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| 2-29-04
The
January 2004 Federal Tax Trial of Dick Simkanin
Please
Note: Although these are just excerpts from the trial, readers should be able to discern the problems with the prosecution's case and the unlawful and immoral tactics employed to control the trial, deny due process and manipulate the jury. The pervasive patterns of restricted testimony, biased rulings, inability to present a substantive defense and the deliberate misrepresentation of the law to the jury should be apparent to the most casual reader. Comments have been embedded throughout this document to provide the reader with a better understanding of the specific trial context and the issue of law and/or due process in question.
Although as
of this date portions of the trial transcript remain sealed by the Judge for
unknown reasons (including possibly to prevent the public from determining
the identities of the jurors) the Volumes The following links will you advance/jump to the desired section of this document:
·
The elements of law required to convict
(from the Judges Instructions to the Jury) Below is a portion of the jury instructions from the judge given at the conclusion of the trial. In addition, we have provided a short summary of the failings in the prosecution's case to prove each element as required by law.
This
excerpt was the judge's explanation to the jury of what the prosecution must
prove beyond a reasonable doubt in order to convict on “Willful Failure to
Withhold.” The jury instructions concerning “Willful Failure to File” were
very similar in structure and content.
Volume 2, Beginning page
253 2 Now, let me explain there that each count, 1 through 12, 3 pertains to a different tax quarter. You'll have the text of 4 the indictment with you in the jury room so you can see which 5 tax quarter is at issue in each count. And this proof has to 6 be made as to each of those counts. And I'm going to list one, 7 two, three, four -- first, second, third, and fourth -- the 8 things the government has to prove as to each of those counts. 9 First, that Arrow Custom Plastics was an employer that
10 paid wages to its
employees. These witnesses were of course, not expert witnesses in the law and could not be cross-examined as to the content of the law. Furthermore, these non-government witnesses were not, and could not speak in an official capacity for the US Government. At no point in the trial did any U.S. Government witness, in his/her official capacity for the government assert as a legal fact, under oath, that Simkanin had a legal obligation to file or withhold taxes. Details are below. In regard to the refund claim related allegations, no U.S. Government witness, in his/her official capacity for the government ever cited a specific law, or averred under oath, that such requests for refunds constituted crimes or that the law even required Simkanin, personally and specifically, to withhold payroll taxes.
12 Plastics who had responsibility for decisions of Arrow Custom 13 Plastics regarding the withholding from its employees' wages of 14 Medicare taxes, social security taxes, and federal income 15 taxes, the accounting for such taxes, and the payment of such
16 taxes over to the
Internal Revenue Service. 17 Third, that defendant caused Arrow Custom Plastics not to 18 withhold and not to truthfully account for and pay over such
19 taxes.
Comment: If
Simkanin had no statutory obligation to withhold or “pay over”, he obviously
would not have withheld. Failure to perform an act NOT explicitly
required by law, cannot be a crime. 20 And, fourth, that the defendant's conduct in causing Arrow 21 Custom Plastics not to withhold and not to truthfully account
22 for and pay over
such taxes was willful. Comment: “Willfulness” requires rejection of a “known legal duty” – Simkanin was prevented from presenting ANY substantive defense concerning the element of “willfulness”. The tax crimes Dick Simkanin was charged with require clear CRIMINAL INTENT.
