Benson followers lose: "the law that never was" lives on in Tax Court

[jcolvin2]

https://www.ustaxcourt.gov/UstcDockInq/ ... ID=6935141

UNITED STATES TAX COURT
WASHINGTON, DC 20217
FRANCES M. SCOTT & )
GALEN L. AMERSON, )
)
Petitioners, )
v. ) Docket No. 26717-14.
COMMISSIONER OF INTERNAL REVENUE, )
)
Respondent )

ORDER

Petitioners filed a "Motion to Dismiss All Actions". We will deny the
motion for the following reasons:

1. Petitioners complain that they are deprived of a jury trial. However, the "right of trial by jury" in Amendment VII to the U.S. Constitution extends, the amendment says, only to "suits at common law". At common law, one was not generally entitled to sue the sovereign, see Murray's Lessee v. Hoboken Land & Improvement Co., 59 U.S. (18 How.) 272, 280-84 (1855), so there is no constitutional right to a jury in a suit against the Government in Tax Court. As we have previously explained, in Swanson v. Commissioner, 65 T.C. 1180, 1181 (1976):

In Wickwire v. Reinecke, 275 U.S. 101 (1927), the Supreme Court made it clear that there is no constitutional right to jury trial in tax matters, stating:

It is within the undoubted power of Congress to provide any
reasonable system for the collection of taxes and the recovery of them when illegal, without a jury trial--if only the injunction against the taking of property without due process of law in the method of
collection and protection of the taxpayer is satisfied.

In Olshausen v. Commissioner, 273 F.2d 23 (9th Cir. 1959), cert. denied, 363 U.S. 820 (1960), rehearing denied 364 U.S. 855, it was held that the statutory procedure provided by the Internal Revenue Code of 1939 for issuance of the notice of deficiency and the procedure for the redetermination of that deficiency by petition to the Tax Court did not deprive the taxpayer to any right to trial by jury. The court said:

Having taken advantage of the deficiency notice procedure by filing a petition in the Tax Court without paying the tax first, petitioner now makes the claim that he was deprived thereby of a jury trial. Such deprivation was due to his own act. If he desired a jury trial, he
should have paid the tax first and then sued for a refund in the district court. There is no right to a jury trial without paying first as a statutory matter (Flora v. United States, 1958, 357 U.S. 63, 78 S.Ct. 1079, 2 L.Ed.2d 1165) and no right to a jury trial at all in tax matters as a constitutional requirement. (Wickwire v. Reinecke, 1929, 275 U.S. 101, 48 St.Ct. 43, 72 L.Ed. 184). * * *

2. Petitioners allege that the undersigned judge has a conflict of interest that prevents him from deciding this case, but they do not explain intelligibly what it is. We are not aware of any conflict of interest and cannot assume that one exists. Moreover, if a conflict of interest did exist, the remedy would be to assign the case to a judge on this Court who does not have a conflict, not to dismiss the case. Petitioners allege that the undersigned "et al" (the Latin et alia means "and others") "are financial beneficiary(s) and is fully aware of his financial benefit of the tax code". This seems to be a suggestion that all of the Judges of the Tax Court have a supposed conflict of interest. If this were so, then the Rule of Necessity would permit a Judge to retain responsibility for the case. See United States v. Will, 449 U.S. 200, 213-216 (1980); Cupp v. Commissioner, 65 T.C. 68, 86-87 (1975), aff'd without published opinion, 559 F.2d 1207 (3d Cir. 1977).

3. Petitioners advance the theory that the Internal Revenue Code is not law because the Sixteenth Amendment was not properly ratified. In support of this theory they cite a book entitled "The Law That Never Was", by Bill Benson and Martin Beckman, which they say was published in 1985. Petitioners must have noticed that in the intervening 30 years, income tax returns have continued to be required and filed, and income taxes have continued to be paid by taxpayers, collected by the IRS, and enforced by the courts. In fact, litigation involving Mr. Benson himself has shown his theory to be without merit. The United States Court of Appeals for the Seventh Circuit stated:

Benson's claim to have discovered that the Sixteenth Amendment was not ratified has been rejected by this Court in Benson's own criminal appeal. United States v. Benson, 941 F.2d 598, 607 (7th Cir.1991) ("In Thomas, we specifically examined the arguments made in The Law That Never Was, and concluded that 'Benson ... did not discover anything.'" (quoting United States v. Thomas, 788 F.2d 1250, 1253 (7th Cir.1986))). "[W]e have repeatedly rejected the claim that the Sixteenth Amendment was improperly ratified. One would think this repeated rejection of Benson's Sixteenth Amendment argument would put the matter to rest." Benson, 941 F.2d at 607 (citations omitted).

