attorney general of ohio appellant damion m. clifford (0077777) (counsel of record) assistant...
TRANSCRIPT
IN THE SUPREME COURT OF OHIO
Carl Robert Wagenknecht Jr.,
Appellant,
V.
William W. Wilkins,Tax Commissioner of Ohio,
Appellee.
Appeal from the OhioBoard of Tax Appeals
Board of Tax AppealsCase No. 2006-T-1007
Supreme Court Case Number:2008-0095
MERIT BRIEF OF APPELLANT CARL ROBERT WAGENKNECHT JR.
Carl R. Wagenknecht Jr.174 Cheltenham LaneMunroe Falls, Ohio 44262330-388-8968AppellantPro Se
Marc Dann (0039425)Attorney General of OhioDamion M. Clifford (0077777) (COUNSEL OF RECORD)Assistant Attorney General30 East Broad Street 25" FloorColumbus, Ohio 43215Telephone: (614 ) 466-5967Facsimile: (614) 466-8226dclifford(cr^,ae.state.oh.us
COUNSEL FOR APPELLEE,WILLIAM W. WILKINS, TAX COMMISSIONER OF OHIO
L CDMAY 2'2 2008
CLERK OF COURTSUPREME COURT OF OHIO
TABLE OF CONTENTS
Page
TABLE OF AUTHORITIES ... .................................................................................................iii
STATEMENT OF FACTS ........................................................................................................ I
ARGUMENT .............................................................................................................................4
Proposition of Law No. I:
An Ohio Citizen who is not required to file or is prohibited by lawfrom filing Form 1040 with the Internal Revenue Service is thereforenot required to file or prohibited by law to file Form IT-1040 withthe Ohio Department of Taxation ...............................................................................4
Proposition of Law No. II:
The Ohio Tax Commissioner is prohibited from demanding paymentof an alleged tax owed with interest as a condition precedent forjurisdiction to hear a Petition for Reassessment pursuant to ORC 5747.13for an Ohio Citizen who is not required to file or is prohibited by law tofile Form IT-1040 as an original return or amended return .................................18
Proposition of Law No. III:
It is mandatory for the Ohio Tax Commissioner to independentlyverify the accuracy and truthfulness of information received undera contractual relationship with the Internal Revenue Service as a conditionprecedent to make an assessment when an Ohio Citizen alleges that theinformation received from the IRS is not accurate or truthful before theinformation obtained shall be used to determine an Ohio Citizen'sstate tax liability ......................................................................................:................23
Proposition of Law No. IV:
When the Internal Revenue Service..takes any action which includes butis not limited to an assessment or notice of deficiency after the statute oflimitations has expired then the Ohio Tax Commissioner is prohibitedfrom using any information obtained from said action .......................................29
TABLE OF CONTENTS (Cont'd)
CONCLUSION .. ......................................................................................................................36
PROOF OF SERVICE .......... ..................................................................................................38
APPENDIX ,Aprox. Page
Notice of Appeal to the Ohio Supreme Court(Jan.14, 2008) ..................................................................................................................1
Decision and Order of the Ohio Board of Tax Appeals(Dec. 21, 2007) ............................. ................................................................................ 10. ,
Final Determination from Ohio Tax Commissioner(May 19, 2006) ..............................................................................................................15
CONSTITUTIONAL PROVISIONS: STATUTES
26 CFR 1.1 ....................................................................................................................17
26 CFR 602.101 ........:...................................................................................................20
26 USC 6011 .................................................................................................................21
26 USC 6061 .................................................................................................................23
26 USC 6065 .........................................................................................................:.......24
28 USC 1746 ..........:......................................................................................................25
44 US C 3 512 .................................................................................................................26
ORC 5703.25 .................................................................................................................27
ORC 5703.26 .................................................................................................................27
ORC 5747.01 .................................................................................................................28
ORC 5747.13 .................................................................................................................30
ii
TABLE OF AUTHORITIES
PaEe
CASES
Alcan Aluminum Corp. v. Limbach(1989), 42 Ohio St.3rd 121 ................................................23
Bank of Commerce v, New York City, 2 Black 620 ...................................................................21
Belgrade Gardens, Inc. v. Kosydar (1974), 38 Ohio St.2d 135 ...............................................23
Benua v. Columbus (1959), 170 Ohio St. 64 ............................................................................13
Berends v. Butz 357 F.Supp 144 (D.Minn.1973) ........................................................................5
Bosher v. Euclid Income Tax. Bd. OfRev. 99 Ohio St.3d 330, 2003-Ohio-3886 .....................13
Burnes Nat'l Bank v. Duncan, 265 U.S. 17 .........:..............:.....................................................21
Continetal Oil Co. V. US., 83 Ct. Cl. 344, 14 F. Supp 533 ..................................................... 35
Czubaj v. Tallmadge , 2003-Ohio-5466 ..................................................................................12..
Dery v. Lindley(1979), 57 Ohio St.2d 5 ............................ ............. ......... ................................. 22
Dole v. United States SteelworkersofAm., 494 U.S. 26, 33 (1990) ...........................................4
Farmers' & Mechanics' Bank v. Deering, 91 U.S. 29 ........................:...................................21
Farrington v. Tennessee, 95 U.S. 679(1877) ...........................................................................21
Federated Department Stores v. Lindley (1983), 5 Ohio St.3rd 213 .......................................23.
Gonzalez v. Freeman, 334 F.2d 570(D.C.Cir. 1964) .................................................................5
Gulf Oil Corp. V Kosydar(1975), 44 Ohio St.2d 208 .............................................................13
Hoffman v. Commissioner, 119 T.C. 140, 143 (2002) ............................................................34
Hotch v. United States, 212 F.2d 280 (9`" Cir.1954) ..................................................................5
iii
Lamoureux v. Burrillville Racing Ass'n, 91 R.I. 94, 161 A2d 213, 215 ....................................23
Maxxim Med., Inc. v. Tracy(1999), 87 Ohio St.3rd 337 ............................................................23
Matter of Harper, 590 F.2d 165 ..........................................................................................31, 34
McCulloch V. Marylancl 17 U.S. 316(1819) .............................................................................20
W. Bank Co. V. Evatt 145 O.S. 179(1945) ..................................................................................24.
Ohio Fast Freight v. Porterfield (1972), 29 Ohio St.2d 69 ........................................................23
Payne v. United States ofAmerica , No. 05-1941(7th Cir. 2005) .................................................7
Robinette v. Commissioner, 123 T.C. 5(2004) .....................................................................31,35
Roxane Laboratories, Inc. v. Tracy (1996), 75 Ohio St.3d 125 .................................................13
Sears v. Weimer (1944), 143 Ohio St. 312 ................................................................................13
Signal & Oil Co. V. U.S. (CSJ) See Rev. Rul. 72-42, 1972-1 C.B. 398 ................................31,34
South Carolina v. United States, 199 U.S. 437 ...........................................................................21
Suleiman V. Zaino (November 2, 2001), B.T.A. No: 99-L-1 823 ...............................................22
Tarble's Case, 13 Wall. 397, 407-408 ........................................................................................21
Tiedemann v. Johnson (Me. 1974), 316 A. 2d 359 .....................................................................22
United States v. Meyer ( 1987, CA8 Minn) 808 F2d 1304,87-1 USTC 9132, 59 AFTR 2d 87-454 ......................................................................................33
United States v. Taylor 305 F.2d 183 (1962) ...............................................................................24
United States v. Two Hundred Thousand Dollars ($200, 00) In United States Currency,590 F.Supp 866 (S.D.Fla. 1984) ...................................................................................................5
United States ofAmerica vs. Chisum , Case: 06-7082., Document: 010138646USCA 10t° Cir.(September 25, 2007) ...........................................................................................4
iv
United Tel. Co. Of Ohio v. Limbach(1994), 71 Ohio St.3d 369, 372 . ........................................ 13
US. v. Van Griffin, 874 F.2d 634 (9" Cir. 1989) .........................................................................19
Watson v. Commissioner oflnternal Revenue T.C. Memo. 2007-146(2007) ...............................7
W. Union v. Brodt, 171 Ohio App.3d 434, 2007-Ohio-2742 .....................................................12
Worcester v. Georgia 6 Pet. 515 .................................................................................................22
CONSTITUTIONAL. PROVISIONS: STATUTES:
5 CFR 1320 ....................................................................................................................................5
26 USC 1 .................................................................................................................................5,6, 7
26 CFR 1.1 .............................................................................................................................5, 6, 7
26 CFR 1.1(h)-1(e) ........................................................................................................................6
26 CFR 602.101 ........................................................................................................................5, 6
26 USC 4791 ...............................................................................................................................24
26 USC 6011 ......................................................................................................................5,6,7,16
26 USC 6061 ..............................................................................:............................................11,12
26 USC 6061(a) ..................................................................................:........................................12
26 USC 6062 .......................................................................:........................................................11
26 USC 6063 ................................................................................................................................11
26 USC 6065 ...........................................................................................................................11,12.
26 USC 7609(e) ............................................................................................................................34
28 USC 1746 .....................................................................................................................8,9,10,15
28 USC 1746 (1) ....................................................................................................................8,9,10
28 USC 1746(2) ..................................................................................:..................................8,9,10
v
44 USC 3501-20 ...........................................................................................................................4
44 USC 3512 .................................................................................................................................5
44 USC 3512 (a) ...........................................................................................................................4
44 USC 3512(b) ............................................................................................................................4
ORC 5703.25 ..........................................................................................................................14,15
ORC 5703.26 ........:.................................................................................................................14,15.
ORC 5747.01 ..........................................................................................................................13,14
ORC 5747.13 .............................................................................................................4,18,29,30,36
ORC 5747.13(E)(8) ................................................................................................................18,22
vi
STATEMENT OF FACTS
On about October 15, 1997 , Appellant's Form IT- 1040 Ohio Individual Income Tax Return
for the tax year 1996 was mailed and received by Appellee on or about October 20, 1997. Appellant
signed the 1996 return without prejudice UCC 1-207.(Supplement to the Briefs, herein after will
be referred to as "Supp", 1, Exhibit that is attached to Response In Opposition To Appellee's Motion
To Affirm the Tax Commissioner's Final Determination , herein after will be referred to as
"Rexhibit.", A). The Assessment Statutory Expiration Date (ASED) for 1996 became October 15,
2000.
On or about February 13, 1998 Charles Rossotti, Commissioner of Internal Revenue and
Ashley Bullard, District Director Internal Revenue Service each received by certified mail a
document signed by Appellant titled REVOCATION OF SIGNATURES ON PREVIOUSLY FILED
W-4. 1040 FORMS AND STATE INCOME TAX FORMS, et al. (Supp.2, Rexhibit. B) .
On April 15, 2000 Appellant mailed to the Ohio Department of Taxation his affidavit
executed on April 13, 2000 which explained that District Director Ashley Bullard of the Intemal
Revenue Service was taking over directly the Wagenknecht's case because of the credible allegations
of IRS employees misconduct.(Supp.3-5, Rexhibit. C) In the affidavit was further explained that
Appellant was to take no further action until resolution occurred. Appellant further stated that, " It
is my honest and good faith belief and intent to submit to the Ohio Department of Taxation any and
all appropriate forms which are identified as required by law to submit". (Supp.3-5, Rexhibit C). On
or about May 1, 2004 Appellant mailed his Return/ AFFIDAVIT STATEMENT for year 1996 to
Mr. Mark W. Everson, Commissioner of Internal Revenue which was received and accepted.(Supp.
1
78-123 , Statutory Transcript, herein after will be referred to as "S.T.", 60-106 ). No response
was made.
On or about June 18, 2004 Appellant mailed a NOTICE OF DEFAULT for year 1996 to
Mr. Mark W. Everson, Commissioner of Internal Revenue which was received and accepted.
(Supp. 124-127, S.T.107-110) No response was made. Neither the Commissioner of Internal
Revenue nor the Internal Revenue Service notified Carl R. Wagenknecht Jr. that his
Return/AFFIDAVIT STATEMENT was not in compliance with 26 USC 6011.
On March 4, 2005 Appellant Carl R. Wagenknecht Jr. and Supervisor Richard Six of the
Ohio Department of Taxation had a telephone conversation, the sum and substance which was
memorialized in written correspondence dated March 29, 2005 from Carl R. Wagenlmecht Jr. to
Richard Six . Said telephone conference also referenced tax year 1996 and IRS employee
misconduct. On March 18, 2005, Appellant received an unsigned letter dated March 11,2005 from
agent 4039 entitled "1996 Ohio Individual Income Tax Return(s). (S.T. 7-11, 115-119)On March
25, 2005 appellant had a telephone conversation with Agent Lana,#4039, explained the situation
and that he would respond in writing.
Appellant's response to Agent Lana No. 4039 , dated April 17, 2005, was mailed certified
to the Ohio Department of Taxation.( S. T. 111-134) Appellant requested a date and time to go to
Columbus to review any file that the Ohio Department of Taxation had created or maintained on
him. (S. T. 111). In addition Appellant stated in said correspondence that °if additional information
was needed to please advise in writing" (S.T. 111)(emphasis added). The Tax Commissioner and/or
the Ohio Department of Taxation refused, failed, or neglected to respond.
On or about December 12, 2005 Appellant received a Notice of Assessment.(S.T. 43-44)
2
On December 20,2005 Appellant telephoned number 1-614-466-1268 and/or 1-614-387-0224 and
talked to a person who identified herself as Agent Lana No. 4039. As a result of the conversation,
Appellant Carl R. Wagenknecht Jr. was told that the Notice of Assessment would be put on hold
pending the outcome of related issues with the Internal Revenue Service.
Because Appellant Carl R. Wagenknecht Jr. did not receive written confirmation that the
Notice of Assessment was put on hold, Appellant submitted his Petition For Reassessment, dated
2/7/06, to preserve any and all rights, without prejudice, which includes but is not limited to the
United States Constitution, Federal Law, the Uniform Commercial Code, the Ohio Constitution, and
Ohio Law. (S.T. 28-289) In his petition, appellant, requested a personal appearance hearing. No
hearing took place. Also, Appellant explained in the petition that issues were still pending in the
Appeals Division of the IRS.
On or about March 23, 2006 Appellant received correspondence from the Department of
Taxation Administrative Review Section which explained that " Your Petition for Reassessment has
been referred to our Administrative Review Section for consideration. You will be contacted by an
agent when your count is assigned". No agent ever contacted Appellant. (Rexhibit D)
On 3/30/06 Case No: 1:06-cv-00726, Carl R. Wagenknecht Jr. vs Internal Revenue
Service, Commissioner of Internal Revenue Service, and Lawrence Phillips was filed in the U.S.
District Court , Northern District of Ohio. On 3/31/06 Docket No: 6315-06 , Carl Robert
Wagenknecht Jr. vs. COMMISSIONER OF INTERNAL REVENUE was filed in the United
States Tax Court. Both lawsuits are regarding tax year 1996 and are still active. Case No: 1:06-cv-
00726 is in United States Court of Appeals for the Sixth Circuit as case no: 06-4161 .
On or about June 7, 2006 Appellant Carl R. Wagenknecht Jr. received the Tax
3
Commissioner's FINAL DETERMINATION dated May 19, 2006 which alleged the Tax
Commissioner had no jurisdiction.(Appx. 15-16, S.T. 1-2) Appellant timely flied a notice of appeal
with the Board of Tax Appeals on 8/3/06, Case No: 2006-1007. Pursuant to ORC 5743.13 , no
payment of any alleged amount owed was required to be paid with the Petition for Reassessment.
On December 21, 2007 the Ohio Board of Tax Appeals entered its Decision and Order
granting the Tax Commissioner's motion to affirm his final determination. (Appx. 10-14). On
January 24, 2008, Appellant's Notice of Appeal was timely filed with the Supreme Court of Ohio.
(Appx. 1-9)
ARGUMENT
Proposition of Law No. I:An Ohio Citizen who is not required to file or is prohibited by law fromfiling Form 1040 with the Internal Revenue Service is therefore notrequired to file or is prohibited by law to file Form IT-1040 with theOhio Department of Taxation.
44 USC 3512 provides a complete defense or bar.
On September 25,2007 the United States Court of Appeals for the Tenth Circuit rendered its
decision in United States ofAmerica vs. Chisum case: 06-7082. The Appeals Court held that:
" The [Paper Reduction Act] PRA, 44 U.S.C. ¶ 3501-20, precludes the iinposition of anypenalty against a person for "failing to comply with a collection of information" if either (1)it "does not display a valid control number" or (2) the agency fails to alert the person that heor she "is not required to respond to the collection of information unless it displays a validcontrol number." 44 U.S.C. 3512 (a). A 3512(a) defense may be raised at any time . See id.3512(b) . Tax forms are covered by the PRA. See Dole v. United States SteelworkersofAm.,494 U.S. 26, 33 (1990).
...the PRA protects a person only "for failing to file information. It does not protect one whofiles information which is false." Collins, 920 F.2d at 630 n.13"
4
Pursuant to 44 USC 3512 a person can bring forward that a collection of information form
(Form 1040) does not display a valid OMB number assigned by the Director as a complete defense
bar, or otherwise at any time during the administrative process or judicial action applicable.
26 USC 6011 states:
"When required by regulations prescribed by the Secretary and person made liable for anytax imposed by this title , or with respect to the collection thereof, shall make a return orstatement according to the forms and regulations prescribed by the Secretary. Every personrequired to malce a return or statement shall include therein the information required by suchforms or regulations.
The IRS alleges that individuals are made liable for an income tax pursuant to 26 USC I
with implementing regulations at 26 CFR 1.1 . 26 CFR1.1 is titled "Income Tax on individuals".
