Appendix — Brown v. United States

rILED * (2)

9920 66 JUN 23200

OFFICE OF THE CLERK

In the

Supreme Court of the United States

Term, 1999-2000

ROBERT A. BROWN, et al,,

Petitioner,

vs.

UNITED STATES OF AMERICA,

Respondent

APPENDIX TO

PETITION FOR WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

Robert A. Brown

Counsel of Record in Pro Se

1046 Howard Drive

Las Vegas, Nevada 89104

(702) 733-2967

Petitioner in Pro Se

Aprr

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

FILED: March 30, 2000

Cathy A. Catterson, Clerk,

U.S. Court of Appeals

No. 99-15308

D.C. No. CV No. CV-98-00825-PMP

Southern Nevada

ROBERT A. BROWN, ELENA H. BROWN,

Plaintiff-Appellants,

v.

UNITED STATES OF AMERICA,

Defendant-Appellee

ORDER

Before: BROWING, WALLACE AND LEAVY,

Circuit Judges.

The panei has voted to deny appellants’ mo-

tion for publication of the Memorandum Disposition

and to deny the petition for panel rehearing. Judge

Browning has voted to deny the petition for rehear-

ing en banc, and Judges Wallace and Leavy so rec-

ommend.

The full court has been advised of the petition

for rehearing en banc and no judge has requested a

vote on whether to rehear the matter en banc. See

Fed. R. App. P.35.

2a

The motion for publication, the petition for

panel rehearing and the petition for rehearing en banc

are denied.

3a

APPENDIX B -

PETITIONER’S REQUEST THAT THE COURT OF

APPEALS CERTIFY WHETHER OR NOT IT HAD

ADDRESSED THE CONSTITUTIONAL

CASE NO 99-15308

Lower Court Docket No. CV-98-00825-PMP

ROBERT A. AND ELENA H. BROWN

Appellant/ Petitioners

vs.

UNITED STATES OF AMERICA

Defendant / Appellees

SUPPLEMENT

TO APPELLANT/ PETITIONERS’

PETITION FOR REHEARING PURSUANT TO

FRAP 40 AND/OR FOR A REHEARING EN BANC

PURSUANT TO FRAP 35 AND MOTION THAT

THE COURT’S RULING OF

OCTOBER 26, 1999 BE PUBLISHED

COMES NOW Appellant/Petitioners in the above

action and requests that if this Court denies the re-

lief requested in the above petition, then the Ninth

Circuit, en banc, certify to the Supreme Court whether

or not it has addressed the constitutional violations

raised and set forth by Appellant/Petitioners in their

appeal.

Respectfully submitted,

Robert A. Brown, Pro per

1046 Howard Drive

Las Vegas, Nevada 89104

4a

APPENDIX C -

DECISION BY COURT OF APPEALS OF

\ OCTOBER 26, 1999 —

NOT FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

FILED: October 26 1999

Cathy A. Catterson, Clerk,

U.S. Court of Appeals

No. 99-15208

D.C. No CV No. CV-98-00825-PMP

ROBERT A. BROWN, ELENA H. BROWN,

Plaintiff-Appellants,

v.

UNITED STATES OF AMERICA,

Defendant-Appellee

Appeal from the United States District Court

for the District of Nevada

Philip M. Pro, District Judge Presiding

MEMORANDUM"

Submitted October 18, 1999?

Before: BROWING, WALLACE AND LEAVY,

Circuit Judges.

Robert and Elena Brown appeal pro se the dis-

trict court’s summary judgment for the United States

' This disposition is not appropriate for publication and may

not be cited to or by the courts of this circuit as may be

provided by 9" Cir. R. 36-3

2 The panel unanimously finds this case suitable for decision

without oral argument. See Fed. R. App. P 34{a}(2)

5a

in the Brown’s action seeking a refund of taxes paid

for tax year 1996 on the ground the IRS had failed to

make any assessment against them and they had no

tax liability.

These arguments are frivolous. First, the Six-

teenth Amendment authorizes a direct non-appor-

tioned income tax on resident United States citizens.

See Wilcox v. Commissioner, 848 F.2d 1007,1008n.3

(9® Cir. 1988). Second, compensation for labor or

services, paid in the form of wages or salary, is in-

come subject to taxation. See United States v. Romero,

640 F.2d 1014,1016 (9* Cir.1981). The Browns are

taxpayers within the meaning of the Internal Revenue

Code and are subject to federal tax laws and income

tax. See id.

Third, there is no requirement that the IRS

make a formal assessment of tax liability before pay-

ment is necessary. An assessment is merely a book-

keeping procedure that permits the government to

bring its administrative apparatus *o bear in collect-

ing a tax. See Zeier v. United States, 80 F.3d 1360,

1354 (9% Cir. 1996) (rejecting similar argument in

estate tax context). Most taxes are collected volun-

tarily, without an assessment; an assessment serves

as the basis on which the IRS takes action against

those who do not voluntarily pay their taxes on time.

See id.

Accordingly, the judgment of the district court is

AFFIRMED.

6a —

APPENDIX D -

ORDER OF DISTRICT COURT OF

JANUARY 19, 1999

UNITED STATES DISTRICT COURT

DISTRICT OF NEVADA

ENTERED AND SERVED

JAN 21 1999

CLERK U.S. DISTRICT COURT

DISTRICT OF NEVADA

D.C. No CV No. CV-98-00825-PMP (RJJ)

ROBERT A. BROWN,

ELENA H. BROWN,

Plaintiffs,

V.

UNITED STATES OF AMERICA,

Defendant.

This action was commenced on May 29, 1998,

by the filing of Plaintiffs’ Complaint to recover over-

payment of federal income taxes for the year 1996

(#1).

On November 30,1998, Plaintiffs filed a Motion

for Summary Judgment (#12). On December 14, 1998,

Defendant United States filed a Response in opposi-

tion to Plaintiffs’ Motion for Summary Judgment and

Defendant’s Cross-Motion for Summary Judgment

(#13-#15). On January 6, 1999, Plaintiffs filed a Re-

ply to Defendant’s Opposition to Plaintiffs’ Motion for

Summary Judgment and Cross-Motion for Summary

Ta

Judgment (#16).

The pleadings and Motions on file, and particu-

larly the Form W-2’s submitted as exhibits to Defen-

dant United States’ Cross-Motion for Summary Judg-

ment (#15), unambiguously show that Plaintiffs Rob-

ert A. Brown and Elena H. Brown received the sums

of $23,846.73 and $20,354.42, respectively, for the

year 1996 and that a total of $5,035.50 was withheld

for that year. Plaintiffs’ suit for refund is grounded in

the claim that because no assessment had been made

against them with regard to income taxes at the time

they filed their income tax return, Form 1049 (sic),

for the year 1996, they are entitled to a full refund of

the entire amount of the taxes withheld. Plaintiffs

are wrong.

The absence of a tax assessment by the Inter-

nal Revenue Service does not prove that a taxpayer

owes no taxes. See 26 U.S.C. par. 6151 and Moran v.

U.S., 63 F. 3d 663, 666 (7 Cir. 1995). Indeed, the

undisputed facts before the Court demonstrate that

Plaintiffs cannot prove their amen of overpayment and

entitlement to refund.

IT IS THEREFORE ORDERED that Plaintiffs’

Motion for Summary Judgment (#12) is denied.

IT IS FURTHER ORDERED that Defendant

United States’ Cross-Motion for Summary Judgment

(#13-#15) is granted and that Judgment is hereby

entered in favor of Defendant United States and

against Plaintiffs Robert A. Brown and Elena H.

Brown.

DATED: January 19, 1999

PHILIP M. PRO

United States District Judge

8a

APPENDIX E -

PLAINTIFF /APPELLANTS’ PETITION THAT THE

NINTH CIRCUIT RECONSIDER ITS DECISION OF

OCTOBER 26, 1999

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

CASE NO 99-15308

Lower Court Docket No. CV-98-00825-PMP

ROBERT A. AND ELENA H. BROWN

Appellant /Petitioners

vs.

UNITED STATES OF AMERICA

Defendants - Appellees

PETITION FOR REHEARING PURSUANT TO

FRAP 40 AND/ OR FOR A REHEARING EN BANC

PURSUANT TO FRAP 35 AND MOTION THAT

THE COURT’S RULING OF

OCTOBER 26, 1999 BE PUBLISHED

Plaintiff-Appellants would ask this Honorable

Court to reconsider its Decision filed on October 26,

1999 in which it affirmed the lower court’s granting

of a summary judgment to the United States. At the

very least the panel should reconsider its decision

pursuant to FRAP 40, and if the panel will not re-

verse its Ruling pursuant to FRAP 40, than en banc

consideration is warranted, because the Panel’s deci-

sion conflicts with numerous Supreme Court and

lower courts decisions (to numerous to mention) all

of which holding that assessments of an ad valorem

income tax is a condition precedent to the owing of

any such tax.' The Court’s ruling of October 26, 1999

9a

is also in conflict with at least 40 provisions of the

Internal Revenue Code which mandate assessments,

as well as Section 31(a)(1) of the Internal Revenue

Code, to say nothing of numerous Treasury Depart-

ment regulations and IRS procedure manuals man-

dating the making of assessments. The Court’s rul-

ing is also in direct and obvious conflict with the ap-

portionment provisions of the United States Consti-

tution. Therefore, en banc consideration is necessary

in order to bring this 9% Circuit decision into confor-

mity with both law and reason and to maintain and

preserve the reputation of the 9" Circuit as being a

court of law and not merely a Star Chamber. It is

also obvious that the Panel knows that its decision is

in conflict with both law and reason which is why it

seeks to hide its decision by refusing to publish it.

The Panel correctly understands that a published

decision of this Circuit in which the 9 Circuit claims

that income taxes (as well as other ad valorem taxes)

can be owed absent assessments, would throw tax

law in the 9% Circuit into total chaos while causing

tax lawyers all over the country to scratch their heads

in disbelief.

In rendering their decision the Honorable James

Browning, Clifford Wallace and Edward Leavy bla-

tantly disregarded numerous statutes contained in

the Internal Revenue Code, as well as numerous, rel-

evant Supreme Court decisions. The panel also bla-

tantly ignored and disregarded the apportionment

provisions of the United States Constitution especially

as they apply to the wage tax imposed in Code Sec-

tion 3402 and to the $5,035.57 at issue.

' “An ad valorem tax is imposed only by assessment - an as-

sessment being a prerequisite to the existence of the tax” (Em-

phasis added) US. v. Marion Trust, 143 F.Rep 301, 302. (7"

Cir. 1906).

10a

The facts in this case are simple. Plaintiffs paid

$5,035.57 in wage taxes as imposed in Code Section

3402. This amount was fraudulently collected by the

defendant in the guise of “Income tax collected at

source” as Code Section 3402 is fraudulently cap-

tioned. Apart from the wording of the statute itself,

Code Section 6413 clearly identifies that a wage tax

is “imposed” in Code Section 3402, having nothing to

do with the income tax imposed in Section 1. ? Code

Section 6413 states in relevant part that:

If more than the correct amount of tax

imposed by section 3101, 3111, 3201, 3221,

or 3402 is paid etc. etc. etc.” (Emphasis added)

Clearly, therefore, a wage tax is imposed in Code Sec-

tion 3402, having nothing to do with the income tax

imposed in Code Section 1 or the 16" Amendment.

Plaintifis extensively briefed both the trial court and

this Court that a direct, tax on wages as imposed in

Code Section 3402 would be an obvious violation of

the apportionment provisions of the Constitution as

contained in Article 1, Sections 2 and 9, Clauses 3

and 4 — if it were not refundable as provided for in

Code Section 31(a)(1). Plaintiff also extensively briefed

both the trial court and the Ninth Circuit on appeal

that an unapportioned, direct tax imposed directly

on wages was obviously unconstitutional. Plaintiff

pointed out in his pleadings to both courts that a tax

imposed directly on a “source” of income (such as

wages) had to be apportioned, as the Supreme Court

2 Since the only “authorities” cited by the 9" Circuit Panel as

support for its decision were three appellate decisions having

nothing to do with the wage tax imposed in Code Section 3402,

the Appellate Panel relied on no authority that would allow it to

deny plaintiff the refund clearly provided by Code Sections 3402

and 31(a)(1) — overlooking all of the other considerations that

establish plaintiffs right to a refund of the funds at issue.

