In the United States Court of Appeals
For the Eleventh Circuit
Atlanta, Georgia
________________________________________________________________________
No. 06-12817-J
_______________________________________________________________________
Warren Patriot,
Appellant
vs.
United States of America,
Appellee
________________________________________________________________________
On appeal from the United States District Court for the Middle District of Florida, Appellant, Barry, hereby enters this Brief in support of his Notice of Appeal filed May 5, 2006
________________________________________________________________________
Warren Patriot, pro se
Address
Table of Contents
Statement Requesting Oral Argument……………………….……………………..……. 1
Statement of Corporate Affiliations ………………………….…………………….……. 1
Statement of the Issues……………………………………………………………….…... 1
History of the Case……………………………………………………………………..... 2
Statement of the Facts ………….………………………………………………………... 3
Legal Arguments.. …………………….………………………………………………….. 8
Meaning of a “Hearing” in Law ……………………………………....….…………….. 10
Issue I: CDPH Requirements …………………………………………………………... 12
Issue II: Application of New Law: Schulz II ………..…………………….…………... 15
Issue III: IRS Violation of Law: "Paperwork Reduction Act"..…………………... …… 19
Issue IV: Subject Matter Jurisdiction in District Court …………………………... …… 21
Conclusion……………………………………………………………………………… 22
Certificate of Service…………………………………………………………………… 23
Exhibits A through F
Table of Authorities
Albright v. Oliver, 510 U.S. 266 [1994] ………………………………………………….Page 18
Amerada Petroleum Corp. v. Hester (1940), 109 P.2d 820, 821; 188 Okl. 394………….Page 11
Bell v. Burson, supra, at 540 ……………………………………………………………...Page 17
Carpenters’ District Council, Detroit, Wayne, and Oakland Counties and Vicinity, of the United Brotherhood of Carpenters and Joiners of America, AFL-CIO v. Cicci (1958), C.A.Mich, 261 F.2d 5, 8…………………………………………………………………………………..Page 11
D.B. Clayton and Associates v. McNaughton (1966), 182 So.2d 890, 891, 892 …….….. Page 11
Coe v. Armour Fertilizer Works, 237 U.S. 413, 423 ……………………………………..Page 17
Fiorella v. State (1960), 121 So.2d 875, 878; 40 Ala.App...…………………………….. Page 11
Fuentes v. Shevin, 407 U.S. 67, 80, 96-97 (1972) ………………………………………..Page 16
Goldberg v. Kelly, supra, at 267 ………………………………………………………….Page 17
Goss vs. Lopez, 419 U.S. 565, 580 [1975] ………………………………………………..Page 18
Hyman v. Muller, 62 A.2d 221, 223; 1 N.J. 124……………...…………………………...Page 12
Joint Anti-Fascist Committee v McGrath, 341 U.S. 123, 170 ………………………..….. Page 17
Joint Anti-Fascist Refugee Committee v. McGrath, 341 U.S. 123, 168 [1951] ………......Page 18
Joyce v. Bruckman (1939), 15 N.Y.S.2d 679, 681; 257 App.Div. 795………………....…Page 11
Keene v. Commissioner, 121 T.C. No. 2, July 8, 2003…………….………………………Page 4
Moran v. School Committee of Littleton (1945), 59 N.E.2d 279, 281; 317 Mass. 591 …...Page 12
Morrill vs. Jones, 106 U.S. 466……………….…………………......……….…………... Page 4
Morrissey v. Brewer, 408 U.S. 471, 481 [1972] …………………………………………..Page 18
Oklahoma Operating Co. v. Love, 252 U.S. 331, 333 (1920) …………………………….Page 15
Peterson v. Kreidich 139 Fed. Appx. 134 (11th Cir. 2005)………………..…………Page 14 & 15
Schulz v. IRS decision (a.k.a. Schulz II) by the Second Circuit Court of Appeals (413 F.3d 297, 95 A.F.T.R.2d 2005-3007, 2005 WL 152090, June 29, 2005) …………...……Page 3, 7, 15 & 16
Sniadach v. Family Fin. Corp. of Bay View, 395 U.S. 337, 342 (1969) ………………… Page 17
Wisconsin v. Constantineau, 400 U.S. 433 [1971] ………………………...……………..Page 17
Wisconsin Telephone Co. v. Public Service Commission (1939), 287 N.W. 122, 133, 135, 138, 143; 232 Wis. 274 .……………………………………………………………................. Page 11
IRC 6330 ……………………………………………………...……….…Page 3, 4, 5, 7, 14 & 22
IRC 6330 (a) (1)…………………………………………………………………………...Page 12
IRC 6330 (c) (1)…………………………………………………………………………...Page 12
IRC 6330 (c) (2)…………………………………………………………………………...Page 12
IRC 6330 (c) (2) (B) .……………………………………………………………………...Page 12
IRC 6330 (c) (3)…………………………………………………………………………...Page 12
IRC 6331 ………………………………………………………………………………….Page 3
IRC 7521 ………………………………………………………………………………….Page 4
IRC 7521 (a) (1) .………………………………………………………………………….Page 4
IRS’s Office of Chief Counsel’s Notice of May 29, 2003 (CC-2003-016) ………………Page 3
IRS Restructuring and Reform Act of 1998 [RRA 98] § 3707 ………………………...Page 7