Judge
McBryde not only prevented Simkanin from showing the jury the words of the
law and U.S. court decisions that Simkanin formed his beliefs upon, but
deliberately mis-instructed the jury with regard to the Supreme Court's
ruling regarding “willfulness.” (more details below)
23 Those are the four things that the government has to prove 24 as to each of the first 12 counts of the indictment. (end excerpt)
Comment: Simkanin was charged with 12 felony counts of violating 26 USC 7202 (Willful Failure to Withhold) and four felony counts of violating 26 USC 7203 (Willful Failure to File). Note: The remaining 15 felony counts were for requesting refunds of tax payments previously paid. Central to these criminal charges are the words “Any person required...”. It should be obvious that these statutes do NOT, in and of themselves, specifically identify WHO is required! It should also be obvious that these “laws” are in fact “penalty statutes” that arise only after violating a separate legal obligation beyond that specified in statutes the indictment. This question was the central legal issue at the trial: Was Dick Simkanin one of these “required” people? Incredibly, even though the general “penalty” statutes above apply to hundreds of different types of taxes including excise taxes, imposts and duties found within the “Internal Revenue Code” -- the indictment itself NEVER averred what specific statute (or tax) Dick Simkanin was alleged to have not withheld or not paid. In short, Dick Simkanin was charged with 31 tax related felonies. He was convicted of 29 of the 31 counts and now faces up to 129 years in prison – all without the government EVER formally identifying – or asserting – what specific laws Simkanin actually violated. Right-Click here to download read the indictment. (300KB, .pdf) Details in the transcript and below document that even though Simkanin repeatedly asked the government for the source of their legal authority to force him to withhold or file, those requests were never answered.
Even more
incredibly, at trial the witnesses for the government technically never
asserted any specific legal basis for claiming that Simkanin broke any law.
The Manipulation of the Jury – Part 1 This following excerpt was a side bar where Simkanin's attorney, McColl is putting the court on notice that he is objecting to the lack of a “Cheek” type of clarification in the jury instructions.
The Supreme
Court case of Cheek v. U.S. decisively settled that a criminal
defendant can successfully defend against a tax crime involving
“willfulness” simply by demonstrating a “good faith” belief in his
actions – regardless of what those beliefs are or how outlandish they may
appear.
13 MR. McCOLL: Your Honor, for the record, we would 14 respectfully object that the theory of the defense is not to be 15 found anywhere in this Court's Charge and therefore denies us 16 due process. 17 THE COURT: What's not to be found in it? 18 MR. McCOLL: The theory of the defense, mainly there 19 was no -- 20 THE COURT: Good faith? 21 MR. McCOLL: Good faith, yes, sir. There's no 22 definition of it, and we would respectfully request a 23 definition based on Cheek v. U.S. We would also request a 24 definition that willfulness does not mean someone acted out of 25 mistake or ignorance or negligence, gross negligence, as is in
1 the Fifth Circuit
Pattern Jury Charge and in the prior charge 3 THE COURT: Okay. You don't need to make an 4 argument. 5 MR. McCOLL: Yes, sir. 6 THE COURT: Just tell me what it is you -- your 7 comments is really what -- I'm going to give you an opportunity 8 to make your formal objections after I read the charge.
Note: The “Cheek” type instruction regarding the Supreme Court's explicit ruling regarding “willfulness” was never given to the jury. Instead, Judge McBryde substituted his own definition which essentially gutted Simkanin's totally proper and legal defense against the element of “willfulness.” Below are the final words below from the Assistant US Attorney David Jarvis's closing remarks to the jury following the testimony. The US Attorney deliberately mis-characterizes Simkanin's sworn testimony. In fact, Simkanin never testified that he challenged the “constitutionality” of the law per se – he only challenged its applicability to him and the improper enforcement of the law against him by IRS without proper legal authority (jurisdiction).
The words
of the prosecutor are in defiance of the US Supreme Court's decision in
Cheek. 7 His real motivation, folks, as we talked about before 8 here, is not a misunderstanding of the law. It's a rejection 9 of jurisdiction and a constitutional challenge to the law. And 10 the Court tells you in the charge that his views, the 11 defendant's views, about the validity of the law and the 12 constitutionality of the law shall have no bearing on your
13 deliberations on
the issue of willfulness. Thank you.
The Manipulation of the Jury – Part 2 Comment: Following the testimony, the judge gave his instructions to the jury and they began deliberations. During the deliberation process the jury passed out several notes asking for clarifications of the law and matters key to Simkanin's innocence.
