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by Otto Skinner

The following is my response to an article written by Attorney Larry Becraft, as published in the AntiShyster News Magazine, Volume 7, No. 2, at page 38. The last part of this article states:
This shows that the very regulations on which the prosecutions relies to assert that the Defendant had a duty to file some income tax return does not and never has had any assigned O.M.B. control number. Therefore, the duty to comply with this particular regulation has no real force of law and the same may be ignored by the public with impunity.
Well, I will tell you right now that I strongly disagree with the Becraft article, and I will tell you why. Also, it is my understanding that this OMB/PRA argument, which I consider to be extremely flawed, was developed by Vern Holland of Oklahoma and Attorney Jeffrey Dickstein. It is also my understanding that people were charged a hefty sum to "learn" to use this particular argument.

The fact that a tax form or a tax regulation is missing a required OMB number will not provide a defendant with any valid defense for failure to make a tax return, in spite of claims to the contrary. Let me explain.

The Paperwork Reduction Act (PRA) does require federal agencies to acquire a number from Office of Management and Budget (OMB) on all forms and regulations which are used to collect information from members of the public. However, proponents of the purportedly valid "OMB/PRA legal defense" theory present cases such as United States v. Smith, 866 F.2d 1092 (9th Cir. 1989) and United States v. Hatch, 919 F.2d 1394 (9th Cir. 1990), as if they stand for the proposition that an individual may ignore, with impunity, a requirement to make a tax return because either the applicable tax regulation or tax form is missing an OMB number or contains some other seemingly apparent flaw causing it to fail to meet the requirements of the PRA. But these two cases do not even come close to having the same or a similar fact situation that exists in a case of failure to make a tax return. For the proponents of this defense theory to use these two case as if they also apply to criminal charges for failure to make a tax return is misleading, at best.

In both the Smith Case and the Hatch Case, the defendants were facing criminal charges for failing to obey regulations issued by the National Forest Service. Each case involved mining operations (not failure to make a tax return). Each case involved missing OMB numbers. Each case involved a violation of a regulation, not a violation of a statute as is the case of failure to make a tax return.

Now let's list some cases that did involve criminal charges for failure to make tax returns; cases in which the defendants relied upon the purportedly valid "legal defense" of the OMB/PRA argument; cases in which the defendants learned this lesson the hard way. Some of these cases are: United States v. Wunder, 919 F.2d. 34, 38 (6th Cir. 1990) ("Defendant was not convicted for violating a regulation but of violating a statute which required him to file an income tax return."); United States v. Bowers, 920 F.2d 220, 222 (4th Cir. 1990); United States v. Bentson, 947 F.2d 1353 (9th Cir. 1991); and United States v. Hicks, 947 F.2d 1356 (9th Cir. 1991). These are the cases which address the issue. This is just a short list of patriots who unsuccessfully tried the OMB/PRA defense. Many others who were suckered into using this argument either did not appeal their convictions or abandoned this argument after the trial and appealed their convictions on other issues.

In all of the cases in which the OMB/PRA argument was used in an attempt to defend against criminal charges for failure to make a tax return, the supposed failure of the agency to meet the PRA requirements involved Form 1040. It apparently was presumed by these defendants and their defense attorneys that the term "return" means a Form 1040. But the term "return" does not mean a Form 1040. The Form 1040 is merely the form the regulation requires a "taxpayer" to use to make his income tax return.

What does the term "return" mean? In each of the three books I have written since 1986, I have explained that any decent dictionary will show in one of the many definitions provided for the term "return" that it means an official or formal report; much like an election return. So when a statute requires certain persons to make "returns with respect to income taxes under subtitle A" of the Internal Revenue Code (26 U.S.C. 6012), it is merely requiring such a person to make a report of his earnings ("gross income").

A government prosecutor in New York explained this in very plain language. The defendant was using the OMB/PRA argument. The government prosecutor correctly told the judge that a "taxpayer" could report his income on a roll of toilet paper and still satisfy the statutory requirement of reporting his income. In other words, if a "taxpayer" reports his earnings ("gross income") on something other than the required form, he might be sanctioned civil penalties for using the wrong form in violation of the regulation (26 C.F.R. 1.6012-1(a)(6)), but he could not be convicted or suffer any criminal penalties for failing to report his earnings ("gross income") as is required by the statute. Once these details are pointed out, the fact that the term "return" means a report, and does not mean a Form 1040, seems just too simple to ignore. Yet, defense attorneys and many others in the patriot community have chosen to ignore the simple truth. And all at the expense of unsuspecting, and often times desperate, patriots.