United States v. Benson, 561 F.3d 718, 723 (7th Cir. 2009). See also Brown v. Commissioner, T.C. Memo. 1987-78.

4. If we were to grant the petitioners' motion and dismiss their petition, the effect would not be as they seem to suppose. Section 7459(d) provides:

If a petition for a redetermination of a deficiency has been filed by the taxpayer, a decision of the Tax Court dismissing the proceeding shall be considered as its decision that the deficiency is the amount determined by the Secretary.

That is, dismissal of the case would sustain the IRS's determination of the petitioners' liability. To obtain a determination that they do not owe the tax, petitioners must prevail in this suit on the merits of their petition.

Petitioners are advised that section 6673(a) authorizes the Tax Court to require the taxpayer to pay the United States a penalty of as much as $25,000 whenever it appears to the Court that the taxpayer instituted or maintained the proceeding before the Court primarily for delay or that the taxpayer's position in the proceeding is frivolous or groundless. Petitioners are urged to forego the frivolous arguments advanced in their motion to dismiss and, instead, to prepare to litigate valid issues at the trial of this case.

It is

ORDERED that petitioners' motion to dismiss is denied. The case will be tried as scheduled.

(Signed) David Gustafson
Judge
Dated: Washington, D.C.
September 8, 2016

[Famspear]

The very earliest reported court case regarding the idiotic "non-ratification" nonsense was in the year 1975, some sixty-two years after the ratification of the Sixteenth Amendment.

I'm still waiting for a doofus tax protester to explain why not a single state legislature ever objected to the U.S. Secretary of State's certification -- in February 1913 -- that the Amendment was ratified. Out of the 42 states that are on record as having ratified the Amendment, not one state has ever claimed that the state did not ratify the Amendment.

[fortinbras]

The Benson book is based on a memo presented to the US Secretary of State based on microscopic typos in the paperwork returned from the various states reporting the ratifications of the 16th Amendment (the Income Tax Amendment), which indicated tiny changes in the text of the proposed amendment.

BUT ... this was in 1909-1913, when copying machines were in their infancy and typewriters were still cumbersome, and well before anything as convenient as word processors or even electric typewriters. It is very probable that the brief text of the proposed amendment was typed and retyped repeatedly in various steps of the ratification process. The legislators voting on the proposed amendment may well have had a professional typeset page which accurately reproduced the text proposed by Congress - in any case they probably had already seen numerous publications about the proposed amendments and had seen the true text at some point; no such assurance about whatever some secretary might have typed up to send to the US Secretary of State to report the ratification, an uncommon procedure. So the typos may have crept in only after the ratification and there is no way to prove otherwise.

What we do know is that, after the 16th Amendment was announced as adopted, and the Income Tax enacted, not only did no state legislature protest, but no individual legislator protested that his vote had been mistakenly cast on a different or misleading text.

[notorial dissent]

In any event, what they were voting on was NOT the text they used, but the Amendment as proposed by Congress, a simple yes or no vote on the amendment, not the text they were using.

[noblepa]

Even if those alledged typos were real and did invalidate the ratification, there is anothter little problem.

The Secretary of State announced that the ratification of the 16th amendment had been completed.

I don't remember the SCOTUS case, but, in a case relating to the 19th amendment (women's suffrage), the court ruled that ratification is a political question, not a legal one. In essence, SCOTUS said that an amendment is ratified when the SoS says it is.

In so many ways, that argument is a loser.

[Judge Roy Bean]

Leser v. Garnett, 258 U.S. 130 (1922)

Even if the state legislators err in their procedures for ratification, it doesn't matter once the SoS accepts them.