Most
disturbing was that most of the notes dealt directly with the key legal
issues before the court. As the transcript clearly shows, the jury was deliberately lied to and mislead to the extent that the Judge effectively assumed the role of trier of law and fact, and effectively directed the jury to convict Simkanin in violation of his constitutionally protected Right to trial by an impartial jury.
The most
illustrative and egregious of Judge McBryde's efforts to manipulate the jury
were in response to Juror note #4. In that note, the jurors identified that
the government had produced NO evidence that Simkanin fell under one of the
categories in the law that require withholding. Vol IV, pg.13 20 (On record, jury and defendant present, 11:26 a.m.:) 21 THE COURT: Okay. I have the number four note from 22 the jury, and I have a response that I'm going to read to you 23 at this time. 24 Members of the jury, I have your note which is worded as 25 follows: Four. Since no proof was given that the defendant 1 and his employees were in an occupation listed in those 7,000, 2 are we to conclude that they are in fact not in that 7,000, or 3 do we need to read all 7,000 to see what the defendant was 4 referring to and, in fact, wasn't listed in that 7,000. Signed
5 by the foreperson
and dated today.
(The
judge's response:) 7 do not need to concern yourself with whether defendant's 8 employees are in an occupation "listed in those 7,000." The 9 Court has made the legal determination that within the meaning 10 of Title 26, United States Code, Section 7202, during the years 11 1997, 1998, 1999, 2000, 2001, and 2002, Arrow Custom Plastics, 12 through its responsible officials, had a legal duty to collect, 13 by withholding from the wages of its employees, the employees' 14 share of the social security taxes, Medicare taxes, and federal 15 income taxes, and to account for those taxes and pay the 16 withheld amounts to the United States of America. You are to 17 follow that legal instruction without being concerned whether 18 there are certain employers who are not required to collect and 19 withhold taxes from the wages of their employees.
Comment:
Despite the fact that the jury had correctly concluded that the
government had produced NO factual evidence that Simkanin, as an employer,
was required to withhold, the judge openly directed the jury to
ignore the establishment of this essential fact, that is required, by law,
to convict Simkanin. Following his inability to force Judge McBryde to include the Cheek-type instruction in the early stage of the trial, the following excerpt shows how defense attorney Arch McColl fought, and failed again, to have the proper definition included – even after the jury provided Notice to the Court of its problem with this key legal definition that was a statutory element of virtually all the criminal charges. The actual content of Note #1 regarding “willfulness” and the judges written response were never read into the court record. The Court's actual response to the jury's note was hand-delivered to the jury and remains under seal, away from public examination. Volume III, page 270 12 (Court in recess, 4:36 p.m.) 13 (Jury note, 5:55 p.m.) 14 (On record, no jury, no defendant present, 6:01 p.m.:) 15 THE COURT: Okay. At 6:00 o'clock we received a note 16 from the jury asking what is the definition of "willful," and 17 I've given you my proposed response. 18 Does the government have any objection to the proposed 19 response? 20 MR. JARVIS: No, Your Honor. 21 THE COURT: Does the defendant have any objection to 22 the proposed response? 23 MR. McCOLL: Yes, sir, two objections. The first is 24 that the instruction on page 1 says you're instructed that 25 willfully means to act voluntarily and deliberately and 1 intending to violate a known legal duty. So it's got three 2 elements: voluntarily, deliberately, and intending to violate 3 a known legal duty. 4 But then down below on the same page it says "and that he 5 voluntarily and intentionally caused Arrow Custom Plastics to 6 fail to comply," et cetera. So, therefore, it needs the third 7 element, that he voluntarily and intentionally violated a known 8 duty and caused. Otherwise, you have two different mental 9 states. One has three elements and the other has two. 10 THE COURT: Okay. I'll overrule that objection. Any 11 others? 12 MR. McCOLL: Yes, sir. And that I think in the full 13 definition of willfulness, just as you gave in the instruction 14 as a whole when you read them, should include the explanation 15 that it's not by mistake. 16 THE COURT: I overrule that objection. Do you have 17 any others? 18 MR. McCOLL: And then I would make the same 19 objection, Your Honor, on page 2 with regard to the paragraph 20 defining willfulness, that you have three elements at the 21 beginning of it and the instruction only has two when you apply 22 it. Namely, it's missing "the violation of a known legal 23 duty." 24 THE COURT: Okay. Do you have any other? 25 MR. McCOLL: No, Your Honor.
