose to judge people by their character even in spite of how they try to make a positive contribution in our society.
In my opinion, I view those like Meador and Schiff, as protagonists in an era in which our society does not deserve them because they do not appreciate what has been revealed to them. They cannot handle the truth. When they do appreciate truth, it has to come from a "respectable" person. Who are they to judge anybody lest they also be judged. Leave to judging of these two people (Meador and Schiff) to the Father above.
Meador and Schiff are a few examples of what I consider to be the sages to unraveling and exposing the stench steming within our non-government emtities. We cannot afford to be passive lying dogs that roll over and do as we are told. America was never built on a passive government. We forget that we ( the John Q. Public) are the government that those in D.C. work for. They are not public officers; they are public servants.
If you want to change your laws, change that flag. It is wonder the Europeans laugh at us. We are lacking in spine.
If you want to change your laws, change that flag. It is wonder the Europeans laugh at us. We are lacking in spine.
If they did remove the usual gold fringes on the courtroom flags as you wish, would you then accept all those courts' rulings as lawful and binding on litigants?
If they did remove the usual gold fringes on the courtroom flags as you wish, would you then accept all those courts' rulings as lawful and binding on litigants?
That would be Title 4 U.S.C. Section 1,2, and 3. Then, they would actually have to conduct a lawful constitutional court where:
1) they conduct hearings applying the law of substance rather than the law of procedure.
2) they recognize your right to speak and represent yourself in any case.
3) when you pass the bar, to enter the court, you are not pleading in a military jurisdiction where the judge optionally elects to acknowledge your rights.
This is not just in federal courts but also municipal courts too. It is not the court rulings that bind litigants so much as how it is being conducted.
[goldilucky] Actually, nolu chan, I used several of Schiff's statutes back in 2002 in a matter concerning threatening letters a friend of mine received from the IRS just because, although they filed their taxes, they invoked the fifth amendment and other of their lawful rights. Apparently, this upset the IRS so much that they decided to use extortion and other illegal tactics using the US mail service. When my friend received threatening letters from the IRS, it was then that I stepped in and pushed the IRS back by using their own statutes against them. After I fired back letters on my friend's behalf, they never received another threatening letter again. Never.
and they all lived happily after.
I surmise your letters that made the IRS quake in fear were full of the same substance that permeates your every post on LF.
With you as their legal counsel, I suspect they were receiving three hots with their cot, and legal papers that were not letters.
It is a shame you are unable to even express a real legal argument for your bullshit. I would likie a real legal argument so I could crush it.
[goldilucky] Who are they to judge anybody lest they also be judged. Leave to judging of these two people (Meador and Schiff) to the Father above.
I rather suspect two bloodsucking leaches, who profited from the misery they caused others, were directed to exit 1 off the expressway going North, and redirected South to the end of the line.
I include here only the Tax Protester division of the Quatloser Hall of Shame.
This is from a remnant of the old Quatloos site, so links on the page no longer work. The Quatloos Forum moved to a new location at https://quatloosia.blogspot.com/. Archives of the old forum are there. It was like a Wikipedia of tax fraudsters.
QUATLOSERS HALL OF SHAME
"These special-editions Quatloos commemorates those who have made a name for themselves in their particular business endeavors."
In 2003, the Internal Revenue Service had identified about 5,000 tax returns filed by about 3,100 of Schiff's customers in a three-year period, reportedly representing about $56 million in attempted tax evasion.
Convictions for 1997 through 2002 tax years
On October 24, 2005, Schiff was convicted in the U.S. District Court in Las Vegas, Nevada, on multiple counts of filing false tax returns for the years 1997 through 2002, aiding and assisting in the preparation of false tax returns filed by other taxpayers, conspiring to defraud the United States, and (for his own income taxes for tax years 1979 through 1985) tax evasion, and he again began serving jail time.
Despite Schiff's age (he turned 78 years old on the day of sentencing), on February 24, 2006, Schiff was sentenced to 151 months (12 years and 7 months) in prison and was ordered to pay over $4.2 million in restitution to the Internal Revenue Service; Schiff was also sentenced to 12 additional months for contempt of court. On December 26, 2007, the United States Court of Appeals for the Ninth Circuit affirmed Schiff's convictions except for the criminal contempt convictions. The Court vacated the contempt convictions because of the failure of the trial court judge to file contempt orders under rule 42(b) of the Federal Rules of Criminal Procedure.
