AMERICAN PATRIOT NETWORK TAX FREEDOM NETWORK
IN THE UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF TENNESSEE
AT CHATTANOOGA
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UNITED STATES OF AMERICA,
Plaintiff,
VS, No. CR-1-93-91
LLOYD R. LONG,
Defendant.
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Chattanooga, Tennessee
October 13 and 14, 1993
BEFORE:
THE HONORABLE R. ALLAN EDGAR,
UNITED STATES DISTRICT JUDGE
JURY TRIAL
DAYS TWO and THREE
VOLUME II
PAGES 223 thru 482
FOR THE PLAINTIFF:
Curtis Collier, Esq.
Assistant United States Attorney
Second Floor, Warehouse Row
Chattanooga, TN 37402
FOR THE DEPENDANT:
Lowell B. Becraft, Jr., Esq.
Attorney at Law
209 Lincoln Street
Huntsville, AL 35801
-and-
Russell Leonard, Esq.
Attorney at Law
124 First Avenue, N.W.
Winchester, TN 37398
I N D E X
LLOYD RAYMOND LONG:
Direct Examination by Mr. Becraft (cont'd) 227
Cross-Examination by Mr. Collier 292
Redirect Examination by Mr. Becraft 397
Recross-Examination by Mr. Collier 409
Motion and Charge Conference 413
Closing Statement of Mr. Collier 433
Closing Statement of Mr. Becraft 438
Jury Charge 457
Verdict 479
E X H I B I T S (Defendant)
5 Avis Statement 240
6 IRS Cumulative Bulletin 240
7 1979 Annual Report 240
4 Am-Tax Guide 245
9 Letter of July 27, 1989 252
10 Letter of November 12, 1989 256
11 Letter of February 23, 1990 261
12 Letter of January 9, 1990 267
13 Letter of July 20, 1991 274
14 Letter of January 14, 1991 277
15 Letter of September 12, 1991 279
16 Copies of Summons of Bank Records 281
8 Letter of March 14, 1991 285
E X H I B I T S (Government)
S10 Blowups 432
thru
S14
THE COURT: You may proceed.
MR. BECRAFT: May it please the Court.
DIRECT EXAMINATION (Cont'd)
BY MR. BECRAFT:
Q Mr. Long, yesterday before we, the last subject
that we were on when we broke for the afternoon I believe
related to Exhibit No. 3, that Privacy Act notice. And you
were telling us something about watching a video of Mr.
Carter?
A Yes, sir.
Q Okay. Could we pick up right there?
A Yes, sir.
Q Now, this was at a meeting that you attended of
the Tullahoma group?
A Yes.
Q Okay. Tell the jury what you were seeing on
video.
A Well, as I recall, he had told us about the
Privacy Act itself, and then had pulled out the Privacy Act
notice for the Internal Revenue Service. And as I recall,
it said something about that our legal right to ask you for
this information is Internal Revenue Code Section 6001,
6011, and 6012A, I believe, and basically you should be able
to determine from those three sections whether you'd be
subject to file or the liability.
Well, then he proceeded to go ahead, and he
pulled out his code book and flashed Section 6001 up on the
screen. And it read: *Every person liable for any tax
under this Title, or fox the collection thereof, shall keep
such records, render such statements, make such returns, and
comply with such rules and regulations as the Secretary from
time to time may require."
And he really emphasized this "person
required," because that's obviously, whoever this is that's
supposed to do this, "person required," he made the point
that it doesn't say anything about who that is.
Well, I thought, "Yeah, that's right on the
button. It doesn't." And so then he went on to, he said,
'Let's go look in Section 6011." And it's the general rule
which I guess encompasses everything, the way he explained
it.
The general rule says, "Every person made
liable for any tax imposed by this Title, or for the
collection thereof, shall make such return or statement
according to the forms and regulations as prescribed by the
Secretary." Well, here again we've got this -- only this
time it's this "person made liable." But here again, it
doesn't say who this person is. He really emphasizes that,
that this "person liable" and "person made liable" is this
unique entity out here. It's like a form of art. You know,
who is he? And neither section explains who this person is.
It just says the person liable and the person made liable.
Well, then he said, "Let's go on over to
Section 6012 and see what it says." And as I recall, it
said something to the effect that every individual having
gross income that equals or exceeds the exemption amount
shall file a return.
So, then he makes a point, you know, we've gone
now from person liable to person made liable and now we're
talking about individuals and gross income. And the only
conclusion that you can draw from that is that if this
individual has gross income in this capacity or whatever,
then obviously he must be one of these people that's
required -- or that's liable. But it doesn't mention
anything about liability in Section 6012.
So, he goes back over and, you know, who is
this person liable and the person made liable? You know,
that sounds like somewhere they're going to make somebody
liable.
So then he says, you know, "Do you reckon
Congress knows how to impose a tax and then how to make
somebody liable for that tax?" So, he says, "Let's flip
over in the booze part or the alcohol section." And he goes
to Section 5003.
Well, it plainly says, "There is therefore
imposed a tax upon distilled spirits of 12" -- this is, you
know, my quotation of it -- $12.50 per proof gallon, and
then a proportional tax for every portion less than a
gallon. Well, now, that's real clear. I believe anybody
can understand that. I can understand that. It's real
clear. $12.50 and it's on every gallon.
Well, then he says, "Now let's see if they know
how to make somebody liable." So, he flips over to Section
5005, and here it says, "persons liable for the tax." It
says it's the distillers, manufacturers, and the importers.
They're liable for the tax on the booze. Now, that's real
clear, "persons made liable."
So, then he goes back to Section 6001 again and
says, "Maybe we've missed something here. Let's go back
through it again." Well, Section 6001 says, "Every person
liable for any tax imposed by this Title, or for the
collection thereof, shall keep such records, render such
statements, and make such returns, and comply with the rules
and regulations as from time to time prescribed by the
Secretary." Is that clear? Who is this person liable?
Does it say who it is? It just says "person liable.
Well, then he goes over to 6011 again. And
says, "Well, every person made liable for any tax imposed by
this Title shall keep such records and make such a return
that" -- well, I've lost that one. "Every person made
liable for any tax imposed by this Title or for the,
collection thereof, shall make such a return or statement,"
and you do it on such forms and regulations as prescribed by
the Secretary. Here again, it's "every person made liable.