Volume IV, Page 7
Below is Judge McBryde's response to Juror Note # 2,
which requested the "full wording" of the statute 2 Members of the jury, I have your second and third notes, 3 which are worded as follows: The second note, please give us 4 the full wording of the law, and then it has a parentheses 5 after it with an "S" in it, that the defendant allegedly broke 6 for the first 12 indictments. Signed by the foreperson. (...Judge McBryde continuing) 20 The exact wording of the part of Title 26, United States 21 Code, Section 7202, that is pertinent to your decision is as 22 follows: "Any person required under this title to collect, 23 account for, and pay over any tax imposed by Title 26, United 24 States Code, who willfully fails to collect or truthfully 25 account for and pay over such tax shall be guilty of a crime."
Below is the exact wording of 26 USC 7202 (as
found at Findlaw.com)
IRS Agents Deceive:
To further
the conclusion that NO government witness actually avers under oath that
Simknain broke any law, please consider the testimony of IRS Agent McGowan.
He was testifying in regard to Simkanin's violation of 26 USC 7203, Willful
Failure to File: VOLUME III, Beginning on page 14 19 THE COURT: Okay. You may proceed. 20 ALLAN McGOWAN, 21 having been duly sworn, testified as follows: 22 DIRECT EXAMINATION 23 BY MR. JARVIS: 24 Q. Agent McGowan, I would like to direct your attention to 25 Government's Exhibit 176. Let me know when you're there. 1 A. I'm ready. 2 Q. All right. Did you prepare that chart indicating the 3 approximate gross income Mr. Simkanin received? 4 A. Yes, I did. 5 MR. JARVIS: Your Honor, we would move Exhibit 176 6 into evidence. 7 THE COURT: It's received. 8 BY MR. JARVIS: 9 Q. At my request did you total up the amounts of payments to 10 Mr. Simkanin, as well as his 50 percent share relating to 11 Counts 28, 29, 30, and 31 of the indictment? 12 A. Yes. 13 Q. And the total payments to Mr. Simkanin, did they equal 14 $820,715? Is that correct? 15 A. That's correct. 16 Q. And his 50 percent community property share would be 17 $410,357. 18 A. That's right. 19 Q. And attached to Exhibit 176, does that list the minimum 20 filing requirements for the tax years in question, 1998, '99, 21 2000, and 2001? 22 A. That's correct. 23 Q. And based upon the amounts listed in the chart, was 24 Mr. Simkanin above the minimum filing requirement? 25 A. Yes, he was. Notice that the US Attorney's carefully constructed question is “conditional” in that it is based upon “income” amounts listed in the exhibit “chart”. In other words, Agent McGowan is NOT specifically asked if he (Simkanin) actually had a legal obligation to file, he is only asked if Simkanin's income was above the theoretical “minimum filing requirement”, leaving the jury to infer (by linguistic sophistry) that the law was, in fact, applicable to Simkanin and that, therefore, he had a legal obligation to file. In short, this IRS agent's brief testimony FAILS to establish the legal fact that Simkanin was specifically required to file income tax returns per US statute. Despite this failing of establishing a statutorily required element of the alleged crime and regardless that the judge was even Noticed by the jury of such, Simkanin was nonetheless, held convicted of four felony counts of Willful Failure to File.
