Quatloos! > Tax
Scams > Tax
Protestors > EXHIBIT:
Tax Protestor Dummies 2 > Cases
("Damn, We Lost Again!
And why is it
that people who sell
tax protestor materials file their tax returns anyway . . .")
Just want to make a small comment here as to these two paragraphs. They
are both dicta and the court only used adjectives and no
law to support the dicta. In other words the
court said absolutly nothing but rethoritc here they are.
Ross, who was born in Colorado,
raises a standard tax protestor argument, claiming
that he is a citizen of the sovereign state of Indiana and
that Indiana is not a part of the United States. Therefore,
he argues, the federal district court was without subject
matter jurisdiction to try him on tax evasion charges
because he is not a citizen of the United States and
because the alleged offenses were not committed within its
territory. We have held before that this belief is "simply
wrong" and reject his argument without further
discussion. United States v. Hilgeford, 7 F.3d
1340, 1342 (7th Cir.1993). [FN1]
Furthermore, Ross contends that the
district court was without subject matter jurisdiction because there were
no regulations issued to implement the criminal statute under which he
was convicted and because the Department of the Treasury failed to properly
delegate authority to the Commissioner of the Internal Revenue Service. Ross
reasons that the court does not have authority to prosecute him because
26 U.S.C. s 7201 does not appear in a parallel table of authorities in
the Code of Federal Regulations. These claims are equally frivolous. Section
3231 of Title 18 of the United States Code vests in the district courts
original jurisdiction over all offenses against the laws of the United
States including the tax offenses enumerated in sections 7201 through 7210
of Title 26. United States v. Koliboski, 732 F.2d 1328, 1329 (1984). Enabling
legislation is unnecessary to enforce these statutes.
Now can anyone cite me a passage of law by the court, refutting what Ross contends? I
read the rest but only wanted to show to everyone that this is what the courts
get away with when they don't want to go to the trouble of finding a law that
does not exist so they use dicta. Remember this well, 7201
through 7210 are penalty statutes only and not tax offenses. Find
one IRC statute that carries the IRC section 7201 to 7210 within it as required
by law. I give you an example. Read 18 USC 844, the penalty statute and
note the reference to 842 in section (a). Thgis is how it has to be done. Now
read 18 USC 842. Now go and read 18 USC 847 on regulations. This
destroys the court's reasoning in Ross on the last part about they don't need
regs. Of course the penalty statutes don't need regs, but the other statutes
that Ross allegedly violated do need regs. For a violation of regs is needed
in administrative crimes and the IRS is an agency, albet not of the US government,
and this is spelled out in so many supreme court cases it is concrete. Try
California Bankers case, Merskey case, and about at least a dozen others.
For as is stated;
California Bankers Assn. v. Schultz, 416 U.S. 21, 26:
"we think it important to note that the Act's
civil and criminal penalties attach only upon the violation
of regulations promulgated by the Secretary; if the Secretary
were to do nothing, the Act itself would impose no penalties
on anyone."
Further authority for this is cited in United States
v. $200,000 in United States Currency, 590 F. Supp. 866 (1984),
Hotch v. United States, 212 F. 2nd 280 (1954); U.S. v Reinis,
794 F. 2d 506, 507-508 (1986); U.S. v Richter, 610 F. Supp
480; and, "For tax purposes regulations govern," Dodd
v U.S., 223 F. Supp. 785; National Mufflers
Dealers Assoc. v U.S., 59 L.Ed. 2d, 519; U.S. v Murphy, 809
F 2d 1427; Northern States Power Co. v. Rural Electrification
Adm, D.C. Minn. 1965, 248 F. Supp 616; United States v Mersky,
361 U.S. 429 and, U.S. v. Minarik, 875 F.2d 1186 (6th Cir.
1989).
Need I say any more that the Ross court decided on dicta rather than any law?
Big Al
Quatloos! wrote:
Because the authority of Congress to act has NEVER been
limited to the District of Columbia, Puerto Rico, etc. This
is yet another lie by your group of idiots. Go read
the Constitution and the Federalist Papers and you might
(though I doubt it, your collective IQ is in double digits)
be able to pull your heads out of your respective arses.