Over in the booze section or the alcohol
section, it plainly states what the tax is on and it plainly
comes over here and says "persons made liable for the tax."
Well, now, that's real clear to me.
And then I remember the Sprinkles case, United
States Supreme Court case, that says, "keeping in mind the
well-settled rule that the citizen is exempt from taxation
unless the tax is imposed in clear and unequivocal language,
and that should there be a doubt about the language of the
tax law, the doubt should be resolved in favor of the person
upon whom the tax is sought to be collected."
Well, now, that gets my attention. Well, I'm
sitting here with my head spinning, thinking about all this,
because, you know, I know that the income tax is an excise
tax, like I told you yesterday. Now this guy is talking
about that this "person liable" and it's not defined there.
We can't find it.
So, then he makes a statement that just curls
my hair. He says out of all of his research and going
through this book, a complete internal Revenue code, that he
has not found the section in this whole book, two thousand
pages and nine hundred sections, that makes anybody liable
for the income tax.
Whew. You could've knocked me over with a
feather. Now, surely, a book that big, if we're liable,
there ought to be a section in there somewhere that makes us
liable. Well, now, he had my attention by then, you can
believe.
Then he came out and said not only had he
researched it, but there was a group up North that had put
out a one-hundred-thousand-dollar reward for anybody that
could find the section in that book that made somebody
liable for the income tax. I'll tell you, I just couldn't
believe it. I just couldn't believe it.
So, you know, there's nobody liable, no section
in there that makes anybody liable, and yet we're all filing
and paying all these taxes? Now, I knew it was an excise
tax. But now he's done showed me something else here that's
just blowing my mind.
Well, then he pulls out a document, it's the
mission statement from the IRS themselves, and says, it
says, "The mission of the Internal Revenue Service is to
encourage and achieve the highest degree possible of
voluntarily compliance."
Now, I'd heard "voluntarily" all my life. And,
you know, when you're in school they say, "I need a
volunteer," and then they pick somebody, you know, in a
class a lot of times. But that's not quite voluntary, is
it?
But then he went on to say, "Do you know what
the definition of 'voluntarily' is in Black's Law
Dictionary?" Of course, we sat there and waited. He said,
"The definition of 'voluntary' in Black's Kaw Dictionary is
'To do something without legal obligation.'"
Now, that sounds right, you know. I know what
voluntary means. It's voluntary. Then he said, "Do you
know what compliance means?" We waited. Black's Law
Dictionary said that compliance means "To do something in an
effort to please."
So, then he said, "What we've been doing is
donating to the IRS in an effort to please." Now, I'll tell
you, it just blew my mind. And this is what he said. Then
he showed us another document by, Mr. Kurts, who was the
Commissioner of the Internal Revenue Service. And it was an
annual report, I believe. And in this report he had
mentioned the word "voluntary" six or eight times.
Well, by this time he's got my head spinning.
No section in the code that makes anybody liable,
a hundred-thousand-dollar reward for anybody that could find
one, and now he's telling me the mission statement says it's
voluntarily. Not only that, but the commissioner himself
has mentioned the word "voluntary" six or eight times in his
annual report.
Then he pulls out a document. It was a Senate
subcommittee --
Q We've got exhibits on these.
A Okay.
Q Can we skip over those?
A Sure.
Q Okay. Besides what you know are exhibits in
this case, was there anything else that he said that had an
impact upon your beliefs?
A Well, that's where I was going. That
particular document was, it was a statement by the head of
the Alcohol and Tobacco division, which was Mr. Dwight Avis.
And he had made this comment before Congress.
The statement said, as best I recall, said, he
said, "Let me make this clear. Your income tax is 100
percent voluntary tax, while your alcohol tax is 100 percent
enforced tax. There's as much difference as day and night,
and the same rules will not apply."
Now, here's a guy right in the Internal Revenue
Service himself, one of the heads of the department, and
he's saying that the income tax is a hundred percent
voluntary.
Now, I'm a school teacher. And when we grade
papers and we give somebody a grade, a hundred percent is a
hundred percent. There ain't no in between, not 99.5. He
said it was a hundred percent voluntary tax. Well, needless
to say, he got my attention, had me thinking.
And I recalled, you know, that the Bible says
we're to prove and reprove the Scriptures. And the reason
we're to do that is we're not supposed to just read it and
say, "I accept that." God wants us to read it, put it in
practice in our lives, and test it so that when we may we
believe it, we believe it from our heart because we know it
works.
So, I determined in my mind, with a little
incentive called a hundred-thousand-dollar reward, that I
was going to see if what this guy said was right.
So, by this time I believe it was somewhere
around 1988, early '88. I was at Saturn and I was staying
over there part of the time. So, I had some time to study.
And then I'd get with the group when I'd come in on the
weekends sometime.
So, I went to the Read More Book Store in
Columbia, Tennessee, and I ordered me a complete Internal
Revenue code book. Cost $27.52. And I sat down -- took me
a week to get it. They had to order it. And I set out over
the next few weeks, when I had time, and remembering as best
I could what he did, I sat down and I went to Section six
thousand
Q Can I stop you there?
A Yes, sir.
Q Did you -- yesterday we introduced Exhibit No.
3, which is copies out of your 1988 1040 instruction
booklet.
A Right.
Q Do you remember that exhibit?
A Yes, sir.
Q Okay. Now, after he told you or after you
viewed this video of this Mr. Carter, did you look at that
document? This was in '88?
A Yeah. That was one of the first documents I
looked at before I started studying because I went back, I
had to go back to it to remember the 6001, 6011 and...
Q The '88, you would've gotten that in the mail
sometime in 1989?
A (Moving head up and down.) No. Well...
Q Early part of -- late '88?
A Well, I saw the video before I got that.
Q Okay. All right.
A Yeah.
Q I'm sorry.
A That's okay.
Q You went to the Read More Book Store and got
that code?
A Uh-huh.
Q And then what happened?