The Court of Appeals indicated that the trial judge could file the appropriate paperwork and re-sentence Schiff on the contempt convictions. On September 5, 2008, the trial judge re-sentenced Schiff to 11 months in prison in connection with the contempt of court, effectively lowering Schiff's overall original sentence by another month.
One of Schiff's co-defendants, Lawrence Cohen, was sentenced on February 3, 2006 to 33 months in prison and was ordered to pay $480,000 in restitution. On December 26, 2007, the United States Court of Appeals for the Ninth Circuit reversed Cohen's conviction because of the failure of the trial court to allow testimony from a psychiatrist regarding Cohen's mental state. The Court of Appeals remanded the Cohen case for a possible re-trial. On June 16, 2009, Cohen pleaded guilty to aiding and assisting in the filing of a false tax return. However, Cohen died on August 6, 2009, and his case was therefore dismissed.
On February 23, 2006, Cynthia Neun, another co-defendant, was sentenced to 68 months in prison and was ordered to pay over $1.1 million in restitution. Neun's conviction was affirmed by the United States Court of Appeals for the Ninth Circuit. According to the prosecutor's office, Neun sold materials encouraging people not to pay taxes, prepared false tax returns, and represented hundreds of taxpayers in dealings with the IRS where she promoted Schiff's arguments. She was required to submit to three years of supervision following her release, which occurred on December 28, 2010.
In this last case, Schiff's attorneys again asked that the court consider the claim that Schiff had a mental disorder relating to his beliefs about taxes. According to the prosecutor's office, the evidence at trial showed that Schiff had attempted to evade the payment of over $2 million in taxes from 1979 through 1985 and that he had used offshore bank accounts using multiple tax identification numbers and had attempted to hide assets in connection with his tax protester related activity. Convictions of Schiff's followers
Other individuals who have been convicted of federal tax crimes after following Irwin Schiff include Warren J. Burdett; Christopher and Pamela Harrison; Scott D. Haynes; Kenneth Heath; Joseph Letscher; David Middleton; Robert L. Mosel; James C. Payne; David G. Pflum; and Steven A. Swan.
That sort of lunacy just makes me mad, really. I hope the courts make being a lunatic in that manner an expensive hobby.
Here is a lunatic tax protester LAWYER who worked real hard at it until the U.S. Tax Court finally assessed him a $3,000 penalty earlier this month.
Ten to twenty years ago, this tax protester crap was a cottage industry for bloodsucking leeches who did care what harm they did to others. The DOJ finally stepped in and started putting them behind bars and getting restraining orders against their peddling their crap.
There is a bit of crossover between these mopes and birthers. Shady birther lawyers had a cottage industry peddling their incredible garbage and collecting donations to fund their idiotic lawsuits. They had quite a following of useful idiots. Their biggest achievement was helping to get Obama elected. Twice. They looked like idiots, like the shampeachment idiots are doing now.
MICHAEL C. WORSHAM, Petitioner v. COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 26210-16. Filed December 3, 2019.
Michael C. Worsham, pro se.
David A. Indek and Nancy M. Gilmore, for respondent.
MEMORANDUM OPINION
COLVIN, Judge: This case is before the Court to decide respondent’s motion to impose a penalty under section 6673(a)(1).1 For reasons discussed below, we will impose on petitioner a penalty of $3,000.
Section references are to the Internal Revenue Code in effect at all relevant times. We round all monetary amounts to the nearest dollar.
SERVED Dec 03 2019
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[*2]Background
The facts in this case were found in Worsham v. Commissioner (Worsham II), T.C. Memo. 2019-132, and are incorporated by this reference.
A. Petitioner
Petitioner has a bachelor of science degree in chemistry; a master of science degree in civil engineering; and a juris doctor degree from the University of Baltimore School of Law. He moved to Maryland in 1993 to work for the U.S. Army Environmental Center at Aberdeen Proving Ground. During the next several years he attended law school at night. He was admitted to practice law in Maryland in 1998. He left the Army and started a solo law practice in 2001. Petitioner’s law practice was not in the area of tax, and he took no tax courses in law school.