In the full
transcript, you can see how defense attorney McColl questions the inclusion
of this exhibit in the record, given the fact that the defense had earlier
stipulated (agreed not to question) the government's calculation of
Simkanin's “income”. In retrospect, it becomes very plausible that the
exhibit “chart” may have been offered solely as a vehicle to significantly
limit the exposure of the agent on the stand and thereby circumvent any
cross-examination. In short, Simkanin was again, denied the Right to
confront his accusers at the IRS.
Judge McBryde:
Volume II, page 49 11 BY MR. McCOLL: 12 Q. Good afternoon, ma'am. 13 A. Good afternoon. 14 Q. So part of the decision was to withhold social security 15 and Medicare -- to not withhold social security and Medicare; 16 is that correct? 17 A. That's correct. 18 Q. And did you have a discussion with Mr. Simkanin wherein he 19 explained that social security was, according to the Social 20 Security Administration, a matter of voluntary participation? 21 A. Not that I recall. 22 Q. Do you know that as a matter of fact that it -- 23 THE COURT: Pardon me, Mr. McColl. As a matter of 24 fact, it's not. So let's don't get into things that -- 25 MR. McCOLL: We would object to the Court's -- 1 THE COURT: -- are incorrect such as that. 2 MR. McCOLL: We would object to the Court -- 3 THE COURT: And limit your cross-examination to the 4 scope of the direct. 5 MR. McCOLL: We would object to the Court's remark as 6 being an inaccurate statement of the law. 7 THE COURT: You may proceed. It is not an inaccurate 8 statement of law, Mr. McColl. You may proceed with your 9 questioning. If you want to take up something with the Court, 10 you can do so at the appropriate time. 11 MR. McCOLL: So my objection is overruled, Your 12 Honor?
13 THE COURT: You may
proceed.
Volume II, beginning at page 73
Conveniently, Kelly, as a public accountant is not an IRS employee, and
therefore is not testifying for the government about Dick Simkanin's actual
legal obligation under the law. His testimony and personal conclusions are
based upon what HE believes the law says. 14 BY MR. McCOLL: 15 Q. Sir, you sent 3402 to Mr. Simkanin; is that correct? 16 A. Yes, sir. 17 Q. And your doing that was an attempt to persuade him that he 18 needed to withhold taxes from his employees? 19 A. Yes, sir. 20 Q. You're familiar with the Internal Revenue Code, are you 21 not, sir? 22 A. Yes, sir. 23 Q. And the collection of income tax at the source is what you 24 sent him, Section 3402 on page 523 of that volume in front of 25 you; is that correct? 1 THE COURT: Do you have it as an exhibit, what you 2 sent him? Is one of the earlier exhibits what you sent him? 3 MR. KEMINS: It's Government Exhibit 13, Your Honor. 4 THE COURT: It's in evidence. He has as an exhibit 5 what he sent him. It's Government's Exhibit 13. 6 MR. McCOLL: This is the Code. It's a different 7 exhibit. 8 THE COURT: Okay. But I'm telling you in evidence is 9 Exhibit 13, which is what you sent him. Your question is what 10 did he send him. 11 MR. McCOLL: Right. 12 THE COURT: And I'm reminding you that in evidence is 13 what he sent him. We don't need the book to see what he sent 14 him. 15 BY MR. McCOLL: 16 Q. May I ask you if when you sent him that you understood the 17 definition of "employee" in the document that you sent him? 18 A. I understood what I thought I had been taught for years, 19 yes. 20 Q. Isn't the definition of "employee" -- 21 MR. KEMINS: Objection, Your Honor. Beyond the 22 scope. 23 THE COURT: I'm going to sustain that objection. 24 That is beyond the scope of the direct. 25 You can come get your book back. He's not going to be 1 testifying in reference to the book and the other documents you 2 handed up there. 3 MR. McCOLL: Your Honor -- 4 THE COURT: You can come get those back, if you would 5 like, Mr. McColl. 6 MR. McCOLL: May I leave it there for other purposes? 7 THE COURT: No. Come get them back, and if there's a 8 need for them later, you can bring them back up.
