Reprinted from "Alert," POB 9411, Boise, Idaho 83707 1-208-375-3425

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NON-TAXPAYER BEATS IRS IN TENNESSEE COURT BATTLE
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Another Research Foundation Member Found "Not Guilty" on All Counts
in Well-Publicized Jury Trial
by Lamarr Hardy

"Hallelujah!" was Lloyd L. Long's first comment, after being acquitted,
recently, of all "Willful Failure to File" tax charges lodged against
him by the Internal Revenue Service for the years 1989 and 1990. How
did he do that? No, it wasn't a "miracle." Long did it by bringing
before the jury solid, well-documented evidence, acquired from the
Research Foundation, and other sources.

Long based his defense on his personal belief that he was not a person
required to file Federal income tax returns. Long's war of words was
engaged through his attorneys, the nationally-prominent Lowell Becraft
of Huntsville, Alabama and Russell J. Leonard of Sewanee, Tennessee,
who fought with the most powerful and time-honored weapon available:
THE TRUTH!


ARGUMENTS OPEN JURY EYES IN 3-DAY COURT BATTLE
To open his defense, Long testified under oath that he had personally
studied the IR Code (Title 26), and truly believed the income tax to
be an excise tax which applied only to specific type of individuals or
"persons" specified in the IR Code.

According to Long's research, the income tax applied ONLY to non-
resident aliens, and U.S. citizens living abroad in a country where a
tax treaty exists with the United States (Internal Revenue Code
Sections 1441-1443).

Long stated that the only other IR Code section he found that deals
with the issue of who is liable for income tax on the "withholding
agent." In conclusion Long said "I am not one of those people
referred to in Sections 1441, 1442, and 1461, and therefore I believe
the law cannot apply to me." Long, to verify his statement, picked up
his copy of IR Code book, (a 2 1/4 inch thick, 5 lb. volume containing
9,416 pages of small print!) and cited one of the pages he had
carefully tabbed from Section 7701(a)(16) which defines the term
"withholding agent" used in Section 1461.

The jury also heard Long say that "there are many other tax liability
sections that apply 'privileged occupation' to those who are involved
in the sale or manufacture of alcoholic beverages, tobacco products,
and the manufacture of firearms, BUT I CAN FIND NO SECTION IN SUBTITLE
A THAT APPLIES TO ME."

FILING "REQUIRED BY LAW" DECLARES PROSECUTION LAWYER
In presenting the case for the Internal Revenue Service, assistant U.S.
Attorney Curtis Collier, assisted by IRS special agent Michael
Cheasley, declared that Mr. Long had a gross income in excess of
$49,000 for each of the years 1989 and 1990, and that he had
"willfully" failed to file income tax returns for those years as
"required by law."

In trial, the defense admitted that Mr. Long did in fact have income
in excess of $49,000 for each of the years in question, and that he
did not file a return. Attorney Becraft, in defense of Long,
proceeded to prove to the jury beyond a reasonable doubt that Long was
not "liable" for an income tax, nor was he "required by law" to file.

COURT RULINGS CITED AS PROOF
Defense testimony showed a case titled "Brushaber v Union Pacific
Railroad" wherein it was the unanimous decision of the U.S. Supreme
Court that the Sixteenth Amendment (to the Constitution) did not give
congress any new power to tax any new subjects; it merely tried to
simplify the way in which the tax was imposed. The ruling also showed
that the income tax was, in fact, an excise tax on corporate
privileges and privileged occupations.

The defense then brought out a case entitled "Flint v Stone Tracy Co."
wherein an excise tax was defined as being a tax laid upon the
manufacture, sale and consumption of commodities within the country;
upon licenses to pursue certain occupations; and upon corporate
privileges.

Long's attorneys also brought out a case entitled "Simins v Arehns"
wherein the court ruled that the income tax was neither a property tax
nor a tax upon occupations of common right, but was an excise tax.

Next the defense turned to the case of "Redfield v Fisher." In this
instance, the court ruled that an individual, unlike the corporation,
cannot be taxed for the mere privilege of existing, but that the
individual's right to live and own property was a natural right upon
which an excise cannot be imposed. Defense also pointed to several
studies done by the Congressional Research Service showing the INCOME
TAX is an EXCISE.

A Tennessee Supreme Court case, "Jack Cole v Commissioner," provided
the fifth defense argument. Here, the court ruled that CITIZENS ARE
ENTITLED BY RIGHT TO INCOME OR EARNINGS AND THAT RIGHT COULD NOT BE
TAXED AS A PRIVILEGE.

Finally, Long's legal team pointed to another Tennessee Supreme Court
case, "Corn v Fort," in which the court ruled that individuals have a
right to combine their activities as partnerships; and that this is a
natural right, independent and antecedent of government.

NO IRS CHALLENGE
What's interesting to note here is that the prosecution did not
challenge or attempt to refute any of the cases cited, or the
conclusions of the courts. Furthermore, on the following defense,
once again the prosecution did not challenge or attempt to refute the
point made by Long's attorneys, nor were they able to show a statute
that made anyone liable for income tax.

This testimony, brought out by Defense was the fact that NOWHERE IN
THE ENTIRE INTERNAL REVENUE CODE (some 9,722 separate Sections, as of
1992!) WAS ANYONE ACTUALLY MADE LIABLE FOR THE INCOME TAX.