A Well, like I said, I started to set out to
prove what he had said was either right or wrong. So, I
went and I flipped over to Section 6001. And sure enough,
it said, "Every person liable for any tax imposed by this
Title, or for the collection thereof, shall keep such
records, render such statements, make such returns, and
comply with such rules and regulations as the Secretary from
time to time may prescribe." "Every person liable." But
nowhere in that section did it make any further reference to
who was liable, who the person is, who this entity is.
I thought, Okay, we'll flip over to Section
6011."' And sure enough, General rule. Any person made
liable' for a tax imposed by this Title or for the collection
thereof, shall make a return or statement according to the
forms and regulations prescribed by the Secretary." That's
exactly what he said.
Q Now, can I stop you right there? When you just
made that statement and just did what you did, you're giving
the jury your understanding of what the law is; is that not
correct?
A Oh yeah. Yes, sir.
Q Just as long as we're clear on that.
A Yes, sir.
Q Now, continue.
A I'm just telling you what I remember.
Q All right.
A Well, here again, we've got "any person made
liable." Now, being a school teacher, if you say "somebody
made liable," you assume that somewhere it's going to say
who's made liable or how they're made liable or something.
Well, then the only other section is Section
6012. So, we flipped over there. And it talks about every
individual having gross income. Now, it could've said,
"every American." But it doesn't say "every American." It
says "Every individual having gross income shall make a
return," gross income that exceeds the exemption amount
shall make a return.
And I know sometimes in our studying we
discovered that "shall" can mean "may." But nowhere in
Section 6012 does it talk about making anybody liable, yet
it follows 6011 talking about "persons made liable." So,
who is this person? Who is this person made liable?
Q What did you do?
A Well, I decided I'd do just what he did. So, I
flipped over to Section 5001, the booze section, alcohol
section. "There is hereby imposed a tax on distilled
spirits of $12.50 a gallon and on every proportion thereof".
It's real clear.
I flipped over to Section 5005, and it says
"persons liable for the tax. And it says distillers,
importers and manufacturers. It may not have have
manufacturers, but distillers and importers are liable for
the tax imposed.
Real clear. Now, I can understand that. So now I'm
beginning to understand. I'm reproving what he has told us,
and so far he's right on the money.
Now, who, you know, it's going over in my mind,
"Who is this person liable?" And then I remember he said
there's no section in the entire Internal Revenue code, and
I don't -- they couldn't have left it out to save money. So
why is it not in there, if it's not? But he says it's not
in there, and there's a hundred-thousand-dollar reward out
for anybody that can find it. Why is it not in there?
So, I remembered the mission statement of the
Internal Revenue Service, you know. "Our mission is to
encourage and achieve the highest possible degree of
voluntary compliance." And I remembered what he said
voluntary compliance was. I looked that up. And that's
exactly what it is. Voluntary is voluntary. And there's no
way you can make mandatory out of voluntary, you know. It
just don't work.
And then I, I think probably somewhere in there
I was back home and I went to a meeting. And some of the
people in the other groups had mailed us a copy of this
document by Mr. Avis where he said -- and you've got it
there -- that your income tax is 100 percent voluntary tax.
Q Let me stop you there, Mr. Long. I've just
handed to you, is it 5, 6 and 7? Exhibits 5, 6 and 7?
A Right.
Q Okay. Are those documents that you read and
relied upon in 1988?
A Yes, sir. It says, "Internal Revenue
investigation hearings before" --
Q Let's get it admitted first.
A I'm sorry.
Q And those are the documents you previously
identified and talked about, right?
A Yes, sir.
Q MR. BECRAFT: Your Honor, I'd move for 5, 6 and
7 to be admitted.
THE COURT: Okay. Subject to the government's
objection, they'll be admitted on the same basis that
documents 1, 2 and 3 were admitted yesterday. And they
are -- well, we've got what, this Avis statement, what is
that? That's 5?
MR. BECRAFT: The Avis statement is 5.
THE COURT: They're admitted.
(Defendant's Exhibits 5, 6 and 7 were received
into evidence.)
BY MR. BECRAFT:
Q Now, Mr. Long, take a look at 5. You were
mentioning that a moment ago?
A Right.
Q I just now see that you've got in your pocket a
yellow Magic Marker, right?
A Uh-huh.
Q Now, that document is what, Exhibit No. 5?
A Oh, it's the Internal Revenue investigation
hearings before the subcommittee of the Committee on Ways
and Means, House of Representatives. It's a mouthful.
Q When?
A In 1953.
Q Now, is there something of importance to you in
that document that relates to your beliefs?
A Yes, sir.
Q Can you take your yellow pen out, find that
spot and line it through in yellow so that the jury can see
it?
A Yeah. I had mine marked. It'll take me just a
minute here. (Performs marking.)
Q Now, can you tell us what you've just lined
through in yellow that you found on the report?
A Mr. Avis says, "Let me point this out now.
Your income tax is 100 percent voluntary tax and your liquor
tax is 100 percent enforced tax. Now, the situation is as
different as day and night. Subsequently, your same rules
just will not apply.
Q Now, let's take 6 and 7. Can you briefly
explain to the jury what they are? And then take your Magic
Marker and highlight in yellow those parts of those two
exhibits that you find of importance.
A This is an Internal Revenue Service cumulative
bulletin that states the mission statement. (Performs
marking.)
Q Now, can you tell jury what you just lined
through in yellow?
A "The mission of the Service is to encourage and
achieve the highest possible degree of voluntary
compliance."
Q All right. Now, the next exhibit as what, 7?
A Yes, sir. This is a 1979 annual report by Mr.
Kurtz, Jerome Kurtz. And he mentions the word "voluntary"
in here six times.
Q Now, did you understand those to be official
government documents?
A Yes, sir.
Q Okay. Now, I don't think we need to belabor
the point, but you mentioned a moment ago those were
mentioned on the videotape?
A Right.
Q And then you secured those documents that he
mentioned on the videotape, right?
A Yes, sir.
Q And those are the ones you're talking about?
A Yes, sir.
Q Now, I think I interrupted you. You were
talking about liability, were you not?
A I was talking about, you know, I was reproving
that he had told us about this "person liable or "person
made liable."
Q What did you learn in that respect?