Oh, and thanks for keeping us on your mailing list. We truly
enjoy the opportunity to de-bunk your lies. We've had
indications that our responses are being _w_i_d_e_l_y_
distributed across the internet, and that such support
as you (fraudulently) hoped to build is backfiring in a massive
way. And now for those interested in THE TRUTH, see
case which follows:
Quatloos!
UNITED
STATES of America, Plaintiff-Appellee,
v.
Arthur
W. ROSS, Sr., Defendant-Appellant.
No.
93-1010.
United
States Court of Appeals, Seventh Circuit.
Submitted
April 4, 1995. [FN*]
Decided
April 13, 1995.
Appeal from the
United States District Court for the Southern
District of Indiana, Evansville Division. 91-25-CR; Gene E. Brooks,
Judge.
S.D.Ind.
AFFIRMED IN PART, VACATED IN PART,
REMANDED.
Before POSNER,
FAIRCHILD and KANNE, Circuit Judges.
ORDER
Arthur Ross did not file federal income
returns with the Internal Revenue Service ("IRS") or pay income
taxes on income earned from 1982 to 1987. In addition, he committed
other affirmative acts of tax evasion during this period. He was
subsequently convicted of six counts of tax evasion, one count for each
of the six years, in violation of 26 U.S.C. s 7201. On appeal, Ross
raises numerous issues challenging both his conviction and sentence. We
affirm his conviction but vacate the order of restitution imposed by the
district court and remand for resentencing.
Jurisdiction
Ross, who was born in Colorado, raises
a standard tax protestor argument, claiming that he is a citizen of the
sovereign state of Indiana and that Indiana is not a part of the United
States. Therefore, he argues, the federal district court was without
subject matter jurisdiction to try him on tax evasion charges because he
is not a citizen of the United States and because the alleged offenses
were not committed within its territory. We have held before that
this belief is "simply wrong" and reject his argument without
further discussion. United States
v. Hilgeford, 7 F.3d 1340, 1342 (7th Cir.1993). [FN1] Furthermore,
Ross contends that the district court was without subject matter jurisdiction
because there were no regulations issued to implement the criminal statute
under which he was convicted and because
the Department of the Treasury failed to properly delegate authority to the
Commissioner of the Internal Revenue Service. Ross reasons that the court
does not have authority to prosecute him because 26 U.S.C. s 7201 does
not appear in a parallel table of authorities in the Code of Federal Regulations. These
claims are equally frivolous. Section 3231 of Title 18 of the United
States Code vests in the district courts original
jurisdiction over all offenses against the laws of the United States including
the tax offenses enumerated in sections 7201 through 7210 of Title 26. United
States v. Koliboski, 732 F.2d 1328, 1329 (1984). Enabling legislation
is unnecessary to enforce these statutes.
Ross also contends that the court
lacked personal jurisdiction over him because he was an alien and did not
appear voluntarily in federal court. We have already dispensed with
the argument that Ross's residency in Indiana makes him an alien resident
of the United States. Moreover, Ross was amenable to process and
was properly served a summons following the indictment. See Fed.R.Crim.P.
4(d)(2), 9; see also United States v. De Ortiz, 910 F.2d 376, 381-82
(7th Cir.1990). Although Ross asserts that his rights were violated
when the magistrate judge entered a plea of not guilty on his behalf after
he refused to plead, this procedure is mandated by Federal Rule of Criminal
Procedure 11(a)(1).
Amended Indictment
Next, Ross contends that the district
court erred when it failed to require the government to obtain the grand
jury foreman's signature on an amended version of the indictment. During
voir dire, two errors were discovered in the indictment. First, language
in Count 3 was omitted so that it read as follows: 2. That during
calendar year 1984, Arthur W. Ross, Sr., the Defendant herein, a resident
of Ferdinand, Indiana, had and received taxable income in the approximate
sum of $25,941.81; that upon said taxable income there was owing
to the United States of America an income tax of approximately $5,889.79; that
well-knowing and believing the foregoing facts, Arthur W. Ross, Sr., on
or about the 15th day of April, 1985, in the Southern [omitted language]
America for the said calendar year by failing to make an income tax return
on or before April 15, 1985, as required by law, to any proper officer
of the Internal Revenue Service, by failing to pay to the Internal Revenue
Service said income tax, and by committing one or more affirmative acts
of willfulness in violation of Title 26, United States Code, Section 7201.