: lla

clearly ruled in Brushaber v. Union Pacific RR, 240 US

1, and Pollock v. Farmers Loan & Trust, 158 U.S., 158

U.S. 601. * In upholding the lower court’s granting of

a summary judgment to the Government, the Ninth

Circuit (following the lead of the trial court) ignored

both the apportionment provisions of the Constitu-

tion and the Brushaber and Pollock decisions. :

In addition to ignoring the above statutes and

Supreme Court decisions, both the trial court and

the 9“ Circuit panel also igriored the provisions of

Code Section 31(a)(1). This statute provides that:

The amount withheld, as a tax under

chapter 24 (which includes Code Section 3402)

shall be aliowed to the recipient of the income

as a credit against the tax imposed by this title.

In filing their 1996 income tax return, plain-

“tiffs-appellants showed a “zero” as the amount of in-

come taxes they claimed was due and owing. There-

fore based on the provisions of Code Section 3402

and 31(a)(1), the “credit” they were entitled to, had to

take the form of a cash refund of the $5,035 the

Defendant was holding. Clearly, pursuant to the pro-

visions of Code Section 6501(c)(1) it can not be con-

tended by either the trial court nor the 9" Circuit

Court of Appeals that as of the date plaintiffs-appel-

lants filed their 1996 income tax return and claim for

refund that they owed more in income taxes than the

“zero” shown on their 1996 tax return. Code Section

650 1(c)(1) provides that:

3 Since this issue was extensively covered in plaintiff's underly-

ing pleadings, plaintiff feels no need to rehash this entire issue

in this Motion for Reconsideration. It’s all there in plaintiffs-

appellants underlving pleadings.

12a

In the case of a false or fraudulent re-

turn with the intent to evade tax, the tax may

be assessed or a proceeding in court for collec-

tion of such tax may be begun without assess-

ment at any time.

Therefore, unless and until the Government

assessed an amount of income taxes against plain-

tiffs-appellants (in excess of the “zero” shown on their

return) as being due and owing for 1996, or secured

a judgment against them for a greater amount, as a

result of a “proceeding in court,” as provided for in

Code Section 6501(c)(1) it can not be contended by

this or any other court that plaintiffs-appellants owed

more in 1996 income taxes than the “zero” shown on

their 1996 income tax return.

Therefore any claim by the Government or any Court

that as of the date that plaintiffs-appellants filed their

1996 return and claim for refund, that they owed more

than the “zero” shown on their return, would amount

to a blatant and deliberate violation of Code Section

6501(c)(1). It is clear, that if a federal court were to

rule that plaintiffs-appellants owed more in income

taxes than the “zero” shown on their 1996 income

tax, despite the fact that no assessment-nor any judg-

ment for any greater amount then “zero” exists against

them, then that court would also have ruled that Code

Section 6501 (c )(1) is without legal force and effect.*

* It is also clear that if this Court were to deny plaintiff the

protection of 6501 as well as the many other protections af-

forded him by the assessment provisions of the Internal Rev-

enue Code and the apportionment provisions of the Constitu-

tion, such a denial by this Court would not only amount to a

clear cut case of obstruction of justice, but an obvious criminal

violation of 18 USC 241.

13a

SECTION 6151

In granting the Government a summary judg-

ment, Judge Pro, the trial court judge, relied on Code

Section 6151(a). However, as was fully developed in

plaintiff's Opening Brief, it is clear that Section 6151

has nothing whatever to do with the payment of in-

come taxes. Plaintiff pointed out in his Opening Brief

that:

1) If Code Section 6151 were relevant to

the payment of income taxes, it would have been

identified as such in the Privacy Act Notice as

contained in the 1040 booklet. However only

Code Sections 6001, 6011 and 6012 are iden-

tified in that Notice as being relevant to the

payment of income taxes.

2) In addition, plaintiff supplied this

Court (as Exhibit F) an excerpt from the Paral-

lel Table of Authorities which showed that the

implementing regulation for this statute is in

27 CFR, not in 26 CFR. This proved that 6151

only related to the payment of liquor, tobacco

and firearms, not to the payment of income

taxes.

Therefore it is clear that Judge Pro’s underly-

ing ruling was erroneous as a matter of law.

THE COURT’S RULING OF OCTOBER 26

IS TOTALLY LAWLESS

In sustaining Judge Pro’s decision the 9% Cir-

cuit stated that “There is no requirement that the IRS

make a formal assessment of tax liability before pay-

ment is necessary.” In making this claim (which ren-

ders meaningless over 40 Code Sections mandating

l4a

the making of assessments) the 9™ Circuit cites no

statute to back up its claim. It does not even cite

Code Section 6151; the Code Section relied upon by

Judge Pro in making this same claim. It is instruc-

tive to note that in its two page decision the 9 Cir-

cuit panel does not cite one statute to support its

claim that assessments are unnecessary in establish-

ing whether one owes income taxes or not. Thus plain-

tiff can claim without fear of contradiction that the

panel’s decision was totally lawless.*° In making

such an unsupported claim that assessments are le-

gally meaningless, the Ninth Circuit has ruled that

the Government can seize property without bother-

ing to make the assessments called for by such stat-

utes as Code Sections 6201, 6203, 6213, 6214, 6215,

6225, 6303, 6322, 6501, 6851, and 6852, to name

only 11 of the some 40 statutes that mandate the

making of assessments in a variety of circumstances.

In holding that assessments are not legally neces-

sary, the 9" circle panel has managed TO STAND THE

ENTIRE INTERNAL REVENUE CODE ON ITS HEAD.

If income taxes can be owed absent assessments, on

what date do they become due and owing and who

makes such a determination? Apparently laws as

passed by the U.S. Congress do not impress this 9th

Circuit panel.

5 Since Article 1, Section 1 of the Constitution states that “All

legislative powers herein granted shall be vested in a Congress

of the United States,” and since Congress never passed a law

binding Americans to court decisions in which they took no

part, the three Appellate Court decisions cited by the Panel are

not binding on plaintiff. What are binding on plaintiff and this

Court are the statutes and the legislative regulations issued by

the Treasury Department. So what the Panel has done in this

instance, is to ignore the law , Treasury regulations, and the

Constitution and has sought to enforce as /aw the erroneous

and non - binding opinions of other federal judges, who appar-

entlv labor under the same misconceptions as the instant Panel.

15a

THE NINTH CIRCUIT DECISION IGNORES NU-

MEROUS SUPREME COURT DECISIONS THAT

ARE BINDING ON THE 9™ CIRCUIT

In holding that income taxes can be owed ab-

sent assessments, the Ninth Circuit decision not only

flies in the face of the statutes enumerated above and

common sense (since if assessments serve no legal

purpose, why provide for them at all?), but it also

flies in the face of Supreme Court decisions that are

binding on the 9" Circuit. For example in Bull v.

U.S. 295 U.S. 247, 249, the Supreme Court held,

Once the tax is assessed. The taxpayer

will owe the sovereign the amount when the-

date fixed by law for payment arrives.

If income taxes can be owed absent assessments, then

the above holding by the Supreme Court makes no

sense at all. Clearly the 9" Circuit Panel simply de-

cided to ignore this holding of the Supreme Court.

In Rosenman v. U.S., 323 U.S. 658, 663, the

Supreme Court pointed out, with respect to taxes paid

before they are assessed, that:

The Government does not consider

such advances of estimated taxes as pay-

ments. They are, as it were, payments in

escrow. They are set aside, as we have

noted, in special suspense accounts, es-

tablished for depositing money received

when no assessment is then outstand-

ing against the payment. The receipt by

the Government of moneys under such

an arrangement [i.e. when no assessment

has been made] carries no more signifi-

l6a

cance than would the giving of a surety

bond. Money in these accounts is held

not as taxes duly collected are held but

as a deposit made in the nature of a cash

bond for the payment of taxes thereafter

found to be due [and assessed]. (Empha-

sis and bracketed material added)

So here we have the Supreme Court again ac-

knowledging that taxes paid prior to assessments

having been made can not even be considered as

money paid for taxes owed, but are in fact money “set

aside” as “payments in escrow” until such taxes are

“owed” - which, of course, can only come about

through assessments or a proceeding in court.

There are, of course, numerous court decisions

acknowledging that assessments are a condition pre-

cedent to the owing of income taxes as, for example,

G.M. Leasing v. United States, 429 US 338 (1977).

In this case, parties to the litigation paid $280,000 in

estimated income taxes. In connection with this est-

mated payment the Supreme Court said, at page 341:

The sum of 289,800° was transmitted

when the form was filed and was placed by the

Internal Revenue Service i7 a suspense account

Sor future credit. (Emphasis added)

So the advance, estimatedincome tax payment

was placed in a “suspense account” pending the as-

sessment against which it would eventually be cred-

ited - as is more fully described in Rosenman, supra.

Additional quotations from G. M Leasing show-

© Plaintiff can not account for the disparity in these two num-

bers.

17a x

ing the acknowledgment by the Supreme Court that

assessments are essential before income taxes can

be owed, are as follows:

The agents informed him of the jeopardy

assessments and demanded payment. (Page

343)

The Court of Appeals for the most part

reversed. It ruled that . . .petitioner had not

sustained its burden of proving the assess-

ments to be erroneous; and that the trial court

erred in invalidating the assessments and in

dismissing the Government’s counterclaim. ..(p

348)

...we declined to review petitioner’s and

Norman’s son’s claims that the assessments

and levies should have been voided...We ap-

proach this case accepting the Court of Appeals’

determination that the assessments and lev-

ies were valid . . .Those facts necessarily es-

tablish probable cause to believe that assets

held by petitioner were properly subject to sei-

zure in satisfaction of the assessments. (p.351)

Here, of course, the Supreme course acknowl-

edges that 1) the IRS could only “demand payment”

after the jeopardy assessment had been made; 2) the

invalidation of the assessment invalidated the

Government’s claim; 3) that the taxpayer’s property

was seized to satis/y the assessments; obviously,

without the assessments, there would be nothing to

“satisfy.” However based on the Panel’s instant rul-

ing no jeopardy assessments in the above case were

apparently needed. The IRS could simply have seized

the money in payment of income taxes on the basis

18a

of the 9“ Circuit instant decision, that “there is no

requirement that the IRS make a formal assessment

(jeopardy or otherwise) of the tax liability before pay-

ment is necessary.”

Verification that assessments are a condition

precedent to the “owing” of income taxes can be found

in the definitive work “IRS Practice and Procedure,”

Second Edition by M. Saltzman. Here is what Mr.

Saltzman has to say about the significance of assess-

ments.

1) The assessment of a tax creates a

debt...Once the assessment is made.... the gov-

ernment, without judicial intervention, may

summarily collect the assessment. (Paragraph

14.01[2})

Obviously therefore, only following an assess-

ment is a tax debt created, and without an assess-

ment, the government can not collect the tax without

judicial intervention.

2) An assessment is the official act of re-

cording the liability of a taxpayer....and requires

the signing of the assessment certificate by the

assessment officer...(and) is the first step in the

collection process. (Paragraph 14.05{1})

Therefore, according to Saltzman, the making

of an assessment “is the first step in the collection

process” without which, the collection process cant

even begin.

3) A taxpayer’s liability is recorded by the

official act of assessment. (Par.14.05 [2]

19a

Since the Government acknowledges that no

1996 income taxes have ever been assessed agairst

plaintiffs, than, according to Saltzman, no tax liabil-

ity for 1996 taxes can exist and no “collection pro-

cess” can even begin. What can be plainer than that?