The Paper Reduction Act requires a valid OMB number to be displayed on a Form before an
individual is required to complete it. 26 CFR 602.101 states in pertinent part as its purpose :
"This part collects and displays the control numbers assigned to collections of infonnationin Internal Revenue Service regulations by the Office of Management and Budget(OMB)under the Paper Reduction Act of 1980. The Internal Revenue Service intends that this partcomply with the requirements of [sectioris] 1320.7(f), 1320.12, 1320.13 and 1320.14 of 5CFR part 1320 (OMB regulations implementing the Paper Reduction Act), for the displayof control numbers assigned by OMB to collections of information in Internal RevenueService regulations"
Unless an information gathering form (Form 1040) has been presented by the Agency(IRS)
to the Office of Management and Budget(OMB) for approval and subsequent assignment of the
control number identifying the fonn, and then the form is published in the Federal Register pursuant
to the Federal Register Act and the Administrative Procedures Act, there is no obligation on the part
of the general public to fill it out. United States v. Two Hundred Thousand Dollars ($200, 00) In
United States Currency , 590 F.Supp 866 (S.D.Fla. 1984); Gonzalez v. Freeman, 334 F.2d
570(D.C.Cir. 1964); Hotch v. United States, 212 F.2d 280 (9"Cir.1954); Berends v. Butz 357 F.Supp
5
144 (D,Minn.1973)
According to 26 USC 6011 referenced above the Secretary should have identified a specific
form and regulation so that any individual alleged liable for a tax could prepare a return for the
alleged tax. When Carl R. Wagenknecht Jr. searched 26 CFR 602.101 where the list of valid OMB
control numbers assigned to forms is located, there was no valid OMB number assigned for 26 CFR
1.1. There is an entry for 26 CFR 1.1(h)-1(e) but this applies to Capital Gains look-through rule
for sales or exchanges of interests in a partnership".(Rexhibit O) .
In fact the IRS has never requested that Form 1040 be used by those alleged
to have a tax liability pursuant to 26 CFR 1.1. Form 83 Request for OMB Review for 1986
(Supp. 18-23, Rexhibit Q) ) states that "We[Department of the Treasury/Internal Revenue Service]
are asking for continual approval for these regulations that are associated with Form 1040. There is
no additional burden requirement on..." The document then lists approximately 50 regulations.
26 CFR 1.1 is not included. ( Supp. 23, Rexhibit Q )
Also, in the Paperwork Reduction Act Submission for 1996 (Supp. 24-28, Rexhibit R) states
at item 12. Burden Estimation that "We[Department of the Treasury/Internal Revenue Service]
are asking for continued approval for these regulations that are associated with Form 1040. Please
continue to assign OMB number 1545-0074 to these regulations" The document then lists over 50
regulations and approximately 40 sections from 26 USC. 26 CFR 1.1 and 26 USC 1 are not
included. (Supp.27-28, Rexhibit R)
In addition, in the Paperwork Reduction Act Submission for 1998 (Supp.29-50, Rexhibit
R) states at item 12. Burden Estimation that "We[Department of the Treasury/Internal Revenue
Service] are asking for continued approval for these regulations that are associated with Form 1040.
6
Please continue to assign OMB number 1545-0074 to these regulations" The document then lists
over 100 regulations and approximately 40 sections from 26 USC. . 26 CFR 1.1 and 26 USC 1 are
not included. (Supp. 35-38, Rexhibit S)
Therefore one can only conclude that the intent of the Department of the Treasury and the
Internal Revenue Service was that Form 1040 was not to be used by individuals alleged to have a
tax liability pursuant to 26 CFR 1.1 Appellee knew the procedure to make Form 1040 mandatory
to be filed by the general public who have an alleged tax liability pursuant to 26 CFR 1.1 .
Since there was no form assigned to file for 26 CFR 1.1 and appellant desired to be in
compliance with applicable law, appellant sought to prepare a return/statement that complied with
26 USC 6011. However, return is not defined in the Internal Revenue Code. Case law provides the
requirements for a document to be considered a valid return.
The Appeals Court in Payne v. United States of America , No. 05-1941(7th Cir. 2005) held
that for a document filed with the IRS to be deemed a return, the document must (1) purport to be
a return (2) be signed under penalty of perjury (3) contain enough information to enable the
taxpayer's tax liability to be calculated and (4) an honest and reasonable endeavor to satisfy the law..
(See Watson v. Commissioner oflnternal Revenue T.C. Memo. 2007-146(2007) ).
The Return/AFFIDAVIT STATEMENT Appellant prepared for 1996 included the following:
(1) Item 6 that explains that the Affidavit Statement is being submitted in lieu of Form 1040 to
comply with any alleged filing requirement(Supp.82, S.T.64) ; (2) Item 12 explains that Appellant
is amending by replacement any prior return by the affidavit statement (Supp.89-90, S.T.71-72) ;
(3) signed under penalty of perjury under the laws of the United States of America Supp. 116, S.T.
99); (4) extensive infonnation to establish that appellant has zero tax liability(Supp.78-123, S.T.60-
7
106); and (5) explained in item 29. that if the Affidavit Statement was not in proper format to inform
appellant. Appellant's Return/AFFIDAVIT STATEMENT was received by the Tax Commissioner
twice(2) via registered mail (Supp.110, S.T.93). Hence, Appellant's Return/AFFIDAVIT
STATEMENT is a valid return and Appellant met any alleged filing requirement.
In addition, forms should have a unique OMB Control number. However, the following
forms: (1) Form W-4 titled Emnlovee Withholding Allowance Certificate for 2006. (Rexhibit
T);(2)Form 1040NR titled U.S. Nonresident Alien Income Tax Return for 2005. ( Rexhibit U) ; and
(3) Form 2555 titled Foreign Earned Income for 2005,(Rexhibit V), all have the same OMB Control
Number of 1545-0074 which is the same OMB Control number for Form 1040. Also, there is no
expiration date as required for the before mentioned forms.
Hence, Appellant Carl R. Wagenknecht is not required to file Form 1040.
The Requirements of 28 USC 1746 Are Mandatorv
28 USC 1746 titled Unsworn declarations under penalty of perjury states:
"Wherever, under any law of the United States or under any rule, regulation, order, orrequirement made pursuant to law any matter is required or permitted to be supported,evidenced, established, or proved by the sworn declaration , verification, certificate,statement, oath, or affidavit, in writing of the person making the same(other than a deposition, or an oath of office, or an oath required to be taken before a specific official other than anotary public), such matter may with like force and effect , be supported , evidenced,established, or proved by the unsworn declaration, certificate, verification, or statement inwriting of such person which is subscribed by him, as true under penalty of perjury, anddated, in substantially the following form:
(1) If executed without the United States: I declare (or certify, verify, or state) underpenalty of perjury under the laws of the United States of America that the foregoing
is true and correct. Executed on (date).
(2) If executed within the United States , its territories, possessions, orcommonwealth: "I declare under penalty of perjury that the foregoing is true andcorrect. Executed on (date)." (Emphasize added)
8
According to 28 USC 1746 a person who is required to sign a document pursuant to 28 USC
1746(2) would be executing the document within the United States and therefore subject to its
jurisdiction. For example , a United States Court Reporter must complete Form AO 40B
(REV.7/91) titled STATEMENT OF EARNINGS OF UNITED STATES COURT REPORTERS
and sign and date "CERTIFICATION BY COURT REPORTER: By signing this form, I certify
under penalty of perjury pursuant to 28 USC 1746 that the foregoing is true and correct".(Supp.6
Rexhibit E). Likewise, a bankruptcy petition preparer as defined in 11 USC 110 when completing
Form 19A (10/05) titled DECLARATION AND SIGNATURE OF NON-ATTORNEY
BANKRUPTCY PETITION PREPARER(11 USC 1101 must sign that "I declare under penalty of
perjury that.."( Supp.7, Rexhibit F). Furthermore, a person who is required to complete Form 1040
titled U.S. Individual Income Tax Return must sign Form 1040 "Under penalties of perjury, I declare
that I have examined this return and accompanying schedules and statements , and to the best of iny
knowledge and belief, they are true, correct, and complete. Declaration of preparer(other that
taxpayer) is based on all information of which preparer has any knowledge". (Rexhibit G)
According to 28 USC 1746(l ) a person who is required to sign a document pursuant to 28
USC 1746(1) would be executing the document without the United States and therefore not subject
to its jurisdiction. Appellant was required to complete a separate Form AO 440 (Rev.10/93) titled
SUMMONS IN A CIVIL CASE in case 1:06 CV 2510 for each of the following : (1) Internal
Revenue Agent Maureen Lippert(Supp.8-9, Rexhibit H); (2) U.S. Attorney General (Supp. 10-11,
Rexhibit I); and (3) Internal Revenue Service(Supp.12-13, Rexhibit J). Appellant was required to
sign each of the before mentioned Form AO 440 under DFCLARATION OF SERVER as follows:
9
"I declare under penalty of perjury under the laws of the United States of America that the foregoing
information contained in the Return of Service and Statement of Service Fees is true and
correct."(Supp.8-13, Rexhibit H,I,J)
Appellant was in Akron, Ohio when the documents were executed. But how can one
reconcile Appellant's declaration to Revenue Agent Susan Vuicich's Declaration who was required
to sign her declaration " Pursuant to 28 U.S.C. 1746 , I declare under penalty of perjury that the
foregoing is true and correct" which indicates that she was within the United States when the
document was executed. (Supp. 13 -16, Rexhibit K) Also, Revenue Agent Maureen Lippert signed
her Declaration Under Penalty of Perjury. (S. T. 47-50). In addition Attomey Thomas Clarlc of the
U. S. Department of Justice was required to sign his declaration " Pursuant to 28 U.S.C. 1746 , I
declare under penalty of perjury that the foregoing is true and correct" .(Supp.17, Rexhibit L)
To reconcile the manner in which Agent Vuicich, Agent. Lippert and Attomey Clark were
required to sign their unsworn declaration with the manner in which Appellant was required to sign
, one must look to jurisdiction. Revenue Agent Susan Vuicich and Revenue Agent Maureen Lippert,
and Attorney Clark are required to sign a declaration pursuant to 28 USC 1746(2). Since Agent
Vuicich and Agent Lippert reside in Ohio then jurisdiction must be a result of both being federal
employees and therefore voluntarily subject themselves to the jurisdiction of the United States as
specially defined in the Internal Revenue Code and therefore subject to the jurisdiction of the IRS.
Likewise , Attorney Clark , a federal employee , was in Washington D.C. when he executed his
unsworn declaration. Whereas a person such as Appellant who is required to sign pursuant to 28
USC 1746(1) is not a federal employee and therefore is not under the jurisdiction of the United
States as specially defined in the Internal Revenue Code and therefore not under the jurisdiction of
10
the IRS.
Furthermore, 26 USC 6061(a) states that "Except as otherwise provided by subsection (b)
and sections 6062 and 6063 , any return, statement, or other document required to be made under
any provision of the internal revenue laws or regulation shall be signed in accordance with forms or
regulations prescribed by the Secretary." 26 USC 6065 further requires that "Except as otherwise
provided by the Secretary , any return , declaration , statement , or other document required to be
made under any provision of the intemal revenue laws or regulations shall contain or be verified by
a written declaration that is made under the penalties of perjury." Hence, Appellant would violate
federal law if he completed and signed Form 1040. Therefore, Appellant is prohibited by law from
filing Form 1040.
Appellant Carl R. Wagenknecht Jr. was not and continues to remain neither domiciled
expressly "within" the outer borders and jurisdiction of (1) District of Columbia; (2) a Federal
Enclave within one of the compact states ; nor(3) any Federal territory or possession administered
under the exclusive jurisdiction of the United States Congress. Rather, Appellant is domiciled
expressly "without" the "United States" and failed to meet the "Substantial Presence Test" as the
foregoing quoted terms are specially defined and used under Title 26 U.S.C. and Title 26 C.F.R. and
as the term "include" is legally defined as a word of limitation in the context of the said quoted terms
in Black's Law Dictionary, Sixth Edition, p. 763. (Supp.78-123, S. T. 60-106.)
Furthermore, Appellant Carl R. Wagenlcnecht Jr. was not and continues to remain neither a
"person," nor "U.S. person," nor "U.S. individual," nor "taxpayer," nor "non-resident alien," nor any
other "legal entity" "made liable for" any °internal revenue tax" as the foregoing quoted terms are
specially defined and used under Title 26 U.S.C. and Title 26 C.F.R. and as the term "include" is
11
legally defined as a word of limitation in the context of the said quoted terms in Black's Law
Dictionary, Sixth Edition, p. 763. (Supp.78-123, S.T. 60-106).
In W. Union v. Brodt, 171 Ohio App.3d 434, 2007-Ohio-2742, the parties disagreed on the
meaning of the word "person" as defined by the municipal income tax ordinance. Brodt, a banlc CEO,
maintained that "person" meant "employer" whereas the Village claimed "person" meant "an Officer
of the Corporation". The Village did not present any evidence that the bank was a corporation
defined under the ordinance. The appeals Court held that the village failed to meet its burden that
the bank was a "corporation" an.d that Brodt was an "employer". Hence, there was insufficient
evidence to support the Village's claims.
Likewise, in this case, the burden is with the Ohio Tax Commissioner to establish that Carl
R. Wagen]<necht Jr. has a Federal Tax Liability as defined in the Internal Revenue Code. The Ohio
Tax Commissioner has failed to present any evidence that establishes Appellant Carl R.
Wagenknecht Jr. is a "person," or "U.S. person," or "U.S. individual," or "taxpayer," or "non-resident
alien," or any other "legal entity" "made liable for" any °intemal revenue tax" as the foregoing quoted
terms are specially defined and used under Title 26 U.S.C. and Title 26 C.F.R. Moreover, the Ohio
Tax Commissioner lacks standing to claim Federal Tax liability as explained above.
The Ohio Tax Commissioner has failed to produce any evidence that demonstrates that the
IRS complied with the requirements of 26 USC 6061 and 26 USC 6065.
Accordingto the Tax Commissioner a completed Form IT-1040 or
Form IT-4594 is a condition precedent to determine an Ohio Citizen's
state tax liabilitv.
In Czubaj v. Tallmadge , 2003-Ohio-5466 the 9' District Court of Appeals, Summit County
12
held that :
" In deciding whether Tallmadge's ordinances permit taxation of severance payment inquestion in this case, we must abide by the rules of statutory construction. First, if thespecific language of an ordinance is unambiguous, the clear meaning of the words must beused. Bosher v. Euclid Income Tax. Bd. OfRev. 99 Ohio St.3d 330, 2003-Ohio-3886, at ¶ 14, citing Roxane Laboratories, Inc. v. Tracy (1996), 75 Ohio St.3d 125, 127. Also, when astatute is unambiguous, it is applied , not interpreted. `To interpret language that is alreadyplain is to legislate, which is not the function of the court.' Toliver citing Sears v. Weimer(1944), 143 Ohio St. 312, paragraph five of the syllabus. Additionally, `[w]ords and phrasesshall be read in context and construed according to the rules of grammar and common usage'.R.C. 1.42. In construing an ordinance , other statutes relating to the same general subjectmatter must be read together with the ordinance being construed, in pari materia. Bosher at114, citing United Tel. Co. Of Ohio v. Limbach(1994), 71 Ohio St.3d 369, 372. Finally, theSupreme Court of Ohio has stated that tax ordinances must be strictly construed, and anydoubt as to their meaning must be resolved in favor of the taxpayer. Roxane, 75 Ohio St.3dat 127. Citing Gulf Oil Corp. V. Kosydar(1975), 44 Ohio St.2d 208, paragraph one of thesyllabus. If a legislative body incorporates definitions of words or phrases , these definitionsare controlling and will direct the deterniination of the legislative intent. Toliver, citingBenua v. Columbus (1959), 170 Ohio St. 64, paragraph one of the syllabus."
ORC 5747.01 states in pertinent part:
" Except as otherwise expressly provided or clearing appearing from the context, any termused in this chapter has the same meaning as when used in a comparable context in theInternal Revenue Code, and all other statutes of the United States relating to federal incometaxes.
As used in this chapter:
(A) " Adjusted gross income" or "Ohio adjusted gross income" means federaladjusted gross income, as defined and used in the Internal Revenue Code, adjustedas provided in this section:
(S) "Taxable Income" or "Ohio taxable income " applies only to estates and trusts,and means federal taxable income , as defined and used in the Internal RevenueCode, adjusted as follows:... "(emphasis added)
According to Ohio Form IT-4549 and Ohio Fonn IT-1040 a prerequisite to determine Ohio
Taxable Income is to establish the applicable Federal adjusted Gross Income from Form 1040.
13
(S.T. 56-58). In bold on page 12 of the Ohio Income Tax Return and Instructions 2004 instruction
booldet it states "In all cases line 1 on your Ohio income tax return must match your federal adjusted
gross income as defined in the Internal Revenue Code" (S.T. 59). Therefore if Appellant has no
federal tax liability then there is no federal adjusted gross income. Hence, there is no response for
line 1 of the Ohio Form IT-1040.
Furthermore, as a result of Appellant's research which includes but is not limited to the
Internal Revenue Code, the Internal Revenue Manual, Treasury Regulations, the Code of Federal
Regulations, the Administrative Procedure Act, U.S. Supreme Court decisions, and both state and
federal cases, Appellant has concluded that Form 1040 does not have general applicability for the
public and therefore is not mandatory to file. Therefore, if Appellant is not required to file Form
1040 then there is no way to complete an Ohio Form IT-1040. Hence, Ohio Form IT-1040 is not
applicable to Appellant.( S. T. pp. 60-107).
Moreover, the inapplicability of Form 1040 to Appellant Carl R. Wagenknecht Jr. is
consistent with the inapplicability of Ohio Form IT-1040. On line 5 of Ohio Form IT-1040 it states
Ohio Taxable Income. (S. T. 58). Likewise on page 12 of the Ohio Income Tax Return and
Instructions 2004 it explains the method to calculate Ohio Taxable Income. (S. T. 59). Since
according to ORC 5747.01 "taxable income" or "Ohio taxable income" applies only to estates and
trusts and Appellant is not an estate or trust, the only conclusion is that Ohio Form IT- 1040 does not
apply to Appellant. Therefore the Notice of assessment is invalid, null and void.
ORC 5703.25 And ORC 5703.26 Mandates That AppellantIs Prohibited from Filing Form IT-1040.
14
ORC 5703.25 states:
"5703.25 Returns, claims, and reports need not be sworn to - perjury statement.
All tax returns, claims, or reports with respect to taxes, including accompanyingschedules and statements, which are required by law to be filed with the departmentof taxation, the treasurer of state, a county auditor, or a county treasurer need not besworn to. Any such return, claim, or report shall have printed on it the followingstatement, which shall be subscribed to by the person signing such return, claim, orreport: "I declare under penalties of perjuty that this return or claim (including anyaccompanying schedules and statements) has been exainined by me and to the bestof my knowledge and belief is a true, correct, and complete rethun and report,"
Appellant is prohibited according to 28 USC 1746 of signing any alleged tax return as
required by ORC 5703.25 to the Ohio Department of Taxation.