The omitted language stated "District of Indiana, did willfully attempt
to evade and defeat the said income tax due and owing by him to the United
States of
..."
Ordinarily, an amendment or a variance
will be permitted without presentation to a grand jury if it does not change
an essential or material element of the charge so as to cause prejudice
to the defendant. United States v. Cina, 699 F.2d 853, 857 (7th Cir.),
cert. denied, 464 U.S. 991 (1983). For example, the trial court has
the authority to amend when nothing is added to the indictment, the remaining
allegations state the essential elements of the offense, or when mere surplusage
is eliminated. United States v. McNeese, 901 F.2d 585, 603 (7th Cir.1990).
Here, the original indictment informed
Ross of the amount of taxes he allegedly owed for the 1984 calendar year,
and that he was charged with failure to file an income tax return, failure
to pay the income tax, and one or more acts of willfulness in violation
of s 7201. Although at first the omitted language serves to confuse
the reader, there is no doubt that Ross should have been aware of the elements
of the charge against him and that the charge was tax evasion. Not
only was the specific statute mentioned, but the remaining five counts
included the omitted language in Count 3 and were otherwise identical to
that count. Moreover, the
government's claim that the omitted language in Count 3 was already covered
by an introductory paragraph of the indictment which was incorporated
by reference into Count 3 is fully substantiated by the record. Given
these facts in addition to Ross's admission to the trial court that he
realized the error "some time ago," (Trial Tr. at 250), and his
failure to allege any prejudice from the error, we find that the district
court did not err in amending the indictment. [FN2]
The amendment of Count 4 consisted
of removing two lines which were repetitive of the two previous lines. The
elimination of such surplusage was not erroneous.
Statute of Limitations
Ross also asserts that Counts 1 through
3 should have been dismissed because they were time barred by the six year
statute of limitations for tax evasion. See 26 U.S.C. s 6531. The
indictment was filed October 30, 1991. Each of the six counts of
the indictment charged Ross with the failure to file a tax return or pay
his income taxes by April 15 of a specific year from 1983 through 1988
along with other
affirmative acts of evasion.
The government argues that the limitations
period begins to run with the last affirmative act of evasion in furtherance
of the crime and therefore concludes that because the last affirmative
act of evasion occurred on April 15, 1988 or later, all six counts are
within the statute of limitations. Although we concur with the government's
statement of the law, we disagree with the manner in which it applied the
law to the facts of this case.
First, we note that the government's
reliance on United States v. Dandy as the law of this circuit is incorrect. Dandy
is a Sixth Circuit case. 998 F.2d 1344 (6th Cir.1993), cert. denied,
114 S.Ct. 1188 (1994). However, in United States v. Trownsell, 367
F.2d 815 (7th Cir.1966) (per curiam), we also held that the statute of
limitations runs from the last affirmative act of tax evasion charged. See
also United States v. Winfield, 960 F.2d 970, 974 (11th Cir.1992); United
States v. DeTar, 832 F.2d 1110, 1113 (9th Cir.1987); United States
v. Ferris, 807 F.2d 269, 271 (1st Cir.1986), cert. denied, 480 U.S. 950
(1987). In Trownsell, the defendant incurred an income tax deficiency
for the years 1946 through 1953 but was first indicted with tax evasion
in 1964. 367 F.2d at 816. In addition to the defendant's failure
to pay his taxes for those years, the indictment also charged him with
liquidating all of his assets in 1961 and depositing the money into a Swiss
bank account so that the funds were beyond the reach of the United States
government. Id. We held that such conduct constituted tax evasion.
Because the indictment charged the defendant with conduct in violation
of 26 U.S.C. s 7201 ending in February 1961, the statute of limitations
had not run. Id.
The government errs, however when
it suggests that the failure to file a tax return and pay taxes on April
15, 1988 constitutes an affirmative act relating to the charges in Counts
1 through 3 for the failure to file a tax return and pay taxes in the years
1983 through 1985, such that those first three charges are brought within
the statute of limitations. In fact, each of the six counts constitutes
a separate offense.