A well, I searched through -- I didn't try to
read the whole book, because I'm sure everybody can look at
that and see it's tough reading. But I went through the
entire section on the income tax, which is about 1500
sections, just looking at the captions. I couldn't find a
section there that made anybody liable.
I looked through the six thousand parts, which
you'd think would go with it. The 6001 is supposed to be
right in that area. I couldn't find any section that made
anybody liable. Then I remembered that he said there was a
hundred-thousand-dollar reward out. So obviously, the
people that put the reward out had researched. And my only
conclusion was that there is not a section in there that
makes me liable, or anybody else for that matter.
Q Well, what's so important about that? Being
liable for the income tax, what's so important?
A well, I know that it's an excise tax. So, in
order to be liable for it, I'm assuming, since it's an
excise tax, you've got to have some kind of privilege or be
in an occupation that's a privileged occupation.
Q Okay. But if someone is liable, in your view,
if someone is liable for a tax, are they required to do
something?
A Well, yeah.
Q What?
A Like we talked about in the booze tax, if it's
clearly liable then they'd be required to file the forms and
things and keep the records.
Q Now, if someone, in your view, if someone is
not liable for the tax, what's the consequence?
A If you're not liable for the tax, you're not
required to file.
Q That was the conclusion you reached from that
study you just described?
A Yes. There is no other conclusion. If the
person liable for the tax is required to file, and if
somebody is not liable for it, then obviously they wouldn't
be required to file.
Q Mr. Long, I've handed you what's been marked as
Defendant's Exhibit No. 4, is it?
A Yes, sir.
Q Now, can you identify that document for us?
A Yes. It's the AM-Tax guide to the Internal
Revenue laws as they pertain to individuals.
Q Is that a document you acquired when?
A I think it was sent to the group somewhere
around '88, somewhere in there.
Q Did you read and rely upon it?
A Yes, sir.
Q It was relevant to the formation of your
beliefs?
A Yes, sir.
MR. BECRAFT: Your Honor, I'd move for the
admission of Exhibit No. 4.
THE COURT: Ladies and gentlemen, it will be
admitted, but I want to give you this special instruction
with respect to this document. This document is received
only for whatever it may show about the defendant's state of
mind. You should not consider this document as evidence or
proof that anything said in the document is true.
(Defendant's Exhibit 4 was received into
evidence.)
BY MR. BECRAFT:
Q Now, Mr. Long, all these exhibits, particularly
Exhibit No. 4, you recognize?
A Yes.
Q You're not trying to tell the jury what the law
is?
A Oh, no. No, sir.
Q And you're trying to show the jury what you
read to reach your conclusions, to show your beliefs?
A Yes, sir.
Q Okay. With that understanding in mind and any
comments you make when we're talking about this particular
document, can you tell the jury now what you've learned by
reading this document?
A Well, basically this document goes through and
discusses basically what I've told you. It goes through and
shows how, just like Mr. Carter did, that Congress knows how
to impose a tax and knows how to make anybody liable by
going through Sections 5001, 5005. It just compounded
and -- what's the word -- reinforced what I had already
learned, that there's no section in there that makes anybody
liable.
Q Without getting into detail then, this
particular exhibit summarizes your belief?
A Right.
Q And what you've just said about the process
that you went through about this liability argument, it's
covered in the book?
A Right.
Q Word for word?
A Well --
Q Or substantially.
A Mighty close.
Q Same argument?
A Yes, sir.
Q Now, when you looked at Exhibit 4 and read it
and studied it, that AM-Tax guide, did you find anything in
there that would cause you to distrust it?
A No, sir.
Q Did you believe it?
A Yes, sir.
Q Now, let's come forward. Had you reached all
these conclusions by, say, December 31st, 1988?
A Somewhere in there. Maybe a little before
then.
Q At least by that time?
A Yes.
Q At the latest?
A Right.
Q Now, that's the end of the year for 1988?
A Right.
Q And I showed you a minute ago, and I think I
got ahead of myself, on Exhibit No. 3, the Privacy Act
notice. You'd filed a return for '87, right?
A Yes, sir.
Q And for '88 did you receive -- you know, we've
got here the complete, but we've offered the excerpts from
the '88 instruction booklet. Would you have gotten that
sometime in early '89?
A Uh-huh.
Q Well, when you got in the mail the instruction
booklet and the 1040 form, you went ahead -- and it's
offered into evidence. I think it's Government's Exhibit
No. 11, or thereabouts. You went ahead and filed a return,
did you not?
A Yes, sir, I did.
Q Well, why?
A Well, I was still thinking about all this. And
you know, I knew beyond a shadow of a doubt in my mind that
if the United States Supreme Court said it was an excise
tax, that was good enough for me. And we had all these
state supreme court cases that said that the income tax was
an excise tax. Then we had two government reports where the
government said it was an excise tax, from the Congressional
Research Service. I knew that for a fact.
Then I had studied and researched Mr. Carter's
material and had reproved that to myself, that there's no
section in the entire code that makes anybody liable, that I
can find. And I had looked up the mission statement and I
had gone to Mr. Avis's statement, it had come in, and it
said that it was voluntary. But I still wanted to prove and
reprove. You know, I knew all this, believed it in my
heart, that I didn't have to. But I went ahead and filed
that year. And then I decided that I'd give the Internal
Revenue Service an opportunity to tell me that I was wrong.
Q Let me stop you there before we move on to that
topic. Exhibit No. 3, when you got the '88 instruction
booklet in '89, I take it then you looked at it, at the
Privacy, Act notice?
A Yes, sir.
Q Okay. And you confirmed what you'd learned
earlier about the contents of that notice?
A Right.
Q Okay. And it mentioned just three Internal
Revenue code sections that dealt with the requirement to
file returns, right?
A Yes, sir.
Q So, that's where it fits in your overall
picture; is that correct?
A Right.
Q Now, let's say by at least April 15th, or
whatever the date is for 1989. April 16th. Who knows. But
that time you did file an '88 return?
A Yes, sir.
Q Correct?
A Sure did.
Q Well, what did you do the rest of the year of
'89?
A Well, I decided to write some letters to the
Internal Revenue Service.
Q Now, these letters on this point, the copies
that I have in these file folders are your letters. You
have your original letters up there, right?