Therefore the Court’s ruling that “there is no

requirement that the IRS make a formal assessment

(are there “informal” assessments?) before payment

is necessary” is contrary to at least 40 statutes re-

quiring assessments, such Supreme Court’s holdings

as Bull, Rosenman, G. M Leasing (and others too

numerous to mention) and the definitive observations

of M. Saltzman

THE PANEL’S CLAIM THAT THE “SIXTEENTH

AMENDMENT AUTHORIZES A DIRECT NON-

APPORTIONED INCOME TAX ON RESIDENT

UNITED STATES CITIZENS” IS

A TOTALLY FALSE CLAIM

In plaintiffs Reply Brief he extensively briefed

the panel that the Supreme Court in the Brushaber

decision held that the effect of the 16 Amendment

was to allow the government to impose an income tax

in the form of an excise tax, and not in the form of a

non-apportioned direct tax on income. Plaintiff even

quoted for the appeals panel the very words of the

Supreme Court in Brushaber, where the Court stated

(on pages 16 & 17) that:

Taxation on income was in its nature an

excise entitled to be enforced as such.

(Emphasis added)

Plaintiff also included as Exhibit E pages 4&5

20a

of the “CRS Report for Congress” which reported that

the Supreme Court had held that the 16" Amend-

ment did not “authorize any new type of tax” and that

“Direct taxes were notwithstanding the advent of the

Sixteenth Amendment still subject to the rule of ap-

portionment and indirect taxes were still subject to

the rule of uniformity.” And plaintiff even pointed

out to this Court that in its report the Congressional

Research Service even captioned one paragraph in

that report as follows, “WHAT DOES THE (SUPREME)

COURT MEAN WHEN IT STATES THAT THE INCOME

TAX IS IN THE NATURE OF AN EXCISE TAX?”

Therefore for the Ninth Circle panel to hold that

the “Sixteenth Amendment authorized a direct no-

apportioned income tax on resident United States citi-

zens” when Plaintiff supplied the Court with irrefut-

able evidence that the Supreme Court in Brushaber

(and other cases quoted by plaintiff) held that the 16"

Amendment did not amend the Constitution but al-

lowed an income tax to be imposed in the form of an

excise tax “on income separated from its source,”

means that Judges James Browning, Clifford Wallace

and Edward Leavy have deliberately falsified their

ruling and are guilty of obstruction of justice and bla-

tant violations of their oaths of office.

If the Panel believed that its decision were valid,

why don’t they publish it? And plaintiff moves this

Court that itdo so? The novel insight of the 9" Cir-

cuit that income tax assessments are not legally nec-

essary should be shared with other federal courts

around the country, since they are obviously labor-

ing under a contrary belief.

It is clear that plaintiffs-appellants are entitled

to a refund on two grounds.

2la

1) If the funds at issue involved in- 7

come taxes (which they do not) they would

be entitled to a refund on the basis that no

income tax assessments exist against them

for the year at issue, and no court has ever

held that they owe more in income taxes

than what they reported on their 1996 in-

come tax return as provided in Code Sec-

tion 6501(c)(1).

2) Since the funds at issue involve the

unapportioned, wage tax imposed in Code

Section 3402, they are entitled to have these

taxes refunded to them pursuant to the pro-

visions of Code Section 31(a)(1) and the

United States Constitution which bars the

Government from imposing and collecting

an unapportioned, direct tax on wages ee

The reputation of the 9% Circuit will not be sal-

vaged by the fact that the Panel’s egregious ruling is

to be unpublished. This egregious ruling - if it is not

reversed - will be publicized far and wide and will serve

as an example to the American public concerning the

reliability and integrity of federal court decisions.

Based upon all of the above, the Court’s ruling

of October 26 must be reconsidered and reversed ei-

ther by the panel itself or on the basis of an en banc

consideration.

Respectfully submitted,

Robert and Elena Brown

22a

APPENDIX F -

PLAINTIFF /APPELLANTS’ OPENING BRIEF ON

APPEAL TO THE NINTH CIRCUIT

hiss,

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

CASE NO 99-15308

- Lower Court Docket No. CV-98-00825-PMP

ROBERT A. AND ELENA H. BROWN

Appellant/ Petitioners

vs.

UNITED STATES OF AMERICA

Defendants - Appellees

APPELLANTS’ OR PETITIONERS’

INFORMAL BRIEF

1. Jurisdiction

a. Timeliness of Appeal or Petition:

(i) Date of entry of judgment or order of

district court: January 21,

1999

(ii) Date of service of any motion made

after judgment

(other than for fees and costs):

(iii) | Date of entry or order deciding

motion

(iv) Date of notice of appeal or petition

23a

filed_On or about January 30,

1999

(v) For prisoners, date you gave notice

of appeal to prison authorities

b. PLEASE ATTACH ONE COPY OF EACH

OF THE FOLLOWING

1. The order from which you are ap-

pealing

2. The district court’s entry of judg-

ment

3. The district court’s docket sheet

Page 2

CASE NO 99-15308

What are the facts of your case.

On or about April 14, 1997 Plaintiffs

filed a 1996 income tax return showing no income-

taxes due and owing for that year and, therefore, re-

quested a refund of the $5,035 in wage taxes (im-

posed pursuant to Code Section 3402(a)(1)) that they

had paid for that year. When Plaintiffs filed their 1996

income tax return (claiming a tax refund) and when

filing this instant lawsuit, they erroneously assumed

the funds being held by Defendant were income taxes.

However, since filing their claim for refund and this

refund law suit, Plaintiffs have discovered that the

funds at issue were actually exacted as “wage taxes”

imposed in Code Section 3402(a)(1). Plaintiffs had

been mislead by Defendant (using a variety of tech-

niques ) into believing that the $5,035 at issue repre-

sented income taxes - imposed in Section 1 of the

24a

Code — when such was not the case. Since Plaintiffs

believed that income taxes are based on “self-assess-

ment, ” Plaintiff sued for recovery of the funds at is-

sue on the grounds that the “income” taxes they

thought they had paid had never been assessed as

specifically required by Code Section 6201, numer-

ous other statutes, aNd IRS procedure manuals -

see Exhibits A & B.

Exhibit A are pages 3.17.63-122 & 123 of the

IRS’ “SC and MCC Accounting and Data Control”

manual (MT 3.17-291, 10/01/97). Relevant excerpts

from this manual are as follows:

The Summary Record of Assessments

provides the detail assessment data by

type of tax and if the assessment was

current or deficiency. Assessments are

broken type into four types: Regular (R),

Jeopardy (J), Quick (Q), and Prompt....”.

Continuing from MT 3.17-291....

The Summary Record of Assessments

must be signed by the Assessment Officer

on the date the assessment is made as

outlined in IRM Manual 3(17)(63)5.3. The

certification statement included in the

report. At least one person in each cen-

ter must be assigned the 7esponsibility of

reviewing all certificates for timely entry

of the assessment officer’s signature and

date. The responsible employee will ini-

tial the certificate after validation. This

practice should be accomplished daily in

case statutes are involved. (Emphasis

added throughout)

SS ey

25a

Note the elaborate descriptions for

making assessments which are further shown on page

2 of Exhibit B. If assessments count for nothing as

Judge Pro seems to think, why all the fuss and elabo-

ration (as shown above) for making them? Why all

this bother?

Plaintiffs have also attached as Exhibit

B page 3(17)(63)0-96(10-1-89) from IRS Manual MT

3(17)00-193, and page 3 from IRS Manual MT3(17)00-

184) Note paragraph 3(17)(63)(14).1 which states:

The assessment Certificate must be

signed by the Assessment Officer and

dated. The Assessmeut Certificate

is the legal document that permits

collection activity. (Emphasis added)

Obviously if an Assessment Certificate is the

LEGAL DOCUMENT “that permits collection activity”

- any attempt by the United States to keep (i.e. “col-

lect”) the funds at issue WITHOUT such a “legal docu-

ment” obviously, has to be illegal. No other legal

conclusion is possible

Plaintiffs request that this Court to take judi-

cial notice of all the elaborate directions for making

assessments as described in Exhibit B2 - yet Judge

Pro has ruled that “the absence of a tax assessment

does not prove that a taxpayer owes no taxes.” If this

is true, than what does an assessment prove? Noth-

ing?

The fact that an assessment (or a court deter-

mination) must be in effect before any income taxes

can be said to be owed is also confirmed (if common

sense is not enough) in Sen. William v. Roth’s, Jr.

2 26a

new book, THE POWER TO DESTROY which re-

ports on, and exposes the wide spread, illegal prac-

tices employed by the IRS.’ Attached as Exhibit C is

page 71 of that book in which the Senator recounts

how such illegal IRS activities were directed at Tom

Savage of Lewes, Delaware.

Savage and his tax counselor filed an

immediate protest with the local appeals office,

but before they received the opportunity to be

heard - and before an assessment, or judg-

ment, had been entered against either the

phony partnership or Savage’s company - the

collection officer seized a large check that had

been written to TSA, a check the small busi-

nessman depended on to pay his own bills. This

a clear violation of the tax code, which makes it

unlawful (i.e. criminal) for the Internal Rev-

enue Service to seize taxpayer property or un-

dertake any type of enforcement action until an

assessment has been appropriately entered

against a taxpayer. (Emphasis added through-

out)

Note that in the above paragraph Sen. Roth

points out that it is “a clear violation of the take code”

and “unlawful” (i.e. criminal) “to seize taxpayer prop-

erty or undertake any type of enforcement action until

an assessment has been appropriately entered against

a taxpayer.” Yet this is precisely the situation we have

here! In the above example the unlawful behavior

? Senator Roth is chairman of the Senate Finance Committee,

the Senate oversight Committee for the IRS. He attempts to

blame the IRS for the numerous “abuses” (actually violations of

law) uncovered by his Committee - when the actual biame lies

with Congress and the Courts, which allow the IRS to get away -

with it.

27a

was committed by an IRS agent. In the instant case

(involving the same set of facts - the Defendant holds

$5,035.57 of Plaintiffs’ money, even though no as-

sessment nor judgment exists with respect to any

such amount or tax due) the “unlawful” action was

committed by Judge Philip M. Pro - by ruling that

even in such circumstances the United States is still

legally entitled to keep the money at issue. The only

question now is - will the Ninth Circuit become his

accomplice and accessories after the fact, by affirm-

ing his “unlawful” ruling?

Itis important for this Court to understand that

as of the date that Plaintiffs filed their claim for re-

fund

1. No assessment for 1996 income taxes ex-

isted, and

2. No court of competent jurisdiction had ever

determined that plaintiffs owed more in income

taxes than what they reported on their 1996 in-

come tax return.

Therefore, it cannot be contended by any court

- on any basis- that as of the date Plaintiffs filed their

claim for refund, they owed more in income taxes then

what they reported on their 1996 income tax return.

It is clear that under the laws passed by Congress

(as will be shown below) only 3 persons can be said to

be legally authorized to determine if income taxes are

owed:

1. Taxpayers who “self-assesses” themselves

on 1040s.

2. Tax Court judges who determine - pursu-

28a

ant to Code Section 6214 - that there is a

“deficiency” in the self-assessment made by

taxpayers.

3. District Court Judges whose jurisdiction is

invoked by the United States pursuant to

Code Sections 6501(c)(1) and 6501(e)(1)(A),

because United States contends that the

returns filed by such taxpayer are “false or

fraudulent” ® and, therefore, initiates “gq

proceeding in court for collection of such

_ fax”,

Code Section 6501(e)(1)(A) clearly provides, in

relevant part, that with respect to income taxes “the

tax may be assessed, or a proceeding in court for the

collection of such tax may begun without assess-

ment....”. (emphasis added). Thus the provisions of

6501 make it crystal clearthat before any court could

claim that Plaintiffs LEGALLY owed income taxes for

the year at issue, such taxes would have had to be

either:

1. Assessed, or

2. Determined to be owed as a consequence

of a civil lawsuit brought by the United

States pursuant to the provisions of

6501.

Since neither of the above two actions ever took

place in connection with income taxes Plaintiffs al-

legedly owe for 1996, no_court can LEGALLY con-

8 Since as of the dates that Defendants filed their claim for re-

fund and refund law suit, the Government had never charged

Plaintiff's with filing a “false or fraudulent return” with respect

to their 1996 return, both the Defendant and any Court is

estopped from making any such claim with respect to their 1996

income tax return.

neat

29a

tend that plaintiffs owe more in income taxes than

what they reported on their 1996 income tax return.