Petitioner filed a Federal income tax return for every year from 1989 (when he had just begun graduate school for his master of science degree) through 2004. Petitioner’s law practice became more profitable during 2005. An accountant suggested that petitioner incorporate his business for tax reasons, which he did under the name of Michael C. Worsham, P.C. (Worsham P.C.). During 2006 Worsham P.C. had a corporate charter in Maryland, elected to be treated as an S corporation, and was wholly owned by petitioner. Also during 2006 petitioner
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[*3] discovered information which led him to conclude that he was not required to file Federal tax returns or pay Federal income tax. As a result petitioner did not file an individual Federal income tax return for any year since 2004 through the time of trial.
B. Worsham I and Worsham II
In Worsham v. Commissioner (Worsham I), T.C. Memo. 2012-219, 2012 WL 3101491, aff d, 531 F. App’x 310 (4th Cir. 2013), relating to petitioner’s 2006 tax year, we held that he failed to report taxable income and was liable for additions to tax under section 6651(f) for fraudulent failure to file, section 6651(a)(2) for failure to pay reported tax, and section 6654 for failure to pay estimated income tax. We did not impose a penalty under section 6673, but we warned petitioner not to continue making frivolous arguments. In Worsham I, 2012 WL 3101491, at *4, petitioner argued that “there is no constitutional basis for federal taxes on the ordinary labor of a working American like Petitioner”, that “there is no federal statute that * * * establishes federal tax liability for money earned from the ordinary labor of Americans”, and that respondent failed to account for the basis value of a person’s labor which “would be valued at near or the same as the value of the gross receipts which that same labor generated.”
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-4-
[*4] In this case, which involves petitioner’s 2005 and 2007-10 tax years, petitioner continued to argue that he is entitled to take into account his “basis in labor” and that the value or cost of his labor is its fair market value. Petitioner contends that sections 61, 83, 1001, and 1012 and various regulations under those sections support his “basis in labor” contention. In Worsham II we held that: (1) petitioner had income, self-employment income, and deductions in the amounts determined by respondent for the years at issue; (2) “basis in labor” is not considered in determining Federal income tax liability for income from performance of services; (3) petitioner is liable for tax on his self-employment income and entitled to the deductions for self-employment tax as determined by respondent; (4) we had jurisdiction over the case; (5) petitioner was liable for the additions to tax for failure to timely file tax returns and failure to make estimated tax payments; (6) the statute of limitations bars a refund of petitioner’s overpayments (if any); and (7) section 6673 is not unconstitutional.
Discussion
A. Respondent’s Motion To Impose a Penalty Under Section 6673(a)(1) Respondent filed a motion to impose a penalty of up to $25,000 on petitioner under section 6673(a)(1) for taking positions that are frivolous or groundless. In pertinent part, section 6673(a)(1) authorizes this Court to impose a
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[*5] penalty of up to $25,000 if the taxpayer has instituted or maintained proceedings before the Court primarily for delay or if the taxpayer’s position in the proceedings is frivolous or groundless. “A taxpayer’s position is frivolous if it is contrary to established law and unsupported by a reasoned, colorable argument for change in the law.” Rader v. Commissioner, 143 T.C. 376, 392 (2014) (quoting Goff v. Commissioner, 135 T.C. 231, 237 (2010)), affd in part, 616 F. App’x 391 (10th Cir. 2015).
In Worsham I, 2012 WL 3101491, at *5, we said that “[pjetitioner’s argument that no Federal statute imposes a tax on a person’s ordinary labor relies on selective and misguided readings of multiple statutes. Petitioner’s argument that he had a basis in his labor is also frivolous.” We noted that courts have previously held that taxpayers have no basis in their labor and that petitioner’s claim to the contrary is frivolous. Id. We did not impose a penalty under section 6673, but we “strongly wamfed] petitioner that making such arguments before this Court in the future * * * [would] likely result in the imposition of sanctions against him.” Id. at *10.