(The questioning continues on page 76) 4 Q. When you sent it to him back then, did you know what the 5 definition of "employee" was? 6 A. I knew what I thought it was. 7 Q. What did you think it was? 8 A. An employee is somebody who works for an organization -- 9 an entity and is employed by, under the direction of, that 10 entity. 11 Q. And that was your understanding? 12 A. Yes, sir. 13 MR. McCOLL: May I approach the witness, Your Honor? 14 THE COURT: Let me see what you're going to approach 15 him with. 16 (Bench conference with Mr. Kemins and Mr. McColl:) 17 MR. McCOLL: I want him to read the definition of 18 "employee" for purposes of 3402. 19 THE COURT: We're not going to play this game. 20 MR. McCOLL: That's not a game. That's the 21 definition. 22 THE COURT: Pardon me. Listen to what I'm saying 23 first. 24 MR. McCOLL: Yes, sir. 25 THE COURT: This says for purposes of this chapter 1 the term "employee" includes. It goes on to say the things it 2 includes. It does not say it's an inclusive definition 3 applicable to the issue of the section under consideration. So 4 we're not going to play that game. That obviously is not an 5 inclusive definition. So we're just not going to go through 6 that. 7 MR. McCOLL: But, Judge, it doesn't incorporate 8 anything else. It doesn't say this incorporates -- 9 THE COURT: We're not going to go through that. I 10 sustain the objection.
From volume II, page 164 Again, note the protection afforded the government by the judge as McColl zeros in on the IRS's application of the critical legal definition of “employee.” 3 BY MR. McCOLL: 4 Q. I think you testified that these letters -- 5 THE COURT: You don't need to go over what he's 6 already testified to. We've heard that. Go on with some 7 questions. 8 BY MR. McCOLL: 9 Q. Were you able to determine whether or not these workers 10 for Mr. Simkanin were employees? 11 A. Yes, sir. Our opinion was that they are employees. 12 Q. And there's more than one definition of employee in the 13 Internal Revenue Code? 14 MR. KEMINS: Objection, Your Honor, beyond the scope. 15 THE COURT: I sustain the objection. 16 BY MR. McCOLL: 17 Q. Which definition of employee did you -- 18 THE COURT: I'm sustaining the objection as to the 19 definitions of employees in the Internal Revenue Code. There 20 will be no further questions about that from this witness. 21 MR. McCOLL: May I ask him which one he applied? 22 THE COURT: I'm telling you there will be no further 23 questions on that subject, Mr. McColl. 24 BY MR. McCOLL: 25 Q. Is there a difference of opinion, from time to time, 1 whether or not someone is an employee or not? 2 A. Yes, sir. 3 Q. Now, I know that these letters are somewhat sarcastic, but 4 does a worker have a right of privacy as to the information 5 about him when you contact a business person? 6 MR. KEMINS: Object, Your Honor, beyond the scope. 7 THE COURT: Yes. That's beyond the scope of the 8 direct and, plus, don't have a preamble into your question 9 that's a statement. Ask only questions. I sustain the 10 objection to that question. 11 BY MR. McCOLL: 12 Q. Are you hampered in your work at all in trying to get 13 information by the Privacy Act? 14 MR. KEMINS: Objection, Your Honor. That's -- 15 THE COURT: I sustain the objection. 16 BY MR. McCOLL: 17 Q. To your knowledge, can an employer get in trouble or 18 violate any law with regard to the privacy of an employee by -- 19 THE COURT: I sustain that objection as well, and I'm 20 going to ask that you be seated unless you have a question 21 that's within the scope of the direct that you would like to 22 ask. 23 MR. McCOLL: Thank you, Your Honor. Comment: The definition of “employee” was specifically testified about in Simkanin's first trial in November, 2003 which ended with a hung jury. In that trial The IRS agent recanted his own testimony about which legal definition of “employee” applied to Simkanin when it was pointed out to the court that it included ONLY government officials and employees.
