Tennessee Man Wins "Willful Failure to File" Case

IRS Strategy Upset

Reprinted from "Alert" (Circa 1992-1993) POB 9411, Boise, Idaho 83707


Another Research Foundation Member Found "Not Guilty" on All Counts in Well-Publicized Jury Trial
by Lamarr Hardy

"Hallelujah!" was Lloyd L. Long's first comment, after being acquitted, recently, of all "Willful Failure to File" tax charges lodged against him by the Internal Revenue Service for the years 1989 and 1990. How did he do that? No, it wasn't a "miracle." Long did it by bringing before the jury solid, well-documented evidence, acquired from the Research Foundation, and other sources.

Long based his defense on his personal belief that he was not a person required to file Federal income tax returns. Long's war of words was engaged through his attorneys, the nationally-prominent Lowell Becraft of Huntsville, Alabama and Russell J. Leonard of Sewanee, Tennessee, who fought with the most powerful and time-honored weapon available: THE TRUTH!


To open his defense, Long testified under oath that he had personally studied the IR Code (Title 26), and truly believed the income tax to be an excise tax which applied only to specific type of individuals or "persons" specified in the IR Code.

According to Long's research, the income tax applied ONLY to non- resident aliens, and U.S. citizens living abroad in a country where a tax treaty exists with the United States (Internal Revenue Code Sections 1441-1443).

Long stated that the only other IR Code section he found that deals with the issue of who is liable for income tax on the "withholding agent." In conclusion Long said "I am not one of those people referred to in Sections 1441, 1442, and 1461, and therefore I believe the law cannot apply to me." Long, to verify his statement, picked up his copy of IR Code book, (a 2 1/4 inch thick, 5 lb. volume containing 9,416 pages of small print!) and cited one of the pages he had carefully tabbed from Section 7701(a)(16) which defines the term "withholding agent" used in Section 1461.

The jury also heard Long say that "there are many other tax liability sections that apply 'privileged occupation' to those who are involved in the sale or manufacture of alcoholic beverages, tobacco products, and the manufacture of firearms, BUT I CAN FIND NO SECTION IN SUBTITLE A THAT APPLIES TO ME."


In presenting the case for the Internal Revenue Service, assistant U.S. Attorney Curtis Collier, assisted by IRS special agent Michael Cheasley, declared that Mr. Long had a gross income in excess of $49,000 for each of the years 1989 and 1990, and that he had "willfully" failed to file income tax returns for those years as "required by law."

In trial, the defense admitted that Mr. Long did in fact have income in excess of $49,000 for each of the years in question, and that he did not file a return. Attorney Becraft, in defense of Long, proceeded to prove to the jury beyond a reasonable doubt that Long was not "liable" for an income tax, nor was he "required by law" to file.


Defense testimony showed a case titled "Brushaber v Union Pacific Railroad" wherein it was the unanimous decision of the U.S. Supreme Court that the Sixteenth Amendment (to the Constitution) did not give congress any new power to tax any new subjects; it merely tried to simplify the way in which the tax was imposed. The ruling also showed that the income tax was, in fact, an excise tax on corporate privileges and privileged occupations.

The defense then brought out a case entitled "Flint v Stone Tracy Co." wherein an excise tax was defined as being a tax laid upon the manufacture, sale and consumption of commodities within the country; upon licenses to pursue certain occupations; and upon corporate privileges.

Long's attorneys also brought out a case entitled "Simins v Arehns" wherein the court ruled that the income tax was neither a property tax nor a tax upon occupations of common right, but was an excise tax.

Next the defense turned to the case of "Redfield v Fisher." In this instance, the court ruled that an individual, unlike the corporation, cannot be taxed for the mere privilege of existing, but that the individual's right to live and own property was a natural right upon which an excise cannot be imposed. Defense also pointed to several studies done by the Congressional Research Service showing the INCOME TAX is an EXCISE.

A Tennessee Supreme Court case, "Jack Cole v Commissioner," provided the fifth defense argument. Here, the court ruled that CITIZENS ARE ENTITLED BY RIGHT TO INCOME OR EARNINGS AND THAT RIGHT COULD NOT BE TAXED AS A PRIVILEGE.

Finally, Long's legal team pointed to another Tennessee Supreme Court case, "Corn v Fort," in which the court ruled that individuals have a right to combine their activities as partnerships; and that this is a natural right, independent and antecedent of government.