Worsham I was affirmed by the U.S. Court of Appeals for the Fourth Circuit, which held that petitioner “argues that his earnings as an attorney are not taxable income because they include the ‘basis value’ of his labor. We agree with
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[*6] the numerous other courts to have addressed this argument that it is meritless.” Worsham v. Commissioner, 531 F. App’x at 311. Petitioner filed his petition in this case in 2016 and continued to raise the “basis in labor” argument, even though the Court of Appeals had warned him that the argument is frivolous. In letters dated February 12, March 30, and April 2, 2018, respondent warned petitioner that raising the basis in labor argument could result in the imposition of a penalty under section 6673. Petitioner failed to heed these warnings from the courts and respondent.
B. Petitioner’s Contentions
Petitioner contends that his positions in this case are not frivolous and are issues of first impression. We disagree. In Worsham I petitioner argued that labor has a basis determined from the value of gross receipts, while in this case he argued that labor has a basis determined from the fair market value of the labor. Petitioner cites authorities to support his argument different from those he cited in Worsham I, but his argument relies upon a selective and misguided reading of those authorities and does not establish an argument different in substance from his argument in Worsham I.
As we have previously told petitioner: “We perceive no need to refute * * * [frivolous] arguments with somber reasoning and copious citation of
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[*7] precedent.” Worsham I, 2012 WL 3101491, at *4 (quoting Craig v.Commissioner, 737 F.2d 1417, 1417 (5th Cir. 1984)). Because petitioner continues to make frivolous arguments despite numerous warnings, we will require him to pay to the United States a penalty of $3,000 under section 6673.
An appropriate order and decision will be entered.
The Maryland Court of Appeals has ordered disbarment of an attorney for tax crimes
Among other things, an attorney is an “officer of the legal system and a public citizen.” If this is a special role in a nation that prides itself on the rule of law, then it entails a special responsibility to abide by the law. It also means that, when acting as an advocate, a lawyer must advance only arguments that are good faith interpretations of existing law or good faith efforts to change existing law. Fraudulent conduct and frivolous argument to avoid a civic obligation are antithetical to the lawyer’s role.
Respondent Michael Craig Worsham carved out a practice that concentrated in the private enforcement of federal and state laws prohibiting unsolicited faxes and telephone a role specifically provided in those statutes that augments public enforcement efforts and that is sometimes referred to as a “private attorney general." Mr. Worsham, however, proved to be less law-abiding in the conduct of his private affairs. As his practice grew more lucrative, he ceased to file income tax returns or pay income taxes. When detected, he attempted to justify his conduct with well-worn meritless arguments about the constitutionality and validity of the federal income tax – arguments that he repeated in his filings with us even after he had lost at every level in the federal courts and that, he ultimately conceded, had no bearing on his obligation to comply with State tax laws.
We hold that the willful failure to file income tax returns and pay income taxes, when done with fraudulent intent, merits disbarment.
The attorney was admitted in 1998 in Maryland.
He stopped paying state and federal taxes in 2005. When the IRS got on his trail, he engaged in concealment and raised frivolous claims in the courts. (Mike Frisch)
BEFORE: Beckwith, Associate Judge, and King and Reid, Senior Judges.
ORDER
(FILED - May 7, 2015)
On consideration of the certified order indefinitely suspending respondent from the practice of law in the United States District Court for the District of Maryland,this court’s April 3, 2014, order suspending respondent and directing him to show cause why reciprocal discipline should not be imposed, the response and respondent’s affidavit as required by D.C. Bar R. XI, §14 (g) filed on May 3, 2014, the statement of Bar Counsel regarding reciprocal discipline and request to stay the proceeding, this court’s June 9, 2014, order staying the matter until resolution of the pending disciplinary matter in the state of Maryland, a certified order of the Court of Appeals of Maryland disbarring respondent from the practice of law in that jurisdiction, see Attorney Grievance Com’n of Maryland v. Worsham, 105 A.3d 515 (Md. 2014), this court’s January 26, 2015, order that vacated the stay and directed respondent to show cause why reciprocal discipline of disbarment should not be imposed, the statement of Bar Counsel, and respondent’s lodged response to Bar Counsel that includes a request for oral argument, and it appearing that respondent does not rely on any of the established bases for challenging reciprocal discipline, see D.C. Bar R. XI § 11 (c), but is attempting to improperly re-litigate the discipline imposed by the state of Maryland, see In re Zdravkovich, 831 A.2d 964, 969 (D.C. 2003) (“Put simply, reciprocal discipline proceedings are not a forum to reargue the foreign discipline”), it is
ORDERED that the Clerk shall file the lodged response of respondent. It is
FURTHER ORDERED that respondent’s request for oral argument is denied. It is
FURTHER ORDERED that Michael C. Worsham is hereby disbarred from the practice of law in the District of Columbia, nunc pro tunc to May 3, 2014.