The agent
later testified that a subsequent definition of the word “employee” from the
law actually applied, although this too, was problematic for the government
because the section of code that the second definition came from was, by
statute, only applicable in Washington DC and the US Territories and was not
from the section of the code that Simkanin was accused of violating. What Law Was Used to Deny Simkanin His Refunds? Vol II, page 123
Below is
the direct examination by the US prosecutor of IRS Agent Joe Cooper who
personally denied Simkanin's refund claims for his employee's tax payments.
13 Q. After you reviewed all of this, did you reach a conclusion 14 as to whether this refund should be granted or not? 15 A. I did. 16 Q. And what was your conclusion? 17 A. Concluded that the refund had no merit and the claim would 18 be denied in full. 19 Q. And did you inform Mr. Simkanin of this decision? 20 A. Yes, I did. 21 Q. And did you actually have any conversations with 22 Mr. Simkanin about this decision? 23 A. Yes, I did. 24 Q. Were these in person? 25 A. They were over the telephone.
From page 123
5 BY MR. KEMINS: 6 Q. Now, it looks like in here that Mr. Simkanin cited some 7 court cases and some sections of the Internal Revenue Code; is 8 that correct? 9 A. Yes, sir. 10 Q. Now, when you reviewed this claim, did you review what he 11 put in this letter? 12 A. Yes, sir, I did. 13 Q. After you reviewed all of this, did you reach a conclusion 14 as to whether this refund should be granted or not? 15 A. I did. 16 Q. And what was your conclusion? 17 A. Concluded that the refund had no merit and the claim would 18 be denied in full. 19 Q. And did you inform Mr. Simkanin of this decision? 20 A. Yes, I did. 21 Q. And did you actually have any conversations with 22 Mr. Simkanin about this decision? 23 A. Yes, I did. 24 Q. Were these in person? 25 A. They were over the telephone. 1 Q. And what, if you recall, did you tell Mr. Simkanin? 2 A. I informed Mr. Simkanin that after reviewing the 3 information that he provided I denied his claim in full. I 4 also told him that the courts have consistently ruled against 5 this type of position that he was taking in regards to seeking 6 refunds of payroll taxes. 7 Q. And did you tell him anything -- Did you express any 8 opinion about some of the court cases or other legal areas he 9 put in that letter? 10 A. Not that I recall.
Note how
the IRS witness simply states he denied the claim and then (carefully) makes
a non-committal statement about the how courts have ruled against “this type
of position”. The witness is never asked to cite any specific law
that made refund requests from Simkanin a crime nor does he cite any legal
authority that required such tax withholding from Simkanin. 5 BY MR. McCOLL: 6 Q. You determined this was an invalid request for a refund. 7 A. Yes, sir. 8 Q. If it had been exempted income, it would have been a valid 9 request. 10 MR. KEMINS: Same objection, Your Honor. 11 THE COURT: I'll let him answer that. If it had been 12 exempted income, I'll let him answer that. 13 A. Would you repeat. I don't understand. 14 THE COURT: If it was exempted income, would it have 15 been a valid request? 16 THE WITNESS: If it was exempted income? 17 THE COURT: You mean, if he didn't have -- I'm not 18 sure -- 19 THE WITNESS: I don't understand the question. I'm 20 sorry. 21 THE COURT: -- doesn't have any income, Mr. McColl? 22 Restate your question. 23 BY MR. McCOLL: 24 Q. Well, don't the CFRs provide that some income is exempted 25 by statute and also under the Constitution as to corporate 1 returns? 2 MR. KEMINS: We're going to object to that question, 3 Your Honor. That's beyond the scope. 