A Yes, sir, sure do. And where I mailed them.
Q On Monday you made copies of those letters and
they're here, right?
A Right.
Q Now, let's take the very first letter that you
wrote.
A Okay.
Q And I'm going to call it Exhibit No. 9. Do you
need to look at this?
A No, sir, I've got it right here.
Q Okay. Now, is this a letter that you read -- I
mean that you wrote to certain people?
A Yes. This was the first letter I wrote, and I
sent it to the Department of the Secretary of Treasury in
Washington, the Commissioner of the Internal Revenue
Service, and I sent one to the district director in
Nashville.
Q And does this exhibit also have a letter from
the IRS back to you?
A It has a reply, yes, sir.
MR. BECRAFT: I'd move for the admission of 9.
THE COURT: I've got it listed here as 8. Oh,
this is a letter of July 27th?
MR. BECRAFT: Well, I should have, on my list,
Your Honor, I should've put correspondence.
Q What is the -- are these letters dated?
A This one was mailed July 27th.
Q Oh, okay. So Exhibit No. 9 is two letters that
you wrote in and a reply back?
A Yes, sir. And I'm not too good a typist, so I
left the date off of that particular one. But I do have my
certified return receipts that they got the letter.
Q so, you deposited it in the mail?
A Yeah. And then you get a green card back
saying they've signed that they received it.
THE COURT: Nine is received.
(Defendant's Exhibit 9 was received into
evidence.)
MR. BECRAFT: I'm going to work off of it, Your
Honor, and he's going to work off of his original.
BY MR. BECRAFT:
Q Now, tell the jury what you were doing by
these -- one is a letter to the Department of Treasury and
one is to the Commissioner of Internal Revenue. Why did you
write these letters?
A Well, I knew what I knew. But where I come
from, if you owe somebody money and they send you a bill and
you show them you don't owe it, then, you know, they got to
agree you don't. If they try to keep saying you owe it,
then that's wrong. That's the way I was raised.
So, I thought that the Internal Revenue Service
is supposed to be part of the United States government, and
that if I wrote them and explained to them who I was and my
situation, that they'd see since I knew it was an excise tax
and I knew there was no section in here that made anybody
liable, and it's voluntary, that they would see that I
wasn't a person that was liable and they'd tell me that.
And so I wrote the letter.
Q Can you describe for the jury, you know, just
summarize the contents of these two letters. were the
letters to the Department of Treasury and the commissioner
identical?
A Yes, sir.
Q Just changed the address?
A They're identical letters. I just sent them to
three different people.
Q Now, what did you state in these letters,
briefly?
A I told them who I was, where I was from, that I
was born and raised in Tennessee, that I worked in
Tennessee, worked in Tennessee all my life, that I didn't
have any licenses or privileges that I knew of. I did say
that I had applied for, years ago, and received, a social
security number that I was told I had to have. And then I
said, you know, could you help me understand, you know, from
my situation and my circumstances, I said, number one, given
my situation and circumstances, am I required to file a
federal income tax return? And then I put in one more
question. I said, "Is a native born Tennesseean, American,
required by any Tennessee, state or federal law to have a
social security number?" Because I was told when I got mine
you had to have one.
Q Did you receive a reply?
A Yes, sir.
Q Tell the jury what was in it.
A I received a reply back. And basically it said
that the current federal tax law enacted by Congress,
Internal Revenue Service Code Section 6012, and the code
provides that every individual whose gross income for tax
year equals or exceeds specified amounts must make a return
with respect to income tax. That's what it said.
There's 6012, you know, that Mr. Carter had
showed us, that I had looked at. It doesn't say anything
about anybody being liable. It just says you shall make a
return. And I know from some of our studies that the word
"shall" can be "may."
And I had asked them, I thought, very
specifically, given my situation and circumstances, am I
required to file a federal income tax return? I was
expecting a yes or no, but I didn't get one.
Q Now, Mr. Long, just for the benefit of the
jury, I notice you made a copy of this letter. And they've
got a rubber stamped date on here. It's kind of dim. I can
see August 25th. What's the year?
A August 25, '89.
Q That's the rubber stamp date on the letter?
A Yes, sir.
Q So, your question wasn't answered?
A No, sir.
Q What did you do next?
A Well, I wrote another letter.
Q Mr. Long, I have in my hand proposed Exhibit
No. 10, which is a letter, one to the district director,
you've got it notarized November 12th of '89; another one to
the commissioner, same date; another one to the Department
of Treasury, same date.
A Should be three.
Q And then some letters back to you?
A Right.
Q Now, do you have your originals there?
A I have the originals.
Q These are accurate copies of the letters you
mailed to the government and the reply that you got back,
which is dated October 31st of '89?
A It was mailed on the 11th. So, that's about
right.
Q I'm asking about the letter you received.
A Oh. Let me look. What does your date say?
Q What does yours say?
A This one says December 5th.
Q I'm looking at the copy I've made. Is there
one for October 31st of '89?
A Is this my second letter?
Q Yes.
A Are we confused here? Oh, okay. Yeah.
Q You flipped too far.
A I got it from two different people that time.
I got the same letter from two different people. But the
letter -- let me explain that. I got two answers that said
the same identical thing, you know. It was from, one was
from maybe the Secretary and one of them was from the
commissioner, but they were both written by Ms. Ruth Hill,
Chief of the Information and Campaign Branch.
Q You have a second letter you didn't make a copy
of?
A Yeah.
Q That says the same thing?
A Same identical thing.
MR. BECRAFT: Your Honor, I'd move for
admission of 10.
THE COURT: Is that 8?
MR. BECRAFT: Ten.
THE COURT: Ten is received.
(Defendant's Exhibit 10 was received into
evidence.)
BY MR. BECRAFT:
Q Now, Mr. Long, why did you write what, two or
three letters here?
A Yeah. I mailed them to three different people:
the commissioner and the Secretary and, I think, the
district director.
Q But the body of the letter in each one, three
different people, different address and different
greetings --
A Right.
Q But the body of the letter --
A Body of the letter is identical.
Q So, let's just cover one. You mailed it to
these three different people. What were you trying to
accomplish? Why were you writing these letters?