Furthermore, ORC 5703.26 states:
5703.26 Prohibition against making a false or fraudulent renort. return, schedule, statement,claim, or document.
"No person shall knowingly make, present, aid, or assist in the preparation or presentationof a false or fraudulent report, return, schedule, statement, claim, or document authorized orrequired by law to be filed with the department of taxation, the treasurer of state, a countyauditor, a county treasurer, or a county clerk of courts, or knowingly procure, counsel, oradvise the preparation or presentation of such report, return, schedule, statement, claim, ordocument, or knowingly change, alter, or amend, or Icnowingly procure, coimsel, or advisesuch change, alteration, or amendment of the records upon which such report, return,schedule, statement, claim, or document is based with intent to defraud the state or any of itssubdivisions. (Emphasis added)
With respect to such acts or conduct, no conviction shall be had under any other section ofthe Revised Code. "
Appellant knows that Form 1040 is for use by federal employees not the general public.
Likewise, Form IT-1040 is not applicable to Appellant. Hence, if Carl R. Wagenlcnecht Jr. would
complete the before mentioned forms he would be in violation of ORC 5703.26. Therefore, the Ohio
Tax Commissioner was incorrect when he stated that "the petitioner[Carl R. Wagenlrnecht Jr.] failed
15
to file the required Ohio Personal income tax return".
It is undisputed that Appellant filed Form IT-1040 Ohio Income Tax Return for year 1996
on October 15, 1997.(Supp. 1, Rexhibit A) Appellant filed said Form IT-1040 as he understood the
applicability of the Intemal Revenue Code to himself in 1997. Subsequent research revealed that
Appellant Carl Wagenknecht erred when he filed Form 1040 and Form IT-1040 for year 1996.
Appellant having reserved without prejudice his rights pursuant to UCC 1-207 revoked in
1998 his "signatures on previously filed W-4, 1040 Forms, and State Income Tax Forms[Ohio IT-
1040]." (Supp.2, Rexhibit B). Then in April 2000 Appellant filed with the Ohio Department of
Taxation an affidavit that included a statement of his "intent to submit to the Ohio Department of
Taxation any and all appropriate forms which are identified as required by law to submit". (Supp.3 -5,
Rexhibit C).
Finding no identified form that is mandatory to complete, Appellant prepared a Return/
AFFIDAVIT STATEMENT to comply with 26 USC 6011 which provides in the altemative to a
return, a statement. Carl R. Wagenknecht Jr.'s Return/AFFIDAVIT STATEMENT met the
requirements of a valid return according to the Payne case, supra. (Supp78-123, S.T.60-106 )
Appellant in May 2004 filed his Return/AFFIDAVIT STATEMENT pursuant to 26 USC
6011 for year 1996 that superceded any prior filings with the Internal Revenue Service. Appellant
alleged in the Return/AFFIDAVIT STATEMENT that based upon an extensive legal analysis Carl
R. Wagenknecht Jr. has zero tax Liability and the Intemal Revenue Service lacked jurisdiction.
.(Supp. 78-123, S.T.60-106 ) When there is no federal tax liability then there is no filing requirement
for both Ohio and the Internal Revenue Service
All of the above referenced actions occurred prior to the date of issuance of the assessment
16
by the Ohio Department of Taxation. The Return/ AFFIDAVIT STATEMENT was filed with both
the Tax Commissioner of Internal Revenue and Secretary of the Treasury Department. Both have
failed , refused, or neglected to respond.
According to IRM 20.1.1.2.1(6) compliance is achieved when a taxpayer makes a good faith
effort to meet the tax obligation defined by the Intemal Revenue Code. Therefore, for Tax Year 1996
Appellant is in compliance with IRC 6011.
For Tax Years 1997,1998,1999, 2000, 2001, 2002, 2003, 2004, 2005, 2006, and 2007
Appellant paid more to the IRS than the IRS alleged Appellant owed. Likewise, the Ohio
Department of Taxation received an overpayment for each of the before mentioned years. According
to the IRS Appellant was entitled to a return of monies for each of the before mentioned years. The
reason overpayments have been allowed to be made is so that while Appellant Carl R. Wagenknecht
Jr. has continued to dispute and challenge the IRS which includes but is not limited to alleged Tax
liabilities regarding Tax Year 1996, the misconduct of I.R.S. employees/agents, what Tax liable for,
and what form to complete if required, no one could make any unsubstantiated, broad sweeping
characterization that Appellant Carl R. Wagenknecht Jr. does not comply with applicable laws,
makes frivolous arguments, and/or impedes the administrative or judicial process.
Appellant has never disputed the constitutional right of the federal government to tax those
who are under its jurisdiction. Petitioner with sound legal arguments has disputed the interpretation,
implementation, and applicability as to who, what when, where, and how the IRC applies.
A challenge to jurisdiction can be made at anytime and if the burden is not met by the
challenged party(IRS) then jurisdiction does not exist. Jurisdiction was challenged and facts stated
by Appellant went unchallenged thereby according to law Carl R. Wagenknecht Jr's
17
Return/AFFIDAVIT STATEMENT for 1996 contains the undisputed facts that the IRS must use
regarding any action the IRS alleges they anticipate taking.
Appellant's Return/AFFIDAVIT STATEMENT for Tax Year 1996 went unchallenged by
IRS and thereby establishes that Carl Wagenknecht has a zero tax liability and the IRS lacks
jurisdiction over him.
Proposition of Law No. II:The Ohio Tax Commissioner is prohibited from demanding paymentof an alleged tax owed with interest as a condition precedent for jurisdictionto hear a Petition for Reassessment pursuant to ORC 5747.13 for an OhioCitizen who is not required to file or is prohibited by law to fileForm IT-1040 as an original return or amended return.
No payment was required by Appellant pursuant to ORC 5747 . 13
The Tax Commissioner erred when the Tax Connnissioner stated in his Final Detennination
that "there is no jurisdiction to consider the petition since "the petitioner failed to malce the required
payment on the assessment when submitting the petition for reassessment " because Appellant was
not required to make payment pursuant to ORC 5747.13 as further explained in the instruction as
provided with Form titled Petition for Reassessment. Appellant is classified under ORC
5747.13(E)(8). (see no. 4 under Payment Requirements of instructions)(Supp.128, S.T.44)
According to the instructions accompanying the Notice of Assessment under PAYMENT
REQUIREMENTS it states :
"PAYMENT REQUIREMENTS
To file a Petition for Reassessment , certain payments must be made , but only in the
following situations:
Payment requirements for filing a Petition for Reassessmentare as follows:
18
1. If you are only objecting to the assessment of penalty and/or interest, full payment of theassessed tax and interest is required. The penalty does not have to be paid at this time, butmust be paid if the appeal is unsuccessftil,
2. If the assessment was issued because you failed to file the annual report or any amendedreturns required by law for the given tax period, you must pay all of the tax and interest thatwas assessed. The penalty does not have to be paid at this time, but must be paid if the appealis unsuccessful.
3. If this assessment was issued because you did not pay the entire tax shown on the reportsyou filed, you must pay the unpaid balance of the tax shown on the report(s) and any interest.
No payment is required if none of the conditions outlined in 1 to 3, above, apply. 'temphasisadded)
The instructions referenced above were prepared and provided to Appellant by the Tax
Commissioner of Ohio. Said document can be considered a government pamphlet and tlierefore a
party admission. U.S. v. Van Griffan, 874 F.2d 634 (9`h Cir. 1989). Hence, the Ohio Tax
Commissioner has admitted that there are situations "where no payment is required if none of the
conditions outlined in 1 to 3, above, apply". The facts of this case establish that this is a such a
situation where the conditions in I to 3 do not apply.
Number 1 does not apply because Appellant is objecting to the TOTAL DUE which includes
TAX DUE AMOUNT, ASSESSMENT INTEREST and LATE FILING PENALTY. Likewise,
Number 2 does not apply because Appellant has filed any required return that is applicable for 1996,
as explained in the section for Proposition of Law No.I. Also, Number 3 does not apply because
Appellant paid the entire tax amount shown due on any reports Appellant filed. Therefore Number
4 is the only condition that applies. Hence, No Payment was due with the Petition For Reassessment.
The Ohio Tax Commissioner was put on notice with competent, credible evidence that
information received from the IRS contained erroneous information that was prepared by IRS
19
employees whose truthfulness and veracity had been put into question. The Ohio Tax Commissioner
appears to have ignored the information provided by Appellant. The Ohio Tax Commissioner by and
through his agent refused, failed, and/or neglected to respond to the correspondence dated April 17,
2005 which provided cornpetent credible evidence to support Appellant's allegations.
(S.T.3-27, 84-135) Furthermore, Appellant included in said correspondence that if additional
information is needed please advise in writing. Appellant never received any correspondence from
the Ohio Department of Taxation until the Notice of Assessment.
Ohio Tax Liability and Federal Tax Liability are mutuallyExclusive and therefore must be established independently.
The United States Supreme Court in McCulloch V Maryland 17 U.S. 316(1819) defined the
limits of the taxing authority of a State. The Supreme Court held that:
"It may be objected to this definition , that the power of taxation is not confined tothe people and property of a state. It may be exercised upon every object brought within itsjurisdiction. This is true, But to what source do we trace this right? It is obvious, that it isan incident of sovereignty, and is co-extensive with that to which it is an incident. Allsubjects over which the sovereign power ofa state extends, are objects of taxation; but thoseover which it does not extend, are, upon the soundest principles, exempt from taxation. Thisproposition may almost be pronounced self-evident.
"The sovereignty of a state extends to everything which exists by its own authority,
or is introduced by its permission." (Emphasis added) Id at 429
McCulloch not only delineated and defined the area or scope over which a sovereignty may
exercise its power to tax, but also defined those over which a sovereignty may not exercise its power
to tax. The Court further held that:
" That the power to tax involves the power to destroy; that the power to destroy may
defeat and render useless the power to create; that there is a plain repugnance in
conferring on one government a power to control the constitutional measures of
another, which other, with respect to those very measures, is declared to be supreme
20
over that which exerts the control, are propositions not to be denied. "(emphasis
added) Id at 431
In Farrington v. Tennessee, 95 U.S. 679(1877), the Supreme Court recognized that areas
within the State jurisdiction, State law is supreme to that of the federal government. In Farrington
,supra at 685 the court held that:
" In cases involving Federal questions affecting a State, the State cannot beregarded as standing alone. It belongs to a union consisting of itself and its sisterStates. The Constitution of that union, and the "laws made in pursuant thereof, arethe supreme law of the land. ..anything in the constitution or laws of any State to thecontrary notwithstanding;" and that law is as much a part of the law of every State asits own local laws and Constitution. Farmers' & Mechanics' Bank v. Deering, 91U.S. 29.
Yet every State has a sphere of action where the authority of the national
government many not intrude. Within that domain the State is as if the union were
not. Such are the checks and balances in our complicated but wise system ofSate and
national policy. "(Emphasis added)
In Farrington, supra , the Court made it clear that the mutually exclusive nature of
sovereignty, and the power to tax according to McCulloch was reciprocal , holding that where the
State governs, it is as though the federal government does not exist. (Emphasis added)
Justice Sutherland, dissenting in Burnes Nat'l Bank v. Duncan, 265 U.S. 17, 26 (1924),
reiterated this vital principal:
" It is fundamental , under our dual system of government that the Nation andthe State are Supreme and independent, each within its own sphere of action; and that each
is exempt from the interference or control of the other in respect of its governmental powers,and the means employed in their exercise. Bank of Commerce v, New York City, 2 Black,620, 634; South Carolina v. United States, 199 US. 437, 452, et seq; Farrington v.
Tennessee, 95 US. 679, 685. "How their respective laws shall be enacted; how they shall becarried into execution; and in what tribunals, or by what officers; and how much discretion,or whether any at all shall be vested in their officers, are matters subject to their own control,and in the regulation of which neither can interfere with the other." Tarble's Case, 13 Wall.
397, 407-408. Except otherwise provided by the Constitution, the sovereignty of the States"can be no more invaded by the action of the general government, than the action of the state
21
government, that the action of the state governments can arrest or obstruct the course of the
national power. Worcester v. Georgia 6 Pet. 515, 570." (Emphasis added)
Thus any alleged tax liability for the federal government is distinct and separate from any
alleged Ohio State tax liability.
The State of Ohio has chosen to use a person's alleged status as a taxpayer pursuant to the
Internal Revenue Code with an alleged federal tax liability as the measuring instrument in
determining a person's Ohio State tax liability. In Dery v. Lindley(1979), 57 Ohio St.2d 5, the Ohio
Supreme Court held per curiam that:
"...that by specifying "adjusted gross income" as the that base, the General Assemblyintended to adopt an objective "yardstick" approach to measurement of Ohio income fortaxing purposes. In this was the General Assembly "sought to foreclose the necessity fordetermination of the source, nature or composition of the funds'." Tiedemann v. Johnson
(Me. 1974), 316 A. 2d 359, 364, citing Katzenzenberg, supra, at page 473 . The vast majorityof courts in other states that have considered similar issues have reached the sameconclusion, i.e. that by adopting the federal income tax standard for their owntaxing purposes, their legislatures attempted to greatly simply their taxing schemes, so thatinclusion of an item of income in the federal "yardstick" would automatically require its
inclusion in the state tax base as well".
The Tax Commissioner of Ohio lacks standing to claim federal jurisdiction over a Citizen
of Ohio for tax purposes. Using the federal jncome tax standard pursuant to the Internal Revenue
Code as the measuring staudard for Ohio Tax liability does not in and of itself involce IRS [federal]
jurisdiction. If a person does not have a federal tax liability then a person has no Ohio tax liability
. Appellant has no federal tax liability and therefore no Ohio tax liability. ORC 5747.08(E) states
in pertinent part "If either spouse is not required to file a federal income tax return...". Hence, the
Ohio Revised Code confirms that not all Citizens of Ohio are required to file a federal tax return,i.e.
Form 1040.
The Ohio Board of Tax Appeals in Suleiman V. Zaino (November 2, 2001), B.T.A. No: 99-
22
L- 1823 delineated the burdens placed on the parties involved in an appeal before the Board of Tax
Appeals. The Board stated that:
" We initially note that the findings of the Tax Commissioner are presumptively valid.Maxxim Med, Inc. v. Tracy(1999), 87 Ohio St.3rd 337; Alcan Aluminum Corp. v.Limbach(1989), 42 Ohio St.3rd 121. It is incumbent upon a taxpayer challenginga fmding of the Tax Commissioner to rebut the presumption and establish a right to the reliefrequested. Belgrade Gardens, Inc. v. Kosydar (1974), 38 Ohio St. 2d 135; Ohio Fast Freightv. Porterfield (1972), 29 Ohio St.2d 69. The Taxpayer is assigned the burden of showing inwhat manner and to what extent the Tax Commissioner's determination is in error. MaxximMed. Inc., supra; Federated Department Stores v. Lindley (1983), 5 Ohio St.3rd 213.
What follows is "the manner and to what extent the Tax Commissioner's determination is
in error".
Proposition of Law No. III:It is mandatory for the Ohio Tax Commissioner to independentlyverify the accuracy and truthfulness of information received undera contractual relationship with the Internal Revenue Service as acondition precedent to make an assessment when an Ohio Citizenalleges that the information received from the IRS is not accurateor truthful before the information obtained shall be used todetermine an Ohio Citizen's state tax liability
The Ohio Tax Commissioner breached his duty to Appellant
A contract is an agreement between two or more persons which creates an obligation to do
or not to do a particular thing. Its essentials are competent parties, subject matter, a legal
consideration, mutuality of agreement, and mutuality of obligation. Lamoureux v. Burrillville Racing
Ass'n, 91 R.I. 94, 161 A2d 213, 215. "An implied contract is one not created or evidenced by the
explicit agreement of the parties , but inferred by the law, as a matter of reason and justice from their
acts or conduct, the circumstances surrounding the transaction making it reasonable , or even a
necessary assumption that a contract exited between them by tacit understanding." Black's Law
23
Dictionary Fifth Edition at page 283 .
Circumstances can exist where "it becomes the mandatory duty of the Tax Commissioner
to investigate the facts in connection with [the] claim". N. Bank Co. V. Evatt 145 O.S. 179(1945).
Likewise, the facts of this case demanded the Tax Commissioner to investigate.
The Tax Commissioner breached his duty to Appellant( and any other similarly situated Ohio
Citizens) when the Ohio Department of Taxation calculated Appellant's alleged income tax based
upon the federal adjusted gross income reported by the Internal Revenue Service without
independently verifying the truthfulness and accuracy of the alleged reported facts. "Mere
computations of a revenue agent do not legally determine one's tax liability". United States v. Taylor
305 F.2d 183 (1962). Appellee has not produced a scintilla of evidence to establish that Appellant
has a federal tax liability. Appellee has only provided unsubstantiated allegations and rhetoric.
The Ohio Department of Taxation received information from the Intemal Revenue Service
pursuant to a contractual relationship between the State of Ohio and the Internal Revenue Service
. Appellant is a third party beneficiary to the contract and therefore has certain rights under said
contract. One obvious right is that the information obtained from the I.R.S. is truthful and accurate
especially when said information may be used to Appellant's detriment.
The presumption should be that an Ohio Citizen has provided true and accurate infonnation.
Appellant Carl R. Wagenknecht Jr. has produced credible evidence that substantiates his allegations.
Hence, according to 26 USC 4791 the burden of proof rests with the I.R.S. to establish the veracity
of its alleged facts. If the I.R.S. meets its burden then the burden of proof shifts to Appellant.
Internal Revenue Agent Maureen Lippert was in charge of the 1996 audit. Agent Lippert'
refused, failed, or neglected the following which includes but is not limited to: (1) correct records;
24
(2) respond to Appellant's legal representatives correspondence which involved providing
documents relating to 1996, etc. Agent Maureen Lippert's actions lead to erroneous and/or
misinformation in Appellant's Individual Master File (IMF). (For an extensive explanation see the
document titled Analysis of Individual Master File in Supnort of Request for Amendment of
Individual Master File of Carl R. Wagenknecht Jr. ( S.T.108-291.)
This is the same modus operandi that Agent Maureen Lippert had regarding tax year 1998.