The indictments and informations charging individuals with failure to make tax returns all read pretty much the same, to wit:
"Defendant, Joe Patriot, well knowing and believing all of the foregoing [that he was (supposedly) required to make an income tax return], did willfully fail to make an income tax return to said director...."
I have never seen an indictment or information charging an accused with failure to report his "gross income" on a Form 1040. I have never read a court trial transcript where the prosecutor ever argued to the jury that the defendant failed to complete a Form 1040. The Form 1040 is simply not part of the statute enacted by Congress requiring certain persons to make a return (report) of their "gross income", and it is simply not part of the charges against an individual for failing to make an income tax return (i.e., a report of his "gross income").

The regulation, 26 C.F.R. 1.6012-1(a)(6), which is written pursuant to the statute, 26 U.S.C. 6012, does require a Form 1040 to be used for purposes of making a tax return. Civil penalties (not criminal penalties) apply to the "taxpayer" who actually reports his earnings on something other than the required form and who does not, within a reasonable time, correct the situation by supplementing the "tentative return" with a return made on the prescribed form. See 26 C.F.R. 1.6011-1(b).

But criminal charges are brought against individuals for violating a statute which merely requires the "taxpayer" to make a return (report) of his "gross income". Requirements to make tax returns, like the rest of the Code, can only apply to persons who are subject to (liable for) the tax. Whether or not you are a person subject to the provisions of the Code, regardless of OMB numbers, is an entirely separate issue. It simply will not mix successfully with the OMB/PRA argument.

Those who argue that they are not required to make a tax return and cannot be punished for failure to make a tax return because of some supposed flaw in the OMB number requirement, are essentially saying that they would be required to make a return if the silly agency would just get the OMB number requirement taken care of.

Given all of the appellate court decisions shown above, wherein the courts have clearly explained that the defendants were convicted for violation of a statute and not a regulation, I find it abominable and intolerable that such a purportedly valid, but totally unsuccessful, "legal defense" theory as the OMB/PRA argument is still being perpetrated upon the patriot community.

I think it is important for individuals in the patriot community to know who the defense attorneys were in some of these cases. If you get copies of these cases from a law library, I believe you will find that the attorneys on appeal were as follows:
United States v. Wunder, 919 F.2d. 34, 38 (6th Cir. 1990); Trisha Zeller James (argued), James & James, Louisville, KY., for defendant-appellant..

United States v. Bowers, 920 F.2d 220, 222 (4th Cir. 1990); Lowell Harrison Becraft, Jr., Huntsville, Ala., for defendants-appellants.

United States v. Bentson, 947 F.2d 1353 (9th Cir. 1991); William A. Cohan, Cohan & Greene, Encinitas, Cal., for defendant-appellant.

United States v. Hicks, 947 F.2d 1356 (9th Cir. 1991); Donald W. MacPherson, MacPherson & McCarville, Phoenix, Ariz., for defendant-appellant.
It is my personal opinion that after the Wunder Case, the other attorneys should have understood why the argument was not legally valid. I can only urge individuals to understand the substance of their own arguments, and to not rely upon anyone else to take care of them.

The preceding articles show just a few of the issues upon which patriots have been provided with false or misleading information. Over the past 16 years, I have studied many, many court cases, including many cases wherein patriots were appealing their convictions. Case after case involved "legal" defense arguments which had no more basis in law or fact than in the examples shown in the above three articles. The patriots had simply relied upon what they had "learned" from one promoter or another; all to the detriment of the unsuspecting, and not so careful, patriots.

Over these years, I have come to the personal belief that just because a promoter of various "legal" arguments dances like a patriot, sings like a patriot or talks like a patriot, it does not necessarily mean that the promoter is a patriot. I also have come to the personal belief that each individual patriot must be willing to take off the rose-colored glasses, be willing to call a spade a spade, not take anyone's word on anything, and check everything out for himself before he relies upon it.

I have also considered the fact that the most effective scams, the most effective confidence games, the most effective fraudulent schemes, contain many truths. The parts that are not true are the parts that can cause problems for the unwary. Think about it.

I further believe that each individual patriot must realize that when he is in a legal battle, he is, in a sense, at war. In this war, the battle is over the minds, property and liberty of otherwise free individuals. If patriots can be led down the primrose path with one or more groundless "legal" arguments, will this not result in more victories for the other side? Is this not what in fact happened in the cases of Wunder, Bowers, Bentson and Hicks shown above? Is this not what in fact happened in many other cases too numerous to mention? I leave it to the reader to answer these questions for himself.

Please do not simply accept what I am telling you here at face value. Please go to a law library and check it all out for yourself. If you do, you will then know the facts for sure, your confidence in your personal position will skyrocket, nobody will be able to mislead you on these issues, and my credibility rating will go up. We both will win. Indeed, to some degree, the entire patriot community will win.

Otto Skinner is the author of the following three books:

The Best Kept Secret, "Taxpayer" V. Nontaxpayer" (1986, revised 1996) - $24.95
If You Are the Defendant (1989, revised 1996) - $24.95
The Biggest "Tax Loophole" of All (1997) (A 2 pound book.) - $39.95

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Order from: Otto Skinner
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