What's interesting to note here is that the prosecution did not challenge or attempt to refute any of the cases cited, or the conclusions of the courts. Furthermore, on the following defense, once again the prosecution did not challenge or attempt to refute the point made by Long's attorneys, nor were they able to show a statute that made anyone liable for income tax.

This testimony, brought out by Defense was the fact that NOWHERE IN THE ENTIRE INTERNAL REVENUE CODE (some 9,722 separate Sections, as of 1992!) WAS ANYONE ACTUALLY MADE LIABLE FOR THE INCOME TAX.


Long's attorneys showed that in the IRS's own privacy act (Notice #609), only three sections were cited, and that none of these sections made anyone liable for the income tax. They also proved that this was not an oversight, by showing that the alcohol tax was worded so clearly that no one could misinterpret who was made liable for the alcohol tax.

At this time, Defense presented one of the arguments provided by Long's Research Foundation studies. They read to the jury the Mission Statement of the Internal Revenue Service, which state that the income tax relied upon "VOLUNTARY COMPLIANCE," and a quote from the head of the Alcohol and Tobacco Tax Division of the IRS which, in essence, showed that the income tax is 100% voluntary, as opposed to the alcohol tax, which is 100% enforced.


Under oath, Lloyd L. Long now testified that in 1988 he knew that the income tax was, in fact, an excise tax based on his personal research on the issue, and that he was not enjoying any corporate privileges nor engaged in any privileged occupation, and further that income or earnings from the exercise of common right could not be taxed as an excise or otherwise, and that nowhere in the Internal Revenue Code was he made liable for the tax; that he had always believed that the income tax was voluntary (just as the IRS own Mission Statement states!).


Lloyd L. Long came to his attorneys, and to trial "prepared to be acquitted" (as it were). What had he already done? Long had written a series of letters to the IRS explaining that he believed that he had no licenses or privileges issued to him by the Federal government. In his letters he asked the IRS for direct answers to simple questions such as: "Am I required to file federal income tax returns?" and "Am I liable for federal income taxes?" (He was building a strong evidentiary foundation for his belief that he was NOT a person "required.")

THE IRS NEVER GAVE A DIRECT ANSWER TO ANY OF LONG'S PERSONAL LETTERS OR QUESTIONS. Instead, they inferred and insinuated and extrapolated and beat around the bush, and generally avoided answering his letters. This is when Long testified "I decided to stop 'volunteering' because if the IRS can't answer my questions, I must assume that I'm correct; that there is NO section of the IRS Code that makes me liable for the income tax.


The IRS now brought in two "expert" witnesses, who -- it was learned - - were actually IRS employees who had received special training as professional witnesses.

Under cross-examination, Defense attorney Larry Becraft faced down Special Agent, Ms. Jeu. She admitted that a secret code, known only to the IRS and encoded on Mr. Long's permanent record, showed that THE IRS KNEW THAT HE WAS NOT REQUIRED TO MAIL OR FILE A 1040 INCOME TAX RETURN. Ms. Jeu, of course, made every effort to avoid the admission, to the point that she was beginning to frustrate the jury. Finally the judge ordered her to answer the question!

Under cross-examination by Mr. Becraft, the other Special Agent gave testimony that conflicted with the Privacy Act notice. (Attempts by the IRS at a cover-up of the truth must have been obvious to the jury, by this time.)


In a last ditch attempt, the Prosecution tried to insinuate "guilt by association." They claimed Mr. Long had "known and relied upon persons of questionable character." Their argument was that the writers of some of the books he had read, and some of the people he knew and relied on as the basis for his belief had been convicted of tax-related charges in the past, and were in fact "criminals."

Long responded that just because a person had been convicted of a crime by a court, this did not invalidate everything he said. To illustrate his point, Long pointed out that "the Apostle Paul was a murderer, but by the Grace of God he became the greatest of the Apostles." He added "I did not rely on anything that I did not personally check out thoroughly."


In summation, Mr. Becraft reminded the jury that Galileo was imprisoned for holding a belief that conflicted with what everyone else "knew as a fact" and that Columbus, acting on a belief which conflicted with what everyone else knew as a "fact," discovered something no one else thought existed.

The jury agreed with the Defense. By finding Lloyd L. Long "Not Guilty" on all counts, they have ventured into hitherto uncharted territory in their monumental decision.

A Chattanooga TV station quoted a government spokesman as saying that this case will change the way the IRS will handle such cases in the future. The spokesman for the government indicated that the government will, "be less likely to prosecute if a jury isn't going to decide in our favor."



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