A Well, I wanted a clear answer. And I felt like
a native born Tennesseean deserves a clear answer. If
they're a service like they say they are, you know, they
tell us to call or write and they'll answer our questions.
So, I wanted a clear answer, yes or no.
Q Did you ask some questions in these letters?
A Yes, sir. I told them basically the identical
same thing, my situation, that I had never asked for or
received any kind of licenses or privileges that I knew of,
that I was just, I think in both of these I had said I am
exchanging my labor, contracting my labor with other
individuals for compensation of equal value. And then at
the bottom I asked them three -- well, it was kind of one
question but three parts. I said, "Am I required to file a
federal tax form of any kind? And if so, what type of
federal tax are you implying that I am liable for, and what
is the source of such a tax liability?"
Q Now, for the jury, quickly, have you got your
beliefs in this letter about the license and privilege, the
excise tax position that you have?
A Well, yes, sir, pretty much. I told them I
didn't have any licenses.
Q And when you say you asked the question about
what I am liable for, that's based upon what you had
understood about being liable for tax?
A Yes, sir.
Q So, this letter or these three letters are
premised upon, they're based upon your two positions?
A Yes, sir.
Q That it's an excise? You've got to be liable
for the tax to be required to file a return?
A Yes, sir.
Q Now, what, if any, reply did you receive?
A Well, I got a letter again from Ms. Ruth L.
Hill, Chief of the Information and Campaign Development
Branch.
Q You got two of them?
A They were both from her, but they were from,
you know, different people I sent the letter to. In other
words --
Q Different dates?
A Yeah. She sent it to me twice.
Q But beyond that, it was the identical letter?
A Identical letter.
Q So the jury, when they see this, they'll see
that both letters were identical?
A Right.
Q Okay. Now, what did you learn from this letter
that you received from Ruth L. Hill?
A Well, I got real excited about this letter
because in my previous one I think I had made the statement
that if they couldn't tell me, you know, yes or no, then I
was going to assume, you know, that I wasn't required or
wasn't liable.
Well, they wrote me back and said, "You cannot
presume or infer anything that we don't send you expressly
stated in our letters to you."
Well, now, a school teacher like myself, when
they taught us how to teach, we get a new class, they always
told us you, "Don't assume that they know anything, so you
start them at the bottom and come up." So, anything means
anything.
And they're telling me that I can't assume
anything here, and yet they go ahead then and say the
Internal Revenue Code Section 6012 refers to returns with
respect to income taxes as explained before, and goes on and
says that, says something to the effect that if I'm trading
services or whatever that I've got to file for the fair
market value or something of those services.
And then they go on and explain about Sections
1401 and 1402 of the self-employment stuff. And that wasn't
my questions at all. I'd told them my circumstances. And
there they were quoting Section 6012 again, "individuals
having gross income."
So, I didn't get a yes or no or any kind of
statement as to what my liability might be or anything.
Q Now, they sent to you, attached to that letter
is a couple of, one of these is labeled "Self-Employment
Tax"?
A Right.
Q Were you self-employed at the time?
A No, sir.
Q And how about this other document that's
attached to it?
A It was something about some kind of a revenue
law, about folks being in barter clubs and stuff. And I've
never been in a barter club in my life, you know. I'm just
contracting my natural occupation of common right with other
people for other property.
Q When you read the letter, did you have any
opinion or conclusion that you reached as to whether or not
the questions that you had asked had been answered?
A They hadn't answered my question.
Q What, if anything, did you do next?
A Well, I wrote them another letter.
Q The third letter?
A Right.
Q Now, I have -- you made, on Monday, I've got
copies of letters dated February 23rd, or at least there's
notary on them of February 28, I'm sorry, 1990, Mr. Long?
A I'm sorry?
Q This Exhibit No. 11?
A Right.
Q Is the third series of letters, right?
A Uh-huh.
Q I have in my hand -- you have the originals
there?
A Yes.
Q But three letters, and they're all notarized on
February 28, 1990. Are these letters that you wrote to the
Secretary, commissioner, district director?
A Right.
MR. BECRAFT: Your Honor, I would move for the
admission of 11, Defense Exhibit 11.
THE COURT: Received.
(Defendant's Exhibit 11 was received into
evidence.)
Q Now, Mr. Long, let's talk about why you wrote
this third set of letters.
A Why?
Q Yeah.
A Well, like I said, you know, I have heard the
IRS advertise, you know, "Call us and we'll be happy to
answer your questions." They've got this voluntary service,
they've got all this kind of stuff going on. They're
supposed to be a division of the United States government.
I'm a citizen. So, I'm wanting a straight answer, and I
believe I deserve a straight answer.
You know, they've got, I don't know how many
employees they got, I don't know how many lawyers they got.
You know, why won't they tell me yes or no? If that's what
Section 612 says, why can't somebody say, yeah?
So, I'm kind of a determined type of person.
Like I say, I dated my wife for six years before we got
married. I kind of hang in there, you know. So, I wanted
an answer.
Q Did you ask any questions?
A Yeah.
Q Were all the letters alike?
A Basically. Oh, yeah, they're all the
same again.
Q One is to the Secretary of the Treasury and one
is to the district director?
A Yeah.
Q And one is to ...
A The commissioner.
Q And one's to Nashville, right?
A Right.
Q Okay. Now, they're all alike?
A Right.
Q Okay. And you sent this letter to all three of
them to get an answer to what question?
A Well, I wanted to know if I was required to
file, you know, the questions I'd been asking basically.
And I think in this one they keep talking about these
individuals that have gross income. So, I think in this one
I asked them to tell me if I was an individual as defined in
the IRS code.
And let me read right here just a little bit.
I said that I appreciate them answering and telling me that
they do answer expressly in writing, and then the fact that
they told me I couldn't assume anything.
Let me just read this little portion right
here. It says, "You tell me in your letter that I cannot
presume or infer anything that is not expressly stated in
writing in your letters to me. Instead of saying expressly
yes or no, you appear to be avoiding my questions by stating
Section 6012 about individuals and gross income again. It
appears to me that you are trying to make me presume or
infer that I am one of these individuals that you refer to
in your letter. Therefore, would you please state to me
expressly in writing, 'Yes, Mr. Long, you're a native born
citizen of Tennessee, domicile therein, and having no
licenses or privileges issued by the federal government, are
an individual as defined in the IRS code.'" You know, yes
or no.