Maureen Lippert was assigned to audit tax year 1998 for Appellant. Agent Maureen Lippert was
continually provided documentation that there was an overpayment made. Agent Lippert refused to
correct the records. Appellant was forced to go to Tax Court and incur the time and expense
associated with Tax Court. The end result was that IRS and the Commissioner of Intemal Revenue,
had to stipulate that there was an overpayment and that Appellant was entitled to a return of monies
in the amount of $1735.(Rexhibit X, RexhibitY). It is not only plausible but highly probable that
Intemal Revenue Agent Maureen Lippert did similar acts regarding tax year 1996 which lead to an
erroneous tax liability.
But the 1998 debacle does not stop there. On or about July 13, 2006 Carl R. Wagenlniecht
Jr. received an unsigned document from the IRS titled "We have Changed Your Account" which
stated that "We have changed your 1998 federal income tax return because of your recent audit".
(Rexhibit Z). Carl R. Wagenknecht Jr. is unaware of any new audit unless the alleged audit was in
conjunction with the Tax Court's Decision.
Once again the I.R.S. has entered erroneous information into Appellant's IMF. As the I.R.S.
and Carl R. Wagenknecht Jr. stipulated as the basis for the Tax Court's Decision the tax paid was
$9083.67 and Tax liability of $7348.00, with an overpayment of $1735.67. The I.R.S. manipulated
25
the account to reflect "None" owed rather than an overpayment. Specifically the I.R.S. states that
Appellant's account reflects before audit(tax paid) was $5860.35, an Increase in tax (tax liability)
$7348.00, and a credit of $1735.00 which equals "0" and no overpayment. Hence, more incorrect
information in Appellant's IMF. It is plausible and highly probable that IRS employees and/or agents
did similar acts regarding tax year 1996 that resulted in erroneous tax liabilities. Evidence produced
supports such allegations.
Apuellant's Individual Master File (IMF) documents that the IRS alleeedassessment is not valid and therefore the Ohio Notice of Assessment is not valid.
The Ohio Department of Taxation requests that one provides a copy of their MFTRAX
transcript which is a selected portion of the entire IMF if one believes the information obtained from
the Internal Revenue Service is incorrect. (S.T.7)) . The alleged representation to the Ohio Tax
Commissioner that the IRS has complied with applicable law(i.e. IRC) and ascertained that
Appellant has an alleged tax liability is diametrically opposed to the facts contained in Appellant's
IMF.
DOCUMENT 6209(Supp.54-66, Rexhibit BB) which is prepared and distributed by the
Internal Revenue Service is the information that allows one to decipher their Individual Master
File(IMF). The Document Locator Number (DLN) is a fourteen(14) digit control number assigned
to every return or document input through the Automatic Data Processing (ADP) System. The ninth,
tenth, and eleventh digits represents the Block Series number. (Supp.58-60, Rexhibit BB).
Transaction Codes listed in DOCUMENT 6209 consist of three digits. Transaction Codes
are used to " identify a transaction being processed and to maintain a history of actions posted to a
taxpayer's account on the Master File. Every transaction processed by the Automatic Data
26
Processing(ADP) must contain a Transaction Code to maintain Accounting Controls of debit and
credits, to cause the computer at MCC/TCC to post the transaction on the Master File, to permit
compilation of reports, and to identify the transaction when a transcript is extracted from the Master
File".(Supp.67, Rexhibit CC)
Furthermore, words are specially defined in the Internal Revenue Code. One must used the
definition of a word or term pursuant to the IRC. For example , in IRM 4.425 the IRS provides an
explanation of Quick Assessments and in 452.3 of the Handbook For Special Agents is defined
"additional taxes".
Hence , in Appellant's IRS Account Transcript their must be documented that procedural
requirements were complied with regarding the assessment and that the ASED had not expired.
On January 3, 2003 TC 560 was entered into Appellant Carl R.Wagenknecht Jr's Individual
Master File(IMF) declaring that the Assessment Statutory Expiration Date (ASED) was extended
to February 10,2003. (Supp. 53, Rexhibit AA) This transaction on January 2, 2003 was after the
original ASED and after both the date alleged by Appellant as the correct ASED date and past the
date alleged correct for ASED by the IRS.(Supp.52-53, Rexhibit AA)
TC 560 is a "Waiver Extension of Date Assessment Statute Expires".(Supp.73, Rexhibit
CC). As has been documented Appellant never agreed to any extension of the ASED nor has
Appellant signed a waiver extending the ASED date. Furthermore, it is obvious from the Statutory
Transcript Carl R. Wagenknecht Jr. has never agreed to any alleged exam/audit results prepared by
the IRS. But this is exactly what the IRS has entered into Appellant's IMF. The IRS had to take such
drastic measure because the IRS knew the ASED had expired making any assessment invalid, null
and void.
27
Then on January 10, 2003 TC 300 for Quick Assessment was entered into Appellant's IMF.
(Supp.52-53, Rexhibit AA). The Document Locator Number(DLN) assigned was 17251-010-13000-
3. The ninth, tenth, and eleventh digits, 130, represents the Blocking Series.(Supp. 53, Rexhibit
AA). According to IRM 4.425.4.1.2 the bloclcing series for Quick Assessment of 130 means an
"agreed exam".(Supp.76, Rexhibit DD). Such a representation is blatantly false. The blocking series
should have been 132-134, "unagreed exam". (Supp.76, Rexhibit DD) By representing that there was
an agreed exam one could allege a waiver existed which would allow an extension to the ASED.
On February 2, 2003 TC 300 "Additional Tax Assessed by Examination" was entered on
Appellant's IMF.(Supp.53, Rexhibit AA). "Additional Tax" has a specific meaning. According to
the IRS Handbook for Special Agents 452.3 titled assessments of additional or delinquent excise
taxes are referred to as "additional taxes". (Supp.77, Rexhibit EE). This is consistent with the IRS
alleging that Appellant owed an excise tax as indicated on the waiver the IRS asked Appellant to
sign.(Supp. 51, Rexhibit W). Such allegation that Carl R. Wagenknecht Jr. owes an excise tax is
false.
But what unequivocally substantiates that the ASED had expired and the IRS Notice of
Deficiency was not valid is not what was recorded in Carl R. Wagenknecht Jr's IMF but what was
not recorded, TC 494. There is no TC 494.(Supp.52-53, Rexhibit AA). As previously explained all
transactions taken by the IRS must be documented in the IMF. TC 494 is that a Notice of Deficiency
had been issued.(Supp. 65, Rexhibit BB)( Supp, 72, Rexhibit CC). To enter TC 494 the IRS
would have to go on the record that they had complied with all applicable law which the IRS can
not. As has been continually demonstrated by Appellant that the IRS is not in compliance with the
IRC, IRM, and other applicable law as well as the blatant misconduct of IRS employees.
28
Since the IRS assessment is invalid, null and void, then the Oltio Notice of Assessment is
also invalid, null and void. Thus the Ohio Tax Conunissioner's Final Determination is wrong.
Proposition of Law No. IV:If the Internal Revenue Service has taken any action which includes but is notlimited to an assessment or notice of deficiency after the statute of limitationshas expired then the Ohio Tax Commissioner is prohibited from using anyinformation obtained from such action.
The Statue of Limitations for the Tax Commissioner. State of Ohio to make or issueAppellant an assessment expired prior to the Notice of Assessment being issued onDecember 8,2005.
On October 15, 1997 Appellant filed Ohio Form IT-1040 for tax year 1996 under the
assumption that Appellant was required to file said form. ORC 5747.13 states in pertinent part:
"No assessment shall be made or issued against an employer, taxpayer, or qualifying entitymore than four years after the final date the return subject to assessment was required to befiled or the date the return was filed , whichever is later. However, the commissioner mayassess any balance due as the result of a reduction in the credit allowed under division (B)of section 5747.05 of the Revised Code, including applicable pernalty and interest, withinfour years of the date on which the taxpayer reports a change in either the portion of thetaxpayer's adjusted gross income subjected to an income tax or tax measured by income inanother state or the District of Columbia, or the amount of liability for an income tax or taxmeasured by income to another state or the District of Columbia, as required by division(B)(3) of section 5747.05 of the Revised Code. Such time limits may be extended if both theemployer, taxpayer, or qualifying entity and the commissioner consent in writing to theextension or if an agreement waiving or extending the time limits has been entered intopursuant to section 122.171 [171.17.1 ] of the Revised Code. Any such extension shall extendthe four-year time in division (B) of section 5747.11 of the Revised Code for the same periodof time..."
According to ORC 5747.13 the general rule is that the Tax Commissioner, State of Ohio to
make an assessment has "four years after the final date the return subject to assessment was required
to be filed or the date the return was filed , whichever is later". Therefore, the four year Statute of
Limitations expired on October 15, 2001. Since this Notice For Assessment for tax year 1996 was
29
issued on December 8, 2005 which is after the expiration of the 4 year Statue of Limitation this
assessment is time barred. Therefore any actions taken in conjunction with this Notice of Assessment
are null and void.
There exist exceptions to the general rule of ORC 5747.13 that may extend the statue of
limitation period. However, none of the exceptions apply to this case. First, Appellant has never
reported to the Ohio Department of Taxation a change in either the portion of the Appellant's alleged
adjusted gross income subjected to an income tax or the amount of liability for an income tax for
tax year 1996 because no such action was warranted by Appellant. Secondly, Appellant has never
entered into a written consent with the Tax Commissioner, State of Ohio to extend the time limits
or any agreement that waived or extended the time period. Hence, the 4 year statue of limitation time
period was never extended.
The Assessment Statutory Expiration Date (ASED) for the Commissioner, InternalRevenue expired prior to the IRS manufacturing an alleged valid Notice ofAssessment that alleged a corrected adjusted gross income which is the basis of theNotice of Assessment issued on December 8 . 2005 by the Tax Commissioner . Stateof Ohio The information provided in February 2003 has been continually disputedand is invalid.
According to correspondence dated December 8, 2005 titled `NOTICE OF ASSESSMENT
INDIVIDUAL INCOME TAX for Tax Year Ending 1996, the Notice Of Assessment is Case Type
No. 10, Audit Type: RAR which is defined as "Assessment based on an audit done by IRS". (S. T.
pp 43-44). According to correspondence received from Agent Lana 4039 and reiterated in a phone
conversation on 12/20/05 with Agent Lana No. 4039 that the information used to establish the
alleged corrected adjusted gross income was from information received from the IRS in February
2003. The information was prepared by the IRS after the expiration of the ASED. Therefore, the
30
information provided was invalid , null and void which likewise made the Ohio Notice of
Assessment invalid, null and void. The following is a detailed analysis of the accuracy of Appellant's
assertions.
On October 15, 1997, Appellant's federal return for Tax Year 1996 was filed. The statue
of limitations expired on October 15, 2000. Any action that occurred after the expiration of the
statute of limitations was time barred and therefore any actions taken in reliance on information
from the IRS such as this Notice of Assessment are time barred, null and void.
The IRS has alleged that the correct Statutory Assessment Expiration Date (ASED) was
September 13, 2002. According to applicable law and the IRS policy and/or procedure any Notice
Of Deficiency mailed after the before mentioned date is invalid and any assessment is time barred.
The IRS refused failed or neglected to mail the Notice of Deficiency within the alleged
statute of limitation period. The Notice of Deficiency dated September 12, 2002 and metered
September 12, 2002 was in fact not mailed until September 14, 2002 as established by the US
Postmarlc. According to USPS Policy and Procedure for 2002 , the US Postmark supersedes a
metered date. (see Section 301.7502-1(c)(1)(iii)(b), Proced. & Admin. Regs. and See Robinette v.
Commissioner, 123 T.C. 5 (2004) ) Appellant did not receive the Notice of Deficiency until on or
about Septernber 17, 2002. (S. T. 45).
After the expiration of the period for assessment prescribed by the applicable statue of
limitations, assessment is barred, Matter ofHarper, 590 F.2d 165 , and, in the absence of a waiver,
if a purported one is made, it is invalid. Signal & Oil Co. V. US. (CSJ) See Rev. Rul. 72-42, 1972-1
C.B. 398. Therefore, since the Statutory Notice of Deficiency for 1996 was mailed after the ASED
date, the Statutory Notice of Deficiency was invalid. All assessments are time barred. Because the
31
Notice of Deficiency was invalid Appellant has the right as a matter of law to challenge any alleged
tax liabilities.
The analysis provided by the IRS agent for determining a new assessment date of February
10, 2003 was predicated on numerous false and material misrepresentation of facts. The undisputed
facts are that on October 15, 1997, Appellant's return for Tax Year 1996 was filed. The Assessment
Statutory Expiration Date (ASED) was October 15, 2000.
On May 23,2000 Revenue Agent Maureen Lippert asked Appellant to sign a Waiver to
extend the Statutory Assessment Expiration Date (ASED) for tax year 1996 to June 30, 2001.
Appellant declined. (Supp. 51, Rexhibit W)
On July 6, 2000 Revenue Agent Maureen Lippert Served on Third Party Record Keepers
Administrative Summons. On July 25, 2000, Appellant filed a Complaint captioned as Petition to
Quash Summons in the United States District Court for the Northern District Of Ohio , Eastern
Division. The Complaint was assigned to Judge Oliver, and assigned Case No. 1:00 CV 1890.
(S. T..46). Case No. 1:00 CV 1890 was filed 81 days prior to the assessment statutory expiration of
October 15, 2000.
On September 12, 2000 Revenue Agent Maureen Lippert issued two (2) new summons that
she hand delivered.( S.T..47-50). On October 2, 2000, Petitioner filed a second and distinct
Complaint captioned as Petition to Quash Summons in the United States District Court for the
Northern District Of Ohio , Eastern Division. The Complaint was assigned to Judge Gaughn , and
assigned Case No. 1:00 CV 2510. (S.T.. 51). Each complaint remained separate and distinct. The
two complaints were never joined into one complaint. Case No. 1:00 CV 2510 was filed 13 days
prior to the assessment statutory expiration of October 15, 2000.
32
On October 23, 2000 the Internal Revenue Service withdrew the two summons issued on July
6,2000. (S. T.. 52) The United States moved to dismiss Case No. 1:00 CV 1890 and U.S. District
Judge Solomon, Jr. dismissed the complaint as moot on October 31, 2000. No Appeal was made..
(S.T.52)
On February 26, 2001 Judge Gaughn entered a Judgment Entry for defendants in the second
Complaint 1:00 CV 2510.(S.T.53) On March 22,2001 Appellant filed a Notice Of Appeal for Case
No. 1:00 CV 2510, the second Complaint. On October 26, 2001 the United States Court Of Appeals
for the Six Circuit affirmed the district court's judgment. Appellant's Petition for a writ of certiorari
to the United States Supreme Court was denied on June 24, 2002.(S.T.. 54-55)
On May 7, 2002 Revenue Agent Maureen Lippert asked Appellant to sign a Waiver to extend
the Assessment Statutory Expiration Date (ASED) for tax year 1996 to September 30, 2003.
Appellant declined.
26 USC Sec. 7609 (e) states in pertinent part`... then the running of any period of limitation
under section 6501 (relating to the assessment and collection of tax) ....with respect to such person
shall be suspended for the period during which a proceeding and appeals therein, with respect to the
enforcement of such summons is pending. Furthermore, the Statue of Limitations is tolled when
enforcement proceedings for IRS Summons are pending; time of tolling includes time during which
appeal may be taken from enforcement proceedings. United States v. Meyer (1987, CA8 Minn) 808
F2d 1304, 87-1 USTC 9132, 59 AFTR 2d 87-454. Toll is defined as to suspend or stop temporarily
as the statue of limitations is tolled during the defendant's absence from the jurisdiction. Black's
Law Dictionary 5' Edition
. Whether the Commissioner's assessment was made within the limitation period also
33
constitutes a challenge to the underlying tax liability. Hoffman v. Commissioner, 119 T.C. 140, 143
(2002) That after the expiration of the period for assessment prescribed by the applicable statue of
limitations, assessment is barred, Matter ofHarper, 590 F.2d 165 , and, in the absence of a waiver,
if a purported one is made, it is invalid. Signal & Oil Co. V. U.S. (CSJ) See Rev. Rul. 72-42, 1972-1
C.B. 398
According to 26 USC Sec 7609 (e) if the date of July 25, 2000 is used for the start when the
period of limitation is suspended which is 81 days prior to the ASED , then 81 days after October
23, 2001 when the ls` complaint was dismissed would be January 12, 2002, the new ASED date.
Since the IRS alleges the Notice of Deficiency was mailed on 9/12/02 which is after the statute
of liniitation period for assessment, the Notice of Deficiency is invalid and any assessment is time
barred.
According to 26 USC Sec 7609 (e) if the date of October, 2, 2000 is used for the start when
then period of limitation is suspended which is 13 days prior to the ASED , then 13 days after June
24, 2002, when all appeals were exhausted, the new ASED would be July 7, 2002. Since the IRS
alleges the Notice of Deficiency was mailed on 9/12/02 which is after the statute of limitation period
for assessment, the Notice of Deficiency is invalid and any assessment is time barred.
Also, the analysis provided by the IRS agent for determining a new assessment date of
February 10, 2003 is predicated on false and material misrepresentation of facts . The false
assumption is made that Appellant initially filed the first complaint,Case No. 1:00 CV 1890, in Tax
Court and was then appealed all the way to the United States Supreme Court. Appellant did not
petition Tax Court for tax year 1996.
The Courts have ruled a petition for review by a federal Appeals court of the order of a Tax
34
and void, then it must be concluded that the Ohio Notice of Assessment is also invalid, null and void.
CONCLUSION
Appellant Carl R. Wagenknecht Jr. has established that he is classified under ORC 5747.13
(E)(8) (see no. 4 under Payment Requirements of instructions) and no payment was due with
Appellant's Petition for Reassessment. The decision below undermines a scared relationsliip
between Ohio and its Citizens that the government will not use information whose veracity and
credibility has been challenged without an opportunity to be heard. The Tax Commissioner's
position would make ORC 5747.13 meaningless.