In United States v. Smith, a three
count indictment was returned against the defendant, each count alleging
income tax evasion for the years 1951 through 1953, respectively. 335
F.2d 898, 900 (7th Cir.1964), cert. denied, 379 U.S. 989 (1965). This
court stated that "the three counts might be said to pertain to a
'continuing course of illegal conduct,' in the sense that the intention
was to avoid taxes so long as payoffs continued, but in a criminal tax
evasion case each year stands alone, and the failure to pay taxes in each
of the years involved constitutes a separate offense." Id. at
900-01.
Nonetheless, the first three counts
of the indictment are not barred by the statute of limitations. Incorporated
into each of the six counts of the indictment is paragraph 12 which charged
that "[b]etween 1981 and 1988, Arthur W. Ross, Sr. instructed various
persons or entities, including Thermwood [Ross's former employer] and his
former tax return preparer, to ignore any records summonses from the Internal
Revenue Service regarding Arthur W. Ross, Sr." Such behavior
is of the same kind cited in Trownswell and constitutes tax evasion under
26 U.S.C. s 7201. Therefore, because the indictment charges Ross with attempts
to conceal his conduct charged in Counts 1 through 3 through 1988, we hold
that the statute of limitations had not run on these counts before the
indictment was returned.
Double Jeopardy
At trial, the government entered into
evidence documentation of a levy imposed on Ross's wages, salary and income
in April 1986 in the amount of $531.05 as a result of Ross's submission
of a false W-4 form to his employer and the IRS. (Exhibit 27). This
amount included the income taxes owed by Ross, interest and a late payment
penalty. Ross claims that because he has already paid a civil fine
for the submission of a false W-4 form, the criminal prosecution for tax
evasion constitutes double jeopardy.
The double jeopardy clause of the
Fifth Amendment provides that no person shall be prosecuted twice for the
same offense. United States v. Thornton, 972 F.2d 764, 765 (7th Cir.1992). Assuming
arguendo that the imposition of a late payment penalty constitutes a "prosecution" for double
jeopardy purposes, Ross's argument still fails for we have previously held
that the failure to file a tax return and the filing of a false W-4 form
are separate and distinct offenses from the felony of tax evasion and a
conviction for all three does not constitute double jeopardy. United
States v. Davenport, 824 F.2d 1511, 1519 (7th Cir.1987); United States
v. Foster, 789 F.2d 457, 459-61 (7th Cir.), cert. denied, 479 U.S. 883
(1986).
Trial and Evidentiary Issues
Ross alleges that an IRS agent intimidated
certain defense witnesses by contacting them on the eve of trial. Merely
speaking with a witness, however, does not constitute intimidation. Because
we find nothing in the record to substantiate Ross's claim, relief is not warranted
on this issue. See United States v. Wilson, 715 F.2d 1164, 1170 (7th
Cir.1983) (bare allegations of prosecutorial misconduct based on the intimidation
of witnesses were insufficient to warrant an evidentiary hearing).
Next, Ross contests the admission
of evidence at trial obtained by the government through summonses pursuant
to 26 U.S.C. s 7602. He reasons that s 7602 is paired with regulations
in the "CFR Table I" which pertain to the Bureau of Alcohol,
Tobacco, & Firearms. Because he is not charged with a crime relating
to alcohol, tobacco, or firearms, he argues that any evidence obtained
with these summonses should not have been admitted. Ross's claim is wholly
without merit. Section 7602 "authorizes the IRS to issue administrative
summonses involving both the civil and criminal elements of the tax laws." United
States v. Becker, 965 F.2d 383, 390 (7th Cir.1992).
We also reject Ross's contention that the trial court deprived
him of compulsory process when it denied his motion
for issuance of several subpoenas pursuant to Federal
Rule of Criminal Procedure 17(b). Rule 17(b)
requires the court to subpoena witnesses for indigent defendants when
the "presence of the witness[es] is necessary to an
adequate defense." The subpoenas named the
Secretary of the Treasury, the Commissioner of the
IRS and two other IRS employees. Ross claims that these
witnesses were necessary to explain the government's authority
to prosecute him for tax evasion and to collect evidence
on his activities. We have already held that the court
had subject matter jurisdiction and personal jurisdiction
over Ross and have rejected his claim that the government's
evidence was collected without proper authority. Similarly,
we find no error in the district court's withdrawal of one of Ross's exhibits
consisting of excerpts from the Code of Regulations and which was offered
to suggest that the court had no jurisdiction over the case. Ineffective
Assistance of Standby Counsel
Next, Ross contends that he requested
assistance of counsel on two occasions but that standby counsel was appointed. Furthermore,
standby counsel failed to advise him of certain procedures to contest the
jury's verdict and offered so little advice "as to make a mockery
of the trial."
