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Old 08-11-2003, 03:17 PM   #1 (permalink)
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The IRS vs. Kuglin: Does she have to pay income taxes. The court says... NO!!!

I think I'm still dreaming... If this turns out to be infallible, the govt is in deep deep doodoo, while the rest of us are ecstatic!

Link: IRS vs. Kugler Article

And the article itself:

Quote:
Forget the war in Iraq, Afghanistan and our excellent adventure in Liberia. Forget about Kobe, Arnold, Arriana, Scott and Laci. The biggest news of the entire week is that on August 8, 2003, the IRS was unable to convince a jury in Memphis, Tennessee that the Federal Tax Code requires the citizens to pay individual income taxes. I kid you not.

I watched as many Sunday news programs as I could possibly stand, and I didn’t hear a single mention of the IRS’ debacle in Memphis. If you ever had doubts about the mainstream media being controlled by the federal government, doubt no more.

For those not already aware, FedEx Pilot Vernice Kuglin began studying the IRS Code some years ago, and was simply unable to find anywhere in the code that she was required to pay federal income taxes.

And here’s the most remarkable part: Back in 1995, Kuglin wrote letters in good faith to the IRS, asking them to show her where the Tax Code requires individual citizens to pay federal income taxes. Incredibly, the IRS never answered a single one of her letters!

As she studied the facts, laws and related documents more, Kuglin became convinced that, regardless of the IRS’ failure to respond one way or the other, she was exempt from paying federal income taxes. So, Kuglin filled out W-4 forms showing 99 exemptions, and turned them in to her employer. Doing that meant Kuglin got to take home almost all of her paycheck each payday, instead of what was left after the feds ravaged it.

The IRS went after Kuglin for six counts of tax evasion on $920,000.00 income, and for filing “false” W-4 forms, charges that could have put the 58 year-old Kuglin in federal prison for up to 30 years and cost her 1.5 million in fines.

Apparently, things didn’t go quite the slam-dunk way federal prosecutor Joe Murphy thought they would. My money says the IRS wishes they had never gone after Kuglin at all. In fact, after the jury returned not guilty verdicts on all counts, Murphy is reported to have demanded that the judge order Kuglin to file her forms, pay her taxes and “obey the law”. The judge reportedly replied, “Sir, I don’t work for the IRS.”

Now pinch yourself and review this astonishing turn of events: A highly trained and educated federal prosecutor in Memphis was unable to convince 12 American citizens that Vernice Kuglin was required to pay federal income taxes. He was clearly unable to produce a single section of the Tax Code to that end, and the jury was unanimous in clearing Kuglin of all charges against her. If the foregoing was not so, Kuglin would have been convicted.

Jurors tend not to be very sympathetic with tax scofflaws, since each one of them is also a taxpayer and they understandably feel resentment towards anyone not paying “their fair share”. So in order for this federal jury to completely vindicate Kuglin, the government’s failure to prove their case against her had to have been clear and unequivocal!

I haven’t read the trial transcript yet, but I must assume the federal prosecutor at least tried to twist some vague and ambiguous section of the Tax Code to make it look like it applied to Kuglin. I don’t know that, but I’ll bet he tried. What else could he use to prosecute her with?

Thanks to the IRS’ arrogance and stupidity, and Kuglin’s refusal to plead to lesser charges, Kuglin accomplished what Bob Schultz and the other “tax protesters” had been denied all along: To force the IRS into a public debate and to answer the question of whether or not the Tax Code requires an individual to pay personal income taxes. Kuglin and her two attorneys, Larry Becraft and Robert Bernhoft, have unequivocally forced the IRS to show its hand, and 12 judges hearing that debate ruled the answer to be “NO”.

I think it’s time for everyone reading this to send a very polite letter to the IRS, telling them they read about the case in Memphis, and is it true that there is no section in the U.S. Tax Code that requires an individual citizen to pay federal income taxes?

Don’t be threatening in any way, or announce that you plan to stop paying federal income taxes. This request is for your personal edification, and you just simply want to know the truth.