Appellant's Return/AFFIDAVIT STATEMENT for 1996 established :(1) that the
Return/AFFIDAVIT STATEMENT was being submitted in lieu of Form 1040 to comply with any
alleged filing requirement; (2) that appellant was amending by replacement any prior return by the
Return/AFFIDAVIT STATEMENT (3) the Return/AFFIDAVIT STATEMENT was signed under
penalty of perjury under the laws of the United States of America; (4) the Return/AFFIDAVIT
STATEMENT included extensive information to establish that appellant has zero federal tax
liability; and (5) that if the Affidavit Statement was not in proper format to inform appellant. The
Return/AFFIDAVIT STATEMENT was received by the Commissioner of Internal Revenue
Twice(2) via registered mail (Supp. 78-123, S.T.60-106). Hence, the Return/AFFIDAVIT
STATEMENT is a valid return and further, appellant met any alleged filing requirement both
federal and state.
Also, Appellant has established that the information received from the IRS used by the Ohio
Commissioner for his determination was often times incorrect and /or not credible. Also, Appellant
has demonstrated that information received from the IRS is not reliable, accurate, competent, and/or
36
credible because of IRS employee misconduct.
The Ohio Tax Conunissioner has failed to establish that the IRS has jurisdiction, that the
Internal Revenue Code applies to Appellant , or that Appellant is a citizen of or resides in the
United States as specifically defined in the Internal Revenue Code.
Appellant Carl R. Wagenknecht Jr. was not and continues to remain neither a "person," nor
"U.S. person," nor"U.S. individual," nor "taxpayer," nor "non-resident alien," nor any other "legal
entity" "made liable for" any "internal revenue tax" as the foregoing quoted terms are specially
defined and used under Title 26 U.S.C. and Title 26 C.F.R. .
Case No: 1:06-cv-00726, Carl R. Wagenknecht Jr. vs Internal Revenue Service,
Commissioner of Internal Revenue Service, and Lawrence Phillips_ filed in the U.S. District Court
, Northern District of Ohio and Docket No: 6315-06 , Carl Robert Wagenknecht Jr. vs.
COMMISSIONER OF INTERNAL REVENUE filed in the United States Tax Court regarding tax
year 1996 are still active. Case No: 1:06-cv-00726 is in United States Court of Appeals for the Sixth
Circuit as case no: 06-4161 . Any decision regarding any alleged state tax liability is premature
until there is resolution as to whether Appellant has any federal tax liability
Based upon the foregoing, the Decision and Order below should be reversed by this
Honorable Court.
Submitted,
Carl R. WagenknechtAppellant174 Cheltenham LaneMunroe Falls, Ohio 44262330-388-8968
37
CERTIFICATE OF SERVICE
This is to certify that a copy of the foregoing APPELLANT'S MERIT BRIEF AND
SUPPLEMENT TO THE BRIEFS was served on Damion M. Clifford, Assistant Attorney General,
a! 1 21Ya 8-counsel for Appellee, TAX COMMISSIONER OF OHIO by mailing the saine on 'fv7in
a postage paid wrapper addressed as follows:
DAMION M. CLIFFORDAssistant Attorney General30 East Broad Street 25'h floorColumbus, Ohio 43215
i
Date:
Carl R. WagenkneAppellant, Pro Se174 Cheltenham LaneMunroe Falls, Ohio 44262Telephone : 330-388-8968
38
IN THE SUPREME COURT OF OHIO
Carl Robert Wagenknecht Jr.,
Appellant,
V.
Appeal from the OhioBoard of Tax Appeals
William W. Wilkins,Tax Commissioner of Ohio,
Appellee.
Board of Tax AppealsCase No. 2006-T-1007
NOTICE OF APPEAL OF CARL ROBERT WAGENKNECHT JR.
Carl R. Wagenknecht Jr.174 Cheltenham LaneMunroe Falls, Ohio 44262330-388-8968AppellantPro Se
Marc Dann (0039425)Attomey General of OhioDarnion M. Clifford (0077777) (COUNSEL OF RECORD)Assistant Attorney General30 East Broad Street 25'h FloorColumbus, Ohio 43215Telephone: (614 ) 466-5967Facsimile: (614) 466-8226dcliffbrd(@a&.state.oh.us
COUNSEL FOR APPELLEE,WILLIAM W. WILKINS, TAX COMMISSIONER OF OHIO
F LDDJAN 14 2o(;8
CLERK OF COURTSUPREME COURT OF OHIO
001
Notice of Appeal of Appellant Carl Robert Wagenknecht Jr.
Appellant Carl Robert Wagenknecht Jr. hereby gives notice of his appeal as of right, pursuant
to R.C. 5717.04, to the Supreme Court of Ohio, from a Decision and Order of the Board of Tax
Appeals, journalized in case No. 2006-T-1007 on December 21, 2007. A true copy of the Decision
and Order of the board being appealed is attached hereto and incorporated herein by reference.
The appellant complains of the following errors in the Decision and Order of the Board of
Tax Appeals:
1. The Board of Tax Appeals erred by affirming the Final Determination based on
Appellee's interpretation of ORC 5747.13 that "there is no jurisdiction to consider the petition
since "the petitioner failed to make the required payment on the assessment when submitting the
petition for reassessment " because Appellant was not required to make payment pursuant to ORC
5747.13 as further explained in the instruction as provided with Form titled Petition for
Reassessment. Appellant is classified under ORC 5747.13(E)(8). (see no. 4 under Payment
Requirements of instructions)
2. The Board of Tax Appeals erred by not allowing Appellant to present evidence at a
hearing before the Board (which evidence was proffered in Appellant's Response In Opposition To
Appellee's Motion To Affirm The Tax Commissioner's Final Determination) , to prove that the
Appellee was interpreting, instead of applying ORC 5747.13.
3. The Board of Tax Appeals erred by not allowing Appellant to present evidence at a
hearing before the Board( which evidence was proffered in Appellant's Response In Opposition To
2
002
Appellee's Motion To Affinn The Tax Commissioner's Final Determination ), to prove that
Appellant was not required to make payment with the Petition for Reassessment.
4. The Board of Tax Appeals erred by not allowing Appellant to present evidence at a
hearing before the Board (which evidence was proffered in Appellant's Response In Opposition To
Appellee's Motion To Affirm The Tax Commissioner's Final Determination), to prove that
Appellee Tax Commissioner lacked jurisdiction.
5. The Board of Tax Appeals erred by affirming the Appellee's Final Determination
because Appellee had no standing to claim that Appellant had a federal tax liability.
6. The Board of Tax Appeals erred by affirming the Final Determination issued by
Appellee because the Final Determination violates 28 USC 1746.
7. The Board of Tax Appeals erred by affirming the Final Determination issued by
Appellee because the Final Determination violates 44 USC 3512.
8. The Board of Tax Appeals erred by affirming the Final Determination issued by
Appellee because the Tax Commissioner in the Final Determination required Appellant to violate
federal law which included but was not limited to 28 USC 1746 as a condition precedent for the Tax
Commissioner to hear Appellant's Petition for Reassessment.
9. The Board of Tax Appeals erred by affirming the Final Determination issued by
Appellee because Appellant challenged the alleged jurisdiction of the Tax Commissioner over
Appellant thereby shifting the burden of proof for jurisdiction to the Appellee. Appellee Tax
Commissioner has failed to provide any evidence that disputes the evidence which was proffered in
Appellant's Response In Opposition To Appellee's Motion To Affirm The Tax Commissioner's
Final Determination which established that Appellee had no jurisdiction.
3
003
10. The Board of Tax Appeals erred when the board stated in footnote I of the Ohio
B oard of Tax Appeal Decision and Order dated December 21 ,2007 that "However, this board's
jurisdiction is limited to those issues considered by the commissioner in his final determination. As
the only issue addressed by the commissioner was his lack of jurisdiction over the petition for
reassessment, our jurisdiction is likewise limited to a review of that issue" because Appellant raised
issues which included but was not limited to jurisdiction and 44 USC 3512 that can be raised at
anytime in any proceeding.
11. The Board of Tax Appeals erred by affirming the Final Determination based on
Appellee Tax Commissioner misstatement and/or misrepresentation of the facts when the Tax
Commissioner stated "petitioner failed to file the required Ohio Personal income tax return"
because Appellant is in compliance with 26 USC 6011 and therefore in compliance with ORC
5747.08, 5747.42, 5747.10, 5747.45, or 5747.05.
12. The Board of Tax Appeals erred by affirming the Final Determination based on
Appellee Tax Commissioner misstatement and/or misrepresentation of the facts when the Tax
Commissioner stated in footnote 1 of the Final Determination that "there is no further pending action
before the Internal Revenue Service pertaining to this taxpayer for this tax year" because tax year
1996 which is the subject of the Petition for Reassessment and this Appeal is currently in litigation
with the Commissioner of Intemal Revenue before the Tax Court, Docket No: 6315-06L and in
United States District Court, Case No: 1:06 CV 0726.
13. The Board of Tax Appeals erred by affirming the Final Determination issued by the
Tax Commissioner who, by and through, the "Ohio Department of Taxation calculated his
[Appellant's] Ohio income tax based upon the federal adjusted gross incomes reported by the
4
004
Internal Revenue Service" because the information the Internal Revenue Service maintains in their
f-i les, records and/or Appellant's Individual Master File(IMF) is based upon erroneous
iraisrepresentation of facts, and other numerous errors.
14. The Board of Tax Appeals erred by affirming the Final Determination issue by
p,ppellee Tax Commissioner who, by and through, the "Ohio Department of Taxation calculated his
[ Appellant's] Ohio income tax based upon the federal adjusted gross incomes reported by the
In ternal Revenue Service" because the information the Intemal Revenue Service provided Appellee
was erroneous , misrepresentation of facts, and/or a misstatement of the facts.
15.. The Board of Tax Appeals erred by affirming the Final Determination based on
Appellee Tax Commissioner's misstatement and/or misrepresentation of facts when the Tax
Commissioner stated "petitioner failed to file the required Ohio Personal income tax return"
because Appellant filed appropriate documents with the IRS and/or the Ohio Department of Taxation
regarding Tax Year 1996 prior to the date of issuance of assessment.
16. The Board of Tax Appeals erred by affirming the Final Determination based
on Appellee Tax Conunissioner proceeding with a Notice of Assessment for Tax Year 1996 after
the Statue of Limitations had expired.
17. The Board of Tax Appeals erred by affirming the Final Determination issued by
Appellee Tax Commissioner because the Tax Commissioner failed , refused, or, neglected to
respond to repeated notification from Appellant that the Internal Revenue Service maintains in
Appellant's file, records, and/or Individual Master File(IMF) erroneous, false information and/or
material misrepresentation of facts and provides such to entities which includes but is not liniited
to the Ohio Department of Taxation. The Tax Conunissioner proceeded to use such erroneous, false
5
005
information, andlor material misrepresentation of facts as the basis for the personal tax assessment
of which is the subject of this Petition for Reassessment and this Appeal. The Tax Commissioner
thereby breached his duty to Appellant that has resulted in damages.
18. The Board of Tax Appeals erred by affirming the Final Determination based on
Appellee Tax Commissioner because no person from the Administrative Review Section made
contact with Appellant as explained in correspondence dated March 23, 2006 from the
Administrative Review Section which stated that Appellant would be contacted by an agent when
his account was assigned. Rather the Petition for Reassessment was denied without an opportunity
for Appellant to challenge such drastic action before the Final Determination was issued.
19. The Boardof Tax Appeals erred by affirming the Final Determination based on
Appellee Tax Commissioner's breach of his duty to Appellant ( and any other similarly
situated Ohio Citizens) when the Ohio Department of Taxation calculated Appellant's alleged
income tax based upon the federal adjusted gross incomes reported by the Internal Revenue Service
without independently verifying the truthfulness and accuracy of the alleged reported facts.
20. The Board of Tax Appeals erred by affirming the Final Determination based on
Appellee Tax Commissioner failure to establish as a condition precedent to an assessment that
Appellant had a tax liability
21. The Board of Tax Appeais erred by affirming the Final Determination based on
Appellee Tax Commissioner failure to establish as a condition precedent to an assessment that
Appellant had not filed any "annual report or any amended return required by law".
22. The Board of Tax Appeals erred by affirming the Final Determination based on
Appellee Tax Commissioner interpreting rather than applying the Internal Revenue Code
6
006
23. The Board of Tax Appeals erred by affirming the Final Determination because
Appellant established that he was not required to make payment with the Petition for Reassessment
at1d the Tax Commissioner provided no support for his refusal to hear the Petition for Reassessment
based on his claim that Appellant was required to make payment which indicates the decision was
arbitrary.
24. The Board of Tax Appeals erred by affirming the Final Detennination because the
Tax Commissioner abused his discretion, acted unreasonably, unlawfully and arbitrarily in making
his determination.
25. The Board of Tax Appeals erred by affirming the Final Detennination because the
determination of the Tax Commissioner violates the Ohio Constitution and/or the United States
Constitution.
26. The Board of Tax Appeals erred by affirming the Final Determination because the
Tax Commissioner's determination was erroneous, unreasonable and/or unlawful for the reason that
the Record does not contain credible and competent evidence to support the determination.
27. The Board of Tax Appeals erred by affirming the Final Determination issued by the
Tax Commissioner because Appellee did not fulfill his duties and thereby violated his Oath of
Office pursuant to ORC 3.22
28. The Board of Tax Appeals erred by affirming the Final Determination issued by
Appellee because the Tax Commissioner in the Final Determination failed to establish that as a
condition precedent for the Tax Comniissioner to allege that Appellant is required to complete and
file Ohio Form IT-1040 that Appellee must establish that Appellant is required to file form 1040.
29. The Board of Tax Appeals erred by affirming the Final Determination issued by
7
007
Appellee because the Tax Commissioner in the Final Determination failed to establish that
Appellant's Affidavit Statement was not a retum, not in compliance with the Intemal Revenue Code
and not properly filed with the Commissioner of Intemal Revenue.
30. The Board of Tax Appeals erred by affirming the Final Determination issued by
Appellee because the Tax Commissioner in the Final Determination required Appellant to violate
Ohio law which included but was not limited to 5703.25 and 5703.26 as a condition precedent for
the Tax Commissioner to hear Appellant's Petition for Reassessment.
31. The Board of Tax Appeals erred by affirming the Final Determination issued by
Appellee because the Final Determination is in conflict with Ohio Case law which includes but is
not limited to W. Union v. Brodt, 171 Ohio. App.3d 434, 2007-Ohio-2742.
32. The Board of Tax Appeals erred by affirming the Final Determination issued by
Appellee because the Tax Commissioner breached a contractual relationship that exists between
government which includes but is not limited to the Ohio Department of Taxation and Appellant.
Resp y submitted,
^ ^2^i^^
Carl R. Wagenkne Jr.
174 Cheltenham LaneMunroe Falls, Ohio 44262330-388-8968AppellantPro Se
8 008
Certificate of Service
I certify that a copy of this Notice of Appeal was sent by certified mail to counsel for
appellee, Marc Dann , Attorney General of Ohio, and Damion M. Clifford Assistant Attorney
General, 30 East Broad Street 25" Floor Columbus, Ohio 43215 on13.200^-
Carl R. Wagenknefct$ Jr.174 Cheltenham LaneMunroe Falls, Ohio 44262330-388-8968AppellantPro Se
9 009
OHIO BOARD OF TAX APPEALS
Carl R. Wagenknecht, Jr., ))
Appellant, ))
vs. )
William W. Wilkins, TaxCommissioner of Ohio,
))))
Appellee. )
APPEARANCES:
CASE NO. 2006-T-1007
(PERSONAL INCOME TAX)
DECISION AND ORDER
For the Appellant - Carl R. Wagenknecht, Jr., pro se174 Cheltenham LaneMunroe Falls, Ohio 44262
For the Appellee - Marc DannAttomey General of OhioDamion M. CliffordAssistant Attomey GeneralTaxation SectionState Office Tower,25th Floor30 East Broad StreetColumbus, Ohio 43215
Entered: DEC 21 Z001
Ms. Margulies, Mr. Eberhart, and Mr. Dunlap concur.
The Tax Commissioner has filed with this board a motion, in which he
asks us to affirm his final determination. In that final determination, issued on May
19, 2006, the commissioner determined that he lacked subject-matter jurisdiction over
Mr. Wagenknecht's petition for reassessment because Mr. Wagenknecht had failed to
.010
pay the assessment, as required by R.C. 5747.13. We now consider this matter
pursuant to the commissioner's motion and the memoranda filed by the parties.1
Every taxpayer who is liable for income earned or received in this state
is required to file an annual income tax return. R.C. 5747.08. Returns must be filed,
annually, on the fifteenth day of April. R.C. 5747.08(G). If, however, a taxpayer's
annual income tax liability "must be altered as the result of an adjustment to the
taxpayer's federal income tax return, whether initiated by the taxpayer or the internal
revenue service, and such alteration affects the taxpayer's tax liability ***, the
taxpayer shall file an amended return with the tax commissioner in such form as the
commissioner requires." R.C. 5747.10.
The record before us establishes that the Ohio Department of Taxation
("ODT") obtained information from the Internal Revenue Service ("IRS") that Mr.
Wagenknecht's 1996 Federal Adjusted Gross Income had been increased by $308,600
as a result of a review performed by the IRS and the deternnination of the IRS Office
of Appeals. Although the adjustments altered his Ohio income tax liability, Mr.
Wagenknecht failed to file an amended return with ODT, as required by R.C. 5747.10.
On March 8, 2005, ODT informed Mr. Wagenknecht of the deficiency and the amount
now due. S.T. at 291. ODT subsequently issued an assessment for the delinquency on
' We observe that Mr. Wagenknecht specifies several errors in his notice of appeal and furtheraddresses those specifications in his memorandum contra the commissioner's motion to affirm.However, this board's jurisdiction is limited to those issues considered by the commissioner in hisfinal determination. As the only issue addressed by the commissioner was his lack ofjurisdiction overthe petition for reassessment, our jurisdiction is likewise limited to a review of that issue. SchroederPaper Specialty Co. v. Tracy (Sept. 20, 1996), BTA No. 1996-T-31, unreported.
20i1
December 8, 2005. S.T. at 295. The assessment was in the amount of $30,906,
including penalty and interest. S.T. at 291, 295.
Mr. Wagenknecht filed a timely petition for reassessment but did not pay
the assessment. S.T. at 1, 28. Subsequently, the Tax Commissioner dismissed the
petition because of the failure to pay the assessment at the time the petition was filed.
S.T. at 1. The commissioner now asserts that we must affirm the dismissal. We agree.