And then I said, "It also appears that you're
trying to make me assume that I'm self-employed." So, I
said, "If you cannot say to me expressly in writing, 'Yes,
Mr. Long, you, a native born citizen of Tennessee, domicile
therein, and having no licenses or privileges issued to you
by the federal government, are self-employed.'"
So, I put it in a way that I hoped they'd have
to answer. And then I said, "Since you are experts in this
field, and according to your letter you do state things
expressly in your letters to people, I am eagerly awaiting
your express statements as to my being an individual or
self-employed as defined in your IRS code."
I went on to say then, "However, if you cannot
or will not state positively and expressly that I am an
individual and am self-employed as defined in your IRS code
and the sections you refer to me in your letters within 15
days, I must expressly presume or infer that this is prima
facia evidence and that I am not an individual or
self-employed as defined in your IRS code and sections you
refer to me in your letters.
"In addition to answering the questions above,
please send me a copy of your order of authority given by
the Secretary of the Treasury to the commissioner of the IRS
granting him the authority to assess a tax or file a Form
1040 for a citizen of Tennessee, domicile therein."
Q Did you get an answer?
A No, sir.
Q Now, that was apparently decided February 28 of
1990. When did you mail it off, those three letters?
A It was mailed January 10, 1990.
Q That one?
A That one. The one you've got, yeah. Have you
jumped head of me?
Q The ones we just talked about.
A Yeah.
Q You notarized them on February 28, 1990. You
sent them certified mail?
A Right.
Q If you notarized it February 28, 1990, would
you have mailed it about that time?
A Something like that.
Q And did you have a return receipt showing they
received it?
A Yes.
Q Now, let's move on to the -- what letter is the
next one?
A Well, this is the same identical letter. Since
they didn't answer it, I just copied it again. I thought,
"Well, maybe they got lost or maybe they just didn't have
time to answer them." So, I sent the same letter to the
same people again. And this was, I'm showing it mailed
March 2, 1990. And it's got a typo on it. It was supposed
to be have been written January 9, '90, but I hit "12"
instead of 01."
MR. BECRAFT: (To the clerk.) Could you show
him this, please?
Q Now, that's Exhibits No. 12. You made copies
of --
A What we've done is I've got two sets of letters
in that other exhibit. This is the next one.
Q Okay.
A This is letter four.
Q All right. Is that the one that's...
A Yeah.
Q Okay. Letter four?
A Yeah.
Q Now, 12 that you've got there in front of you,
or proposed Exhibit No. 12, have you got your originals?
A Yes, sir.
Q You made copies of it, accurate copies?
A Right.
Q Those are letters you mailed to the IRS?
A Yes, sir.
MR. BECRAFT: Your Honor, I'd move for the
admission of 12.
THE COURT: Received.
(Defendant's Exhibit 12 was received into
evidence.)
BY MR. BECRAFT:
Q Mr. Long, you're at, in your book, those
particular ones?
A Right.
Q Could I get the exhibit back from you now?
A Sure.
Q Now we're on the same set of letters?
A Right.
Q Now, tell the jury what this is.
A Well, here again I keep trying to get answers.
And I mailed that other letter, the last letter twice and
got absolutely no reply. So, I decide, it's getting close
to filing time again, and so I decide, "Well, you know, I'm
not trying to hide nothing here. I'm trying to get some
straight answers from these folks."
So, by this time I've got my 1099s from Maury
County Board of Education and from Grower's and I think one
from the credit union. So, I make copies of all my 1099s.
I make a copy of my contract with Maury County. And I write
a little letter and I explain to them, I sent this to all
four -- let's see. Yeah. I sent one to the Secretary of
Treasury, the commissioner in Washington, to both district
directors in Tennessee. I sent, like I say, copies of
1099s, my contracts. And this was mailed on March the 7th.
Q Now, it's dated, my copy has there 2/27/90 at
the top of the page?
A Right.
Q And you signed it the 28th?
A Yeah.
Q Okay. February has got 28 days in it.
A Right.
Q And then you mailed it --
A I mailed it March the 7th.
Q Now, if the jury had this in front of them,
would all four of these letters, or however many we have
here, be identical?
A Right.
Q Except for who it's mailed to?
A Right. That's all.
Q This exhibit also has a one-page reply at the
very end?
A I believe that's correct.
Q Now, why did you mail this set of letters?
Let's talk about them all in a group.
A Well, here again, I'm trying to get straight
answers. I ain't trying to hide nothing. I'm just who I
am. I'm asking questions that I feel like need to be
answered, and I'm not getting answers.
So, you know, there's a lot of fear out here.
I know what I know. I believe what I know. But I want to
give the Internal Revenue Service, since they're such as a
service, a chance to correct me if I'm wrong; and at least
give them an opportunity to show their good faith.
So, I write, you know, it's the same letter.
And what I say is, "After inspecting the documents, please
answer this question for me. Would the dollar amounts shown
in Box 7 of the 1099 miscellaneous forms and the dollar
amount shown in Box 1 of the 1099 INT form, or any portion
of the dollar amounts in either of these forms, be
considered income as defined in the IRS code for me, a
native born citizen of the commonwealth of Tennessee,
domicile therein."
And I wrote on, I said, "If in your expert
opinion you feel that these dollars amounts would be
considered income as defined in the code for me, a native
born citizen of Tennessee, domicile therein, please answer
my question clearly and expressly, 'Yes, Mr. Long, for you,
a native born citizen of Tennessee, domicile therein, and
having had no licenses or privileges issued to you by the
federal government, the dollar amount shown in the boxes
that you mentioned and the dollar amount in Box 1 of the
1099 INT form, or portions of this amount, would be
considered income as defined in the IRS code and would
require you to file a IRS Form 1040.'"
Now, I wrote that so that -- and I wanted them
to come back and tell me yes. Then I said, "If you cannot
or will not answer me expressly yes, and in the manner
stated above, within 15 days of receipt of these documents,
then I must presume this to be prima facia evidence that the
dollar amounts on the 1099s herein are not income as defined
in the IRS code for me, a citizen of the state of Tennessee,
domicile therein." And then it's notarized.