Like Kuglin, you probably won’t get an answer back, but just to prove you sent the letter and that they received it, be certain to send the letter via certified U.S. Mail, with a return receipt requested. When you get that receipt back, staple it to a copy of the letter you sent the IRS, and put it somewhere real secure, like a personal safe or bank deposit box.

I don’t have to explain why, now do I?

Now, how many calls to FOX’ Bill O’Reilly will it take to convince him we know he’s doing a spin in the No-Spin Zone by sitting on this story? Start e-mailing O’Reilly at oreilly@foxnews.com, and be sure to give him your city and state. He’s gonna love me.

Carl F. Worden
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Old 08-11-2003, 03:45 PM   #2 (permalink)
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this is simply astonishing, if true, this could be one big BIG BIG conspirecy of the goverment leeching of its public
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Old 08-11-2003, 03:51 PM   #3 (permalink)
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holy shit! this could be spectacular!

one must wonder, however, why <a href="http://www.google.com/search?hl=en&lr=&ie=UTF-8&oe=UTF-8&q=vernice+kuglin&btnG=Google+Search">Google turns up almost nothing...</a>

(if this is true, I would imagine that our gov. will pass an amendment to the Tax Code in less than 90 days!!)

Last edited by macmanmike6100; 08-11-2003 at 04:01 PM..
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Old 08-11-2003, 04:57 PM   #4 (permalink)
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Way to go Vernice Kuglin.
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Old 08-11-2003, 05:08 PM   #5 (permalink)
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Quote:
Originally posted by macmanmike6100
(if this is true, I would imagine that our gov. will pass an amendment to the Tax Code in less than 90 days!!)
I'll bet my ass that's what they do. They'll just cover their ass so nobody else could do the same thing. Our media sucks fucking dick. I can't believe I never even heard of this.

It sure would be nice to keep the majority of my paycheck each week. I get raped for a few hundred each week, and I don't get shit back because I'm a single dude.
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Old 08-11-2003, 05:39 PM   #6 (permalink)
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This wouldn't apply to me personally, because I'm low income and have a kid. But, this is pretty incredible. Now, for the ethics. Yeah, yeah, yeah...I know. We ARE obligated to do something. We live here, vote here, and stuff like that. In this case, I'd have to say that this person has no right to vote, or anything like that. I agree that paying no taxes would be nice, but we do have the duty to do so. Although I am of the firm belief that they should be reduced.
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Old 08-11-2003, 06:15 PM   #7 (permalink)
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This case probably wasn't widely reported in the media because it will be overturned as soon as the IRS appeals it.

You must pay tax on income earned.
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Old 08-11-2003, 09:03 PM   #8 (permalink)
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Originally posted by gov135
This case probably wasn't widely reported in the media because it will be overturned as soon as the IRS appeals it.

You must pay tax on income earned.
I have studied this subject and researched every nook and cranny that I can. There is nothing in the US Constitution stating that there is an income tax. Yes, the government can tax, but there is nothing that is required along the lines of tithing or income tax.

So far I've hit a dead end around the turn of the 20th century. Here's what I have found and it's not anything but speculation based on pieces that I have read here and there. it's boiled down into this...

Quote:
In 1917 the United States entered the First World War and it became necessary to provide revenue to defray war expenses. That was the express purpose of the revenue Act of 1917, which was intended to raise 1.8 billion of additional taxes.
So someone (i forgot the name) convinced the government a way to make this was legal. What they did was create a corporate tax system. Each township, village, county, municipality and state became incorporated. Each person who is a resident of any said place is considered an "employee" and is required to pay taxes as such.
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Last edited by Cynthetiq; 08-12-2003 at 12:40 PM..
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Old 08-12-2003, 12:36 PM   #9 (permalink)
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Very enlightening. Where can we find out more about the trial? Anybody have access to a transcript perhaps?
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Old 08-12-2003, 12:50 PM   #10 (permalink)
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Sounds like an Urban Legend to me. I've seen a similar story previously debunked.

I live in Memphis, you certainly think it would have made the news here.
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Old 08-12-2003, 01:00 PM   #11 (permalink)
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Originally posted by sipsake
Sounds like an Urban Legend to me. I've seen a similar story previously debunked.