Pursuant to R.C. 5747.13, a taxpayer's ability to challenge an income tax
assessment is specifically dependent upon the payment of the assessment. Under R.C.
5747.13(B), a taxpayer must file a petition for reassessment within sixty days after
service of the notice of assessment. R.C. 5747.13(E) further provides:
"The portion of an assessment that must be paid upon thefiling of a petition for reassessment shall be as follows:***
"(2) If the taxpayer or qualifying entity that is assessedfailed to file, prior to the date of issuance of theassessment, the annual return or report required by section5747.08 or 5747.42 of the Revised Code, any amendedreturn or amended report required by section 5747.10 or5747.45 of the Revised Code for the taxable year at issue,or any report required by division (B) of section 5747.05 ofthe Revised Code to indicate a reduction in the amount ofthe credit provided under that division, payment of theassessment, including interest but not penalty, is required,except as otherwise provided under division (E)(6) or (7)of this section ***." (Emphasis added.)
Based upon the foregoing, payment of the assessment, i.e., the tax and
interest, became a condition precedent to Mr. Wagenknecht's ability to have the
assessment reviewed. The right to contest an assessment specifically depends upon
payment of the assessment upon the filing of a petition for reassessment. See W.T.
0123
Grant Co. v. Lindley (1977), 50 Ohio St.2d 7, 8; Niemeyer v. Collins (1976), 45 Ohio
St.2d 63, 64-65; and, Pre-Fab Transit Co. v. Bowers (1964), 176 Ohio St. 163. In the
instant matter, the amount of tax and interest necessary to be paid to invoke the
commissioner's jurisdiction over the petition was $30,756. The record shows that Mr.
Wagenknecht made no payment; consequently, the commissioner was without
jurisdiction to consider Mr. Wagenknecht's petition for reassessment.
Mr. Wagenknecht nevertheless argues that payment was not required
because the assessment was barred by the statute of limitations contained in R.C.
5747.13(A). However, although the four-year statute of limitations imposed upon the
state under R.C. 5747.13(A) limits the ability of the state to issue an assessment upon a
return, the statute does not bar an assessment against a taxpayer who fails to file an
amended return pursuant to R.C. 5747.10. Gibson v. Limbach (1991), 74 Ohio App.3d
498, motion to certify overruled (1991), 62 Ohio St. 3d 1445 (holding that because
"appellants failed to file a return that was subject to an assessment (i.e., an amended
return), the statute of limitations on the state assessment, which was the result of the
federal adjustments, has not commenced to run"); Waring v. Wilkins (Aug. 19, 2005),
BTA No. 2004-V-626, unreported. Cf. McLean Trucking Co. v. Lindley (1982), 70
Ohio St. 2d 106. Here, the record establishes that Mr. Wagenknecht failed to file the
amended return required under R.C. 5747.10.
Based upon the foregoing, the Board of Tax Appeals finds that Mr.
Wagenknecht failed to invoke the commissioner's subject-matter jurisdiction due to a
failure to comply with the provisions of R.C. 5747.13. We therefore conclude that the
0134
final determination is supported by a preponderance of the evidence and is in
accordance with law. Accordingly, the Board of Tax Appeals hereby affirms the Tax
Commissioner's final determination.
I hereby certify the foregoing to be a true andcomplete copy of the action taken by theBoard of Tax Appeals of the State of Ohio andentered upon its joumal this day, with respectto the captioned matter.
0145
Ohio Department of
TAXATIONoRlca of fha Tar Commissfcnar
30 E. Brosd Sf., PT° Floor i Columbu9, OH 43215
FINALDETERMINATI
Date: MAY I 9 2006
Carl R. Wagenknecht, Jr.Jacqueline J. Miller-Wagenknecht174 Cheltenham Ln.Munroe Falls, OH 44262
Re: Assessment Nos. 02200532748027Ohio Personal Income TaxTax Year: 1996
I .)_ .)
This is the final determination of the Tax Commissioner on a petition for reassessmentunder R.C. 5747.13 conceming the following personal income tax assessment:
Tax Interest Penalty Total$19,964.00 $10,792.00 $150.00 $30,906.00
This assessment resulted from information obtained from the Intemal Revenue Serviceunder authorization of Section 6103(d) of the Intemal Revenue Code. The petitioner failed tofile the required Ohio personal income tax retum. Consequently, the Ohio Department ofTaxation calculated his Ohio income tax based upon the federal adjusted gross incomes reportedby the Intemal Revenue Service.' This resulted in the above assessment.
R.C. 5747.13 requires the following:
(E) The portion of an assessment which must be paid upon the filing of a petitionfor reassessment.shall be as follows: * * *
(2) If the taxpayer or qualifying entity that is assessed failed to file, prior to the dateof issuance of the assessment, the annual return or report required by section5747.08 or 5747.42 of the Revised Code, any amended return or amended reportrequired by section 5747.10 or 5747.45 of the Revised Code for the taxable yearat issue, or any report required by division (B) of section 5747.05 of the RevisedCode to indicate a reduction in the amount of credit provided under thatdivision, payment of the assessment, including interest but not penalty, isrequired * * *.
' This information reports the final Federal Adjusted Gross Income for the taxpayer. There is no further pendingaction before the Intemal Revenue Service pertaining to this taxpayer for this tax year. The assessment by theInternal Revenue Service has been finally determined.
ois
MAY 19 2006-2-
The petitioner failed to make the required payment on the assessment when submitting thepetition for reassessment. There is no jurisdiction to consider the petition.
Accordingly, the petition is dismissed.
Current records indicate that no payments have been made on this assessment. However,due to payment processing and posting time lags, payments may have been made that are notreflected in this final determination. Any unpaid balance bears post-assessment interest asprovided by law, which is in addition to the above total. Payments shall be made payable to"Treasurer, State of Ohio." Any payment made within sixty days of the date of this finaldetermination should be forward to: Department of Taxation, Office of Chief Counsel, StateOffice Tower, 23`d Floor, 30 East Broad Street, Columbus, Ohio 43215.
THIS IS THE TAX COMMISSIONER'S FINAL DETERMINATION WITH REGARDTO THIS MATTER. UPON EXPIRATION OF THE SIXTY-DAY APPEAL PERIODPRESCRIBED BY R.C. 5717.02, THIS MATTER WILL BE CONCLUDED AND THE FILEAPPROPRIATELY CLOSED.
I CERTIFY THAT THIS IS A TRUE AND AIX,IJRATE COPY OF 17-M FINAL
DETERMINATION RECARDEDIN THE TAX CbMIvIISSIONER'S JOURNAL
u/?X^' ^ llvAIMI^Wn.ISArA W.WIUCINS
TAx OorNv¢ssioNER
/s/ William W. Wilkins
William W. WilkinsTax Commissioner
ois
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Title 26: Internal RevenuePART 1-INCOME TAXESNormal Taxes and Surtaxes
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§ 1.1-1 Income tax on individuals.
(a) General rule. (1) Section 1 of the Code imposes an income tax on the income of every individual whois a citizen or resident of the United States and, to the extent provided by section 871(b) or 877(b), onthe income of a nonresident alien individual. For optional tax in the case of taxpayers with adjustedgross income of less than $10,000 (less than $5,000 for taxable years beginning before January 1,1970) see section 3. The tax imposed is upon taxable income (determined by subtracting the allowabledeductions from gross income). The tax is determined in accordance with the table contained in section1. See subparagraph (2) of this paragraph for reference guides to the appropriate table for taxable yearsbeginning on or after January 1, 1964, and. before January 1, 1965, taxable years beginning afterDecember 31, 1964, and before January 1, 1971, and taxable years beginning after December 31,1970. In certain cases credits are allowed against the amount of the tax. See part IV (section 31 andfollowing), subchapter A, chapter 1 of the Code. In general, the tax is payable upon the basis of returnsrendered by persons liable therefor (subchapter A (sections 6001 and following), chapter 61 of theCode) or at the source of the income by withholding. For the computation of tax in the case of a jointreturn of a husband and wife, or a return of a surviving spouse, for taxable years beginning beforeJanuary 1, 1971, see section 2. The computation of tax in such a case for taxable years beginning afterDecember 31, 1970, is determined in accordance with the table contained in section 1(a) as amendedby the Tax Reform Act of 1969. For other rates of tax on individuals, see section 5(a). For the impositionof an additional tax for the calendar years 1968, 1969, and 1970, see section 51(a).
(2)(1) For taxable years beginning on or after January 1, 1964, the tax imposed upon a single Individual,a head of a household, a married individual filing a separate return, and estates and trusts is the taximposed by section 1 determined in accordance with the appropriate table contained in the followingsubsection of section 1:
Taxable years beginningafter Dec. 31, 1970
Taxable Taxable years (references in this columnyears beginning after are to the Code as
beginning in 1964 but before amended by the Tax1964 1971 Reform Act of 1969)
Single . Sec. 1(a)(1) Sec. 1(a)(2) Sec. 1(c).individualHead of a Sec. l(b)(1) Sec. 1(b)(2) Sec. 1(b).householdMarried I Sec.1(a)(1) Sec.1(a)(2) Sec.1(d).
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>;tectronic Code of Federal Regulations: Page 2 of 3
individualfiling aseparatereturnEstates andtrusts
Sec. 1(a)(1) Sec. 1(a)(2) Sec. 1(d).
(ii) For taxable years beginning after December 31, 1970, the tax imposed by section 1(d), as amendedby the Tax Reform Act of 1969, shall apply to the income effectively connected with the conduct of atrade or business in the United States by a married alien individual who is a nonresident of the UnitedStates for all or part of the taxable year or by a foreign estate or trust. For such years the tax imposed bysection 1(c), as amended by such Act, shall apply to the income effectively connected with the conductof a trade or business in the United States by an unmarried alien individual (other than a survivingspouse) who is a nonresident of the United States for all or part of the taxable year. See paragraph (b)(2) of §1.871-8.
(3) The income tax imposed by section 1 upon any amount of taxable income is computed by adding tothe income tax for the bracket in which that amount falls in the appropriate table in section 1 the incometax upon the excess of that amount over the bottom of the bracket at the rate indicated in such table.
(4) The provisions of section 1 of the Code, as amended by the Tax Reform Act of 1969, and of thisparagraph may be illustrated by the following examples:
Example J. A, an unmarried individual, had taxable income for the calendar year 1964 of$15,750. Accordingly, the tax upon such taxable income would be $4,507.50, computed asfollows from the table in section 1 (a )( 1) :
Tax on $14,000 (from table) $3,790.00iTax on $1,750 (at 41 percent as determined from the table) 717.50
I Total tax on $15,750 4, 507.50^
Example 2. Assume the same facts as in example ( 1), except the figures are for the calendaryear 1965. The tax upon such taxable income would be $4,232.50, computed as follows fromthe table in section 1(a)(2):
Tax on $14,000 ( from table) $3,550.00Tax on $1,750 (at 39 percent as determined from the table) 682.501
Total tax on $15,750 4,232.50
Exampfe 3. Assume the same facts as in example (1), except the figures are for the calendaryear 1971. The tax upon such taxable income would be $3,752.50, computed as follows fromthe table in section 1(c), as amended:
Tax on $14,000 (from table) $3,210.001Tax on $1,750 (at 31 percent as determined from the table) 1 542.50
Total tax on $15,750
(b) Citizens or residents of the United States liable to tax. In general, all citizens of the United States,wherever resident, and all resident alien individuals are liable to the income taxes imposed by the Codewhether the income is received from sources within or without the United States. Pursuant to section876, a nonresident alien individual who is a bona fide resident of Puerto Rico during the entire taxableyear is, except as provided in section 933 with respect to Puerto Rican source income, subject totaxation in the same manner as a resident alien individual. As to tax on nonresident alien individuals,see sections 871 and 877.
3,752.50
01s
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(c) Who is a citizen. Every person born or naturalized in the United States and subject to its jurisdictionis a citizen. For other rules governing the acquisition of citizenship, see chapters 1 and 2 of title III of theImmigration and Nationality Act (8 U.S.C. 1401-1459). For rules governing loss of c@izenship, seesections 349 to 357, inclusive, of such Act (8 U.S.C. 1481-1489), Schneider v. Rusk, (1964) 377 U.S.163, and Rev. Rul. 70-506, C.B. 1970-2, 1. For rules pertaining to persons who are nationals but notcitizens at birth, e.g., a person born in American Samoa, see section 308 of such Act (8 U.S.C.1408).For special rules applicable to certain expatriates who have lost citizenship with a principal purpose ofavoiding certain taxes, see section 877. A foreigner who has filed his declaration of intention ofbecoming a citizen but who has not yet been admitted to citizenship by a final order of a naturalizationcourt is an alien.
[T.D. 6500, 25 FR 11402, Nov. 26, 1960, as amended by T.D. 7332, 39 FR 44216, Dec. 23, 19741
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26 CFR Ch. 1(4-1-07 Ediflon)
,-ovisions of this subpart, such as.ctions for using lettera of credit.;uch operating procedures or in-:ions will be incorporated into:ooperative agreement.Ioint funding. Tax Counseling forlderly programs will not be eligi-r joint funding. Accordingly, theFunding Simplification Act of
'ub. L. 93-510, December 5, 1974 (881604, 42 U.S.C. 4251-4261) and of-,f Management and Budget Cir-No. A-111, Jointly Funded Assist-to State and Local OovernmentsQonprofit Organizations (41 FRwill not apply.
Discrimination. No program spon-all discriminate against any per-.oviding tax return assistance onLsis of age, sex, race religlon orial origin in conducting program:ions. No program sponsor shall:ninate against any person in pmo-• such assistance on the basis ofLoe, religion or national origin.
72113, Dec. 13, 1979, as amended at 49)D, Sept. 18, 1984]
06 Solicitation of applicationa
olicitation. The Commissioner of,al Revenue or the Commis-'s delegate may, at any time, so-eligible agencies and organiza-to submit applications. Gen-applications will be solicited
,cepted in June and July of eachDeadlines for submitting applica-and the schedule for selecting.m sponsors will be provided withation documents.3efore preparing and submittingsolicited application, organiza-are strongly encouraged to con-he Internal Revenue Service atldress provided in paragraph (b)his section.. solicitation of an application is
assurance.or commitment thatternal Revenue Service will entercooperative agreement. The In-Revenue Service will not pay
penses or other costs incurred byplicant in considering, preparingnitting an application.tpplication. (1) In the applicationents, the Commissfoner or thelssioner's delegate will specifYm requirements which the apP1i-mst meet.
Internai Revenue Service, Treasury
(2) Eligible organizations interestedin participating in the Internal Rev-enue Service Tax Counseling for theElderly Program should request an ap-plication from the:
Program Manager, Tax Counseling for theP.7derly, Taxpayer Service Diviefon TX:T:I,Internal Revenue Service, 1111 Constitu-tion Ave., N.W., Washington, DC 20224, (202)66g-4904.
Subpart i-Use of Penaify Mail inthe Location and Recovery ofMissing Children
SoURCE: T.D. 8848, 64 FR 69398, Dec. 13, 1999,unless otherwise noted.
1601.901 Missing children shown onpenalty mail.
(a) Purpose. To support the nationaleffort to locate and recover missingchSldren, the Internal Revenue Service(IRS) joins other executive depart-ments and agencies of the Governmentof the United States in using officialmail to disseminate photographs andbiographical information on hundredsof missing children.
(b) Procedures for obtaining and dis-seminating data. (1) The IRS shall pub-lish pictures and biographical data re-lated to missing children in domesticpenalty mail containing annual taxforms and instructions, taxpayer infor-mation publications, and other IRSproducts directed to members of thepublic in the United States and its ter-ritories and possessions.
(2) Missing children informationshall not be placed on the "Penalty In-dlcia," "OCR Read Area," "Bar CodeRead Area," and "Return Address"areas ofletter-size envelopes.
(3) The IRS shall accept photographioand biographical materials solely fromthe National Center for Missing andExploited Children (National Center).Photographs that were reasonably cur-rent as of the time of the child's dis-appearance, or those which have beenupdated to reflect a missing child'scurrent age through computer en-hancement technique, shall be the onlyacceptable form of visual media or pic-torfallikeness used in penalty mail..(c) Withdrawal of data. The shelf lifeof printed penalty mail is limited to 3months for missing child cases. The
§602.101
IRS shall follow those guidelines when-ever practicable. For products with anextended shelf life, such as those re-lated to filing and paying taxes, theIRS will not print any pictures or bio-graphical data relating to missing chil-dren without obtaining from the Na,-tional Center a waiver of the 3-monthshelf-life guideline.
(d) Reports and contact official. IRSshall compile and submit to OJJDP re-ports on ita experience in imple-menting Public Law 99-37, 99 Stat. 290,as required by that office. The IRS con-tact person is: Chief, Business Publica-tions Section (or successor office), TaxForms and Publications Division,Technical Publications Branch,OP:FS:FP:P:3, Room 5613, InternalRevenue Service, 1111 ConstitutionAve., NW., Washington, DC 20224.
(e) Period of applicability. This sectionis applicable December 13, 1999 throughDecember 31, 2002.
[T.D. 8848, 64 FR 69398, Dec. 13, 1999; 65 FR15862, Mar. 24, 2000]
PART 602-OMB CONTROL NUM-BERS UNDER THE PAPERWORK RE-DUCTION ACT
3602.101 OMB Control numbers.(a) Purpose. This part collects and
displays the control numbers assignedto collections of information in Inter-nal Revenue Service regulations by theOffice of Management and Budget(OMB) under the Paperwork ReductionAct of 1980. The Internal Revenue Serv-ice intends that this part comply withthe requirements of §§1320.7(f), 1320.12,1320.13, and 1320.14 of 5 CFR part 1320(OMB regulations implementing thePaperwork Reduction Act), for the dis-play of control numbers assigned byOMB to collections of information inInternal Revenue Service regulations.This part does not display controlnumbers assigned by the Office of Man-agement and Budget to collections ofinformation of the Bureau of Alcohol,Tobacco, and Firearms.
(b) Display.