Here at LF and back at LP, the relevant ones were John Kotmair Jr., Larken Rose, and Ed & Elaine Brown.
Back when Goldi-Lox, who lived in Maryland at the time, and a poster named christine were just ordinary posters over at LP. Goldi didn't own LP at that time. Go back to the LP archives and look in the early years at the section on Taxation articles.
Petitioner has a bachelor of science degree in chemistry; a master of science degree in civil engineering; and a juris doctor degree from the University of Baltimore School of Law. He moved to Maryland in 1993 to work for the U.S. Army Environmental Center at Aberdeen Proving Ground. During the next several years he attended law school at night. He was admitted to practice law in Maryland in 1998. He left the Army and started a solo law practice in 2001. Petitioner’s law practice was not in the area of tax, and he took no tax courses in law school.
I still don't know why the state of Maryland keeps surfacing in these cases so often. Was it a hotbed of tax rebels or just a state with a low bar to getting admitted to the bar?
Obviously an attorney who is a tax resister needs to lose his license and no longer be an attorney.
The tax law is what it is. One may dislike paying taxes, but one cannot be a licensed attorney, an officer of the court, and yet proclaim that the court and the government itself have no authority to impose or enforce taxes.
"Conquest grants a title that the courts of the conqueror are bound to respect." - John Marshall
This is not just in federal courts but also municipal courts too. It is not the court rulings that bind litigants so much as how it is being conducted.
HOW courts conduct business is determined by the courts themselves, and by statute. It is not determined by the opinions of individual citizens.
Here at LF and back at LP, the relevant ones were John Kotmair Jr., Larken Rose, and Ed & Elaine Brown.
Back when Goldi-Lox, who lived in Maryland at the time, and a poster named christine were just ordinary posters over at LP. Goldi didn't own LP at that time. Go back to the LP archives and look in the early years at the section on Taxation articles.
I did not mention Goldi-Lox, or Christine, and have never linked them to the Save-a-Patriot scam. Christine back then was running Freedom 4um, still is for all I know. Nor did I mention old LF or LP. I don't know that LF was ever connected to Maryland. I joined LF in 2011. I'm not sure what point you are making or contesting.
John Kotmair Sr. made the Quatloos Hall of Shame, not Jr. The only names I bolded and commented upon were Meador and Schiff.
I see no reason to "Go back to the LP archives and look in the early years at the section on Taxation articles." If there is some point you want to make from some old LP tax article, link to it and make it.
For those not steeped in the history of the defunct LP, the original server was run out of the headquarters for the Save-a-Patriot Fellowship (SAPF) scam, of Kotmair Sr. and Jr., both of whom went to federal prison. The video and print publications of SAPF were permanently enjoined by the court in 2006.
Goldi was the Registrant, Admin, and Technical Contact for Information of LP while it was located in Maryland. Kotmair provided the server.
Old Raw Registrar Data February 17, 2010
Registrant Contact Information: Name: Goldi-Lox Organization: Liberty Post Address 1: 12 Carroll Street Address 2: Suite 6022 City: Westminster State: MD Zip: 32256 Country: US Phone: +1.9048279637 Email: @bellsouth.net
Administrative Contact Information: Name: Goldi Lox Organization: Liberty Post Address 1: 12 Carroll Street Address 2: Suite 6022 City: Westminster State: MD Zip: 32256 Country: US Phone: +1.9048279637 Email: @bellsouth.net
Technical Contact Information: Name: Goldi Lox Organization: Liberty Post Address 1: 12 Carroll Street Address 2: Suite 6022 City: Westminster State: MD Zip: 21157 Country: US Phone: +1.9048279637 Email: @bellsouth.net
A Permanent Injunction Order, issued by USDC Maryland on 29 November 2006, ordered Kotmair to stop operating, directly or indirectly, the "Save-A-Patriot Fellowship" (SAPF).