Q Now, you sent it to what, three or four
different people in the IRS?
A Four. It went to the Secretary of the Treasury
too.
Q Now, you sent this letter, said the same thing,
and everybody qot copies of your 1099s?
A Right.
Q You've seen what the government showed you made
for 1989, right?
A Right.
Q Did you give to them everything in this letter?
You give them Maury County, you give them -- did they show
that there was anything more on their side of the case?
A No, sir. No, sir. It was identical to what I sent them.
Q So, what they showed you made during the course
of this trial for '89 is what you'd already given to them
sometime in the early part of '90?
A Right.
Q Now, did you receive a reply to this?
A Well, I got a reply back that they had received
my letter but that the documents weren't attached. This was
in Memphis. So, I mailed them again. I sent them to the
Memphis Service Center. And then this time I got, they sent
them back and stamped them where they had received them.
Q Okay. The first batch you mailed had the
exhibits attached to it?
A Yes, sir.
Q That was in March?
A March.
Q All right. Then when did you mail it to them
again?
A I don't know if I've got that date. They
received them April the 2nd.
Q The second set?
A Yes, sir.
Q What did you do? Did you make copies of it all
over again?
A Uh-huh.
Q And you just stuck that in the mail?
A Right.
Q So, twice Exhibit No. 12?
A Yes, sir.
Q Was mailed to them?
A Right.
Q Okay. Now, they received it by April 2nd?
A That's what it says, yes, sir.
Q Now, did you receive a reply?
A Finally got a reply, and it was dated Nay 15th.
Q What did you learn from this? Now, Ruth Hill
has already responded to you in the past, correct?
A Uh-huh.
Q Ms. Hill is also responding to this set of
letters?
A Right.
Q what did you learn by reading the letter that
she mailed back to you?
A Well, in this letter she goes to talking about
Section 61 of the code, about wages, salaries, and
compensation for services and all this kind of stuff being
included in gross income.
And she also states -- and this blew my mind.
Said the current federal tax law is the Internal Revenue
code which does not define the general term "income," that
income -- gross income, it says, not income, is the starting
point of determining an individual's federal income tax
liability.
Well, now, I'm an ol' country boy, folks. And
there's no definition of income in this whole book? And it
starts at gross income? Well, now, if you want to know what
a gross dog is, you've got to know what a dog is, don't you?
And then at Section 61 it says gross income is
all income. Well, if you don't define income in the first
place, how are you going to know what all income is? Then
you've got to go to gross income.
So, there's no definition for income in this
whole book, and yet they're out here collecting income taxes
everyday.
That blew my mind.
Q The answer that you got back?
A Yeah. No definition of income in the whole
code?
Q I've lost myself. This set of letters is what
you called the fourth set of letters?
A Yeah.
Q Now, I've got -- again on Monday you made
copies of the next set of letters?
A Right.
Q You have them in your book?
A Five. Yes, sir.
Q And you made copies of all the letters that are
in this packet of letters labeled Defendant's Exhibit Ho.
13? These are letters you mailed to the IRS?
A Yes, sir. Uh-huh.
MR. BECRAFT: Your Honor, I'd move for the
admission of 13.
THE COURT: Received.
(Defendant's Exhibit 13 was received into
evidence.)
THE COURT: Let's take a recess. We'll be in
recess for about ten minutes.
(Brief recess.)
MR. BECRAFT: May it please the Court.
BY MR. BECRAFT:
Q We were on Exhibit No. 13, Mr. Long. Are you
still at it?
A I believe so. It's probably my letter number
six.
Q Whatever it is. It's the one that's dated July
20th of '90 at the top of the page?
A Right.
Q Now, you made some letters and sent them to
what, the Department of Treasury, district director in
Memphis?
A Both district directors and then the
commissioner in Washington.
Q So, four letters?
A Four letters. They say the same thing.
Q And you mailed it to them sometime around the
date that it's stamped?
A Yes, sir.
Q What was that date?
A July 26th.
Q And it was received?
A Right.
Q Why did you mail this other set of letters?
A Well, I didn't get my reply back until, you
know, after the filing date, and it was beginning to get on
up close to the other one and I wanted an answer. They
still hadn't answered yes or no. They hadn't told me I was
required. They tell me there's no definition of income.
And I'd asked them to tell me that this was income, you
know, that would require me to file. They didn't do that.
So, I thought I'd write them again.
Q Can you summarize for the jury what you were
seeking by these letters that you wrote in July of '90?
A Well, let me just read the two. "Am I, Lloyd
R. Long, a native born citizen of Tennessee and domicile
therein, and having never applied for or received any
license or privilege from the federal government, liable for
any type of federal tax, income or otherwise? Simply yes or
no."
And the second one was, "Do the dollar amounts
represented on the 1099s bearing my name represent anything
other than an information return documenting an equal,
nontaxable exchange between two contracting parties? Yes or
no."
And then I went ahead to say, "If you cannot or
will not state simply, within 20 working days, then I must
assume that I'm not." Basically that's what I said.
Q Now, did you receive any answer or reply?
A No, sir, I didn't.
Q What did you do next?
A Well, I sent it again.
Q I don't know what we called this. I've got
some letters of January 14th of '91.
A That's it.
Q Is that the next set of letters?
A That's the next.
Q You've got the originals, your copies?
A I got them right here.
Q Monday you made copies of this?
A That's correct.
THE COURT: We need to move on here.
MR. BECRAFT: Okay, Your Honor. I move 14 to
be admitted.
THE COURT: Fourteen is received.
(Defendant's Exhibit 14 was received into
evidence.)
Q Can you briefly tell the jury what you were
trying to accomplish? What was the purpose of writing these
letters?
A Same purpose. I just wanted them to tell me
straight out. You know, I'm an ol' country boy. I've asked
a straight question expecting a yes or no answer and they
won't give me one, and they keep coming back with 6012 about
individuals and gross income. If that's what it says, why
can't they tell me yes? That's all I want to know.
Q Were you asking the -- the previous exhibit
that we've just admitted, is it basically the same thing as
this letter?
A Yes, sit. Yes, sir.