1.1(h)-t (e) ......................................................... 1545-16541.23-5 ..... ........................................................... 1845-0e14
^yiresihst beftp 222
den^{tOn 350
677.* toctivelydwith-hl thatess ot'it dis-iightst983)
didself-af to
§iiquor
Fes,
i5l itu-^.Statesy;47 S^U20.1`4 by`A'ilegelefore^9 Pa)
ouldfactcifi-
st941.313314313
greed408,
4 US,94
me taxIlim of•on on
barpayer
iionbclan-
^o con-jZuld bepyidence^ if dis-wd been!n keptNte taxEre hadaunt sovner vA 370.USTC
ZSROCEDURE AND ADMINISTRATION
§§ 6002-6010. [Reserved for future use.]
26 USCS § 6011
PART II. TAX RETURNS OR STATEMENTS
SubpartA. General requirement.B. Income tax retums.C. Returns relating to transfers during life or at death.D. Miscellaneous provisions.
HISTORY; ANCILLARY LAWS AND DIRECTIYES
Prospective amendments:Sunset nf amendments made by Economic Growth and Tax Relief Reconciliation Act of2001 (P. L. 107-16). Pursuant to § 901(a)(1), (b) of Act June 7, 2001, P. L. 107-16 (26 USCS§ I note), the amendment made to the part analysis by Title V of such Act shall not apply toestates of decedents dying, gifts made, or generation skipping transfers, aRer December 31,2010, ond the Intemal Revenue Code of 1986 shall be applied and adnunistered to such estates,gifts, and transfers as if the amendment had never been enacted.
Arnendments:In 2001, P.L. 107-16, Sec. 542(b)(5)(B), substituted item C for one which read: "C. Estate andgift tax returns.". _
SUBPART A. General Requirement
Sec,6011. General requirement of retum, statement, or list.
§ 6011. General requirement of return, statement, or list.(a) General rule. When required by regulations prescribed by the Secretary any person made li-able for any tax imposed by this title, or with respect to the collection thereof, shall make a returnor statement according to the forms and regulations prescribed by the Secretary. Every personrequired to make a return or statement shall include therein the infonnation required by such formsor regulations.(b) Identification of taxpayer. The Secretary is authorized to require such information withrespect to persons subject to the taxes imposed by chapter 21 or chapter 24 as is necessaly orhelpful in securing proper identification of such persons. "(c) Returns, etc., of DISCs and former DISCs and FSC's and former FSC's. (1) Records and
information. A DISC or former DISC or a FSC or forrtter:FSC shall for the taxable year-(A) furnish such information to persons who were shareholders at any time during suchtaxable year, and to,the Secretary, and(B) keep such records, ¢s may be required by regulations prescribed by the Secretary.
(2) Returns. A DISCshall^file for the taxable year such returns as may be prescribed by theSecretary by forms or regulations.
(d) Authority to require information concerning section 912 allowances. The Secretary mayby regulations require any individual who receives allowances which are excluded from grossincome under section 912 for any taxable year to include on his return of the taxes imposed bysubtitle A for such taxable year such informatYon with respect to the amount and type of such al-lowances as the Secretary determines to be appropriate.(e) Regulations requiring returns on magnetic media, etc. (1) In general. The Secretary shall
prescribe regulations providing standards for determining which returns must be filed onmagnetic media or in other machine-readable form. The Secretary may not require rettirns ofany tax imposed by subtitle A on individuals, estates, and trusts to be other than on paper formssupplied by the Secretary. ,(2) Requirements of regulations, In prescribing regulations under paragraph (I). the Secre-tary-
(A) shall not require any person to file returns on magnetic media unless such person isrequired to file at least 250 returns during the calendar year, and(B) shall take into account (among other relevant factors) the ability of the taxpayer tocomply at reasonable cost with the requirements of such regulations.
Notwithstanding the preceding sentence, the Secretary shall require partnerships having morethan 100 partners to file remms on magnetic media.
(f) Promotion of electronic filing. (1) In general, The Secretary is authorized to promote thebenefits of and encourage the use of electronic tax administration programs, as they becomeavailable, through the use of mass communications and other means. n0 41
26 USCS § 6011 INTERNAL REVENUE CODE
(2) Incentives. The Secretary may implement procedures to provide for the payment of ap-propriate incentives for electronically filed returns.
(g) Income, estate, and gift taxes. For requirement that returns of incotne, estate, and gift taxeshe made whether or not thereis tax liability, see subparts B and C.
HISTORY; ANCILLARY LAWS AND DIRECTIVESAmendments: .In 1998, P.L. 105-206, Sec. 2001(c), redesignated subsec. (f) as subsec. (g); and added a newsubsec. (f).In 1997, P.L. 105-34, Sec. 1224 (applicable to partnership taxable years beginning after12/31/97, as provided by Sec. 1226 of P.L. 105-34, which appears as a note to this section),aniended subsec. (e)(2) by adding the concluding matter.In 1989, P.L. 101-239, Sec. 7713(a), amended subsec. (e), effective for returns the due date forwhich (determined without regard to extensions) is after 12/31/89.Prior to amendment, subsec. (e) read as follows:"(e) Regulations requiring retums on magnetic tape, etc.
"(t) In general. The Secretary shall prescribe regulations providing standards for determin-ing which returns must be filed on magnetic media or in other machine-readable form. TheSecretary may not require retums of any tax imposed by subtitle A on individuals, estates,and trusts to be other than on paper forms supplied by the Secretary. In prescribing suchregulations, the Secretary shall take into account (among other relevant factors) the abilityof the taxpayer to comply at reasonable cost with such a filing requirement."(2) Certain returns must be filed on magnetic media.
"(A) In general. In the case of any person who is required to file returns under sections6042(a), 6044(a), and 6049(a) with respect to more than 50 payees for any calendar year,all retums under such sections shall be on magnetic media."(B) Hardship exception. Subparagraph (A) shall not apply to any person for any periodif such person establishes to the satisfaction of the Secretary that its application to suchperson for such period would result in undue hardship."
In 1988, P.L. 100-647, Sec. 1015(q)(1), substituted "with respect to the collection thereot"' for"for the collection thereof" in subsee. (a), effective on 11/10/88.In 1986, P.L. 99-514, Sec. 1899A(52), substituted °subparts B and C" for "sections 6012 to6019, inclusive" in subsec. (f), effecfive 10/22/86.In 1984, P.L. 98-369, Sec. 801(d)(12)(A), added "or a FSC or former FSC" after "fornierDISC" in para. (c)(1) ... Sec. 801(d)(12)(H), added "and FSC's and former FSC's" after"Former DISC's" in the Iteading of subsec. (c), effective for transactions after 12/31/84, in tax.yrs. end. after 12/31/84.In 1983, P.L. 98-67, Sec. 109(a); amended subsec. (e), effective for payments made after12/31/83. Sec. 109(b) of this Act provides:"(b) Study &f wage returtts on magnetic tape. (1) Study. The Secretary of the Treasury, in
consultation with the Secretary of Health and Hutnan Services, shall conduct a study of thefensibility of requiring persons to file, on magnetic media, returns under section 6011 of theInternal Revenue Code of 1954 containing information described in section 6051(n) of suchCode (relating (o W-2s).
"(2) Report to Congress. Not later than July 1, 1984, the Secretary of the Treasury shallsubmit to the Committee on Ways and Means of the House of Representatives and theCommittee on Finance of the Senate the results of the study conducted under paragraph
Prior to amendment. subsec. (e) read as follows:
"le) Regulations requiring retums on magnetic tape, etc. The Secretary shall prescribe regula-tions providing standards for determining which mtums must be filed on magnetic media or inother machine-readable form. The Secretary may not require returns of any tax imposed bysubtide A on individuals, estates, and tmsts to be other than on paper forms supplied by theSecretary. In prescribing such regulations, the Secretary shall take into account (among otherrelevant factors) the ability of the taxpayer to comply at a reasonable cost with such a filingrequirement."
In 1982, P.L. 97-248, Sec. 319, redesignated subsec. (e) as subsec,(f) and added new subsec.(e), effective 9/3/82.
In 1978, P.L. 95-615. Sec. 207(c), redesignated subsec. (d) as subsec. (e) and added new subsec.(d). effective for tax. yrs. begin. after 12/31/77.
In 1976,P.L. 94-455, Sec. 1904(b)(10)(A)(ii), deleted subsec. (d) and redesignated subsecs. (e)and (f) as snbsecs, (c) and (d), respectively ... Sec. 1906(b)(13)(A), substituted "Secretary"for "Secretary or his delegate" each place it appeared in Code Sec. 6011, effective 2/1/77.Prior to deletion subsec. (d) read as follows:"(d) Interest equalization tax returns, etc. (1) In general. (A) Every person shall make n return
for each calendar quarter during which he incurs liability for the tax iinposed by section4911, or would so incur liability but for the provisions of section 4918. The return shall,in addition to such other information as the Secretary or his delegate may by regulationsrequire, include a list of all acquisitions made by such person during the caiendar quarter 022
PROt
26 USCS § 6060 INTERNAL REVENUE CODE
Law Review Articles:Ryan. An Overview of the Treatment of Return Preparers Under the 1976 Tax Refonn Act. 13New England L Rev 137.
INTERPRETIVE NOTES AND DECISIONS
1. Who must file 2. Form and contents of return or report
2. Form and contents of return or report Preparer need not sign or affix his identification1. Who must file number to taxpayer's copy of retum. Rev Rul 78-317,
Finance corporation which leases facilities and 1978-2 CB 335.fumishes limited services for agreed fee to unrelated Preparers who wish to satisfy annual reponingindependent income tax retum preparer at several of requirement by use of magnetic tape instead of paperits branches, but does not engage in preparation of - documents must first file letter of applicntion ad-returns, have access to retums, provide computer dressed to Internal Revenue Service Center, and cer-services to preparer, compensate preparer, or controlpreparation of returns is not income tax return pre-parer or employer of income tax return preparer forpurposes of 26 USCS § 6060. Rev Rul 78-318,1978-2 CB 345.
tain specifications are required to insure IRS is ableto process tape. Rev Proc 77-1 g, 1977-1 CB 577.
PART IV. SIGNING AND VERIFYING OF RETURNS ANDOTHER DOCUMENTS
Sec.6061. Signing of retums and other documents.6062- Signing of corporation retums.6063. Signing of partnership retums.6064. Signature presumed authentic.6065. Verification of remrns.
§ 6061. Signing of returns and other documents.(a) In general. Except as otherwise provided by subsection (b) and sections 6062 and 6063, anyreturn, statement, or other document required to be made under any provision of the internulrevenue laws or regulations shall be signed in accordance with forms or regulations prescribed bythe Secretary.(b) Electronic signatures. (1) In general. The Secretary shall develop procedures for the ac-
ceptance of signatures in digital or other electronic form. Until such time as such proceduresare in place, the Secretary may-
(A) waive the requirement of a signature for; or(B) provide for altemafive methods of signing or subscribing,
a particular type or class of return, declaraGon, statement, or other document required orpermitted to be made or written under internal revenue laws and regulations.(2) Treatment of alternative methods. Notwithstanding any other provision of law, any return,declaration, statement, or other document filed and verified, signed, or subscribed under anymethod adopted under paragraph (1)(B) shall be treated for all purposes (both civil and criminal,including penalties for perjury) in the same manner as though signed or subscribed.(3) Published guidance. T'he Secretary shall publish guidance as appropriate to define andimplement any waiver of the signature requirements or any method adopted under paragraph(1).
HISTORY; ANCILLARY LAWS AND DIRECTIVESAmendments:In 1998, P.L. 105-206, Sec. 2003(a) (effective on 7122/98, pursuant to Sec. 2003(f) of P.L.105-206, which appears as a note to this section), designated the existing provisions as subsec.(a) and, in such subsection, inserted the heading and substituted "Except as otherwise providedby subsection (b) and" for "Except as otherwise provided by"; and added subsec. (b).In 1976, P.L. 94-455, Sec. 1906(b)(13)(A), substituted 'Secretary' for'Secretary or his delegate'in Code Sec. 6061, effective 2/t/77.
Other provisions:Effective date of July 22, 1998 amendments. Act July 22, 1998, P. L. 105-206, Title lI,§ 2003(f), 112 Stat. 725, provides: "The amendments made by this section [amending 26 USCS§§ 6061 and 7502(c)] shall take effect on the date of the enactment of this Act.".
CODE OF FEDERAL REGULATIONSfntemal Revenue Service, Depantnent of the Treasury-Income taxes, 26 CFR Part I.Internal Revenue Service, Department of the Treasury-Excise tax on greenmail, 26 CFR Part 156.
EVENUE CODE
647.rs, trusteesincome tax
h person is same3u183-41, 1983-I' CB 305.
ficient, and it didy of cnrporation.(1957) TC Menm
of the partners.lence that such
unient shall beit was actutrlly
hninistration,
'IR 2d 70-421.1. 90 S Ct 1234.
itting report ofront W-4 formsipoenas: adntis-:asunable doubty provided ad-er signed W-4lid sign them is
PROCEDURE AND ADMINISTRATION
also supported by statutory presumption of gendine-ness of signatures on tax documents under 26 USCS§ 6064. United States v Brink (1981, CAS Mo) 648F2d 1140, cert den 454 US 1031, 70 L Ed 2d 475,102 S Ct 568.
Presumption in § 6064 that person may be pro-sumed to have signed a retum that contains hisreponed signature, is constitutional. United States vKim (1989, CA5 Tex) 884 F2d 189, 89-2 USTC19555.
2. Fraud or IrregularitySummary judgment for the govemment was re-
versed where taxpayer raised an issue as to the
26 USCS § 6065
authenticity of a party's signature through whom theyclaimed tax collection waivers extending the statuteof limitations; taxpayer has standing. and the pre-sumption created by 26 USCS § 6064 that signaturesare genuine cannot override irregularity on the docu-menL United States v Borchardt (1972, CA7 III) 470F2d 257, 72-2 USTC 9 9750, 30 AFTR 2d 72-5747,on remand (ND 111) 381 F Supp 672, 75-I USTC1 9114. 35 AFTR 2d 75-505.
Taxpayer claiming signature on tax return wasfmged or procured by fraud or trickery has burden ofproving such fact. Dolan v Commissioner (1965) 44TC 420.
§ 6065. Verification of returns.Except as otherwise provided by the Secretary, any return, declaration, statement, or other docu-ment required to be made under any provision of the internal revenue laws or regulations shallcontain or be verified by a written declaration that it is made under the penalties of perjury.
HISTORY; ANCILLARY LAWS AND DIRECTIVESAmendments:In 1976, P.L. 94-055, Sec. 1906(a)(6), deleted subsec. (b) and deleted the heading of subsec.(a), effective 2/177.Prior to deletion subsec. (b) read as follows:"(b) Oath.
"The Secretary or his delegate may by regulations mquire that any return, statement, orother document required to be made under any provision of the intemal revenue laws ormgulations shall be verified by an oath. This subsection shall not apply to returns anddeclarations with respect to income taxes made by individuals."
Prior to deletion the heading of subsec. (a) read as follows:"(a) Penalties of perjury."
-P.L. 94-455, Sec. 1906(b)(l3)(A), substituted 'Secretary' for 'Secretary or his delegate' inCode Sec. 6065, effective 211177.
CODE OF FEDERAL REGULATIONSInternal Revenue Service, Department of the Treasury-Income taxes, 26 CFR Part 1.Burean of Alcohol, Tobacco and Firearms, Department of the Treasury-Drawback on taxpaid distilledspirits used in manufacturing nonbevemge products, 27 CFR Part 17.Bureau of Alcohol, Tobacco and Firearms, Department of the Treasury-Production of volatile fruit-flavor concentrate, 27 CFR Part 18.Bureau of Alcohol, Tobacco and Firearms, Department of the Treasury-Distilled spirits plants. 27CFR Part 19.Bureau of Alcobol, Tobacco and Firearms, Department of the Treasury-Distribution and use ofdenatured alcohol and rum, 27 CFR Part 20.Bureau of Alcohol, Tobacco and Firearms, Department of the Treasury-Distribution and use of tax-free alcohol, 27 CFR Part 22.Bureau of Alcohol, Tobacco and Firearrns, Department of the Treasury-Wine, 27 CFR Part 24.Bureau of Alcohol, Tobacco and Firearms, Department of the Treasury-Beer, 27 CFR Part 25.Bureau of Alcohol, Tobacco and Firearms, Department of the Treasury-Liquor deaten, 27 CFR Pan194.Bureau of Alcohol, Tobacco and Firearms, Department of the Treasury-Exportation of liquors, 27CFR Part 252.Bureau of Alcohol, Tobacco and Firearms, Department of the Treasury-Manufacture of tobaccoproducts and cigarette papers and tubes, 27 CPR Part 270.Bureau of Alcohol, Tobacco and Firearms, Department of the Treasury-Exponation of tobaccoproducts and cigarette papers and tubes, without payment of tax, or with drawback of mx, 27 CFR Part290.
CROSS REFERENCES •False, fictitious, or fraudulent statements or representations in any matter within jurisdiction of anydepartment or agency of United States, 18 USCS § 1001.Punishment for perjury, 18 USCS § 1621.Punishment for subommion of perjury, 18 USCS § 1622.Remrns conceming income tax of individuals, 26 USCS § 6012.Joint income tax retums by husband and wife, 26 USCS § 6013.Punishtnent for fmud and false statements, 26 USCS § 7206.
RESEARCH GUIDEFederal Procedure:20 Fed Proc L Ed, Intemal Revenue §§ 48:889, 973.
1
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From the U.S. CodeOnline via GPO Access[wais.access.gpo.gov](Laws in effect as of January 3, 2005]
[Document not affected by Public Laws enacted betweenJanuary 3, 2005 and October 17, 2006]
[CITE: 28USC1746]
TITLE 28--JUDICIARY AND JUDICIAL PROCEDURE
PART V--PROCEDURE
CHAPTER 115--EVIDENCE; DOCUMENTARY
Sec. 1746. Unsworn declarations under penalty of perjury
Wherever, under any law of the United States or under any rule,regulation, order, or requirement made pursuant to law, any matter isrequired or permitted to be supported, evidenced, established, or provedby the sworn declaration, verification, certificate, statement, oath, oraffidavit, in writing of the person making the same (other than adeposition, or an oath of office, or an oath required to be taken beforea specified official other than a notary public), such matter may, withlike force and effect, be supported, evidenced, established, or provedby the unsworn declaration, certificate, verification, or statement, inwriting of such person which is subscribed by him, as true under penaltyof perjury, and dated, in substantially the following form:
(1) If executed without the United States: " I declare (or certify,verify, or state) under penalty of perjury under the laws of the UnitedStates of America that the foregoing is true and correct. Executed on(date).
