Lawrence N. Cohen, Defendant, in Proper Person
Cynthia L. Neun, Defendant, In Proper Person
444 E. SAHARA AVE.
LAS VEGAS, NEVADA 89104
UNITED STATES DISTRICT COURT
DISTRICT OF NEVADA
UNITED STATES, ) CASE NO: CV - S-03-0281-LDG-RJJ
IRWIN SCHIFF, CYNTHIA NEUN ) REBUTTAL OF GOVERNMENT'S
and LAWRENCE N. COHEN, a/k/a/ ) RESPONSE TO DEFENDANT'S
LARRY COHEN, individually and ) MOTION FOR RECONSIDERATION
All doing business as FREEDOM ) OF PRELIMINARY INJUNCTION
BOOKS, www.livetaxfree.com, )
COMES NOW, Cynthia Neun, and Lawrence N. Cohen, Defendants in the above-entitled action, for the record in this case rebutting Government's Response to Defendant's Motion for Reconsideration as follows:
1.The Government Attorney notes on page 1 of its response, in Footnote 1 following the words "tax scheme":
"We do not separately respond to Neun's motion other than, in answer to Neun's question on Page 4 asking the Court to identify any of her 'legitimate' tax advice, to note that the Government is not aware of any of defendants activities that would be considered 'legitimate' tax advice or assistance. If they now choose to assist others to follow the tax laws as written not as perversely misinterpreted by Defendants, but as the Court has delineated- then the Government suggests that these activities would not run afoul of the Court's order."
Defendant asked the Court to identify what the "legitimate" tax related activities are that the Court stated in it's June 13th Order that it was being cautious not to enjoin (page 33, lines 9 and 10) since none of the activities or teachings shared with individuals are based on anything except the law and regulations and the government's own manuals and materials as they are written, word for word.
On page 2 of Defendant's Motion to Reconsider, Defendant stated:
"Therefore, this Court needs to be specific about what the Defendants can say, for Defendants believe that their activities and teachings are based squarely on the law which is why they have not attempted to deny the fact that they counsel individuals to protect themselves from IRS abuses by using the Laws that Congress enacted."
This Court did not delineate, (meaning to describe or explain something in detail), what tax laws as written the Defendants may still read out loud word for word to the American Public in light of the Preliminary Injunction. The fact is, the Court did not name any tax law at all other than 6700, 6701 and 7408, the Internal Revenue Code Sections the Government wishes that the Court rule applicable to Defendants in order to ban at least one book and to shut Defendant's business down, while simultaneously setting up tens of thousands of other individuals for "criminal prosecutions" for filing a "false" or "fraudulent" Form 1040's - or "false" or "fraudulent" W-4 Forms, when never before in Defendant's extensive experience and knowledge has an IRS Agent, Appeals Officer, IRS Attorney, Department of Justice Attorney, Tax Court or District Court Judge named the "zero return" "false", "fraudulent", "scam" or "scheme" as it is being labeled now here in the instant case against these Defendants. With all of these new labels, definitions and threatening terminology suddenly being used by the Government and this Court to describe and indict people filing the zero income tax return and exempt W-4 Forms, it is imperative that this Court fully apprises Defendants of what teachings and advocacy activities this Court deems legitimate. Certainly the Defendants are entitled to understand the terms of the Court's Order which has already virtually blocked Defendants ability to continue working for Mr. Schiff, and making Defendant's not hirable with other companies in the private sector for being tied up in litigation, (alleged Federal Grand Jury Investigations, criminal investigations, and the return of documents and personal property stolen in the Raid on Freedom Books and, going on in the Courts concurrently), oppressing Defendants while working a severe injustice. Defendants work on lawsuits practically non-stop while attempting to eke out a living scurrying around to comply with the Court's Order to keep from being illegally jailed for Contempt of an Order that is impossible to comply with. If the Court expects to be the owner of Defendants lives in this fashion, the Court can at least give definition and clarity to the language of it's Order.