I live in Memphis, you certainly think it would have made the news here.

maybe you don't read the news or pay close attention... because the above poster mentioned how it's not getting lots of media attention....it was picked up by Associated Press.

Quote:
Tax Refuser Wins Federal Evasion Case
By THE ASSOCIATED PRESS


Filed at 1:17 p.m. ET

MEMPHIS, Tenn. (AP) -- A woman who said she refused to pay federal income taxes because the IRS didn't respond to her inquiries about tax law has been acquitted of tax evasion.

Vernice Kuglin, a 58-year-old FedEx pilot, had been charged with six counts of tax evasion. Had she been convicted by the federal court jury, she would have faced up to 30 years in prison and $1.5 million in fines.

``I feel justified,'' she said after Friday's verdict.

Kuglin said she began to question the federal tax system about 10 years ago and wrote the Internal Revenue Service twice in 1995 with questions about what law required her to pay taxes. She said she didn't get a response. On Dec. 30, 1995, she filed a withholding statement directing that no taxes be withheld from her pay.

The government accused Kuglin of filing false W4 forms from 1996 to 2001, during which time she earned $920,000 in income. Normal withholding would have been about $250,000.

Federal prosecutor Joe Murphy said during closing arguments that Kuglin did have an opportunity to sit down and discuss her situation with the IRS, ``and she didn't.''

The five-day trial did not resolve whether she must make the tax payment.

``I think it is safe to assume the IRS will attempt civil collection, but she is not guilty of tax evasion,'' said defense attorney Robert Bernhoft.

Larry Becraft, another defense attorney, said after the verdict that the federal tax code is confusing and ``at best is a walking due process violation.''

Becraft, who helped win acquittals for 17 defendants in another Memphis tax trial 12 years ago, said the letters from his client to the IRS showed a lack of criminal intent to evade tax laws and that she sincerely believed her conduct was proper.

``The whole thing could have been resolved if the government had simply answered her questions,'' Becraft said. ``It didn't happen. I made an argument to the jury that an American has a right to ask the government for answers.''

IRS spokeswoman Nancy Mathis was unable to state agency policy on responding to letters asking it to specify the law that makes people liable for income taxes.

She said the IRS had posted various items on its Web site and issued news releases stating that taxes are mandatory. The first words of the Internal Revenue Code are ``a tax is hereby imposed.''

When asked if she planned to start paying federal income taxes again, Kuglin said: ``I will pay all the taxes for which I am liable.''

She said she believes the 16th amendment to the Constitution -- giving Congress the power to collect income taxes -- and the Internal Revenue Code are constitutional, ``but I also feel there is a gross misapplication of the individual income tax laws by the IRS.''

Kuglin said she hopes to resume flying for the Memphis-based cargo airline as soon as the government returns her passport, which was seized after her indictment this year.
NYTimes.com

and

Quote:
August 12, 2003
Jury Acquits Pilot Who Questioned Liability for Income Tax
By DAVID CAY JOHNSTON


federal jury in Memphis has acquitted a FedEx pilot on six counts of tax evasion after she testified that she wrote letters asking the Internal Revenue Service what law required her to pay taxes but never received a response.

The verdict, reached on Friday, brings into question the I.R.S. practice of ignoring such questions, which it regards as frivolous because the first words of the Internal Revenue Code are "a tax is hereby imposed."

The pilot, Vernice Kuglin, 58, filed a withholding statement on Dec. 30, 1995, directing that no taxes be withheld from her pay. From 1996 through 2001 she earned $920,000 as a pilot for FedEx, but no taxes were withheld, she said yesterday. Normal withholding for the period would have been about $250,000.

FedEx would not say yesterday how many other employees had submitted W-4 forms requesting that little or no tax be withheld. Sandra Munoz, a company spokeswoman, also declined to say whether the company had reviewed its payroll to identify employees who were having no taxes withheld. She did say that FedEx was complying with all I.R.S. regulations on withholding.