(Signature) " .(2) If executed within the United States, its territories,
possessions, or commonwealths: " I declare (or certify, verify, orstate) under penalty of perjury that the foregoing is true and correct.Executed on (date).
(Signature) " .
(Added Pub. L. 94-550, Sec. 1(a), Oct. 18, 1976, 90 Stat. 2534.)
Prior Provisions
A prior section 1746 was renumbered section 1745 of this title.
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From the U.S. Code Online via GPO Access[wais.access.gpo.gov][Laws in effect as of January 3, 2005][Document not affected by Public Laws enacted betweenJanuary 3, 2005 and February 2, 2007]
[CITE: 44USC3512]
TITLE 44--PUBLIC PRINTING AND DOCUMENTS
CHAPTER 35--COORDINATION OF FEDERAL INFORMATION POLICY
• SUBCHAPTER I--FEDERAL INFORMATION POLICY
Sec. 3512. Public protection
(a) Notwithstanding any other provision of law, no person shall besubject to any penalty for failing to comply with a collection ofinformation that is subject to this subchapter if--
(1) the collection of information doesnot display a validcontrol number assigned by the Director in accordance with thissubchapter; or
(2) the agency fails to inform the person who is to respond tothe collection of information that such person is not required torespond to the collection of information unless it displays a validcontrol number.
(b) The protection provided bythis section may be raised in theform of a complete defense, bar, or otherwise at any time during theagency administrative process or judicial action applicable thereto.
(Added Pub. L. 104-13, Sec. 2, May 22, 1995, 109 Stat. 181; amended Pub.L. 106-398, Sec. 1[[div. A], title X, Sec. 1064(b)], Oct. 30, 2000, 114Stat. 1654, 1654A-275.)
Prior Provisions
A prior section 3512, added Pub. L. 96-511, Sec. 2(a), Dec. 11,1980, 94 Stat. 2822, related to protection of persons failing tomaintain or provide information if information collection request didnot display current control number prior to the general amendment ofthis chapter by Pub. L. 104-13.
Another prior section 3512, added Pub. L. 93-153, title IV,Sec. 409(b), Nov. 16, 1973, 87 Stat. 593, related to information'forindependent regulatory agencies, prior to the general amendment of thischapter by Pub. L. 96-511.
Amendments
2000--Subsec. (a). Pub. L. 106-398 substituted " subchapter " for" chapter " in introductory provisions and par. (1).
Effective Date of 2000 Amendment
Amendment by Pub. L. 106-398 effective 30 days after Oct. 30, 2000,see section 1 [[div. A], title X, Sec. 1065] of Pub. L. 106-398, set outas an Effective Date note under section 3531 of this title.
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5703.25 Returns, claims, and reports need not be sworn to -perj_ury statement.
AII tax returns, claims, or reports with respect to taxes, including accompanying schedules andstatements, which are required by law to be filed with the department of taxation, the treasurer ofstate, a county auditor, or a county treasurer need not be sworn to. Any such return, claim, or reportshall have printed on it the following statement, which shall'be subscribed to by the person signingsuch return, claim, or report: "I declare under penalties of perjury that this return or claim (includingany accompanying schedules and statements) has been examined by me and to the best of myknowledge and belief is a true, correct, and complete return and report."
Effective Date: 07-01-1985
5703.26 Prohibitionagainstmakinga false orfraudulent rereturn,_schedule,statement claim, or document.
No person shall knowingly make, present, aid, or assist in the preparation or presentation of a false or
fraudulent report, return, schedule, statement, claim, or document authorized or required by law to be
filed with thedepartment of taxation, the treasurer of state, a county auditor, a county treasurer, or a
county clerk of courts, or knowingly procure, counsel, or advise the preparation or presentation of such
report, return, schedule, statement, claim, or document, or knowingly change, alter, or amend, or
knowingly procure, counsel, or advise such change, alteration, or amendment of the records upon
which such report, return, schedule, statement, claim, or document is based with intent to defraud the
state or any of Its subdivisions.
With respect to such acts or conduct, no conviction shall be had under any other sectlon of the RevisedCode.
Effective Date: 10-05-1987
5703.261 Payment with nonnegoti_able ordishonoredinstrument
- penalty.
If a taxpayer or employer required by any tax administered by the department of taxation to paytaxes, penalties, or interest makes payment of the taxes, penalties, or interest with a nonnegotiable ordishonored instrument, a penalty of fifty dollars shall be added to the amount due. The penaltyimposed by this section shall be assessed and collected in the same manner as the taxes, penalties, orinterest. All or part of any penalty imposed under this section may be abated by the tax commissioner.
Effective Date: 10-05-1987
5703.262 Commissioner may designate documents that must be
signed by preparers - penalties..
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§ 5747.01. Definitions.
Except as otherwise expressly provided or clearly appearing from the context, any term used in thischapter has the same meaning as when used in a comparable context in the Internal Revenue Code, andall other statutes of the United States relating to federal income taxes.
As used in this chapter:
(A) "Adjusted gross income" or "Ohio adjusted gross income" means federal adjusted gross income, asdefmed and used in the Internal Revenue Code, adjusted as provided in this section:
(1) Add interest or dividends on obligations or securities of any state or of any political subdivision orauthority of any state, other than this state and its subdivisions and authorities.
(2) Add interest or dividends on obligations of any authority, commission, instrumentality, territory, orpossession of the United States to the extent that the interest or dividends are exempt from federalincome taxes but not from state income taxes.
(3) Deduct interest or dividends on obligations of the United States and its territories and possessions orof any authority, commission, or instrumentality of the United States to the extent that the interest ordividends are included in federal adjusted gross income but exempt from state income taxes under thelaws of the United States.
(4) Deduct disability and survivor's benefits to the extent included in federal adjusted gross income.
(5) Deduct benefits under Title II of the Social Security Act and tier 1 railroad retirement benefits to theextent included in federal adjusted gross income under section 86 of the Internal Revenue Code.
(6) In the case of a taxpayer who is a beneficiary of a trust that makes an accumulation distribution asdefined in section 665 of the Internal Revenue Code, add, for the beneficiary's taxable years beginningbefore 2002 or after 2004, the portion, if any, of such distribution that does not exceed the undistributednet income of the trust for the three taxable years preceding the tazable year in which the distribution ismade to the extent that the portion was not included in the trust's taxable income for any of the trust'staxable years beginning in 2002, 2003, or 2004. "Undistributed net income of a trust" means the taxableincome of the trust increased by (a)(i) the additions to adjusted gross income required under division (A)of this section and (ii) the personal exemptions allowed to the trust pursuant to section 642(b) of theInternal Revenue Code, and decreased by (b)(i) the deductions to adjusted gross income required underdivision (A) of this section, (ii) the amount of federal income taxes attributable to such income, and (iii)the amount of taxable income that has been included in the adjusted gross income of a beneficiary byreason of a prior accumulation distribution. Any undistributed net income included in the adjusted grossincome of a beneficiary shall reduce the undistributed net income of the trust commencing with theearliest years of the accumulation period.
(7) Deduct the amount of wages and salaries, if any, not otherwise allowable as a deduction but thatwould have been allowable as a deduction in computing federal adjusted gross income for the taxableyear, had the targeted jobs credit allowed and determined under sections 38, 51, and 52 of the InternalRevenue Code not been in effect.
(8) Deduct any interest or interest equivalent on public obligations and purchase obligations to the extentthat the interest or interest equivalent is included in federal adjusted gross income.
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(iv) The transfer is made to a trust on account of a contractual relationship existing directly or indirectlybetween the transferor and another person who at the time of the decedent's death was domiciled in thisstate for purposes of this chapter.
(v) The transfer is made to a trust on account of the will of a testator:
(vi) The transfer is made to a trust created by or caused to be created by a court, and the trust wasdirectly or indirectly created in connection with or as a result of the death of an individual who, forpurposes of the taxes levied under Chapter,5731. of the Revised Code, was domiciled in this state atthe time of the individual's death.
(g) The tax commissioner may adopt rules to ascertain the part of a trust residing in this state.
(J) "Nonresident" means an individual or estate that is not a resident. An individual who is a resident foronly part of a taxable year is a nonresident for the remainder of that taxable year.
(K) "Pass-through entity" has the same meaning as in section 5733.04 of the Revised Code.
(L) "Return" means the notifications and reports required to be filed pursuant to this chapter for thepurpose of reporting the tax due and includes declarations of estimated tax when so required.
(M) "Taxable year" means the calendar year or the taxpayer's fiscal year ending during the calendaryear, or fractional part thereof, upon which the adjusted gross income is calculated pursuant to thischapter.
(N) "Taxpayer" means any person subject to the tax imposed by section 5747.02 of the Revised Codeor any pass-through entity that makes the election under division (D) of section 5747,08 of the RevisedCode.
(0) "Dependents" means dependents as defined in the Internal Revenue Code and as claimed in thetaxpayer's federal income tax return for the taxable year or which the taxpayer would have beenpermitted to claim had the taxpayer filed a federal income tax return.
(P) "Principal county of employment" means, in the case of a nonresident, the county within the state inwhich a taxpayer performs services for an employer or, if those services are performed in more than onecounty, the county in which the major portion of the services are performed.
(Q) As used in sections 5747.50 to 5747.55 of the Revised Code:
(1) "Subdivision" means any county, municipal corporation, park district, or township.
(2) "Essential local government purposes" includes all functions that any subdivision is required bygeneral law to exercise, including like functions that are exercised under a charter adopted pursuant tothe Ohio Constitution.
(R) "Overpayment" means any amount already paid that exceeds the figure determined to be the correctamount of the tax.
(S) "Taxable income" or "Ohio taxable income" applies only to estates and trusts, and means federaltaxable income, as defined and used in the Internal Revenue Code, adjusted as follows:
(I) Add interest or dividends, net of ordinary, necessary, and reasonable expenses not deducted in
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§ 5747.13. Liability for failure to file return or collect or remit taxes; assessment; petition forreassessment.
(A) If any employer collects the tax imposed by section 5747.02 or under Chapter 5748. of theRevised Code and fails to remit the tax as required by law, or fails to collect the tax, the employer ispersonally liable for any amount collected that the employer fails to remit, or any amount that theemployer fails to collect. If any taxpayer fails to file a return or fails to pay the tax imposed by section5747.02 or under Chapter 5748, of the Revised Code, the taxpayer is personally liable for the amountof the tax.
If any employer, taxpayer, or qualifying entity required to file a return under this chapter fails to file thereturn within the time pres.cribe^ files an incorrect return, fails to remit the full amount of the taxes duefor the period covered by the returrt, or fails to remit any additional tax due as a result of a reduction inthe amount of the credit allowed under division (B) of section 5747.05 of the Revised Code togetherwith interest on the additional tax within the time prescribed by that division, the tax commissioner maymake an assessment against any person liable for any deficiency for the period for which the return is ortaxes are due, based upon any infonnation in the commissioner's possession.
An assessment issued against either the employer or the taxpayer pursuant to this section shall not beconsidered an election of remedies or a bar to an assessment against the other for failure to report or paythe same tax. No assessment shall be issued against any person if the tax actually has been paid byanother. •
No assessment shall be made or issued against an employer, taxpayer, or qualifying entity more thanfour years after the final date the return subject to assessment was required to be filed or the date thereturn was filed, whichever is later. However, the commissioner may assess any balance due as theresult of a reduction in the credit allowed under division (B) of section 5747.05 of the Revised Code,including applicable penalty and interest, within four years of the date on which the taxpayer reports achange in either the portion of the taxpayer's adjusted gross income subjected to an income tax or taxmeasured by income in another state or the Distiict of Columbia, or the amount of liability for anincome tax or tax measured by income to another state or the District of Columbia, as required bydivision (13)(3) of section 5747.05 of the Revised Code. Such time limits may be extended if both theemployer, taxpayer, or qualifying entity and the commissioner consen m wnting to the extension or ifan agreement waiving or extending the time limits has been entered into pursuant to section 122.171[122.17.1] of the Revised Code. Any such extension shall extend the four-year time limit in division (B)of section 5747.11 of the Revised Code for the same period of time. There shall be no bar or limit toan assessment against an employer for taxes withheld from employees and not remitted to the state,against an employer, taxpayer, or qualifying entity that fails to file a return subject to assessment asrequired by this chapter, or against an employer, taxpayer, or qualifying entity that files a fraudulentretum.
The commissioner shall give the party assessed written notice of the assessment in the manner providedin section 5703.37 of the Revised Code. With the notice, the commissioner shall provide instructionson how to petition for reassessment and request a hearing on the petition.
(B) Unless the party assessed files with the tax commissioner within sixty days after service of thenotice of assessment, either personally or by certified mail, a written petition for reassessment, signed bythe party assessed or that party's authorized agent having knowledge of the facts, the assessmentbecomes final, and the amount of the assessment is due and payable from the party assessed t^tt ►g^
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commissioner with remittance made payable to the treasurer of state. The petition shall indicate theobjections of the party assessed, but additional objections may be raised in writing if received by thecommissioner prior to the date shown on the final determination. If the petition has been properly filed,the commissioner shall proceed under section 5703.60 of the Revised Code.
(C) After an assessment becomes final, if any porkion of the assessment remains unpaid, includingaccrued interest, a certified copy of the tax commissioner's entry making the assessment final may befiled in the oftice of the clerk of the court of common pleas in the county in which the employer's,taxpayer's, or qualifying entity's place of business is located or the county in which the party assessedresides. If the party assessed is not a resident of this state, the certified copy of the entry may be filed inthe office of the clerk of the court of common pleas of Franklin county.
Immediately upon the filing of the entry, the clerk shall enter a judgment against the party assessed inthe amount shown on the entry. The judgment shall be filed by the clerk in one of two loose-leaf books,one entitled "special judgments for state and school district income taxes," and the other entitled "specialjudgments for qualifying entity taxes." The judgment shall have the same effect as other judgments.Execution shall issue upon the judgment upon the request of the tax commissioner, and all lawsapplicable to sales on execution shall apply to sales made under the judgment.
The portion of the assessment not paid within sixty days after the assessment was issued shall bearinterest at the rate per annum prescribed by section 5703.47 of the Revised Code from the day the taxcommissioner issues the assessment until it is paid. Interest shall be paid in the same manner as the taxand may be collected by the issuance of an assessment under this section.
(D) All money collected under this section shall be considered as revenue arising from the taxesimposed by this chapter or Chapter 5733. or 5748. of the Revised Code, as appropriate.
(E) The portion of an assessment that must be paid upon the filing of a petition for reassessment shallbe as follows:
(1) If the sole item objected to is the assessed penalty or interest, payment of the assessment, includinginterest but not penalty, is required;
(2) If the taxpayer or qualifying entity that is assessed failed to file, prior to the date of issuance of theassessment, the annual return or report required by section 5747.08 or 5747.42 of the Revised Code,any amended return or amended report required by section 5747.10 or 5747.45 of the Revised Codefor the taxable year at issue, or any report required by division (B) of section 5747.05 of the RevisedCode to indicate a reduction in the amount of the credit provided under that division, payment of theassessment, including interest but not penalty, is required, except as otherwise provided under division(EX6) or (7) of this section;
(3) If the employer assessed had not filed, prior to the date of issuance of the assessment, the annualreturn required by division (E)(2) of section 5747.07 of the Revised Code covering the period at issue,payment of the assessment, including interest but not penalty, is required;
(4) If the taxpayer or qualifying entity that is assessed filed, prior to the date of issuance of theassessment, the annual return or report required by section 5747.08 or 5747.42 of the Revised Code,all amended returns or reports required by section 5747.10 or 5747.45 of the Revised Code for thetaxable year at issue, and all reports required by division (B) of section 5747.05 of the Revised Codeto indicate a reduction in the amount of the credit provided under that divisibn, and a balance of thetaxes shown due on the returns or reports as computed on the returns or reports remains unpaid, paymentof only that portion of the assessment representing the unpaid balance of tax and interest is required; 031
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(5) If the employer assessed filed, prior to the date of issuance of the assessment, the annual returnrequired by division (E)(2) of section 5747.07 of the Revised Code covering the period at issue, and abalance of the taxes shown due on the return as computed on the return remains unpaid, payment of onlythat portion of the assessment representing the unpaid balance of tax and interest is required;
(6) In the case of a party assessed as a qualifying entity subject to the tax levied under section 5733.41or 5747.41 of the Revised Code, if the party does not dispute that it is a qualifying entity subject to thattax but claims the protections of section 101 of Public Law 86-272, 73 Stat. 555, 15 U.S.C.A. 381, asamended, no payment is required;
(7) In the case of a party assessed as a qualifying entity subject to the tax levied under section 5733.41or 5747.41 of the Revised Code, if the party does dispute that it is a qualifying entity subject to that tax,no payment is required;
(8) If none of the conditions specified in divisions (E)(1) to (7) of this section apply, no payment isrequired.
(F) Notwithstanding the fact that a petition for reassessment is pending, the petitioner may pay all or aportion of the assessment that is the subject of the petition. The acceptance of a payment by the treasurerof state does not prejudice any claim for refund upon final determination of the petition.
.If upon final detennination of the petition an error in the assessment is corrected by the taxcommissioner, upon petition so filed or pursuant to a decision of the board of tax appeals or any court towhich the determination or decision has been appealed, so that the amount due from the party assessedunder the corrected assessment is less than the portion paid, there shall be issued to the petitioner or tothe petitioner's assigns or legal representative a refund in the amount of the overpayment as provided bysection 5747.11 of the Revised Code, with interest on that amount as provided by such section, subjectto section 5747.12 of the Revised Code.HISTORY: 134 v H 475 (Eff 12-20-71); 139 v H 694 (Eff 11-15-81); 139 v H 366 (Eff 7-9-82); 140 vH 291 (Eff 7-1-83); 142 v H 231 (Eff 10-5-87); 143 v H 111 (Eff 7-1-89); 143 v H 956 (Eff 12-31-90);144 v S 358 (Eff 1-15-93); 145 v H 152 (Eff 7-1-93); 147 v H 215 (Eff 9-29-97); 148 v H 612 (Eff 9-29-2000); 149 v H 405 (Eff 12-13-2001); 149 v S 200. Eff 9-6-2002.
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