Violation of Defendant's First Amendment Constitutional Rights
The Court's Order of June 13, 2003, is an egregious violation of Defendant's First Amendment Constitutional Rights. The Order works a severe injustice against these Defendants as it is ordering Defendants to deny their own minds and prohibiting them from helping their friends, family members, and customers to stop the crimes being committed against them (wrongful levies, liens and seizures), by Internal Revenue Service employees. This Court is put on Notice that since the Government has brought on the Injunction and book-banning case against Defendants, the Internal Revenue Service Examinations and Appeals Functions are issuing Final Notices and scheduling "Appeals Conferences" in record numbers. This case was brought in bad faith. The Government is using this Court to gag and bind Defendants, claiming that the Internal Revenue Service is oppressed by the manpower and hours spent hearing Appeals, (which they never "heard" anyway), in order to commit more crimes against our working Americans, our elderly and our ill. Defendants are emotionally tortured over not being able to help these people fight against the extortion tactics employed by that renegade agency. What does this Court Order that Defendants can say? What brought Defendants into this Court's forum was their reading the laws out loud as written. The Government does not like the laws as written, especially the laws written to protect the American taxpayer from unlawful collection activities, such as Code Sections: 3402(n), 6320, 6330, 7214 and 7433, to name just a few. If IRS employees do not wrongfully lien, levy or seize property in violation of the Constitution and of Statutes, and if Congress did not want to protect the American Public from those illegal collection activities, why did Congress enact those laws? (Not to mention all of the other supporting documentation and rule-making in the Internal Revenue Manual, General Counsel's Manual, Federal Register, The Code of Federal Regulations, The Special Agent's Handbook, the United States Attorneys Manual, The Cumulative Bulletin, and the job descriptions of the employees working for the IRS.) Are Defendants supposed to pretend that whatever IRS agents do to grab a portion of the American worker's pay is okay just because they want it? Defendants believed what they read in the House and Senate Reports and what they witnessed in the televised hearings of Senate Investigations leading up to the enactment of the 1998 Internal Revenue Service Restructuring and Reform Act, as just one example. As a result of what Congress and Senate did, Defendants showed their friends, family members, bankers, employers, and customers what the law says as written and how these individuals can now, according to the laws, determine, based upon required impartial investigations and verifications, whether or not the collection activity is authorized by the Secretary of the Treasury and the Commissioner of Internal Revenue. This is the language as written in the laws that the Government is seeking to enjoin, causing the increased workload for Appeals Functions at the IRS and now in the United States Tax Court and District Courts. The problems that the Government attorneys complain about in this case were caused by Congress, The Committee On Taxation, The House Ways and Means Committee, and other Government employees doing the writing for all the various laws, regulations and rulings, and not caused by these Defendants.
IR Code Sections 1, 61, 6013 and 6151?
The Department of Justice attorney claims that Internal Revenue Code Sections 1, 61, 6013, and 6151 are the Statutes showing "Americans are legally required to pay taxes on their income", (page 3 of Government's response). These Code sections do not appear anywhere under the heading "Liability For Tax" in the Index of The Internal Revenue Code. There is no mention of the "income tax" in the "Liability For Tax" section of the Index of the Code. Should Defendants not talk about that? If the Defendants were to say to the American Public: there is no mention of the income tax liability anywhere in the Internal Revenue Code; no mention of the requirement to pay the income tax; no recordkeeping requirements regarding the reporting of income tax; and, no penalties or interest in the event that American's do not pay the income tax in the laws as written in 26USC The Internal Revenue Code, would this Court agree with the Government attorney that saying so would be a "perverse misinterpretation" of the Code? Is it in violation of this Court's Order to show the American Public that in the 1939 Code there were such provisions written in the law imposing