IRS Restructuring and Reform Act of 1998, (Pub. L. No. 105-206, § 3401(b) 112 Stat. 685) ..…………………………………………………………….……………………………Page 8
5 U.S.C. § 702 …………………………………………………………………….……Page 21
26 USC 6320(b) & 6330(b) ………………………………………………………….Page 2 & 19
26 U.S.C. 6330 …………………………………………………………………………....Page 7
28 U.S.C. §§ 1331, 2201 ………………………………………………………………….Page 21
28 U. S.C. Section 1391 ..…………………………………………………………………Page 21
44 U.S.C. 3500 – 3520 “Paperwork Reduction Act” ..…………………………….……...Page 19
Black’s Law Dictionary ……………………………………………………………………………Page 10
To the Commissioner, Internal Revenue Service (1966), 1966 WL 1798 (Comp. Gen.), 45 Comp. Gen. 654 ……………………………………………………………………...…………... Page 11
H.R. Conf. Rep. No. 105-599 at 263 [1998]………………………………………………Page 8
Corpus Juris Secundum …………………………………………………………………...Page 10
Publication 17 …………………………………………………………………………….. Page 4
Reisman, 375, 2 U.S. at 446; Ex parte Young, 209 U.S. 123, 147-48 (1908)…………….. Page 15
In re Securities and Exchange Commission (1936), C.C.A.N.Y. 84 F.2d. 316, 318 ….…. Page 11
Statement Requesting Oral Argument
Appellant requests oral argument due to the important, unusual, and first impression nature of this case and the constitutional issues involved. Appellant believes this Appeals Court’s understanding of the issues and facts would be assisted by oral argument.
Statement of Corporate Affiliations
Appellant does hereby certify that neither party is a publicly held corporation. No business or corporation has an interest in this case or the outcome of this appeal.
Statement of the Issues
1. Appellant was denied a face-to-face hearing in violation of the intention of Congress, even
though Appellant followed the correct procedure in requesting one.
2. Appellant requires judicial review of IRS actions
3. Appellant was denied his right to raise a complete defense as provided in the "Paperwork Reduction Act"
4. Subject matter jurisdiction in District Court is appropriate with this case.
History of the Case
In response to Appellant’s request for a Collections Due Process Hearing (hereinafter referred to as: “CDPH” or “CDP hearing”), the Internal Revenue Service (hereinafter referred to as IRS) issued its Notice of Determination on August 9, 2005 (attached and made a part hereof as Exhibit A). The Notice of Determination was related to form 1040 for years 2000, 2001 and 2002, and the IRS said that any appeal was to be directed to U.S. Tax Court. Due to the violation of Appellant’s Due Process rights, guaranteed under the United States Constitution, Appellant took the issues to U.S. District Court for the Middle District of Florida from which it is currently being appealed to this Appeals Court.
On April 15, 2005, Appellant, Patriot, timely requested a CDP hearing from the IRS which is guaranteed to him in 26 USC 6320(b) & 6330(b) both of which sections are captioned: “Right to fair hearing”. Patriot, timely filed a second request on April 27, 2005. Patriot filed an amended request for a CDPH on July 26, 2005, whereby he took positions which should have been acceptable to IRS and which Appellant copied right out of IRC 6330 (attached and made a part hereof as Exhibit B).
The face-to-face hearing was never granted. On August 29, 2005, Patriot sued in U.S. District Court for the Middle District of Florida, case no. 2:05-cv-527-FtM-33SPC (Judge Virginia M. Hernandez Covington). The case was dismissed on April 19, 2006 by Judge Virginia M. Hernandez Covington, granting the Motion to Dismiss by the United States. Patriot’s Motion for Reconsideration was filed on April 25, 2006, and subsequently denied in less than twenty-four (24) hours, on April 26, 2006, from which this appeal springs.
Statement of the Facts
1. In 1998, the Congress passed a new law which granted taxpayers embroiled in the IRS
collections process, the statutory right to a Collection Due Process Hearing. Once the Request
Form was timely submitted, all of the IRS collection efforts were to be put on hold. Also, the
taxpayer was entitled to a hearing for certain purposes. This case involves new law (Schulz II),
failure to schedule an in-person hearing, IRS procedural peccadilloes, and illicit abuse of
power, etc. The determinations of the IRS were issued unlawfully, as the following statements
will show.