Therefore, despite having no lawful basis (as

explained above) for contending that Plaintiffs owed

more in income taxes than what they reported on their

1996 income tax return, Defendant — in violation of

law — refused to refund to Plaintiffs the $5,035 at is-

sue — necessitating this lawsuit.

The claim by the Trial Court (in awarding a

summary judgment to the United States) that “The

absence of a tax assessment by the Internal Revenue

Service does not prove that a taxpayer owes no taxes”

is, therefore, absurd on its face. Apart from flying in

the face of numerous Title 26 statutes - such as Sec-

tion 6501 and official IRS procedures, as shown above,

such a claim also flies in he face of common sense!

Since if “The absence of a tax assessment does not

prove that a taxpayer owes no income taxes,” then

what, if anything, do_assessments “prove”? If assess-

ments “prove” nothing - than why do approximately

40 statutes and IRS procedures require them? If the

absence of an assessment does not establish - i.e.

“prove” - that taxes are not owed, then what does

“prove” that taxes avelegally owed? Obviously, there-

fore, the claim by Judge Philip M. Pro, that “The ab-

sence of a tax assessment by the Internal Revenue

Service does not prove that a taxpayer owes no taxes”

stands both law and logic on their respective heads.

Judge Pro basis his irrational claim on two, ir-

relevant sources: Code Section 6151, and Moran v.

U.S., 63 F.3™ 663. Section 6151, as the following will

show, is a totally benign statute having nothing to

do with either income taxes or the wage taxes at is-

sue, while the facts and issues in Moran are not only

30a

totally unreiated to the facts and issues involved in

this case, but Moran, itself, proves that income taxes

are being unconstitutionally exacted. Since all man-

datory, federal taxes must be collected either on the

basis of apportionment or on the basis of geographic

uniformity, Morandemonstrates that income taxes are

being collected differently in the Fifth and Eight Cir-

cuits from how they are being collected in the Sec-

ond, Third, Fourth, Sixth and Federal Circuits. °

Therefore income taxes are - admittedly — being ex-

acted neither on the basis of apportionment, as re-

quired in Article 1, Sections 2 and 9, Clauses 3 and

4, nor on the basis of geographic uniformityi, as re-

quired by Article 1, Section 8, Clause 1 — and, as such,

their exaction can not be made mandatory.

Thus it is undeniable, that based upon Moran -

income taxes are admittedly not being enforced on

the basis of geographic uniformly. Therefore, since

neither income taxes (nor the “wage” tax at issue) are

not being enforced either pursuant to Rule of Gev-

graphic Uniformity nor the Rule of Apportionment,

the taxes at issue are not being enforced pursuant to

either class of taxes authorized in the Constitution:

therefore, the United States can not retain the funds

at issue, since Plaintiffs can not be compelled to pay

a federal tax which is not enforced pursuant to one

constitutional rule or the other - as held by the Su-

preme Court in the bed rock case of Brushaber v. Union

Pacific RR, 240 US 1 at page 12. The 16" Amend-

ment gave the government no new taxing power nor

did it modify zz_any way the apportionment provi-

sions of the Constitution with respect to direct taxes,

° Apart from everything else, any law that can generate such a

divergence of legal opinion (as is described in Moran) must mean

that the statute involved is “void for vaguenéss.” How can any

other conclusion be rationallv possible?

3la

and the holding in Pollock (158 U.S.601), that

unapportioned, direct taxes unconstitutional. See

also Stanton v. Baltic Mining Co., 240 US 103 at page

112: “...the provisions of the Sixteenth Amendment

conferred no new power of taxation....”, but that

“The whole purpose of the Amendment was to relieve

~ all income taxes when imposed from apportionment

from @ consideration of the sourcewhence the income

was derived.” . (Brushaber, supra, at page 17, empha-

sis added in both quotes)

In addition to all of the above, the wage

taxes at issue - as imposed in Code Section 3402(a)(1)

- has nothing to do with either the 16" Amendment

or income taxes. The tax imposed in Code Section

3402(a)(1) — being a direct tax on wages - would obvi-

ously be unconstitutional if it were not made refund-

able upon request (as provided for in Code Section

31(a)(1)), since it not being imposed either as an “in-

come” tax nor on the basis of apportionment, and, as

such, it can not claim the protection of either the

16". Amendment nor the Srushaber decision. See

Brushaber, supra at page 12; and Pollock v. Farmers

Loan & Trust, 158 U.S. 601) both of which held that a

direct tax on “sources” of income (as opposed to a

direct tax on “income” separated from those “sources”)

is unconstitutional if not apportioned. '° That the

“wage tax” provided for in Code Section 3402(a){1)is

indeed a separate and distinct tax from the income

tax imposed in Section 1, is confirmed by Code Sec-

10 The caption over Code Section 3402 “Income tax collected at

source” was obviously designed by the Government to mislead

the American public into thinking that what was being with-

held from their wages were income taxes, when in realty what

was being taken from their pay was an unapportioned, wage

tax, which they could take as a “credit” against any income

taxes ultimately due - thus creating the appearance that in-

come taxes were being “withheld” - when such is not the case.

32a

tion 6413 which states, in relevant, part that “If more

than the correct amount of tax imposed by Section

3101, 3111, 3221, or 3402 is paid etc. etc. etc. etc.”

(emphasis added) . Therefore a separate and distinct

“wage tax” is obviously being “imposed” in Code Sec-

tion 3402 — having nothing to do with either the “in-

come tax” imposed in Section 1 of the Code, or the

16" Amendment.

CODE SECTION 31{(a)

Code Section 31(a) provides that “The amount

withheld as tax under chapter 24 [which includes

Code Section 31] shall be allowed to the recipient of

the income as a credit against the tax imposed by

this subtitle.” Therefore, based upon this statute, the

$5,035.57 in wage taxes “withhold as tax” from Plain-

tiffs pursuant to Code Section 3402(a)(1) must be

“credited” (i.e. refunded) to them “against the tax im-

posed” in subtitle a. Sucha refund mustbe allowed

as a matter of constitutional law - irrespective of any

other consideration - for all of the reasons stated

above. Since Plaintiffs’ 1996 income tax return

showed they owed no 1996 income taxes as imposed

in subtitle a., and since the United States has not

- produced any contrary document — i.e. an assessment

certificate or a decision of a Tax Court or District Court

— that establishes that Plaintiffs /egally owed more

income taxes than what they claimed on their 1996

tax return, the amount at issue must be refunded to

them pursuant to Code Section 31(a)(1) as a matter of

law.

Plaintiffs admit that this particular issue — i.e.

the wage taxes at issue which were exacted pursuant

to Code Section 3402(a)(1) - was not raised in their

initial claim or even in their underlying complaint,

33a

since the fraud perpetrated by the Government (in

mislabeling Code Section 3402)) was not discovered

by these pro se Plaintiffs until after their claim for

refund and complaint were filed. However, this de-

ception should have been recognized and understood

by the Trial Court, and overlooking it amounts to plain

erroron the part of the Trial Court. In any case, the

United States can not contend in its Reply Brief -

and is estopped from doing so - that Plaintiffs can

not raise this issue on appeal because it was not raised

before, because it would be contrary to the principles

own deception and this court has equity jurisdiction.

The United States deliberately sought to deceive Plain-

tiffs (as has already been explained) into thinking

that what was being withheld from their pay was in-

come taxes, when this was not the case.

THIS COURT HAS TAKEN AN

OATH TO UPHOLD THE CONSTITUTION

OF THE UNITED STATES

The United States Constitution provides in Ar-

ticle 1, Sections 2 and 9, clauses 3 and 4 that “all

direct taxes shall be apportioned among the several

states” pursuant to “a census or enumeration .. .

directed to be taken.” The only thing that the Consti-

tution says twice is that direct taxes must be_appor-

tioned. The United States is now holding $5,035.57

of Plaintiffs’ money, which it acquired by imposing a

direct tax - not apportioned -on Plaintiffs’ wages. What

saves this tax - imposed in Code Section 3402 - from

being blatantly unconstitutional is Plaintiffs’ legal

right to get the withheld tax refunded to them upon

request, based on the provisions of 31(a)(1), as is be-

ing done here. Should this Court D/SREGARDITS

OATH TO UPHOLD THE CONSTITUTIONan4d rule that

34a

Plaintiffs can not get this unapportioned, direct tax

refunded to them, then Plaintiffs are claiming that

the WAGE 7AXimposed in Code Section 3402 is un-

constitutional and will appeal to the Supreme Court

on that basis.

WITH RESPECT TO THE AUTHORITIES

UPON WHICH JUDGE PRO’S RULING

WAS BASED

Judge Pro basis his claim that “The absence of a tax

assessment by the Internal Revenue Service does not

prove that a taxpayer owes no taxes on two authori-

ties: 26 U.S.C 6151 and Moran v. U.S., supra.

Apart from the fact that Moranestablishes that

the taxes at issue are being collected unconstitution-

ally for the reasons already discussed, the facts and

elements in Moran have absolutely nothing to do with

the facts and elements in the instant case. The tax-

~ payers in Moran (unlike the Plaintiffs here) determined

that some income taxes were due. Subsequently the

IRS issued a deficiency notice (also absent in the in-

“stant case) and “The taxpayers responded by filing a

petition with the tax court contesting the deficiency

determination.” Then “On December 13, 1985 and

July 14, 1986, the Morans remitted to the IRS

$331,000 and $255,383” with a letter stating that

these amounts should be treated as a partial pay-

ment for the taxes and interest due and even indi-

‘cated how the amounts should be allocated. The 7™

Circuit specifically concluded, therefore, that these

remittances were “not a deposit in the nature of a

cash bond.” Approximately four years later the case

was settled with the parties agreeing that the Morans

had overpaid their taxes by approximately $214,000.

35a

Therefore the Morans filed a refund for the difference

on November 12, 1991 “for the amounts sent to the

IRS in 1985 and 1986 that had been assessed on

September 9 (1991)” The government denied their

claim by claiming that “the Morans’ earlier remittances

were in fact tax payments, as indicated in their let-

ters” and in any case “they could not collect because

they had not requested their refund in a timely fash-

ion.” In any case the trial court sided with the Morans,

which was reversed on appeal.!!

Thus none of the elements in Moran are present

in the instant case. The Plaintiffs never claimed in

any letter to the IRS that they owed any taxes for the

year at issue. Indeed the Plaintiffs in their 1996 in-

come taxes claimed that they owed no income taxes

for that year. No deficiency notice was ever sent. No

tax court was involved and plaintiffs filed a timely

claim for refund Therefore, the trial courts attempt

to apply Moran to the instant case is so outrageous

as to amount to @ clear cut case of judicial fraud and

an attempt to obstruct justice.

In relying on Moran, which was not binding on

him, Judge Pro ignores (as cited in Plaintiffs’ under-

lying pleadings) a Supreme Court case that is bind-

ing on him, namely Bull v. U.S., 295 U.S. 247 wherein

the Supreme Court held on page 249:

Once the tax is assessed, the taxpayer

will owe the sovereign the amount when the

date fixed for payment arrives.

‘! Without analysing this case further it is clear that the trial

court’s decision was statutorally correct, while the 7 Circuit’ s

totured reversal ( using cabalistic logic, reminessant of medival

arguments concerning how many angels can dance on the head

of a pin) simple proves that it is impossible for lay persons to

actuallv know what the law is.

36a

Therefore Judge Pro’s claim that “The absence of a

tax assessment. . . does not prove that a taxpayer

owes no taxes” flies in the face of Bull.

While ignoring Sud/and basing his decision on

a totally unrelated case, Judge Pro also ignored such

on point cases as Behren v. United 764 F. Supp 180,

Radinsky v. U.S., 622 F. Supp. 412(1985) and a Ne-

vada District Court case, Jn Re Western Trading Com-

pany, 340 F. Supp 1130 (1972)

In Behrenv. United States'764 F. Supp 180, a

United States District Court in the Southern District

of Florida, held as follows:

Under Chila, (United States v. Chila, 871 F.2d

1015 (11 Cir. 1989)) it is clear that without

proper assessment and notice, the government

must file a civil suit to obtain a judgment. The

Court declines at this time to determine whether

there was a proper assessment and notice

provided.(emphasis added)

Further the Behren court went on to say: (on page

182)

The threshold issue for determination by

this Court then is whether assessment, notice

and demand of the allegedly outstanding 1974

taxes were a timely made. Resolution of this

question will provide the parties guidance as

to the proper forum for this dispute. T™. : issue

is hotly contested by the parties. The Court

must therefore deny defendant’s motion.