the income tax, making persons liable for the income tax and requiring persons to pay the income tax, (on wages salary and compensation for personal services), and, that as shown in the current 1954 Internal Revenue Code, Section 7851, entitled, Applicability of revenue laws, the 1939 mandatory provisions of the law were repealed? (See Exhibit A). Can Defendants read the Internal Revenue Code Sections mentioned in The Privacy Act Notice of the 1040 Booklet out loud in Public? If this would be in violation of the Court's Order against Defendants, how can that be? Defendants did not write the Privacy Act and Disclosure Notice. Does the Government object to the language of that Notice and the Code Sections listed therein? This is a legitimate question, especially in light of the fact that Evan J. Davis brings forth Code Sections 1, 61, 6013 and 6151 as American's liability and requirement to pay the income tax when none of those Code Sections appear in The Privacy Act Notice of the 1040 Instruction Booklet and sent out to the Public with nearly every piece of IRS correspondence. If Mr. Davis is correct in his assertions, Congress needs to correct the Privacy Act Notice so that it reflects what Mr. Davis is asserting. If Mr. Davis is correct in his allegations that Defendants "perversely misinterpret" the laws, then perhaps Mr. Davis can explain for the record in this case: Why are those Code Sections not mentioned in the Privacy Act Notice of the 1040 Instruction Booklet? Why employees of the Internal Revenue Service Appeals and Examinations Functions do not name Statutes (Sections 1, 61,6013 and 6151), but present Tax Court and District Court opinions, and then run out of the meeting room when taxpayers offer to pay the tax if the IRS employees can point to a legal obligation to do so in the laws as written in the Internal Revenue Code? Why Nevada State (former) Congressman (now Senator) John Ensign who served on The House Ways and Means Committee, and, Congressman Dan Burton from Indiana, in answer to the question, "are Americans liable for and legally required to pay income taxes", wrote letters to their constituents stating that there is no actual law making persons liable, but that "the Courts have ruled"? (Exhibits B and C). Why does the Internal Revenue Cumulative Bulletin so prominently display the "Statement of Principles of Internal Revenue Tax Administration, which states: (Exhibit D). "The function of the Internal Revenue Service is to administer the Internal Revenue Code. Tax policy for raising revenue is determined by Congress. With this in mind, it is the duty of the Service to carry out that policy by correctly applying the laws enacted by Congress At the heart of administration is interpretation of the Code. It is the responsibility of each person in the Service, charged with the duty of interpreting the law, to try to find the true meaning of the statutory provision and not to adopt a strained construction in the belief that he or she is 'protecting the revenue'. The revenue is properly protected only when we ascertain and apply the true meaning of the statute. Administration should be both reasonable and vigorous. It should be conducted with as little delay as possible and with great courtesy and considerateness. It should never try to overreach and should be reasonable within the bounds of the law and sound administration." . When presented with the Internal Revenue Code, and asked for the law making persons liable for the income tax, why did two Department of Justice Attorneys respond, "We are not here to do your research for you, Mr. Schiff", when Mr. Schiff offered to concede every question in a deposition being taken of him, (January 29th and 30th of this year), in a $2.5 Million dollar assessment case working in Federal District Court Judge Philip Pro's department at present? Why wouldn't Department of Justice attorneys, Henry Darmstadter and G. Patrick Jennings name the Statutes that Evan Davis cited in his response? Why did not the Internal Revenue Service Special Litigation Assistant, Mr. Paul L. Dixon, Revenue Officer James Gritis, and Bank of America Attorney Kirk Lenhard identify any of the Statutes mentioned by Evan Davis as laws making persons liable for or required to pay income taxes when Mr. Schiff, (offering to withdraw his lawsuit against the Bank of America), asked the question during a deposition of Revenue Officer Gritis on January 15, 2002? Why did those three experts refer Mr. Schiff to "the Courts" rather than to the laws as written? Defendants ask this Court now: are the laws as written, actually Court Decisions and not the laws Congress enacted?
Failure Of Plaintiff's To Give Constructive Notice.