[Number Six]

I thought even Becraft had rejected Benson's arguments. At any rate he updated his destroyed arguments: http://home.hiwaay.net/~becraft/deadissues.htm

[notorial dissent]

There's always someone who doesn't keep up on the sovcit nonsense memos. Benson is just so last century.

[jcolvin2]

Premature appeal doesn't work:
https://www.ustaxcourt.gov/InternetOrde ... 0&Todays=Y

[Famspear]

Yeah, they just made bad situation worse.

[jcolvin2]

Affirmed by the Tenth Circuit:
http://www.ca10.uscourts.gov/opinions/17/17-9001.pdf

UNITED STATES COURT OF APPEALS
FOR THE TENTH CIRCUIT
_________________________________
FRANCES M. SCOTT; GALEN L.
AMERSON,
Petitioners - Appellants,
v.
COMMISSIONER OF INTERNAL
REVENUE,
Respondent - Appellee.
No. 17-9001
(Tax No. 26717-14)
(U.S. Tax Court)
_________________________________
ORDER AND JUDGMENT*
_________________________________
Before BRISCOE, O’BRIEN, and BACHARACH, Circuit Judges.
_________________________________

The Commissioner of Internal Revenue sent a notice of deficiency to Appellants Frances M. Scott and Galen L. Amerson (collectively, “the taxpayers”), advising them of an income tax deficiency of $36,517 for the 2011, 2012, and 2013 tax years. The taxpayers petitioned the Tax Court for a redetermination of the deficiency. They did not allege any calculation errors, but instead proffered a series of typical tax-defier arguments questioning the essence of our country’s tax system. Despite multiple notices and reminders, the taxpayers did not appear at trial. Ultimately, the Tax Court dismissed the petition under Tax Court Rule 123(b) for lack of prosecution, ruled against the taxpayers on the deficiency issue, and imposed a $6,000 penalty. The taxpayers now appeal. Exercising jurisdiction under 26 U.S.C. § 7482(a)(1), we affirm.

The Tax Court thoroughly and accurately recounted the procedural history of
this case in its orders dated October 21, 2016, November 3, 2016, December 22,
2016, and January 5, 2017. See Aplee. Br., Attach. A at 13-15, 16-21, 23-27 &
28-30. As this history shows, the Tax Court was exceedingly patient with the
taxpayers despite their failure to appear at trial or comply with a show cause order to explain their absence, their insistence on reiterating arguments rejected by the Tax Court as frivolous, and repeated missed deadlines. In addition, the Tax Court carefully detailed the basis for its dismissal.

This court will not reverse a dismissal for failure to prosecute absent an abuse
of discretion. Ducommun v. Comm’r, 732 F.2d 752, 754 (10th Cir. 1983). We have
no difficulty concluding the Tax Court did not abuse its discretion. Nor do we have
anything to add to its well-reasoned orders. We have already denounced similar
tax-defier arguments as “completely lacking in legal merit and patently frivolous.” See Lonsdale v. United States, 919 F.2d 1440, 1448 (10th Cir. 1990); accord Casper v. Comm’r, 805 F.2d 902, 904-05 (10th Cir. 1986), overruled on other grounds by Wheeler v. Comm’r, 521 F.3d 1289 (10th Cir. 2008); Charczuk v. Comm’r, 771 F.2d 471, 472-74 (10th Cir. 1985). And the taxpayers have not even attempted to contest the Tax Court’s authority to dismiss their lawsuit or penalize them for their conduct.

Accordingly, we affirm the Tax Court’s decision.
The taxpayers’ request for leave to file a supplement to their brief dated
June 15, 2017, is granted, and the court has considered the new material presented therein.

Entered for the Court
Terrence L. O’Brien
Circuit Judge


* After examining the briefs and appellate record, this panel has determined
unanimously that oral argument would not materially assist in the determination of this appeal. See Fed. R. App. P. 34(a)(2); 10th Cir. R. 34.1(G). The case is therefore ordered submitted without oral argument. This order and judgment is not binding precedent, except under the doctrines of law of the case, res judicata, and collateral estoppel. It may be cited, however, for its persuasive value consistent with Fed. R. App. P. 32.1 and 10th Cir. R. 32.1.