And on page 183 the Behren’s court noted:

37a

In order to collect a tax by administra-

7 tive means under Sec. 6502, the IRS is re-

quired to assess a tax on its records and pro-

vide a notice of that assessment. Defen-

dant (the Government) has submitted sub-

i stantial documentation that it properly as-

sessed the 1974 tax. Defendant asserts that

the certificate of assessments and payments

contained in the record before this Court es-

tablishes the presumptive correctness and

making of the assessment.

In the instant case, however, not only aren’t

these issues “hotly contested” but the Government

£PXIEC . peEEe T c A PPC ETO g 46

ment WAS EVER SENT QUT. So if the Behren court

rejected the Government’s request for a summary

judgment because these issues were “hotly contested”

how could the trial court in this instance award the

United States a summary judgment when these is-

sues are not even contested, since the Government

readily admits that no assessment exists and no de-

mand for payment was ever made. Obviously, if the

Behren Court is telling the truth, than the trial court

in this instance is not. Two other cases that estab-

lish that the trial court is not telling the truth are, /n

Re Western Trading Company 340 F.Supp.

1130(1972) and Radinsky v. U.S., 622 F.

| Supp.412(1985). In Western Trading, a Nevada Dis-

! trict Court case, the court stated as follows:

While the bankruptcy court may be re-

quired to reconsider its order of confirmation

...lt need do so only if the delayed claim is for a

tax “found to be owing” within one year of the

filing of the petition. “Found to be owing” as

used in this section means “assessed.” The In-

Ee eee eee

_

38a

ternal Revenue Code provides for a specific pro-

cedure for assessments (26 U.S.C. 6203). An

assessment is an administrative determination

of tax liability. Kurio v. United States 281 F.

Supp. 252 (S.D.Tex.1968); United States v.

Miller, 318 F.2d 637 on Cir. — And. nati!

net hoes found te he cian, jemphesia added)

In the instant decision, Judge Pro held totally

contrary to the holding of this Nevada District Court

- that even when no assessment exist, an income tax

can “be owing”? If so, than which Nevada District

Court should the public believe - Judge Pro or the

Nevada court in Western Trading?

In Radinsky v. U.S., 622 F. Supp.412(1985).

the government was trying to hold on to money paid

for taxes which had never been assessed, and look

what the court said about that:

In the two briefs filed in this action, the

IRS has not explained where it finds statutory

authority to employ its tax collection proce-

jon: Siasn the IRS had no ennai | m9 er

the plaintiff's account or employ deficiency pro-

cedures in these circumstances, it is self-evi-

dent that the collection of the sum in this man-

ner was wrongful

In addition, the court rejected the government’s

incredulous argument that

The plaintiffs are not “taxpayers” because

no tax has been assessed. “The United States

39a

agrees that taxpayers do have recourse against

the United States under 28 U.S.C. 1346(a)(1).

But in this case, the plaintiffs are not taxpay-

ers.” (Defendant’s motion for summary judg-

ment at 2)

In Radinsky, the Justice Department argued

assessments were so important, that since none had

been made against the Radinskys (even though “the

IRS succeeded in collecting, the disputed money as a

‘tax”) they were not “taxpayers” and so could not sue

to recover the amount the IRS had “succeeded in col-

iecting” because, the government argued, “Section

1346(a)(1) requires full payment of an assessment

before an income tax refund suit can be maintained.”

The court in this case rejected this “heads I win, tails

you lose” argument. In the instant case, the Court

claims that assessments are so unimportant, that taxes

can be legally owed with them.

Since in Radinsky, the court held that since

the amount at issue “had never been assessed as a

tax” the money was “wrongfully,” held, how could this

trial court rule otherwise? If the money was “wrong-

fully” held in Radinsky, it is being “wrongfully” held

here - and one doesn’t need a law degree to figure

that out. And for the 9 Circuit to rule otherwise,

would be - apart from everything else - to deny Plain-

tiffs their constitutional right of equal protection un-

der the law.

In addition the Radinsky court pointed out that

the “IRS has not explained where it finds statutory

Plaintiff nid sain same question of this peer

Court. If Radinsky could ask that question of the

40a ‘

IRS, why can’t Plaintiffs - with equal justification- ask

it of this Court? WHERE DOES THIS COURT FIND

STATUTORY AUTHORITY TO ALLOW THE GOV-

ERNMENT TO COLLECT FROM PLAINTIFFS A SUM

OF MONEY THAT HAS NEVER BEEN ASSESSED

AS A TAX?

WITH RESPECT TO CODE SECTION 6151

Apart from Moran supra, the only other author-

ity that Judge Pro cites to support his novel theory &

that assessments don’t count is Code Section 6151.

Judge Pro basis his claim on paragraph 6151 (a), which

states as follows:

Except as otherwise provided in

this subchapter, when a return of tax is required

under this title or regulations, the person re-

quired to make such return shall, without as-

sessment or notice and demand from the

Secretary, pey such tax to the internal rev-

enue officer with whom the return is filed, and

shall pay such tax at the time and place fixed

for filing return (determined without regard to

any extension of time for filing the return).

However, as the following will show:

1) Section 6151 is a totally benign stat-

ute, having no force and effect of law

whatsoever as related to income

taxes.

2) If anything, it can only apply to cer-

tain excise taxes appearing in CFR 27.

3) And, in any case, plaintiff compiled

4la

fully with the provisions of Code Sec-

tion 6151 even though the statute

does not apply to him or income

taxes.

Attached, as Exhibit E is the “Privacy Act No-

tice” that appears in the income tax, 1040 booklet.

The only Code Sections that the Government claims

are related to the payment of income taxes — and the

only statutes the public is directed to obey — are Code

Sections 6001, 6011, and 6012, and we will get to

them forthwith. Obviously, if Code Section 6151 had

anything to de with income taxes, it would have been

included in the Privacy Act Notice along with these

Statutes. This factor alone proves that the

Government’s reliance on Code Section 6151 is mis-

placed, contrived, and totally without merit.

In addition, both Code Sections 6001 and 6001

notify the public that they need only “comply with

(such) regulations as the Secretary may from time to

time prescribe,” or do something “when required by

regulations...” Nothing in this statute notifies the

public that they are required to comply with the stat-

utes themselves — such as 6151 - or that they have to

comply (or pay attention to) court decisions involving

litigation in which they took no part, such as Moran,

supra. So, again, the Plaintiff's are not bound by

Moran but only a legislative, Treasury regulation “hav-

The fact that Section 6151 has nothing to do

with income taxes is further established in Exhibit F.

This is an excerpt from the Parallel Table of Authori-

ties which shows that the implementing regulations

for Code Section 6151 as in CFR 27 , the Code of Fed-

eral Regulations dealing with “Alcohol, Tobacco Prod-

42a

ucts and Firearms”, in parts “17, 22, 25, 53, 194,

270 and 290.” There is no entry here that shows that

any implementing regulation for this statute exists in

CFR 26, the Code of Federal Regulations dealing with

income taxes. This is further proof that Code Section

6151 has absolutely nothing to do with income taxes

but is only related to the payment of alcohol, tobacco

and firearms taxes.

However, even if we go to CFR 26 we will find a

totally benign regulation in connection with this stat-

ute that appears there: it is Reg. No. 301.6151-1. Itis

a totally benign regulation because no legislative or

other authority is shown as being the authority

for this regulation. The regulation itself says noth-

ing anyway. Since it says (and I quote the entire regu-

lation) as follows: —

For provisions concerning the time and

place for paying tax shown on returns with re-

spect to a particular tax, see the regulation re-

lating to such tax.

THAT’S IT! All this regulation does, is to tell

you to search out the regulation for a “particular tax”

and “see” what that regulation tells you! But this regu-

lation itself tells you nothing. It says absolutely noth-

ing-about income taxes, let alone contain a require-

ment that income taxes are required to be paid on

any basis. So, obviously, this statute and its bogus

regulation (since no legislative support for the regu-

lation is shown) are totally benign, at least as far as

income taxes are concerned.

But in any case, Plaintiff even complied with

this z7velevant statute and its bogus regulation — since

both the statute and the regulation deal with the pay-

43a

ment of taxes, (as specifically worded in the regula-

tion, and implied in the statute) “shown on a return”

Plaintiffs did just that: they “paid” the exact amount

of taxes “shown” on their return which was “due and

owing.” The “amount” shown as taxes “due” on their

return was “zero” and that is exactly what Plaintiff

paid with their return - “zero.” Therefore, Plaintiff

complied with this statute and “paid” “without as-

sessment or notice and demand from the Secretary”

the amount of taxes “shown” on their return — just

like the statute requested. However, since Plaintiffs

had already erroneously overpaid the amount “shown”

on their return by some $5,158.39, they requested a

refund for that amount. Therefore, Plaintiff complied

with all of the benign provisions of Code Section 6151

and its bogus regulation. Therefore, for Judge Pro to

suggest that Plaintiffs violated any of the provisions

of this benign statute (while he blithely proceeds tc

violate some fifty others dealing with the need for

making income tax assessments) is incredulous to

say the least.

In addition to everything else, Code Section

6151 cannot apply to the provisions of Code Section

31(a)(1). And based upon this statute, Plaintiffs are

entitled to a refund for all of the reasons already

stated.

Apart from the issue of the “wage” tax as dis-

cussed above, Plaintiffs believe (as the following will

show) that they were entitled to a summary judgment

based upon the laws, regulations, and related authori-

ties they already raised in their underlying pleadings,

but which Judge Philip M. Pro ignored, so he could

contrive a ruling favorable to the United States re-

gardless of how lawless and nonsensical that ruling

had to be. So while Plaintiffs do not feel it necessary

toa

to rehash and restate all of the arguments contained

in their 26 pages of underlying pleadings, in the in-

terest of completeness, Plaintiffs has excerpted one

of the arguments contained in their “MOTION FOR

SUMMARY JUDGMENT?” in which they referred (at

page 7) to the authoritative observations from M.

Saltzman’s, “IRS Practice and Procedure.” This work

is often quoted as an authority in court decisions ~

bearing on income taxes — but which Judge Pro chose

to ignore when handing down his decision from which

this appeal is taken.

Verification that assessments are a

condition precedent to the “owing” of income taxes

can be found in M. Saltzman’s definitive work “IRS

Practice and Procedure,” Second Edition. Here is what

Mr. Saltzman has to say about the significance of

assessments, which, according to Judge Pro, have no

significance.

1) The assessment of a tax creates a

debt....Once the assessment is made...the gov-

ernment, without judicial intervention, may

summarily collect the assessment. (Paragraph

14.01[2})

Obviously therefore, only following an assess-

ment is a tax debt created, and without an assess-

ment, the government cannot collect the tax without

judicial intervention.

2) The assessment is the official act of

recording the liability of a taxpayer...and re-

quires the signing of the assessment certifi-

cate by the assessment officer. ..{and) is the first

step in the collection process. (Paragraph

14.05[1]})

45a

Therefore, according to Saltzman, the making

of an assessment certificate “is the first step in the

collection process” without which the collection pro-

cess cannot even begin.

3) A taxpayer’s liability is recorded by the

Official act of assessment. (Paragraph 14.05[2])

Since the Government acknowledges that no

1996 income taxes have ever been assessed against

Plaintiffs, than, according to Saltzman, no tax liabil-

ity for 1996 taxes can exist and no “collection pro-

cess” can even begin. What can be plainer than that?

Therefore, based upon Code Sections 31(a)(1),

6201, 6203, 6303, 6501, 6502, 6852, and 6861, Trea-

Sury Regulation 601.103, the IRS’ own-internal pro-

cedures and documents, such Supreme Court deci-

sions as Bull, supra, and Professor Saltzman’s com-

mentaries, it is clear that without an assessment for

1996 income taxes having been made against Plain-

tiffs, Plaintiffs could not have owed any 1996 income

taxes as of the date that the United States received

Plaintiffs claim for refund. As of that date, no collec-

tion process could have begun; therefore, defendant

had no lawful basis to deny refunding to plaintiff the

$5,035.57 refund requested.