The acquittal does not relieve Ms. Kuglin of the obligation to pay the taxes. Joe Murphy, the federal prosecutor in the case, indicated in court that the government intended to pursue collection in a civil action. Mr. Murphy said yesterday that he was not allowed to comment on the case outside of court.

The lead defense lawyer, Lowell H. Becraft Jr. of Huntsville, Ala., said he built the defense around the absence of response by the I.R.S. to Ms. Kuglin's letters.

He said the letters showed that his client lacked a criminal intent to evade the tax laws and was instead operating from a sincere belief that her conduct was proper.

Mr. Becraft, who 12 years ago was part of a team that won acquittals for 17 defendants in another Memphis tax trial, said that jurors told him they had voted 7 to 5 for conviction on Thursday. They then told Judge Jon P. McCalla of Federal District Court that they were deadlocked. He ordered further deliberations, and the jury voted to acquit on Friday.

"The whole thing could have been resolved if the government had simply answered her questions," Mr. Becraft said. "It didn't happen. I made an argument to the jury that an American has a right to ask the government for answers. A lot of people in the tax movement do not hide, they are in the face of the I.R.S. and they write letters that set forth their position. And while a lot of them are not articulate or well grounded in legal positions, they have some things they want answered" about their tax liability. But their questions are usually ignored, he said.

Mr. Becraft said during an hour he spent with jurors after the verdict their most focused comments were about the absence of a response from the I.R.S. to Ms. Kuglin's letters.

The I.R.S. was unable to state yesterday what policy it has on responding to letters asking it to specify the law that makes people liable for income taxes. Nancy Mathis, an I.R.S. spokeswoman, noted that the I.R.S. had posted various items on its Web site stating that taxes are mandatory and that it had issued press releases making the same point.

Scores of people who contend that they are not required to pay taxes have said, in interviews over the last nine years, that they had sent letters to the I.R.S. asking what law makes them liable for taxes and had received no response. Promoters of tax evasion schemes often cite the absence of a response as evidence for their claims that taxes are voluntary.

Ms. Kuglin said yesterday, "I believe the 16th Amendment is constitutional and the Internal Revenue Code is constitutional, but I also feel there is a gross misapplication of the individual income tax laws by the I.R.S."

"The questions I have asked are what section of the Internal Revenue Code makes me liable for the individual income tax and what law requires me to fill out the Form 1040" tax return, she said.

Ms. Kuglin said she was also troubled by how the "tax honesty movement" had seized on her acquittal, saying she was upset with a remark attributed to Judge McCalla. Both she and Mr. Becraft described the quotation as untrue and misleading.

The quotation, widely distributed over the weekend by people who deny the legitimacy of the tax laws or of the federal government, came from the Web site of the We the People Foundation for Constitutional Education, the chief organizer of the "tax honesty movement." It quoted the judge as refusing to require Ms. Kuglin to file tax returns, saying, "Sir, I don't work for the I.R.S."

Ms. Kuglin said: "I am concerned that some of the tax honesty people are exploiting this and making it look like the judge was being flip. He didn't say that. The judge was very gracious to Mr. Murphy and very fair in my trial. We had a good, clean case and I would have been pleased because of that if the jury had gone either way, though I am obviously more pleased with the way they decided."

She said the judge simply indicated that it was not within his jurisdiction to take any civil actions requiring payment of the taxes.

Ms. Kuglin said she hoped to resume flying as soon as the government returns her passport, which was seized after her indictment early this year.
In February 2002, a Tax Court judge dismissed Ms. Kuglin's claims of I.R.S. irregularities in determining she owed taxes for 1994 and 1995, but declined an I.R.S. request to impose penalties on her for filing frivolous actions to delay collection.
NYTimes.com
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Old 08-12-2003, 01:01 PM   #12 (permalink)
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[quote]Lawyer: Pilot believed she was tax exempt

Pilot Vernice Kuglin did not file income tax returns on $920,000 in earnings because she believed the federal tax code did not apply to her, her lawyer told federal court jurors Tuesday.

Kuglin, 58, is charged with six counts of tax evasion, and with filing false W-4 forms for the period 1996 to 2001. Conviction carries up to 30 years in prison and $1.5 million in fines.