Mr. Davis did not address the point of the lack of Constructive Notice to Defendants before bringing on this injunction lawsuit. Sections 6700 and 6701 are penalty statutes, therefore requiring the Service to "define standards of compliant behavior", "define remedial consequences for non-compliance", and, "providing monetary sanctions against taxpayers who do not meet the standard". These "PURPOSES" are clearly defined in the Internal Revenue Manual. The Government cannot simply choose to ignore the Penalty Handbook of the Internal Revenue Manual, where it states:
"The Service is responsible for providing information to taxpayers, which includes: Written materials that clearly explain the rules. Forms that permit the self-computation of tax liability. (Exhibit E) The Government also ignored Defendant's defense including Code Section 6751, enacted in the year 2000 outlining the procedural requirements pertaining to burden of proof of the Secretary when a penalty applies. According to that law as written, the Internal Revenue Service is required to notify Defendants that they determined Defendants advocacy activities were in violation of Code sections 6700 and 6701. This is a procedural requirement that Defendants brought to this Court as an Exhibit in their pleadings, (Cynthia Neun's Post Hoc Brief). Defendants present here, as Exhibit F, the June 12, 2003 letter to Mr. John B. Kotmair, II, from Area Director of the Internal Revenue Service scheduling an Examination Meeting where Mr. Kotmair is afforded an opportunity to present facts or legal arguments to defend himself and to prevent an injunction action being considered by the agency against him. This is what Defendants in this case are pleading: There must be constructive notice before moving to the Court for this extraordinary remedy that imposes irreparable harm to the Defendants in this case. There must be an opportunity to settle the matter administratively with the Internal Revenue Service itself before an action can be filed with this Court. Defendants Exhibit F shows that the Internal Revenue Service has a letter number 1844 to cover this administrative requirement. It shows that persons being considered in possible violations of the Internal Revenue Code under Sections 6700 and 7408 are afforded Constructive Notice and a right to appear before the agency for an appeal before being subject to a surprise attack by the Department of Justice seeking an immediate emergency Restraining Order that works a severe injustice against these Defendants.
Government Ignored Defendant's Meritorious Defensive Pleadings.
Further, Defendants Cynthia Neun and Lawrence Cohen object to the fact that the Department of Justice Attorney ignores their pleadings in this case. Evan J. Davis did not address any of these two Defendant's filings and meritorious defenses, save one sarcastic and vague reference in footnote 1 of his response to Defendant's Motion For Reconsideration. Mr. Davis should be ordered by this Court to respond to the defenses offered in good faith to the allegations made by the Government against them. If the Department of Justice is continuing to name Cynthia Neun and Lawrence Cohen as Defendants in this case, their pleadings have to be answered just as the Government attempts to answer Mr. Schiff's pleadings. Otherwise, the case against Cynthia Neun and Lawrence Cohen should be dismissed. The Department of Justice Attorney, Evan J. Davis and this Court did not answer with respect to Defendant's meritorious defenses, including: (Defendants pleading:) 1.Defendant's testimony that the Internal Revenue Service and Department of Justice Attorneys had countless numbers of opportunities to dispel Defendants notion (that there is no legal obligation to pay the income tax) accordingly over the course of the past thirteen years since the book, THE FEDERAL MAFIA was published and especially over the course of the past five years where Defendants were constantly appearing before the IRS holding the law itself but where the government employees refused or neglected to do so.
Is it the Department of Justice's and this Court's opinion that this is not a meritorious defense that Defendants appeared before the IRS, the Department of Justice in other proceedings, and at Congresswoman Shelley Berkeley's Office in Las Vegas and in Washington, DC., and, when bringing forth the Internal Revenue Code on these frequent and consistent occasions were denied the identification of any legal requirement to pay the income tax?
(Defendants pleaded:) 2.The Court, nor The Department of Justice proved their claims that Defendants "zero income" Form 1040's were false and fraudulent, by providing statutory law or even by supporting their claim upon "case law" as a basis for deeming them as such here in the instant case. Therefore, Defendants are entitled to be notified now before they end up in jail what the legal basis is for the Court's opinion that the "zero income" tax return is false and fraudulent when no Court, I.R.S. agent, D.O.J. Attorney, United States Attorney, Internal Revenue Service Attorney, Tax Court Judge, or District Court Judge has referred to it or "labeled" it as "false and fraudulent" before in the thousands of cases that have come before all of these governmental departments over the course of the past five years.