2. In July, 2005, Patriot received two letters, both dated July 20, 2005, from an IRS Settlement
Officer located in Tampa, Florida. One letter included the language “Please notify me no later
than July 28, 2005 of your preference for a telephone, correspondence or conditional face to
face hearing” (attached and made a part hereof as Exhibit C). The second letter included the
language “I have scheduled a telephone or correspondence conference for you on August 3,
2005 at 1 p.m.” (attached and made a part hereof as Exhibit D). The “hearing” concerned
whether or not the United States could legally seize Patriot’s property pursuant to Internal
Revenue Code (hereinafter referred to as IRC) Section 6331, even though no court order, writ
of garnishment or writ of attachment had ever been issued by any court of law with respect to
any of Patriot’s property. The hearing would also be used as a means to discuss any proposed
payment schedule or collection alternatives.
a) On August 2, 2005, Patriot, again, requested in writing for the fourth time, that the hearing be a face-to-face hearing (attached and made a part hereof as Exhibit E). Although receipt
was acknowledged, the August 2, 2005 request was ignored. IRC 6330 provides that the
CDP hearing must be convenient to the taxpayer. As the IRS’s Office of Chief Counsel’s
Notice of May 29, 2003 (CC-2003-016), updating the Collections Due Process Handbook,
provides: “If a taxpayer requests a face-to-face meeting, the regulations provide that he or
she should be offered one at the appeals office closest to his or her residence” (page 11).
b) The IRS and Department of Justice have cited Treasury Regulations in defense of its use of
a correspondence hearing instead of a face-to-face hearing. However, the Treasury
Regulations are not law. The Collection Due Process Hearing is not similar to the
Collections Appeal Program that the IRS used to have earlier. The former is an act of
Congress, while the latter was a mere internal procedure.
Congress did not intend that the Treasury Department should be able to trample on the rights of citizens by modifying the law to suit IRS needs best.
3. In his requests for the CDPH, Patriot stated that he intended to make a tape recording of the
meeting pursuant to IRC section 7521 and Publication 17, as well as have witnesses present.
a) Appellant timely submitted a request to make an audio recording of the CDP hearing. Patriot
was also denied his right under the law to make an audio recording of the meeting by virtue
of the fact that a face-to-face hearing was summarily denied by the Settlement Officer. IRC
section 7521 states in relevant part, “Any officer or employee of the Internal Revenue
Service in connection with any in-person interview with any taxpayer relating to the
determination or collection of any tax shall, upon advance request of such taxpayer, allow
the taxpayer to make an audio recording of such interview” (Morrill vs. Jones, 106 U.S.
466).
b) In Keene v. Commissioner, 121 T.C. No. 2, July 8, 2003, the U.S. Tax Court said,
“Accordingly, we hold that, pursuant to section 7521(a)(1), Keene is entitled to audio record
his IRC 6330 hearing with the Appeals Office.” Patriot’s CDP hearing was not held—in
violation of law—and the subsequent determination from the “hearing that never happened”
should thus be set-aside on this basis alone.
4. Patriot has collection alternatives. He has a wife with a terminal illness to support. At a bona
fide hearing, Patriot would have had a right to set forth collection alternatives. However, the
settlement officer would not hear it, and thus violated Patriot’s rights. Therefore the IRS should
be required to facilitate a full and complete CDPH.
a) The government has claimed that Patriot did not propose a viable collection alternative
proposal or submit a “Collection Information Statement”. But by saying so, the IRS is
making up requirements that were not mandated by Congress, forcing Patriot to appeal to
the judiciary. The fact is that Patriot did request collection alternatives on the application
for his CDPH and in his other related correspondence. The term “collection alternatives”
was used several times.
b) IRC 6330 does not say that tax returns for all years have to be filed in order to get a
CDPH. Furthermore, there are no pre-conditions other than requesting the CDPH within
the specified time period, which Patriot did. Thus, the IRS is simply disobeying
Congressional law.
5. In IRC 6330, Congress said that Patriot is entitled to a CDP hearing, but he did not get one.
Instead, the IRS illicitly scheduled a “telephone hearing”. Congress meant the CDPH would
be a face-to-face meeting. Hence, the IRS is viciously denying Patriot’s rights, because a
“hearing” was never held. Patriot was obviously not present—even though he had made a
timely request for a face-to-face hearing on several occasions.
6. Patriot seeks to secure judgment in his favor to at least remand this case to the District Court
for a new trial and decision, granting Patriot his CDP hearing. Patriot is being pummeled by
vicious behavior and recalcitrance of the IRS, coupled with the failure of the District Court to
hear Patriot’s issues, and thus seeks relief in this Appeals Court. Unless admitted, Patriot denies
all allegations of the IRS against him.
The four main issues before this Appeals Court deal with the following:
§ The IRS has denied Patriot a face-to-face hearing in violation of the intention of Congress in 26 U.S.C. 6330, even though Patriot followed the correct procedure in requesting one. Patriot has had no opportunity to raise issues discounting his alleged tax liability and the IRS is stonewalling by trying to make the liability stick without a CDPH. Thus, the IRS is still abusing its power, even though Congress tried to prevent this abuse by passing the Taxpayer’s Bill of Rights II legislation (IRS Restructuring and Reform Act of 1998 [RRA 98] § 3707).
§ The judicial review issue which was elevated in the Second Circuit’s Schulz II decision (Schulz v. IRS, 413 F.3d 297, 95 A.F.T.R.2d 2005-3007, 2005 WL 152090 (June 29, 2005) must be addressed. The IRS is the last major bureaucracy in the federal government that heretofore did not have its efforts against citizens subject to judicial review. Schulz II changed that fact. The IRS is now trying to squirm away from the Schulz II decision, by wrongly ascribing the first ruling in Schulz v. IRS known as Schultz I to the reaffirmation ruling known as Schulz II.