DEFENSE CITES IRS'S OWN CODE BOOK
Long's attorneys showed that in the IRS's own privacy act (Notice
#609), only three sections were cited, and that none of these sections
made anyone liable for the income tax. They also proved that this was
not an oversight, by showing that the alcohol tax was worded so
clearly that no one could misinterpret who was made liable for the
alcohol tax.

At this time, Defense presented one of the arguments provided by
Long's Research Foundation studies. They read to the jury the Mission
Statement of the Internal Revenue Service, which state that the income
tax relied upon "VOLUNTARY COMPLIANCE," and a quote from the head of
the Alcohol and Tobacco Tax Division of the IRS which, in essence,
showed that the income tax is 100% voluntary, as opposed to the
alcohol tax, which is 100% enforced.

LONG TESTIFIES
Under oath, Lloyd L. Long now testified that in 1988 he knew that the
income tax was, in fact, an excise tax based on his personal research
on the issue, and that he was not enjoying any corporate privileges
nor engaged in any privileged occupation, and further that income or
earnings from the exercise of common right could not be taxed as an
excise or otherwise, and that nowhere in the Internal Revenue Code was
he made liable for the tax; that he had always believed that the
income tax was voluntary (just as the IRS own Mission Statement
states!).

LONG'S EXTENSIVE PRE-TRIAL RESEARCH USED IN EVIDENCE
Lloyd L. Long came to his attorneys, and to trial "prepared to be
acquitted" (as it were). What had he already done? Long had written
a series of letters to the IRS explaining that he believed that he had
no licenses or privileges issued to him by the Federal government. In
his letters he asked the IRS for direct answers to simple questions
such as: "Am I required to file federal income tax returns?" and "Am I
liable for federal income taxes?" (He was building a strong
evidentiary foundation for his belief that he was NOT a person
"required.")

THE IRS NEVER GAVE A DIRECT ANSWER TO ANY OF LONG'S PERSONAL LETTERS
OR QUESTIONS. Instead, they inferred and insinuated and extrapolated
and beat around the bush, and generally avoided answering his letters.
This is when Long testified "I decided to stop 'volunteering' because
if the IRS can't answer my questions, I must assume that I'm correct;
that there is NO section of the IRS Code that makes me liable for the
income tax.

IRS WITNESS CRUMPLES UNDER CROSS-EXAMINATION
The IRS now brought in two "expert" witnesses, who -- it was learned -
- were actually IRS employees who had received special training as
professional witnesses.

Under cross-examination, Defense attorney Larry Becraft faced down
Special Agent, Ms. Jeu. She admitted that a secret code, known only
to the IRS and encoded on Mr. Long's permanent record, showed that THE
IRS KNEW THAT HE WAS NOT REQUIRED TO MAIL OR FILE A 1040 INCOME TAX
RETURN. Ms. Jeu, of course, made every effort to avoid the admission,
to the point that she was beginning to frustrate the jury. Finally
the judge ordered her to answer the question!

Under cross-examination by Mr. Becraft, the other Special Agent gave
testimony that conflicted with the Privacy Act notice. (Attempts by
the IRS at a cover-up of the truth must have been obvious to the jury,
by this time.)

GOVERNMENT USES "GUILT BY ASSOCIATION" AS A DESPERATE PLOY
In a last ditch attempt, the Prosecution tried to insinuate "guilt by
association." They claimed Mr. Long had "known and relied upon
persons of questionable character." Their argument was that the
writers of some of the books he had read, and some of the people he
knew and relied on as the basis for his belief had been convicted of
tax-related charges in the past, and were in fact "criminals."

Long responded that just because a person had been convicted of a
crime by a court, this did not invalidate everything he said. To
illustrate his point, Long pointed out that "the Apostle Paul was a
murderer, but by the Grace of God he became the greatest of the
Apostles." He added "I did not rely on anything that I did not
personally check out thoroughly."

BECRAFT SUMMATION "FINISHES" IRS
In summation, Mr. Becraft reminded the jury that Galileo was
imprisoned for holding a belief that conflicted with what everyone
else "knew as a fact" and that Columbus, acting on a belief which
conflicted with what everyone else knew as a "fact," discovered
something no one else thought existed.

The jury agreed with the Defense. By finding Lloyd L. Long "Not
Guilty" on all counts, they have ventured into hitherto uncharted
territory in their monumental decision.

A Chattanooga TV station quoted a government spokesman as saying that
this case will change the way the IRS will handle such cases in the
future. The spokesman for the government indicated that the
government will, "be less likely to prosecute if a jury isn't going to
decide in our favor."

QUESTION: WHAT IS THE IRS PLANNING TO DO -- STACK THE JURY?
NOTE: The Research Foundation will be happy to provide more
information on how to build a "winning" personal foundation. Direct
your inquiry to Lamarr Hardy, The Research Foundation, POB 29265,
Honolulu, HI 96720. The Foundation also has copies of the trial
transcript for those who might want to review the trial. (Mr. Hardy
is Executive Director of the Research Foundation in Honolulu, Hawaii.)





"It's a voluntary system. If people don't perceive it to be fair, people
won't voluntarily comply. We are struggling to maintain ground on voluntary
compliance.", Senator Bob Kerrey (3/6/1997)