Initially, we note that the district
court did appoint counsel for Ross at the initial appearance in December
1991 even though Ross intimated that he would like to represent himself.
[FN3] The court stated that Ross and his attorney would need to determine
when Ross would present his case and when the attorney would represent
him. In July 1992, however, the docket sheet indicates that the appointed
attorney's motion to withdraw was granted and a different attorney was
appointed as standby counsel. Ross does not dispute the court's grant of
the motion to withdraw or deny that he wanted to represent himself.
Ordinarily, a defendant who chooses
to represent himself cannot later claim ineffective assistance of counsel. United
States v. Chapman, 954 F.2d 1352, 1363 (7th Cir.1992); United States
v. Troxell, 887 F.2d 830, 836 (7th Cir.1989). Moreover, Ross does
not direct our attention to anything in the record that would support his
allegations of alleged misconduct or demonstrate how standby counsel's
performance fell outside the wide range of professionally competent assistance. Strickland v.
Washington, 466 U.S. 668, 689 (1984). Thus, this argument also fails.
Sentencing
Finally, Ross contests the sentence
imposed by the district court on two grounds. First, he contends
that the district court abused its discretion in imposing a restriction
on his right to bear firearms in violation of the Second Amendment. This
argument is without merit. Although the district court did not specifically
impose such a restriction, it is a standard condition of supervised release
that a defendant may not possess a firearm or destructive device. Moreover,
the possession of a firearm by a convicted felon is a criminal offense pursuant
to 18 U.S.C. s 922(g). The Fifth Circuit cases which Ross cites are
not analogous in that the defendant in United States v. Voda, 994 F.2d 149
(5th Cir.1993), was convicted of a misdemeanor rather than a felony, and
the issue raised in United States v. Stafford, 983 F.2d 25, 28 (5th Cir.1993),
dealt with the imposition of discretionary conditions of probation.
Next, Ross argues that the court levied
a fine against him for $2700.00 after it concluded that he could not afford
to pay a fine and that it abused its discretion by ordering restitution. Because
Ross did not raise these arguments before the sentencing court, they are
waived and will be reviewed for plain error only. United States v.
Soto, No. 93-4036, slip op. at 13 (7th Cir. Feb. 6, 1995). The plain
error doctrine should be applied only when a miscarriage of justice would otherwise
result; that is, when the error affects the fairness and integrity
of the judicial proceedings. United States v. Stevenson, 6 F.3d 1262,
1267-68 (7th Cir.1993).
The district court did not impose
a fine upon Ross. Rather, Ross was ordered to make restitution to
the IRS in the amount of $35,753.00 and to pay for the costs of prosecution
in the amount of $2,086.20. [FN4] Section 7201 of Title 26 expressly states
that a person convicted for tax evasion shall pay the costs of prosecution. The
sentencing court has no discretion in this matter. United States
v. Jungels, 910 F.2d 1501, 1503-04 (7th Cir.1990). We
must vacate the order of restitution, however, because the district court
abused its discretion in imposing restitution but not a fine without explaining
the inconsistency of these decisions. The Sentencing Guidelines mandate
the imposition of a fine in all cases except where the defendant establishes
that he is unable to pay a fine. U.S.S.G. s 5E1.2. Pursuant to statute
and the Sentencing Guidelines, the court, in determining whether to order
restitution, must consider the financial resources of the defendant and
the financial needs and earning ability of the defendant and the defendant's
dependents as well as other appropriate factors. 18 U.S.C. ss 3563(b)(3),
3664(a); U.S.S.G. s 5E1.1. Here,
the district court made a factual finding that Ross was unable to pay a
fine. [FN5] This conclusion is inconsistent with the implied finding
that Ross can make restitution to the IRS. United States v. Ahmad,
2 F.3d 245, 248 (7th Cir.1993). In United States v. Berman, 21 F.3d
753, 759 (7th Cir.1994), we stated that "when a district judge orders restitution
while withholding a fine on the ground of the defendant's inability to
pay, and fails to explain his action, the case must be remanded for an
explanation." See also United States v. Murphy, 28 F.3d 38,
42 (7th Cir.1994). Accordingly,
we AFFIRM Ross's conviction but VACATE the order of restitution and REMAND
the case to the district court for resentencing.