§ Appellant Patriot was denied his right to raise a complete defense as provided in Section 3512 of the "Paperwork Reduction Act" (PRA) 44 U.S.C. 3500 – 3520.
§ Appellee violated Appellant’s constitutional rights by denying Appellant ‘due process’ when he was refused a ‘face-to-face’ CDP hearing. Therefore, Appellant correctly filed his complaint in the District Court because jurisdiction regarding the case at bar, is clearly delegated to District Court via numerous congressional laws.
Legal Arguments
Legal scholars have been critical of the CDPH process as carried out by the IRS. An appeals officer who is uninvolved in the case is supposed to oversee the process to insure that IRC procedures related to the case have been followed. The purpose of the Internal Revenue Service Restructuring and Reform Act of 1998, (Pub. L. No. 105-206, § 3401(b) 112 Stat. 685), was to establish formal procedures designed to ensure due process where the IRS seeks to collect taxes by levy (see H.R. Conf. Rep. No. 105-599 at 263 [1998]). Prior to that legislation, in the Hearings before the Senate Committee on Finance (1997), 105th Cong., 1st Sess. 1-357, legislators expressed “extreme dissatisfaction with the functioning of the IRS” including “inflammatory testimony detailing alleged abuses of the IRS and its practices”. The CDPH statute was intended to rectify IRS abuses.
However, many legal scholars and politicians have been concerned that IRS abuses have been, and continue to be, prominent features of the landscape of American tax policy. Leslie Book, Professor of Law and Director of the Federal Tax Clinic at Villanova University School of Law, wrote the 2000 article, “The New Collection Due Process Taxpayer Rights” (86 Tax Notes 1127, 1132) describes the CDPH process as a “maze”. Senator William Roth, Jr. (R-DE) called the IRC “a mine field for most Americans, and even too complex to be efficiently and consistently administered by the Internal Revenue Service” (cited in Bryan T. Camp, a Professor at Texas Tech University, School of Law, and former 8 year employee of the IRS, [2004], “Tax Administration as Inquisitorial Process and the Partial Paradigm Shift in the IRS Restructuring and Reform Act of 1998”, 56 Fl. L. Rev. 1, 84). Further scholarly criticism of the CDPH process is found in Diane L. Fahey, Professor of Law with her LL.M. in taxation, currently visiting New York Law School (2003), “The Tax Court’s Jurisdiction Over Due Process Collection Appeals: Is it Constitutional?” (55 Baylor L. Rev. 453), and Leslie Book (2004), The Collection Due Process Rights: A Misstep or a Step in the Right Direction? (41 Houston L. Rev. 1145).
Moreover, in another scholarly article, Danshera Cords, former attorney-adviser to Honorable Maurice B. Foley of the U.S. Tax Court in Washington, D.C., has argued that the intent of Congress in the Internal Revenue Service Restructuring and Reform Act related to CDPH procedure has not been carried out—especially since the IRS has chosen to hold “equivalent hearings” instead of in-person hearings—creating pejorative circumstances for taxpayers that constitute a “slippery slope” that leads to “undercutting congressional intent”. Thus, some scholars have called the CDPH statute merely “symbolic legislation” on account of the non-meaningful way in which it is carried out by the IRS, Danshera Cords (2004), 29 Vt. L. Rev. 51, 104-108 and fn 3, 40, 97, 275-277; also see Pamela H. Kesner, Tax Attorney (2001), “Determining the meaning of a Meaningful Collection Due Process Hearing: Katz v. Commissioner” (54 Tax Law. 823). In a related article, Cords comments that while the delays caused by CDP hearings and judicial challenges have been significant, “the CDP provisions have been identified as among the most important provisions of RRA 1998” (Danshera Cords [2005], “Collection Due Process: The Scope and Nature of Judicial Review”, 73 U. Cin. L. Rev. 1021, 1022). The decisions of virtually every other federal bureau that directly impact American citizens are subject to judicial review. Why shouldn’t the IRS’s summonses, levies, etc. likewise be subject to judicial review?
Meaning of a “Hearing” in Law
According to Black’s Law Dictionary, “hearing” means a “Proceeding of relative formality, generally public, with definite issues of fact or of law to be tried, in which parties proceeded against have a right to be heard, and is much the same as a trial and may terminate a final order.” Standard English dictionaries provide: “an opportunity to state your case and be heard…..[by means of] the act of hearing attentively”; “To listen to in an official, professional, or formal capacity”; “An opportunity to be heard”; “A preliminary examination of an accused person”; “A session, as of an investigatory committee or a grand jury, at which testimony is taken from witnesses”; “a proceeding of relative formality at which evidence and arguments may be presented on the matter at issue to be decided by a person or body having decision-making authority”.
1) One dictionary annotation provides: “The purpose of a hearing is to provide the opportunity
for each side of a dispute, and esp. a person who may be deprived of his or her rights, to
present its position. A hearing, along with notice, is a fundamental part of procedural due
process. Hearings are also held, as for example by a legislature or an administrative agency,
for the purpose of gathering information and hearing the testimony of witnesses.” A fair
hearing is “a hearing that is conducted impartially and in accordance with due process and for
which the Respondent has reasonable opportunity to prepare, the assistance of counsel, the
right to present evidence, the opportunity to cross-examine adverse witnesses, and often the
right to a jury.”