Based on all of the above Plaintiffs requests that

this Honorable Court reverse the decision of Philip

M. Pro of January 21, 1999 in which he awarded a

summary judgment to the United States.

Respectfully submitted,

Robert and Elena Brown

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

ROBERT A. AND ELENA H. BROWN; et al.,

CASE NO 99-15308

Plaintiffs-Appellants,

No. CV-98-00825-PMP

v.

Lower Court Docket UNITED STATES OF

AMERICA,

Defendants - Appellees

APPELANTS/ PETITIONERS’ INFORMAL REPLY

BRIEF

If the Ninth Circuit were ever to adopt the

Government’s position that:

1. Income taxes can be legally owed absent

assessments,

2. Code section 6151 (all by itself) establishes

that income taxes are required to be paid

even though this statute has no legislative,

implementing regulation, and no mention

of this statute appears in the “Privacy Act

47a

Notice” of a 1040 booklet, and that

3. Code section 3402 “does not impose a tax”

(Defendant’s Reply, page 12, line 1 5), when

Code Section 6413(a)(1) clearly states that

it does;

Then, this Court will have abandoned any claim to

being a legitimate court. And the Court will not be

able to save its reputation by not “publishing” such a

ruling, ” !? since such an egregious ruling will be“pub-

lished” and publicized on the Internet as well as in

various other places.

The Government’s Reply Brief also demon-

strates that the oaths of office taken by Loretta C.

Argrett, the Assistant Attorney General, Gilbert S.

Rothenberg and Alice L. Ronk, Justice Department

attorneys, (those listed on the Government’s Reply

Brief) to “see justice done” is a meaningless oath.

Instead of attempting to “see justice done” this trio

have actually conspired to obstruct justice, by fraudu-

lently claiming that Plaintiffs- Appellants are not en-

titled to the refund requested - when, obviously, they

are. In addition, this trio would also appear to be in

criminal violation of 18 U.S.C 241 which makes it a

crime for “two or more persons (to) conspire to injure

and oppress...any citizen in the...enjoyment of any

right or privilege secured to him by the Constitution

or laws of the United States.” Pursuant to the Con-

stitution and laws of the United States the Plaintiffs-

Appellants are clearly entitled to have refunded to

them the $5,035.57 at issue, which no amount of

'? It goes without saying that the Court would never “publish”

such a ruling, since it, obviously, would make this Court a

laughing stock amongst any group of people who had the slight-

est understanding of our laws, especially the Internal Revenue

Code.

48a

legal double talk can obscure.

I

WITH RESPECT TO THE GOVERNMENT’S CLAIM

THAT THE FUNDS AT ISSUE

(THE WAGE TAX IMPOSED IN CODE SECTION

6501) AND INCOME TAXES GENERALLY CAN BE

OWED ABSENT ASSESSMENTS

Despite all of the statutes and supporting au-

thorities (and basic common sense) cited in Plaintiffs

- Appellants opening brief and in the pleadings to the

District Court, this trio of Justice Department law-

yers made the following absurd statement (Reply Brief

page 8, line 12): “A tax liability arises, as a matter of

law, as a consequence of realizing income over the

course of a particular tax year.” Since “The general

term ‘income’ is not defined in the Internal Revenue

Code” United States v. Ballard 535 F2d 400 - how could

Plaintiffs become legally “liable” to pay a tax “as a

matter of law” on something that the Code itself does

not even define? '° In addition, while claiming that

an income tax “liability” arises as “a matter of law”

these Justice Department lawyers_never identified

13 This Court can not claim that Code Section 61 defines “Gross

Income,” since it does so by saying that “Gross income means

all income....” Since the word “income” is not defined in the

Code, “gross income” is not defined either? As every 8™ grader

is taught “You can’t define a word using the same word in the

definition.” Since Congress can not define “income, ” because

“it cannot by legislation alter the Constitution” (as stated in Zisner

v. Macomber, 252 US 189 at page 206), it sought to hoodwink

the American public into believing that-it had defined “Gross

Income” - and with the help of its praetorian courts, it suc-

ceeded. The fact that the Supreme Court in numerous carlier

(but still binding) decisions held that the word “income” as used

in our tax statutes means a corporate profit was extensively

supported in footnote 1, page 5 of Exhibit D as submitted with

Plaintiffs-Appellants’ original. Opening Brief.

49a

the Code Section that

, as, for example, Code Sections

4401, 5005 and 5703 do with respect to wagering,

alcohol and tobacco taxes? Plaintiffs-Appellants have

attached as Exhibit A an excerpt from the Index of

the IR Code published by the Research Institute of

America. I would ask the-Court to take judicial no-

tice that the subdivision entitled “Liability for Tax”

lists some 40 Federal taxes, but an “income” tax is

not included. Why? A letter sent by Congressman

Dan Burton to one of his constituents (Exhibit B) ex-

plains why such a reference is missing. “You are cor-

rect” says Congressman Burton, “that the word 1i-

able’ or the terminology ‘liability for income taxes’ is

not included in any section of the Internal Revenue

Code.” Therefore the Government’s claim that a non-

existent income tax hability “ arises as a matter of

law” is a blatant lie (amounting to obstruction of

justice) and explains why the Government never iden-

tified the Code Section where that “liability” suppos-

edly “arises.”

In addition, what statute puts the American

public on notice that an income tax liability “arises

as a matter oflaw”? Is therea Treasury Department

regulation which provides for this? If so, Plaintiff-

Appellants would expect that this Court would iden-

tify any such regulation if it adopts the Government’s

claim 4

And if such a liability “arises as a matter of

law” why would Code section 6001 provide in relevant

part that:

Whenever in the judgment of the Secre-

tary it is necessary, he may require any per-

\ son, Sy notice served upon such person or by

50a

regulation, to make such returns, render such

statements, or keep such records, as the Sec-

retary deems sufficient to show whether or not

such person is liable for tax under this title.

If an income tax “arises as a matter of law” why would

there be a statute requiring the Secretary to either

serve a notice “upon such person” or write a regula-

tion showing “whether such person is liable for tax

under this title.” According to Defendant, section 6001

is meaningless because - according to the Defendant’s

Reply Brief - an income tax liability “arises as a mat-

ter of law” irrespective of “notices” or “regulations.”

In the instant case, since plaintiff-appellants have

never been “served” with any such “notice,” and since

they have never found a /egis/ative regulation (i.e. a

regulation having the force and effect of law) requir-

ing them to file, on what basis did their income tax

liability “arise as a matter of law”?

And if an income tax liability “arises as a matter of

law,” why would the Supreme Court have stated in

Bull v. U.S. 295 US 247, 24 that:

Once the tax is assessed, the taxpayer

will owe the sovereign the amount when the

date fixed by law for payment arrives.

And if assessments count for nothing'* why would

the Supreme Court have stated in Flora v. United

States, 362 US 145 at page 176 that:

Our system of taxation is based upon

voluntary assessment and payment, not upon

distraint. (Emphasis added) Nanay Racers

Apparently the Supreme Court got it all wrong. Jus-

Sla

tice Department lawyers should have informed them

that an income tax ability “arises as a matter of

law” and that “assessments” have nothing to do with

it.

And, of course, according to the Government,

Treasury Regulation 601.103 makes no sense at all,

since it says:

The Federal tax system is basically one

of self- assessment. In general each taxpayer

. .iS required to file a prescribed form or re-

turn which shows the facts upon which tax li-

ability may be determined and_assessed. (Em-

phasis added)

The Justice Department should inform the Treasury

Department that this regulation is unnecessary be-

cause assessments (self or otherwise) have nothing

to do with owing income taxes, because the “liability”

for income taxes “arises as a matter of law”

As plaintiffs-appellants pointed out in their

Opening Brief (Exhibit B), even an IRS’ procedure

manual provides as follows:

The assessment Certificate must be

signed by the Assessment Officer and

dated. The Assessment Certificate

e is the legal document that permits

collection activity. (Emphasis added)

Therefore, according to the IRS itself, an as-

sessment certificate is the “legal document that per-

mits collection activity” But if an income tax liability

'* If assessments account for something - just exactly what do

thev account for? Why do our laws provide form them at all?

52a

“arises as a matter of law” then, logically the IRS can

begin its “collection activity” wheneverthat “liability”

arises - whether “assessment certificates” exist or

not. The Justice Department should inform the IRS

of this? Having to needlessly wait for “assessment

certificates” must cost the Government money. There-

fore if this Court adopts the Government’s position

that an income tax liability “arises as a matter of law”

it will also be holding that “assessment certificates”

are unnecessary. Hopefully this Ninth Circuit posi-

tion will not cause too much confusion amongst the

other circuits.

How did the Justice Department lawyers arrive

at the novel conclusion that assessments don’t count

and that the Government is entitled to keep the funds

at issue absent any assessment - self-assessment or

otherwise. Well they claim that they relied on the

following cases: Manning v. Seeley Tube & Box Co.

338 US 561; Zeirv. US, 80 F.3d 1360; Moran v. US.

63F3d 663; Laing v. US, 423 US_161; Crompton &

Knowles Loom Works v, White 65 F.2d 132; Zwing v.

US914 F. 499; Dye v. US, 121 F.3d 1399; Fisher v.

United States, 80 F.3d 1576; and Loftin & Wood, Inc. v

US, 577F.2d 1206

Plaintiffs-Appellants will not waste their time

analyzing these cases since - as the statutes (as shown

below) make clear, these decisions are all irrelevant.

Beside, if any judge ever ruled that funds such as

those at issue can be kept by the government absent

any assessment or a court determination, then any

such judge would not be a judge at all, but merely a

charlatan. However, in listing these cases the gov-

ernment quotes Zeir v. US, supra, as holding that

“While an assessment is thus a perquisite to (and sets

limits on) certain kinds of administrative collection

53a

activity...the United States is authorized to collect a

tax without assessment by simply accepting a pay-

ment to satisfy a proposed or agreed liability where

forcible collection is not necessary.” Apart from

this observation from Zeir stating the obvious, it also

clearly establishes plaintiffs’ case.

Obviously, the IRS is “authorized to collect a

tax without assessment” when taxpayers voluntary

make such payments. What is surprising about that?

But this hardly means that the IRS can compel pay-

ments when no assessment or court determinations

exist? Nothing in this quote from Zeir even suggests

any such thing: yet this is the case here. In addition,

Zeir refers to “a proposed or agreed liability where

forcible collection is not necessary.” None of these

elements exist in the instant case.

First of all, the funds at issue were not paid

“voluritarily.”. American workers are made to believe

that if they do not agree to have taxes taken from

their pay (and sign W-4’s under penalty of perjury)

they will go to jail. Indeed, many of them have gone

to jail for (correctly) claiming “exempt” on their W-4s,

because praetorian judges and prosecutors have ruled

that such a legitimate claim constituted an affirma-

tive act of tax evasion.

Secondly, the funds at issue were not paid

pursuant to an “agreed liability.” Plaintiffs contend

that there is no such thing as an income tax “liabil-

ity” as a matter of law. And even if there were,

plaintiffs would still have no income tax “liability” as

a matter of fact.

In addition, as of the date that Plaintiffs filed

their claim for refund, no agency of Government had

54a :

even “proposed” a liability. So, obviously, there was

no “agreed” or “proposed” liability in the instant case

that fell within the criteria enumerated in Zeir?

In addition, the funds at issue are being “forc-

ibly” collected. Plaintiffs were misled and intimidated

- on a variety of grounds - into allowing the funds at

issue to be withheld from their pay and sent to the

Government. When they discovered the truth, they

demanded a refund, which the Defendant has refused

to issue. Therefore, the funds at issue have been “forc-

ibly collected” on this ground as well. Therefore, none

of the elements of the instant case fall within the cri-

teria outlined in Zev.