Is it the Department of Justice's and this Court's opinion that this defense is not meritorious and worthy of an answer, when the 1939 Code defined income as "wages and compensation for personal services" and provided for the liability and requirement to pay the income tax; where Internal Revenue Service and the Courts have only labeled the "zero income" tax return as "frivolous", meaning "silly", and, where the Department of Justice is attempting to attain a new and "criminal" label to this return, morphing the word "frivolous" into meaning "fraudulent" in this instant case?
It is Defendants position that this Court cannot rule the return to be "fraudulent and false" when no law nor any Court has deemed it as such before. The Government failed to notice this pleading, when it is paramount in importance and where Defendants may face incarceration as a result of this Court's ruling that the "zero income" tax return is now suddenly "fraudulent and false", and, where thousands of other American citizens who have filed the return according to the laws, may also be charged "criminally" using this Court's decision as precedence. Neither the Government nor this Court can ignore this pleading in defense of their teachings and advocacy activities at the Internal Revenue Service. (Defendants also pleaded:) 3.The Court states that it is "cautious not to limit defendants' legitimate tax-related activities or advocacy", (page33- ORDER), which makes no sense whatsoever in light of the fact that the Court states again and again that Defendant's are knowingly defrauding the public with the position that the payment of income tax is voluntary absent a liability and requirement to pay the tax in the Internal Revenue Code. The Court does not mention what activities Defendant's engage in that the Court deems "legitimate", and, based upon all the language leading up to and surrounding this Court's statement, the words: "scam", "scheme", "false", "fraudulent", "bogus theories", "nonsense really", "unreasonableness", etc., Defendant's cannot find where this Court could reasonably deem that any of their activities are "legitimate" and not subject to contempt of this Court's libelous Order. Therefore, this Court needs to be specific about what the Defendants can say, for Defendants believe that their activities and teachings are based squarely on the law which is why they have not attempted to deny the fact that they counsel individuals to protect themselves from IRS abuses by using the Laws that Congress enacted.
Defendants have not knowingly committed any act that is unlawful. Defendants have never been charged, indicted, or even told by any employee of the Internal Revenue Service or by the Department of Justice that their teachings or advocacy activities were false or fraudulent. The Government needs to explain why they did not give Constructive Notice to Defendants in this case that they were in violation of the Internal Revenue Laws.
(Defendants pleaded:) 4.The Court wrote 35 pages in which it did not even address Defendant's proof that the 6700 and 6701 Code Sections apply only to Corporate Tax Shelters, (Committee of Taxation Exhibit in this Defendant's Post Hoc Brief), and for this Court to hold that Defendant's should have known that they were subject to these penalty statutes without ever being notified of such, with or without the imposition of the penalty, NOT receiving any determination letter of any kind, the Court is basically claiming that these Defendants should be clairvoyant.
Again, Defendants point to Exhibit F, letter to Mr. Kotmair showing that the Internal Revenue Service has a letter which gives Notice to individuals that may be in violation of those Code Sections and that gives individuals a right to administrative consideration and remedy. For the Department of Justice Attorney to snub this defense in their answer to Defendant's Motion to Reconsider is fraud. This Court should be aware that courts have repeatedly ruled that silence is evidence of fraud.
"Silence can be equated with fraud where there is a legal or moral duty to speak, or where an inquiry left unanswered would be intentionally misleadingWe cannot condone this shocking behavior by the IRS. Our revenue system is based on the good faith of the taxpayer and the taxpayers should be able to expect the same from the government in its enforcement and collection activities." U.S. v. Tweel, 550 F.2d 297, 2999. See, also U.S. v. Prudden, 424 F. 2d 1021, 1032; Carmine v. Bowen, 64 A. 932.