Federal prosecutor Joe Murphy said Kuglin "had a lot of income" during that time, but she "claimed to be exempt from paying withholding tax.''

In opening arguments Tuesday before U.S. Dist. Judge Jon McCalla, defense attorney Larry Becraft told jurors they must decide if Kuglin acted with criminal intent.

Kuglin has lived in Memphis since 1985 when she was hired as a pilot for FedEx.

She testified she is now on a personal leave.

Kuglin testified she questioned whether payment of taxes is "voluntary" or "voluntary compliance" as indicated on some federal documents she read aloud in court.

- Shirley Downing

[\quote]

This was from the Memphis paper last Wednesday. Haven't found documentation on a verdict.

As a lawyer friend once told me, not paying taxes may not be illegal, however, falsifying a tax return is a federal crime.
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Old 08-12-2003, 01:04 PM   #13 (permalink)
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during the Cavuto report there was a teaser about it.. i heard it but didn't know when or what show it will be on.. so it's getting some press.
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Old 08-12-2003, 01:08 PM   #14 (permalink)
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So Cyn...what do you think? It sounds like the case doesn't really resolve the question of whether the income tax is legal, it just aquits her of tax evasion since she didn't receive a response from the IRS.

Think this case will have any profound effect on the tax system?
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Old 08-12-2003, 01:56 PM   #15 (permalink)
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there are a number of people who are "tax protesters"

now what needs to be seen is to see how the gov't now fights the drug cartels since the tax evasion was their easist fight.

IMHO taxes need to be paid, either via income tax or taxing everything that you use.
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Old 08-12-2003, 01:59 PM   #16 (permalink)
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Um, can anyone tell my why a Google of "Vernice Kuglin" only turns up 3 hits. Two from of the Tennesee Western District Federal Court and one from gomemphis.com? Why doesn't Google link to any of the AP articles?
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Old 08-12-2003, 10:13 PM   #17 (permalink)
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Originally posted by BentNotTwisted
Um, can anyone tell my why a Google of "Vernice Kuglin" only turns up 3 hits. Two from of the Tennesee Western District Federal Court and one from gomemphis.com? Why doesn't Google link to any of the AP articles?
Remember the little copyright at the bottom? that's why it's not linked to most AP stuff, then there is fact that most newspapers like NYtimes.com, LAtimes.com, LA Daily News, all require a login.
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Old 08-13-2003, 04:23 AM   #18 (permalink)
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Just out of curiosity, how do tax protesters envision paying for things like defense, federal transportation oversight (road maintenance, regulation of airlines, etc.), etc.? Would corporations be taxed more heavily? Would more duties, and therefore a larger tax burden, be shifted to the states? Seems to me like it would be six of one, half-dozen of the other. We'd still be paying something, either to the states or in higher prices to offset corporate tax burdens. If it didn't come out of our paychecks directly it would come out eventually. What's the difference?
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Old 08-13-2003, 05:33 AM   #19 (permalink)
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I heard a judge discussing this on the news and he said that it isn't as big a deal as people think. This woman was cleared of the "criminal" counts of willful tax evasion. He said that the IRS will sue her for the back taxes and will most likely win.
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Old 08-13-2003, 05:45 AM   #20 (permalink)
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Originally posted by lurkette
Just out of curiosity, how do tax protesters envision paying for things like defense, federal transportation oversight (road maintenance, regulation of airlines, etc.), etc.? Would corporations be taxed more heavily? Would more duties, and therefore a larger tax burden, be shifted to the states? Seems to me like it would be six of one, half-dozen of the other. We'd still be paying something, either to the states or in higher prices to offset corporate tax burdens. If it didn't come out of our paychecks directly it would come out eventually. What's the difference?
not all taxes are paid in just income taxes, there are visible taxes like the gas tax, that 9/10th of a penny, the blue sticker on the bottom of cigarettes, are both great examples.

then there is the simple things that you don't think about like sugar tax, which hits things that one doesn't expect like cakes and cookies, all the way up to alcoholic beverages.

While we aren't taxed as much as other countries, you are right it is that six half dozen thingy (i never understand that statement it always confuses me)
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