So rather than Zeir supporting the

Government’s position, it is clear that Zeir - for all of

the above reasons - SUPPORTS THE PLAINTIFFS’

POSITION. Therefore, based on Zeiralone, it is point-

less to analyze any of the other cases cited by the

Government since, as in the case of Zeir, none of them

can be any more supportive of the Government’s po-

sition then was Zeir. Besides - falsus in uno falsus

in omnibus.

Incredibly, the Government’s footnote on page

10 of its Reply Brief further establishes plaintiffs’ case.

(Prompting plaintiffs to ask, “Does the Government

understand its own pleadings?”), since it correctly

states that a law suit is necessary “to collect a tax

‘without assessment.” This was actually covered and

asserted in plaintiffs’ Opening Brief (pages 8 & 9).

Since neither of these conditions are present in the

instant case, the Government has no lawful basis to

keep the funds at issue - as confirmed in the

Government’s own brief.

IN ADDITION, NONE OF THE COURT DECI-

55a

SIONS CITED BY THE GOVERNMENT ARE BIND-

ING ON PLAINTIFFS-APPELLANTS

For the following reasons, none of the cases

cited by the Government can be binding on plaintiffs-

appellants anyway. The Privacy Act Notice in a 1040

booklet (Exhibit E in plaintiffs-appellants Opening

Brief) specifically directs the public to Code Sections

6001, 6011, 6012_and to none other. So we must

assume that the Government, in this manner, puts

the public on notice as to what laws they must obey in

matters involving income taxes - since these are the

only statutes to which the public is directed. I would

ask the Court to take judicial notice that both Code

sections 6011 and 6011 notify the public that they

need only comply with regulations. These statutes

do so in the following manner.

Code Section 6001 says, in relevant part that:

Every person liable for any tax imposed by this

title...shall...comply with such rules and regula-

tions as the Secretary may from time to time pre-

scribe. (emphasis added)

Code Section 6011 says, in relevant part:

When required by regulations proscribed by

the Secretary any person etc. etc. etc.

Therefore, this Court must take judicial notice

that the U.S. Congress in beth statutes, 6001 and

6011, put the public on notice that they need only

comply with “regulations.” Nothing in Sections 6001

and 6011 informs the public that they must obey stat-

utes - or court decisions involving litigation in which

they took no part . In other words, the only thing

56a

that Congress requires the American public to obey

in connection with income taxes are Treasury Depart-

ment regulations. And there is no legislative regu-

lation that requires plaintiffs-appellants to pay

income taxes, let alone the wage tax at issue.

So the assumption by defendant that plaintiffs-

appellants are bound by all those court decisions cited

in its Reply Brief (litigation in which plaintiff-appel-

lants took no ane is total nonsense. the, Can:

me yg nary if “eerie never anaeen meow a law,

how can plaintiffs be bound by all the court decisions

cited by the Government? Indeed, if the American

public were bound by such court decisions, the Ameri-

can public could never know wheat the law is unless

they spent countless hours in law libraries looking

up hundreds of court decisions many of which are in

conflict with each other.'* Therefore such a claim is

nonsensical on its face.

So while the public is only bound by Treasury

Department regulations, the Defendant has not

cited one legisiative regulation that would require

plaintiffs -appellant to pay income taxes, let alone

allow the Government to keep the funds at issue.

What the Defendant has sought to do in the

instant case, is attempt to treat the opinions of judges

as the equivalent of statutes passed by Congress -

overlooking entirely that the public is only obliged to

comply with regulations. In seeking to elevate judi-

'S While such a situation, obviously, makes no sense whatso-

ever, it certainly will increase the cost of litigation and make

more money for lawyers; which, of course, is the primary objec-

tive of America’s legal svstem.

57a

cial opinion to the status of “law” which plaintiffs-

appellants are supposedly obliged to obey - the Jus-

tice Department was apparently unimpressed by the

words of John Marshall as reproduced on page 16 of

Exhibit D of plaintiffs’ Opening Brief. Therefore it

bears repeating here, and plaintiffs ask this Court to

take judicial notice of the words of John Marshall

explaining that courts are “the mere instruments of

the law” and not the “law” itself.

Judicial power, as contradistinguished

from the power of the laws has no existence.

Courts are the mere instruments of the law,

and can will nothing. When they are said to

exercise discretion, it is a mere legal discretion,

a discretion 'to be exercised in discerning the

course prescribed by law, and, when that is dis-

cerned, it is the duty of the court to follow it.

Judicial power is never exercised for the pur-

pose of giving effect to the will of the judge, al-

ways for the purpose of giving effect to the will

of the legislature; or, in other words, the will of

the law (emphasis added)'’® Osborn et al v.

The Bank of U.S., 6 L Ed. 204

In this case, the “ will of the law” is clear - as shown

by the following statutes passed by Congress. The

“law,” therefore, does not consist of the biased and

often conflicting opinions of judges (as reflected in

the court decisions cited in the Government’s Reply

Brief) but is contained in the following, representa-

tive statutes - all of which have been ignored by the

© In addition, Article 1, Section 1 of the United States Consti-

tution provides that “All legislative Powers shall be vested in

Congress.” Thus the expression “case law” implying that

judges can make law, independent of Congress to which the

public must conform certainly finds no support in the Consti-

tution, as John Marshall obviously understood.

58a

Government in its Reply Brief - and in the underlying

decision.

Section 6201, for example, clearly states, in

relevant part, “The Secretary is authorized and re-

quired to make ...assessments of all taxes ...imposed

by this title. (Emphasis added).” Is the Government

suggesting that this statute is without force and ef-

fect and the Secretary is not “required” to make the

assessments called for by this statute - or that the

legal implication to the public is the same whether

tax assessments exist or not? Apparently, according

to the Government - and to District Court Judge Philip

M. Pro - it makes no difference whether the Secretary

follows the law or not? What purpose, therefore, does

Section 6201 serve? A simply reading of the law and

common sense tells us that until an assessment is

made — no taxes can be owed. How else can this

statute be read? If taxes can be owed absent assess-

ments — then what purpose do assessments serve,

and why do we bother providing for them at all?

Section 6203 further provides that “Upon re-

quest of the taxpayer, the Secretary shall furnish the

taxpayer a copy of the record of the assessment.” If

taxpayers can owe income taxes absent assessments,

why would “taxpayers” bother to get a “copy of the

record of assessment” from the Secretary? What

would it tell him? How much they owed? But if they

owed the same amount absent assessments, why

bother to get “a copy of the record of assessment”?

Presumably if plaintiffs-appellants wrote to the Sec-

retary pursuant to Code Section 6203 they would be.

told that they haven’t been assessed for any 1996

income taxes for that year. What possible meaning

would that information convey? That they owe taxes

for 1996 anyway? If so, how much do they owe? And

59a

who determined it, and when? If this Court will ad-

vise plaintiffs-appellants

1. How much in 1996 income taxes

they owe?

2. When that liability was determined? And,

3. Who determined it?

Plaintiffs will be happy to pay that amount — as

long as the Court also provides them with a copy of

the delegation of authority of the person who deter-

mined their 1996 income tax liability, along with the

legisiative regulation that requires them to pay that

amount.

Further Section 6303 provides, in relevant part

that “the Secretary shall, as soon as practicable, and

within 60 days, after the making of an assessment of

a tax pursuant to section 6203, give notice to each

person liable for the unpaid tax, stating the amount

and demanding payment....” However, since accord-

ing to the Government taxes can be owed absent as-

sessments, the Secretary can presumable demand

payment at any time - whether assessments exist or

not and regardless of the provisions of this statute. If

taxes can be owed absent assessments as argued by

the Government - why can’t the Secretary demand

payment at any time, whether assessments exist or

not?

If taxes can be owed absent assessments, does

this not mean that the IRS can seize property and

impose tax liens even though no assessments exist?

If income taxes can be owed absent assessments as

- the Government (and Trial Court) suggest, why can’t

60a

the IRS seize property and impose liens absent as-

sessments? Presumably, therefore, even though there

are statutes to the contrary, the IRS is free — accord-

ing to the Government and the Trial Court - to seize

property without bothering: to make termination as-

sessments as required by Code Sections 6851(a) and

6852(a)(1)(B); or jeopardy assessments as required by

Code Sections 6861(a) and 6862(a); and can impose

liens absent assessments even though Code Section

6322 states that “the lien ...shall arise at the time the

assessment is made.”

And, of course, Code Section 6204 provides for

the making of “a supplement assessment whenever

it is ascertained that any assessment is imperfect or

incomplete...” Jf assessments don’t count, as the Trial

Court and the Government now claim, why is it im-

portant that they be corrected if they are “imperfect

or incomplete”? If assessments count for nothing,

what difference does it make if they are “imperfect” or

“incomplete.”?

In addition Code Section 6213(c) provides that

“If the taxpayer does not file a petition with the Tax

Court within the time proscribed.... The deficiency....

shall be assessed, and shall be paid upon notice and

demand...” while Section 6214 provides that the Tax

Court can redetermine an amount greater than the

deficiency and that the additional amount “should

be assessed if claim therefor is asserted by the Sec-

retary...” In addition, Code Section 6215 provides that

“If the taxpayer files a petition with the Tax Court,

the entire amount redetermined as the deficiency by

the decision of the Tax Court...shall be assessed and

shall be paid upon notice of demand....” If assess-

ments count for nothing ~.s the trial court and the

Government claim, why would not the simple deci-

6la

sion of the Tax Court be enough to require payment

of the deficiency? Why does the law require that

even a Tax Court’s “redetermination” has to be “as-

sessed” before it needs to be “paid.”? If someone wins

a civil law suit does the amount awarded have to be

“assessed” before the prevailing party is entitled to

collect the award? The answer, of course, is no. It is

therefore clear that for tax purposes, there must be

an assessment, even after the Government wins in

Tax Court. If taxpayers are not even required to pay

a Tax Court determination untii after that amount is

“assessed,” how can the Trial Court and the Govern-_

ment claim that Plaintiffs are required to pay an in-

come tax (i.e. the Government can legally keep the

$5,035 at issue as payment for 1996 income taxes)

absent either a Tax Court determination or an as-

sessment?

Therefore, in ruling that income taxes can be

owed absent assessments the Trial Court and the

Government in its Reply brief have tossed into the

trash can the above 11 statutes and at least 30 oth-

ers while seeking to replace them with the irrelevant

and jaundiced opinions of judges who may have as

little regard for the law and the Constitution as does

Judge Philip W. Pro, the trial judge in this case, and

the Justice Department lawyers who prepared the

Government’s Reply Brief.

WITH RESPECT TO CODE SECTION 6151

Plaintiffs have already explained in detail why

Code Section 6151 can have no bearing on any re-

quirement to pay income taxes. For one thing there

is no mention of Section 6151 in the Privacy Act No-

tice of a 1040 - so how would the public even know

about Code Section 6151(which is not even contained

62a

in subtitle A '’) let alone that it requires them to pay

income taxes without assessments? In addition, the

implementing regulation for this statute - as plain-

tiffs have already pointed out in their Opening Brief -

is shown in the Parallel Table of Authorities to be in

27 CFR and not in 26 CFR. And while CFR 26 does

show a regulation for 6151, t’ ere is no mention about

income taxes in that regulation, and no authority is

shown to support the regulation. '* Thusthe statute

and its regulation are totally benign with respect to

income taxes, and the Defendant in its Reply Brief

does not attempt to refute these facts in any defini-

tive way. Defendant merely makes the naked and

unsupported statement that “Section 6151, by its

plain terms, relates to any taxes imposed under the

Internal Revenue Code. ” Says who? The Govern-

ment does not even address the issue of the lack of

an implementing regulation for this statute, nor at-

tempt to refute plaintiffs’ argument on th’s issue. And

as plaintiffs have mentioned before, Code Section 6001

and 6011 put the public on notice that they need

only_comply with regulations - so what is the regu-

lation that plaintiffs have to comply with in connec-

tion with Code section 6151?

Suffice it to say that if any Ninth Circuit panel

were ever to rule that Code Section 6151 - just on its

own - mandates the payment of income taxes with-

out assessments and without any /egis/ative, imple-

meriting regulation, that panel will go down in in-

famy and nothing will be able to save their reputa-

tions. Such an egregious ruling will be reported and

publicized far and wide and any judge who agrees

17 The suggestion that the public has to sift through 1,500

Code Scctions trying to find those that apply to them and to the

paying of income tax is itself ludicrous. How can any federal

judge fail to see this?