In this case, had the SAP Fellowship had its own bank account in which it maintained its funds it might have little problem in prevailing as to those funds. [n22] Similarly, although perhaps less conclusively, had the SAP Fellowship maintained records of its funds and had Kotmair as Fiduciary keep the association funds completely separate from his own, the Fellowship would have at least a possibility of carrying its burden of proof. However, the Fellowship presents no records whatsoever. Nor does the evidence establish that its funds were maintained separately from those of Kotmair. And, most significantly, there is no evidence from which the Court can determine at what point after Fellowship funds leave the Office in the possession of Kotmair that they cease to be held exclusively as the property of the SAP Fellowship.
The record establishes that Kotmair was entitled to, felt free to, and did, take funds from the Fellowship and use them for his personal sustenance. Kotmair espouses a doctrine that would have funds that he takes to spend for personal use remain the property of the SAP Fellowship. Indeed, in the world according to Kotmair, if he uses Foundation funds for his food, the Foundation ownership extends to the food even as it proceeds through his digestive system. For example:
THE COURT: We are trying to get an understanding of when something belongs to you and when it doesn't. When it belongs to [the SAP Fellowship], so I just want you to try and help me understand that. If you go to the grocery store and you buy Wheaties [with fellowship funds], when is it yours, after you eat it or . . .
Kotmair: That is a hard question to answer.
THE COURT: That is why we ask it.
Kotmair: If the energy from it goes to the Fellowship, and it does, I would say it is to the benefit of the fellowship.
The Court declines to follow the "logic" of Kotmair's position or to dwell upon the point in the digestive process at which Kotmair would agree that the I.R.S. could effect collection. Rather, the Court must conclude that once Kotmair takes Fellowship funds for personal use, those funds can no longer be found to be Fellowship property immune from levy for Kotmair's tax liabilities.
The Court finds from the evidence that the SAP Fellowship obtained, and had ownership of, the cash and money orders it received for memberships and the sales of goods, and, possibly services. If the Fellowship had established that Kotmair's possession of particular assets was solely as Fiduciary for the SAP Fellowship the ownership could remain in the Fellowship. However, at such point as Kotmair took the assets and did not place them in a location [n23] that was exclusively used for the maintenance of Fellowship assets, the ability of the SAP Fellowship to establish ownership in this case was lost. In the context of this case, once the cash and money orders were taken from the office and placed in something other than a Fellowship depository, the funds were available for the immediate personal use of Kotmair, mingled with his own assets, and no longer had the character of Fellowship assets sufficient to avoid levy.
It"s the talismanic force they give to certain words or incidental things 9like fringes on a flag), and the fact they REALLY BELIEVE it that stands out to me. They resemble fanatics handling snakes and proclaiming the REAL meaning of prophesies - such sincere, misguided unrealism.
Here is what an American flag is supposed to look like according. Anything else is not an American flag by definition.
§1. Flag; stripes and stars on
The flag of the United States shall be thirteen horizontal stripes, alternate red and white; and the union of the flag shall be fifty stars representing the fifty states, white in a blue field
§2. Same; additional stars
On the admission of a new State into the Union one star shall be added to the union of the flag; and such addition shall take effect on the fourth day of July then next succeeding such admission
It"s the talismanic force they give to certain words or incidental things 9like fringes on a flag), and the fact they REALLY BELIEVE it that stands out to me. They resemble fanatics handling snakes and proclaiming the REAL meaning of prophesies - such sincere, misguided unrealism.
What is ever freakier and more fanatical. Is a kook who runs around the internet claiming god raised lizards and rats from the dead for them when they were little delusional kids. That is the textbook definition of a kook. Or someone who bumped their head and got brain damage.