2) Corpus Juris Secundum says that a hearing “contemplates an opportunity to be heard”, as one
examines, explains, or refutes any evidence presented, and requires the privilege to be present
and “the right to present one’s contentions and to support the same by proof and argument.”
“It must be fair in all respects and not be a mere form to precede a predetermined result.”
There is to be “a listening to facts and evidence for the sake of adjudication.”
Even the IRS has recognized that hearings are face-to-face in discussing whether to
reimburse the expenses of those traveling to personally present evidence before its
examiners, see To the Commissioner, Internal Revenue Service (1966), 1966 WL 1798
(Comp. Gen.), 45 Comp. Gen. 654.
3) The idea of having an audible, face-to-face hearing is well-established in case law and the
precedents regarding what constitutes a hearing have been continued and cited for decades.
One of the essential characteristics about a “hearing” is the right to be heard, Wisconsin
Telephone Co. v. Public Service Commission (1939), 287 N.W. 122, 133, 135, 138, 143; 232
Wis. 274. A hearing is a formal procedure where evidence may be adduced by both parties
and where all have a right to be heard, In re Securities and Exchange Commission (1936),
C.C.A.N.Y. 84 F.2d. 316, 318. Both parties must be able to adduce proof and argue
inferences from evidence (1966), D.B. Clayton and Associates v. McNaughton (1966), 182
So.2d 890, 891, 892, and this must be done in person or by counsel, Fiorella v. State (1960),
121 So.2d 875, 878; 40 Ala.App. 587. In a hearing, the officer who makes determinations
must consider and appraise the evidence presented, Joyce v. Bruckman (1939), 15 N.Y.S.2d
679, 681; 257 App.Div. 795.
4) An “opportunity to be heard” or hearing contemplates a listening to the facts and evidence for
the sake of adjudication, Amerada Petroleum Corp. v. Hester (1940), 109 P.2d 820, 821; 188
Okl. 394. A hearing embodies the right to be heard on the controverted facts and on the law,
Carpenters’ District Council, Detroit, Wayne, and Oakland Counties and Vicinity, of the
United Brotherhood of Carpenters and Joiners of America, AFL-CIO v. Cicci (1958),
C.A.Mich, 261 F.2d 5, 8. Furthermore, there is no hearing when the affected party does not
know what evidence is offered and considered, and has no opportunity to test, explain, or
refute it, and any subsequent finding without evidence is “arbitrary and baseless” (1948),
Hyman v. Muller, 62 A.2d 221, 223; 1 N.J. 124 and, similarly, Moran v. School Committee of
Littleton (1945), 59 N.E.2d 279, 281; 317 Mass. 591. The IRS is viciously denying Patriot his
right to a genuine hearing.
Issue I: CDPH Requirements
The establishment of the CDPH was enacted by Congress as a result of disclosures emanating from the Senate Finance Committee’s 1997 investigation of the Internal Revenue Service. That investigation revealed widespread, lawless IRS seizures of property, and extensive violations by the IRS of taxpayers’ rights.
a) IRC 6330 (a) (1) provides, in pertinent part, that “No levy may be made on any property or
right to property of any person unless the Secretary has notified such person in writing of
their right to a hearing under this section before such levy is made.”
b) IRC 6330 (c) (1) provides “The appeals officer shall at the hearing obtain verification from
the Secretary that the requirements of any applicable law or administrative procedure have
been met.”
c) IRC 6330 (c) (2) provides that “The person may raise at the hearing any relevant issue
relating to the unpaid tax or the proposed levy…”
d) IRC 6330 (c) (2) (B) provides that “The person may also raise at the hearing challenges to
the existence…of the underlying liability” if the person “did not receive any statutory notice
of deficiency for such tax liability…”
e) IRC 6330 (c) (3) specifically states (in pertinent part) that the “determination by an appeals
officer under this subsection shall take into consideration?(A) the verification presented
under paragraph (1).”
(1) Requirement of investigation
The appeals officer shall at the hearing obtain verification from the Secretary that
the requirements of any applicable law or administrative procedure have been met.
f) Insofar as the regulations are concerned, Patriot contends that the IRS is far too generous in
granting itself wide authority to alter the statute passed by Congress or to create new law
through regulations. The regulations are supposed to clarify or amplify the statute (or fill in
the gaps) rather than replace or counter it. It is simply not fair for the IRS to bring up secret
regulations that no one knows about and then to attempt to hold people accountable to those
clandestine rules.
g) Congress set forth three preconditions for Patriot’s CDPH:
· Patriot must make a request
· Patriot must make a request in a timely manner, and
· Patriot must state the purpose of the hearing which includes collection alternatives,
procedure irregularities, spousal relief, and tax liability in some cases
If Congress wanted to set forth other preconditions that the IRS claims must be met, then why did they not so indicate in the statute? Patriot complied with each of the three items set forth by Congress. The IRS has additional preconditions for a CDPH, viz. that a taxpayer is not to raise political, constitutional and religious concerns. Patriot complied with these preconditions too. So why is Patriot being harassed by the IRS and denied his right under the statute of a face-to-face hearing?
h) Furthermore, Congress did not specify that tax returns for subsequent years be filed as a
precondition for a CDPH.
i) The IRS illegally and wrongfully withheld a CDPH from Patriot and the IRS violated Patriot’s
statutory rights and administrative due process right to appear at a CDPH. Patriot disagrees
with all of the Notice of Determination.