18 Obviously, a regulation that doesn’t even claim to implement

anu statute passed bv Congress - is without force and effect.

63a

with such a spurious proposition will never live it

down. His reputation and credibility will forever be

suspect and stained.

WITH RESPECT TO CODE SECTION 3402(A)(1)

The Government’s statement in its Reply Brief

that: “Section 3402 entitled Income taxes Collected

at Source’ does not impose a tax” — is, of course, an

out and out lie. As plaintiffs pointed out in their

Opening Brief, Code Section 6413 specifically states

that a tax is “imposed by section....3402.” Therefore

how can the Government claim that Code section 3402

“does not impose a tax”?

Further proof that a different tax (not an in-

come tax) is imposed in Code section 3402 is the word-

ing contained in Code Section 3402(d). It states, in

relevant part, “thereafter the tax against which such

tax may be credited....” Obviously Code Section

3402(d) is describing two different taxes. The tax

imposed by Section 3402(a)(1) dnd the one “against

which such tax may be credited” - which is the in-

come tax imposed in Code Section 1.

In order to pretend that it had contested and

refuted plaintiffs claim that the taxes at issue are an

unconstitutional, unapportioned direct tax on wages,

the Defendant states that Section 3402 “merely pre-

scribes a mechanism by which faxis collected from

wages of employees,” and that Section 3402 “provides

that ‘every employer making payment of wages shall

deduct and withhold upon such wages’ certain faxes.”

Notice that in both statements the Defendant care-

fully and deliberately avoided using the words “in-

come taxes” to describe the taxes being withheld in

Code section 3402(a)(1). Obviously, the Defendant

did so because it knew full well that the tax being

64a

withheld pursuant to Code Section 3402(a)(1) was a

wage tax and not an_income tax, and so sought, in

this manner, to avoid having to make an obvious

in connection with the kind of taxes

being described in Code section 3402(a)(1). Hope-

is

fully this Court will not attempt to get away with

kind of subterfuge.

- OTHER FALSE CLAIMS IN

DEFENDANT’S REPLY BRIEF

On page 12, oe 10 the Temenemiant aan “The

payment of income tax is not voluntary,” and cites as

its authority Wilcox v. Commissioner, 848 F. 2d 1007.

This, of course, is in conflict with the Supreme Court’s

observation in Flora v. United States 362 US 145, 176

that “Our system of taxation is based upon voluntary

assessment and payment, not upon distraint” to say

nothing of the IRS’ own “Mission Statement” (see at-

tached as Exhibit C) in which the IRS states that its

mission is to “achieve the highest possible degree of

voluntary compliance.”

However, as plaintiffs have previously pointed

out “Who cares what the judges in Wilcox said?”

Whatever they say is not law. Why didn’t the Gov-

ernment cite a statute or /egis/ative regulation that

mandates the payment of income tax? They didn’t do

so, because no such statute or regulation exists

And this Court should understand that the Govern-

ment (and the Courts) are not going to fool the Amert-

can public any longer with this kind of subterfuge. Too

many Americans now know the truth. '° As Abraham

Lincoln said. “You can fool some of the people all the

time, and all of the people some of the time. But you

can’t fool all of the people all of the time.” And grow-

19 As proof, merely visit “paynoincometax.com”

a a

65a

ing numbers of Americans are discovering the truth,

and the Government is not going to get away with

extorting this tax much longer. The end is near.

But apart from these obvious acknowledg-

ments of the voluntary nature of the income tax, plain-

tiffs attach as Exhibit D pages 28 & 29 from the April

1998, “ United States Attorneys’ Bulletin” Note that

under the caption “Follow That Lead! Obtaining

and Using Tax Information in a Non-Tax Case” the

Justice Department advises its attorneys how to use

1040 information to prosecute citizens in a variety of

situations. The article points out that “(tax) return

information can provide some of the most significant

leads, corroborative evidence, cross-examination

material obtainable from any source” and that it “can

play an important role in criminal investigations of

non-tax crimes.” Is the Justice Department claiming

that the Government can “require” Americans to pro-

vide this kind of information on income tax returns

and then use the information against those who sup-

yd it? if their answer is “yes” - than the ne.

With respect to the Government’s claim that

“the Supreme Court and the lower federal courts have

both implicitly recognized that the Sixteenth

Amendment’s authorization of a non-apportioned di-

rect income tax on United States citizens residing in

the United States and thus the validity of the federal

income tax as applied to citizens” (Defendant’s Reply

Brief, page 12, lines 5-9) is a misstatement of the facts

-irrespective of who this quote is attributed to. First

of all, what “lower federal courts” have to say about

the 16" Amendment is immaterial, since the Supreme

Court has already spoken about the 16" Amendment

66a

in no uncertain terms. However, “lower federal

courts” generally ignore or misstate those “terms;” so

let us put those “terms” in their proper light.

First of all the Government’s claim as stated

above that the Supreme Court “implicitly recognized

that the Sixteenth Amendment” authorized a “non-

apportioned direct income tax” is nonsense. The

bedrock, Supreme Court case on this is Brushaber v.

Union Pacific RR. 240 US 1. This was the decision

that upheld the constitutionality of the income tax

provisions of the Tariff Act of October 3, 1913. Inso

doing the Court held that:

1. The 16" Amendment conferred no new tax-

ing powers on the Government.

2. The 1895 Pollock decision 157 US 429 that

held the income tax of 1894 unconstitu-

tional, was not overturned by the Amend-

ment.?° And income taxes imposed on

sources of income (as contrasted to a tax on

incomes separated from those sources (i.e.

corporate profits)) still were subject to the

rule of apportionment.

1. The Government always had the power to

tax income, so this power was not conferred

upon it by the 16" Amendment, and

2. The purpose of the Amendment was to pre-

vent an income tax from being taken from

the class of taxes to which it inherently be-

longed (which the BrushaberCourt held were

20 If the Court will Sheperdize the Pollock decision, it will see

that, that 1895 decision has not been reversed or overturned

and so it is still binding on this Court today. But what is more

binding on the Court is the provisions of Code Section 61- which,

in seeking to define income, does so in a manner that only cor-

porate profit falls within that meaning.

67a

excise taxes) and being placed in a class

to which they didn’t belong - which was the

class of direct taxes, as held by the Supreme

Court in Pollock. The actual words used by

the Court in Brushaber (at pages 16 & 17)

were that “taxation on income was in its

nature an excise entitled to be enforced as

such.” (Emphasis added)

So the Brushaber court ruled that the “whole

purpose” of the 16" Amendment was to allow the

Government to tax “income” in the form of an excise

tax (subject only to the rule of uniformity), and to

prevent it from being held to be a direct tax (as held

by the Pollock Court/ subject to the rule of apportion-

ment. But in order for an income tax to be treated as

the excise tax the Brushaber Court ruled it to be, it

has to be imposed as an excise tax Obviously, it

can not be an excise tax in name only! It can not

be imposed as a direct tax on sources of income,

such as: wages, dividends, interest, rent, etc. etc.

etc. As the Brushaber Court held cleariy and un-

equivocally held:

...the whole purpose of the Amend-

ment was to relieve all income taxes when

imposed from apportionment from a con-

sideration of the source whence the

income was derived.

(at page 17, emphasis added)

With regard to the false claim generally ad-

vanced by current federal courts and as is advanced

by the Government’s Reply Brief, that the 16" Amend-

ment gave the Government the power to levy a direct

tax on sources of income (such as wages, dividends,

etc. etc. etc.) the Court said, at pages 18 & 19...

68a

The contention that the Amendment

treats a tax on income as a direct tax al-

though relieved from apportionment and is

necessarily therefore not subject to the rule

of uniformity as such rule applies to taxes

which are not direct, thus destroying the

two great classifications which have been

recognized and enforced from the beginning,

is wholly without foundation. . Indeed

from another point of view, the Amendment

demonstrates that no such purpose was

intended and on the contrary shows that it

was drawn with the object of maintaining

the limitations of the Constitution and

harmonizing their operation. (Emphasis

added throughout)

Thus the Supreme Court ruled in Brushaber

- as the Government’s Reply Brief would have us be-

lieve. Direct taxes are still subject to the rule of ap-

portionment (as held in Pollock) while all indirect,

excise taxes - such as a tax on income (when sepa-

rated from its sources) is still subject to the rule of

uniformity - and as is fully proven and set forth in

plaintiffs’ Reply Brief, the income tax is being enforced

neither pursuant to the rule of uniformity or the

rule of apportionment.

All of the above is confirmed in the following

excerpt from Stanton v. Baltic Mining Co., 240 U.S.

103(1915), in which the Supreme Court stated at page |

112.

“...the provisions of the Sixteenth

69a

Amendment_conferred no new power of

taxation but simply prohibited the previ-

ous complete and plenary power of income

taxation possessed by Congress from the

beginning from being taken out of the cat-

egory of indirect taxation to which it inher-

ently belonged and being placec in the cat-

egory of direct taxation subject to appor-

tionment. (Emphasis added)

All of the above is further confirmed by the “CRS

Report for Congress” prepared by John R. Luckey,

Legislative Attorney, American Law Division and dated

December 5, 1996 - and plaintiffs have attached as

Exhibit E pages 4 & 5 of that Report. Note that the

Report states that:

.... the Sixteenth Amendment did not

authorize any new type of tax, not did it

repeal or revoke the tax clauses of Article

I of the Constitution, quoted above. Di-

rect taxes were, notwithstanding the ad-

vent of the Sixteenth Amendment, still sub-

Ject to the rule of apportionment and indi-

rect taxes were still subject to the rule of

uniformity. (Emphasis added)

Mr. Luckey further noted that “The Court noted

that the inherent character of an income tax was that

of an indirect (excise) tax. And in a caption on page

5 he writes, “WHAT DOES THE COURT MEAN WHEN

IT STATES THAT THE INCOME TAX IS IN THE

NATURE OF AN EXCISE TAX?” He then explains

that “An excise tax is a tax levied on the manufac-

ture, sale, or consumption of a commodity or any

various taxes on privileges often assessedintheform -

of a license or fee” Obviously, the income tax is not

70a

imposed in this manner, so obviously the current in-

come tax is not imposed in conformity with the 16%

Amendment.

WHAT DOES THIS ALL MEAN?

It means that the income tax is not being en-

forced pursuant to the 16" Amendment or the taxing

clauses of the Constitution. Does this mean that the

income tax is imposed unconstitutionally? No -since

the laws as passed by Congress do not make the pay-

ment of income taxes mandatory. What it means is

that the tax is being enforced unconstitutionally

by Justice Department lawyers and Federal judges

who obviously have little regard for either the laws as

passed by Congress or the Constitution of the United

States. It means that that for years federal courts have

been enforcing the income tax in violation of the tax-

ing clauses of the Constitution - since the income tax

is not being enforced either pursuant to the rule of

apportionment or the rule of uniformity - as covered

in both Brushaber, Stanton, and as is fully set forth

in plaintiffs’ Opening Brief. It further means that

the funds at issue being a direct tax on plaintiffs wages

(as opposed to it, being a tax on income separated

from its sources) - is totally unconstitutional if their

payment is made mandatory. What saves the wage

tax imposed in Section 3402(a)(1) from being uncon-

- Stitutional - as explained in plaintiffs’ opening brief -

is the ability of those upon whom it is imposed to get

such taxes refunded to them by asking for it, as plain-

tiffs have done. The law and the Constitution are so

overwhelmingly on the side of the plaintiffs in this

action, that no objective tribunal could fail to see it -

as the American public will obviously also recognize.

THEREFORE BASED ON ALL OF THE ABOVE,

Tla

- plaintiffs-appellants requests that this Honorable

Court reverse the outrageous decision of Judge Philip

M Pro of January 21, 1999 in which he awarded a

summary judgment to the United States, and grant

instead plaintiffs request for a summary judgment

and a refund of the funds at issue. If the Ninth Cir-

cuit fails to do this, than it will lose far more from

such failure than will the plaintiffs-appellants.

Respectfully submitted

Robert and Elena Brown