FN* After preliminary
examination of the briefs, the court notified the parties
that it had tentatively concluded that oral argument would
not be helpful to the court in this case. The notice
provided that either of the parties could file a "Statement
as to Need of Oral Argument." See Fed.R.App.P.
34(a); Cir.R. 34(f). The Defendant-Appellant
has filed a statement requesting oral argument. Upon consideration
of that statement, the briefs, and the record, the request for
oral argument is denied, and the appeal is submitted on the
briefs and the record.
FN1. Ross raises
similar jurisdictional challenges to the jury instructinos. He
argues that the instructions did not properly define the "United
States." In his view, the United States includes
the District of Columbia and the federal enclaves,
territories and possessions only but does not encompass
the 50 states. He also contends that the instructions wrongly
declared that he had a legal duty to pay an income tax. Ross's arguments
have been raised before and rejected. The tax code
imposes a "direct nonapportioned [income] tax
upon United States citizens throughout the nation,
not just in federal enclaves." United States v.
Sloan, 939 F.2d 499, 501 (7th Cir.1991) (quoting United
States v. Collins, 920 F.2d 619, 629 (10th Cir.1990)),
cert. denied, 502 U.S. 1060 (1992). Moreover, the federal
income tax is not voluntary and must be paid by all individuals
on their wages. Id.
FN2. In its appellate
brief, the government states that an affidavit from
the Assistant U.S. Attorney who presented the case to the grand
jury accompanied the motion to amend the indictment. Apparently, the
affidavit explained that the errors were the result of computer printer
error and that "[w]hen the government sought the indictment
from the federal grand jury against the defendant all
material elements on each of the six counts were presented
to the grand jurors for their consideration." We
could not find a copy of that affidavit in the record.
FN3. Apparently,
Ross literally wanted only "assistance" of counsel. In
response to the district court's decision to appoint an attorney,
Ross replies, "The Sixth Amendment of the Constitution
says, assistance of counsel. I don't want to
be represented by counsel." (Tr. of Initial Appearance
at 10).
FN4. Although
the Judgment Order states that Ross should pay a fine
of $2,086.20, the Judgment Order is a preprinted form with
no special section to indicate that the defendant must
pay costs. Moreover, both the trial record and
the Judgment Order explicitly note that the money owed by Ross
is for the costs of prosecution of Counts 1 through 6 and
is not a fine. (Trial Tr. at 558; R. 70).
FN5. Specifically,
the district court stated, after imposing restitution,
that it was "making no additional payment for a fine
since I dont' think he has the ability to do so at
this time.' (Trial Tr. at 558).
> -----Original Message----- > From: xxx > Sent:
Wednesday, January 24, 2001 4:17 AM > To: xxx > Cc:
quatloos0504@quatloos.com; xxx, et al. > Subject:
Re: A further whack at the USDC illusion. > > > Julian: The
real question is, "On the other hand, since all Federal > crimes
are statutory and all criminal prosecutions in the Federal
courts > are based on acts of Congress,..." Federal
Rules of Criminal Procedure, > Rule 26, Notes of
Advisory Committee on Rules, para 2. > > And
Rule 54(a), "These rules apply to all criminal prosecutions
in the > United States District Courts;..." > > And
Rule 54(c) Application of Terms. As used in these rules
the > following terms have the designated meanings. > > "Act
of Congress" includes any act of Congress locally applicable
to and > in force in the District of Columbia, in
Puerto Rico, in a territory or > in an insular possession." > > The
question is: On which of the four locations named in
Rule 54(c) Act > of Congress is the United States
District Court in San Antonio, Bexar > County, Texas,
situated on/in? > > Julian: "Quatloos" cannot
answer the question, he doesn't know. But > let's
see. > > These quotes are from the government's
own rules and the question is a > fair question
based on the definitions quoted. > > xxx > > > > > xxx
wrote: > > > >
Dear Quatloos; > > Please
crawl back under that rock until you have something > > substantive
to say on present issues. > > You are getting
in the way. Was the USDC with need to obtain > > extradtion
for xxx? > > -xxx > >
Return to Tax Protestor Exhibit