The law says that Patriot is entitled to a face-to-face hearing if the request is made within the
time period and if there are procedural irregularities or questions about the underlying tax
liability. Patriot’s request met these requirements.
Hence, these legal proceedings revolve around Appellant Patriot’s proposed remedy of forcing the IRS to grant Patriot a face-to-face CDP hearing. Patriot was denied this hearing, even though he properly requested collection alternatives within the thirty (30) day period specified by Congress.
j) The Judge in the District Court case cited, Peterson v. Kreidich 139 Fed. Appx. 134 (11th Cir.
2005), in support of her position, stating that the case was similar. Appellant recognizes that
the aforementioned case may be useful in adjudicating cases similar to this one. However, the
pertinent issues in Patriot’s case are different than this one because Patriot did follow the correct
procedures to get an in-person (or face-to-face) hearing. Peterson did not timely request a
CDP hearing and therefore was only entitled to an “equivalent hearing” which is not subject to
judicial review. Patriot timely filed his request for a CDPH whereby he took positions which
were acceptable to the IRS and copied right out of IRC 6330. Therefore, Patriot is entitled to a
proper face to face CDPH. Further, the court found that Peterson was required to file his
appeal in tax court because the tax court has jurisdiction over income tax liability. This appeal,
nor the District Court case from which it springs, is not about income tax liability, it is about
due process and the denial of Patriot’s constitutional rights. Appellant Patriot was denied an in-
person CDPH.
Accordingly, we conclude from the record that the district
court did not err in dismissing Peterson's complaint for
lack of subject matter jurisdiction because (1) with respect
to tax year 1993, he was entitled to only an equivalent hearing
because he did not timely request a CDP hearing, and a taxpayer
is not entitled to judicial review of a decision following an
equivalent hearing; and (2) with respect to tax years 1994 and
1995, Peterson was required to file his appeal in tax court
because the tax court has jurisdiction over income tax liability,
the underlying tax liability in his case.
139 Fed.Appx.134,95 A.F.T.R.2d 2005-2416,2005-1 USTC P 50,356
In the Appellant’s case in U.S. District Court, the court erred in its interpretation of Peterson v. Kreidich since it was not applicable to Appellant, and now the issue is before this Appeals Court to decide what the law means. Congress has not placed preconditions for exercising one’s right to a CDPH. The IRS has unilaterally held that Patriot is out of compliance, but Congress has not said so.
Issue II: Application of Case Law: Schulz II & Others
Patriot points out the important recent Schulz v. IRS decision (a.k.a. Schulz II) by the Second Circuit Court of Appeals (413 F.3d 297, 95 A.F.T.R.2d 2005-3007, 2005 WL 152090, June 29, 2005).
1) In Schulz II, the Appellate Court held:
The rule of due process upon which we relied in Schulz I, and upon which we
rely now, can be stated thus: any legislative scheme that denies subjects an
opportunity to seek judicial review of administrative orders except by refusing
to comply, and so put themselves in immediate jeopardy of possible penalties
“so heavy as to prohibit resort to that remedy,” Oklahoma Operating Co. v. Love,
252 U.S. 331, 333 (1920), runs afoul of the due process requirements of the Fifth
and Fourteenth Amendments. This is so even if “in the proceedings for contempt
the validity of the original order may be assailed.” Id. 1 at 335; see also Reisman,
375, 2 U.S. at 446; Ex parte Young, 209 U.S. 123, 147-48 (1908). [Bold emphasis added]
In saying “any legislative scheme” and specifying “administrative orders”, the Court broadened its ruling to include not only IRS summonses but also all other IRS administrative edicts.
a) On account of Schulz II, the IRS must comply with the judicial decisions set forth for other
institutions that attempt to collect debts. The debtor is entitled to an independent judge to
scrutinize the enforcement activities of all collection agencies. Accordingly, Patriot filed suit
in District Court in an attempt to procure independent judicial review of the administrative
action taken against him by the IRS. As previously noted, Patriot was denied that judicial
review when the District Court Judge dismissed the case.
b) Until Schulz II, the IRS has been able to conduct seizures without judicial review. The
recent ruling changed how the IRS must comply with judicial review, including how it
conducts CDP hearings. Now the IRS too is finally constrained by the “fundamental
principles of due process” ad its seizure attempts are subject to review by the independent
judiciary in order to protect the rights of citizens.
3) The seizure actions of virtually all other federal agencies are subject to judicial review. A
hearing must be held prior to the agency seizing a man’s property. In Fuentes v. Shevin, 407
U.S. 67, 80, 96-97 (1972), the U.S. Supreme Court recognized “the right to a prior opportunity
to be heard before chattels are taken from their possessor.”