4 THE COURT: Well, that is beyond the scope of the 5 direct. I think you've dealt with that enough. It really ends 6 up just being an argument, Mr. McColl. Go on to something 7 else. 8 MR. McCOLL: Well, Your Honor, if the Court please -- 9 THE COURT: Go to something else at this time. 10 BY MR. McCOLL: 11 Q. When you made your evaluation, did you base it on the Code 12 of Federal Regulations under Chapter 26? 13 A. Yes, sir. 14 Q. And was part of that to analyze his letter, which is 15 Government's Exhibit 91? 16 A. Yes, sir. 17 Q. Okay. And did you look at the citations that he provided? 18 Let me see if we're on the same page here. This is a six-page 19 letter -- 20 THE COURT: Mr. McColl, let me have you and 21 Mr. Kemins come up here. 22 (Bench conference with Mr. Kemins and Mr. McColl:) 23 THE COURT: Mr. McColl, what you're, in effect, doing 24 is cross-examining to the end of proving that he was wrong in 25 his conclusion, which means you're trying to prove that the law 1 is not what the law is. And I'm not going to permit that kind 2 of cross-examination. The law is what the law is. 3 MR. McCOLL: Fine, Judge, but how about a valid, you 4 know, point that he could say, look, I'm wrong but it was not 5 totally unreasonable. 6 THE COURT: If your client wants to make that point 7 when he's on the stand, he can. 8 MR. McCOLL: Well, why can't I get him to say -- 9 THE COURT: But we're not to that point yet. 10 MR. McCOLL: Can't I get him to go there, too? 11 THE COURT: No, we're not going to go through that 12 with this witness. 13 MR. McCOLL: Judge, you're cutting off my right to 14 cross-examine the most critical witness in the case. 15 THE COURT: Well, your cross-examination is directed 16 to lead the jury to believe that there might be something about 17 the Code that caused him not to be required to make those 18 payments. 19 MR. McCOLL: All right. I won't -- 20 THE COURT: And I'm not going to permit that. 21 MR. McCOLL: I won't do that. 22 THE COURT: Okay. Well, you can go back. Don't 23 proceed in that direction whatsoever. 24 (End of bench conference.)
1 Q. Is it your practice or the policy of the IRS when you're 2 rejecting a claim from a citizen to cite cases, legal cases, if 3 they have cited cases? 4 A. Not necessarily. 5 Q. Did you have any Supreme Court cases that you could have 6 cited if you wanted to? 7 THE COURT: That's beyond the scope of the direct. 8 We're not going into that area. 9 BY MR. McCOLL: 10 Q. Well, I know you said that you -- 11 THE COURT: Pardon me. Go on to something else. 12 BY MR. McCOLL: 13 Q. When you said that the cases were against him, were you 14 referring to any Supreme Court case? 15 A. I don't recall referring to a Supreme Court case. 16 Q. You would agree the Supreme Court is the law of the land. 17 MR. KEMINS: Objection, Your Honor. 18 THE COURT: I'll sustain that objection. 19 BY MR. McCOLL: 20 Q. Assuming that Mr. Simkanin is incorrect in his claim for 21 this refund, is it correct that CFRs do provide, both by 22 statute and Constitution, that some corporate income is exempt? 23 MR. KEMINS: Objection, Your Honor. That's beyond 24 the scope of the direct. 25 THE COURT: That's beyond the scope of the direct. 1 I'll sustain that objection.
(continuing...) 9 Q. Okay. Now, in order to reject this claim, you've got to 10 do somewhat of a calculation on your own, do you not? 11 A. Yes, sir. 12 Q. And did you do a calculation with regard to his returns? 13 A. Calculation of what? 14 Q. For example, the gross income that was involved in the 15 taxable income. 16 A. He wasn't -- there was no calculation involved in gross 17 income. He was seeking a refund of taxes already paid. 18 Q. Right. But wouldn't it be appropriate to see if in | |||||||||||||||||||