Yep, it would be kooky to say those things. But guess what, I have talked to God, and he did raise a dead lizard and a dead mouse back to life in my hands. This has, obviously, made a lifelong impression on me. God IS.
That this makes me a kook to you is fine. You're a fanatic for your beliefs.
Many people experience miracles from God. Mine convinced me. That is why I originally spoke of them, in discussions long ago, about how I came to the religious beliefs that I have.
Since then, referring back to what I said then has become a standard means by which to attempt to mock me.
Of course it doesn't actually succeed in hitting the mark - I'm blessed, I've always been blessed, and I know it.
In any case, I always correct the record when I get mocked over those miracles.
Here is what an American flag is supposed to look like according. Anything else is not an American flag by definition.
§1. Flag; stripes and stars on
The flag of the United States shall be thirteen horizontal stripes, alternate red and white; and the union of the flag shall be fifty stars representing the fifty states, white in a blue field
§2. Same; additional stars
On the admission of a new State into the Union one star shall be added to the union of the flag; and such addition shall take effect on the fourth day of July then next succeeding such admission
There is absolutely nothing mandatory about 4 U.S.C., The Flag Code. What you have missed is that there is no enforcement section and, if there were such a section, the Statute would be struck down as unconstitutional.
Legal precedent holds that it is constitutionally protected freedom of political expression to stomp on a flag in protest, burn a flag in protest, fly it upside down, or do whatever with a flag as political protest.
4 U.S.C. is unenforceable etiquette.
It has been judicially determined that a gold fringe is not part of the flag, it is decoration, and that court jurisdiction is not determined by decorations.
Christians know the real meaning of prophecies simply because most prophecies have already been fulfilled.
We can see with crystal clarity the fulfillment of each and every prophecy...which precisely foretell the coming of Christ, and also forewarn of God's dealing with Israel (mostly for disobedience).
There are only a few prophecies remaining that await fulfillment...and we know they will come to pass because they co-exist and intertwine with prophecies that have already been fulfilled.
The "real meaning' of these prophecies have been under the scrutiny of learned men for centuries.
For those who watch and wait, all eyes are on the prophecies of Ezekiel calling for the return of the Jews to Israel (which was fulfilled in 1948)...and now the maneuvering of the key players who will go down to Israel to make war.
Ezekiel 38:1-12(KJV)
And the word of the Lord came unto me, saying,
2 Son of man, set thy face against Gog, the land of Magog, the chief prince of Meshech and Tubal, and prophesy against him,
3 And say, Thus saith the Lord God; Behold, I am against thee, O Gog, the chief prince of Meshech and Tubal:
4 And I will turn thee back, and put hooks into thy jaws, and I will bring thee forth, and all thine army, horses and horsemen, all of them clothed with all sorts of armour, even a great company with bucklers and shields, all of them handling swords:
5 Persia, Ethiopia, and Libya with them; all of them with shield and helmet:
6 Gomer, and all his bands; the house of Togarmah of the north quarters, and all his bands: and many people with thee.
7 Be thou prepared, and prepare for thyself, thou, and all thy company that are assembled unto thee, and be thou a guard unto them.
8 After many days thou shalt be visited: in the latter years thou shalt come into the land that is brought back from the sword, and is gathered out of many people, against the mountains of Israel, which have been always waste: but it is brought forth out of the nations, and they shall dwell safely all of them.
9 Thou shalt ascend and come like a storm, thou shalt be like a cloud to cover the land, thou, and all thy bands, and many people with thee.
10 Thus saith the Lord God; It shall also come to pass, that at the same time shall things come into thy mind, and thou shalt think an evil thought:
11 And thou shalt say, I will go up to the land of unwalled villages; I will go to them that are at rest, that dwell safely, all of them dwelling without walls, and having neither bars nor gates,
12 To take a spoil, and to take a prey; to turn thine hand upon the desolate places that are now inhabited, and upon the people that are gathered out of the nations, which have gotten cattle and goods, that dwell in the midst of the land.
And, Vic, we know who they are: Gog and Magog, Meshech and Tubal, Persia, Ethiopia, Libya, Gomer, Togarmah...they are making headlines this very day.