The appellees do not suggest that these [contractual] provisions waived the
appellants’ right to a full post-seizure hearing to determine whether those
events had, in fact, occurred and to consider any other available defenses.
By the same token, the language of the purported waiver provisions did not
waive the appellants’ constitutional right to a pre-seizure hearing of some
kind...We hold that the Florida and Pennsylvania prejudgment replevin
provisions work a deprivation of property without due process of law insofar
as they deny the right to a prior opportunity to be heard before chattels are
taken from their possessor...Since the essential reason for the requirement
of a prior hearing is to prevent unfair and mistaken deprivations of property,
however, it is axiomatic that the hearing must provide a real test. “[D]ue
process is afforded only by the kinds of ‘notice’ and ‘hearing’ that are aimed
at establishing the validity, or at least the probable validity, of the underlying
claim against the alleged debtor before he can be deprived of his property...
”Sniadach v. Family Finance Corp., supra, at 343 (Harlan, J., concurring).
See Bell v. Burson, supra, at 540; Goldberg v. Kelly, supra, at 267.
4) In Sniadach v. Family Fin. Corp. of Bay View, 395 U.S. 337, 342 (1969), the U.S. Supreme
Court addressed “the issue of whether a post-seizure hearing is meaningful in terms of due process and deciding that a pre-deprivation notice and opportunity to be heard is necessary absent an important governmental or public interest to the contrary [—i.e., under special circumstances]”:
Recent investigations of the problem have disclosed the grave injustices
made possible by prejudgment garnishment whereby the sole opportunity
to be heard comes after the taking [as noted by Congressman Sullivan,
Chairman of the House Subcommittee on Consumer Affairs who held
extensive hearings on this and related problems]...Thus, the U.S. Supreme
Court ruled that where the taking of one’s property is so obvious
[, egregious, and sinister in effect], it needs no extended argument to
conclude that absent notice and a prior hearing (cf. Coe v. Armour
Fertilizer Works, 237 U.S. 413, 423) this prejudgment garnishment
procedure violates the fundamental principles of due process [Sniadach, supra].
5) The Due Process Clause of the Constitution forbids arbitrary deprivations of liberty, and the
U.S. Supreme Court has been careful to protect citizens from abuse by government agencies.
“Where a person’s good name, reputation, honor, or integrity is at stake because of what the
government is doing to him” (Wisconsin v. Constantineau, 400 U.S. 433 [1971]), the minimal
requirements of the Clause must be satisfied. “[F]airness can rarely be obtained by secret,
one-sided determination of facts decisive of rights....” (Joint Anti-Fascist Committee v.
McGrath, 341 U.S. 123, 170). “Secrecy is not congenial to truth-seeking and self-
righteousness gives too slender an assurance of rightness. No better instrument has been
devised for arriving at truth than to give a person in jeopardy of serious loss notice of the case
against him and opportunity to meet it” (Goss vs. Lopez, 419 U.S. 565, 580 [1975]) “Whether
any procedural protections are due depends on the extent to which an individual will be
‘condemned to suffer grievous loss.’” (Joint Anti-Fascist Refugee Committee v. McGrath, 341
U.S. 123, 168 [1951]; cf. Morrissey v. Brewer, 408 U.S. 471, 481 [1972]. “[T]he Fourth
Amendment “balance between individual and public interests always has been thought to
define the ‘process that is due’ for seizures of person or property” (Albright v. Oliver, 510 U.S.
266 [1994]).
6) Patriot therefore, requests independent judicial review of IRS’s enforcement actions. The
courts have a long string of cases requiring a judicial intervention under the due process
clause prior to state action being taken against a citizen. Therefore, this Court should schedule
a hearing to review or scrutinize the intended IRS police state activities.
7) Patriot, additionally, seeks judicial review of the IRS tax assessment under the due process
clause of the United States Constitution. No government agency can take any action against
any citizen absent judicial intervention. Government agents are not allowed into people’s
homes or people’s pocketbooks without review by the independent judiciary.
8) The IRS is always trying to put itself above the law, and this case provides an example of their
abuse. Patriot should not have to jump through the IRS’s self imposed hoops. Their barriers
are unlawful and self-serving, going beyond what Congress has enacted.
9) Furthermore, what would the IRS have Patriot to do? Does it really want the inefficiencies of
Patriot filing form 1040 “zero” tax returns for years in which he had no tax liability. But
everyone knows that the IRS is not happy with so-called “zero” returns so why would they
want them from Patriot? The hypothetical exercise noted here is simply used to make a point.
Patriot contends, of course, that he has had no tax liability to report on a Form 1040.
10) How can it be possible for a taxpayer to have witnesses present at his CDP hearing by means
of a correspondence hearing? In order for witnesses to be present, there must be a face-to-
face hearing. The elected representatives of the people intended a face-to-face hearing when
writing the CDPH legislation because they did not exclude the presence of witnesses.
Likewise, the courts have permitted tape recording of such hearings which require a face-to-
face meeting.
Issue III: IRS Violation of Law: "Paperwork Reduction Act"
Appellant, Patriot, timely requested a CDP hearing from the IRS which is guaranteed to him in 26 USC 6320(b) & 6330(b) and was told he did not qualify for a face to face hearing, in part, because he failed to provide Form 1040 tax returns for years 2001, 2002, 2003, and 2004. In fact, this entire action perpetrated by the IRS, is derived from Patriot’s original failure to file Form 1040 for the years in question.
a) In Section 3512 of the "Paperwork Reduction Act" (PRA) 44 U.S.C. 3500 – 3520, titled
"Public Protection," it says that no person shall be subject to any penalty for failing to comply
with a collection of information (such as a 1040 form), if the request does not display a valid
control number assigned by the Office of Management and Budget (OMB) in accordance with
the requirements of the Act, or if the agency fails to inform the person who is to respond to the
collection of information that he is not required to respond to the collection of information
request unless it displays a valid control number.
b) In Section 3512 Congress went on to authorize that the protection provided by Section 3512
may be raised in the form of complete defense at any time during the agency administrative
process (such as an IRS Tax Court or a Collection Due Process Hearing) or judicial action
applicable thereto (such as this case).
c) The IRS Individual Form 1040 has not and cannot comply with the requirements of the PRA
because no existing statute authorizes the IRS to impose or collect the federal income tax
from individuals. That lack of bona fide authority makes it impossible for IRS to avoid
violating the PRA.
d) Any information collection form, such as IRS Form 1040, which lacks bona fide statutory
authority or which conflicts with the Constitution, cannot be issued an OMB control
number. If a control number were issued for such a form, the form would be invalid and of
no force and effect.
e) IRS Form 1040 violates the federal Paperwork Reduction Act (PRA) and is therefore a legally
invalid form. Under the Public Protection clause of the PRA, no person can be penalized for
failing to file a 1040 if the IRS fails to fully comply with the PRA.
f) The OMB appears to have been complicit with IRS in deceiving the public and in helping
perpetuate the 1040 fraud by promulgating federal regulations that negate the plain language
of the PRA laws passed by Congress and by allowing the IRS to continually skirt the explicit
requirements of those statutes
g) Under the facts and circumstances of the last 24 years, it is safe to say that IRS Form 1040 is
a fraudulent, counterfeit, bootleg form. Government officials responsible for this fraud
should be investigated and face indictment for willfully making and sponsoring false
instruments. These are the same public servants that swear or affirm that they will support
and defend the Constitution of the United States.
In summary, the PRA requires that all government agencies display valid OMB control numbers and certain disclosures, directly on all information collection forms that the public is requested to file. Patriot was not required to file an IRS Form 1040 because it displays an invalid OMB control number.
Issue IV: Subject Matter Jurisdiction in District Court
In the District Court case now under appeal, the U.S. Attorney argued, and the Judge agreed, that the District Court lacked jurisdiction to hear the case that Patriot presented, and that the case should be taken up in U.S. Tax Court. However, Patriot believes that this argument is flawed.
The Internal Revenue Service is an Agency of the United States through the Department of Treasury, and an “agency” within the meaning of 5 U.S.C. § 702. The District Court has jurisdiction over Appellant's action against the United States of America and the Sovereign Immunity is waived as to subject matter jurisdiction by Congress pursuant to 28 U.S.C. §§ 1331, 2201 and 5 U.S.C. § 702.
28 U.S.C. §§ 1331: The District Court shall have original jurisdiction of all civil actions arising under the Constitution, laws, or treaties of the United States.
Procedural abuses, Violation of Law: "Paperwork Reduction Act", the violation of the Appellant’s constitutional due process rights and the implication of the Shultz II decision are issues that can only be addressed in Article III courts. The United States Tax Court is unable to make a ruling of this constitutional magnitude. If there were no other issues, there is no question that the U.S. District Court had jurisdiction in the case at bar, simply because of the due process issue. Venue over this action belongs in District Court pursuant to 28 U. S.C. Section 1391.
Conclusion
The IRS is trying to thwart the will and intention of elected officials and the will of the people. The bureaucracy has usurped the statutory words of Congress (the expression “the will of the people”) in denying Patriot a face-to-face CDPH. The IRS is willfully ignoring, denying, and thwarting the law, stonewalling and throwing up imaginary roadblocks to Patriot’s judicial remedy. Therefore, Appellant Patriot appeals to this Honorable Court for relief from over-zealous bureaucrats by requesting the Court to order the following:
(a) declare invalid the IRS Notice of Determination of August 9, 2005, since no valid hearing was ever held,
(b) order the reopening of a CDPH, and Appellant requests the Judge require the IRS reschedule an in-person face-to-face hearing as the statute requires in IRC 6330, as soon as possible, in a convenient location to Appellant,
(c) order the government to reimburse Patriot for all of his costs in bringing this action, and the previous actions in U.S. District Court,
(d) reprimand IRS agents for their unwillingness to allow Patriot to obtain the face-to-face CDP hearing.
Certificate of Service: I do hereby certify that on this date, I sent properly a copy of this Brief to opposing counsel by depositing a copy thereof, postage prepaid, in the United States mail addressed to:
Karen G. Gregory
Attorney
Appellate Section
P.O. Box 502
Washington, D.C. 20044
Respectfully submitted,
_________________________________ Executed
on June 20, 2006
Warren Patriot, pro se
Address