Due to the Government's failure to answer these pleadings regarding Defendant's defense, this Court must rule that the Government attorneys are committing fraud upon this Court and fraud against these Defendants, since the Government cannot escape from the fact that Defendants have personally appeared countless numbers of times before the Internal Revenue Service through face to face meetings and by way of correspondence, (as has already been shown to this Court), and the employees of the Government and that agency, and the Courts have never before approached Defendants to say that their teachings, returns, letters of correspondence, and advocacy activities were in violation of Internal Revenue Laws.
(Defendants pleaded:) 5.The Court needs to take notice of Defendant's Exhibit A, showing only a few of the pieces of correspondence being sent to her to this day from the Department of Treasury and The Internal Revenue Service, still recognizing her as Taxpayer Representative and Power of Attorney for various individuals, proving that the Internal Revenue Service has not disbarred her from being able to practice before that agency in examination functions. These correspondences bring with them a responsibility for me to contact the individuals named in the correspondence. Does the Court know how Defendant may fulfill this responsibility in light of the Court's Order?
Where the Defendants ask this Court such legitimate and important questions providing such proof that the Government has failed to attempt to disbar Defendants from practicing before the Examinations Functions at the Internal Revenue Service, it is Mr. Davis's job to explain how this can be a fact in light of all of this litigation, supposedly, where the Government is moving this Court, "to shut the scam down". Why Mr. Davis would not answer Defendant for this record is proof that he is knowingly committing a fraud. Mr. Davis most assuredly is aware that Taxpayer Representatives, CPA's, Enrolled Agents and others are commonly disbarred from practicing before the IRS for various "infractions" of IRS Publication 230, and those individuals are afforded administrative and judicial remedies to state their defenses in those matters. These Defendants were not disbarred. These Defendants were not ever warned in any way that they might be disbarred. They were never notified by anybody that what they were teaching and advocating was indeed a violation of law or of rules of practice on examination and appeals at the IRS when they have appeared as Taxpayer Representatives again and again in person at that agency. This defense again goes to the Defendants right to a dismissal of this injunction and book-banning case against them for want of Constructive Notice and this is why the Government's attorney ignores this defense. Evan J. Davis would answer it if he could. He cannot. Therefore, the Government must be praying that the Court will ignore this matter of Fatal Neglect as well.
"Follow the tax laws as written not as perversely misinterpreted by Defendants"
Mr. Davis, in his "Response" to Defendants Motion for Reconsideration, attempts to imply by vague insinuation that Defendants do not promote the tax laws as written, which is a total and complete fraud upon these proceedings. The problems facing these Defendants in all of the current working litigation were brought about by reading the laws as written. (Defendants pleaded:)
This Defendant has done nothing more than read the law out loud word for word disseminating the information that Congress wrote to protect the American taxpayer from illegal IRS practices and procedures. As this Defendant argued in open Court, the Department of Justice's complaint is really one that should have been made to Congress, since Congress wrote those laws and published them in USC Title 26, not the Defendants.
Congress wrote laws to protect the American citizens from illegal practices by Internal Revenue Service employees. The published Treasury Regulations and other rules support these laws. That is what Defendants teach and what Defendants implement to help protect their friends, family members, employers, stockbrokers, bankers, co-workers and customers from IRS fraud, extortion and other abuses. Defendants, for example, show that the Code of Federal Regulations specifically limits the Service personnel from exacting more than what the laws as enacted by Congress authorizes for the payment of income tax or any other tax. See Exhibit G.
Treasury Regulation 601.106(f) Conference and Practice requirements. (1): "Rule I. An exaction by the U.S. Government, which is not based upon law, statutory or otherwise, is a taking of property without due process of law, in violation of the Fifth Amendment to the U.S. Constitution. Accordingly, an Appeals representative in his or her conclusions of fact or application of the law shall hew to the law and the recognized standards of legal construction. It shall be his or her duty to determine the correct amount of the tax, with strict impartiality as between the taxpayer and the Government, and, without favoritism or discrimination as between taxpayers."
This Court should order the Government attorney to respond to Defendants defense regarding this, since the Government comes complaining to this Court that is Defendant's fault that so much manpower and precious resources are being tied up in Examinations and Appeals Functions at the IRS and now in the US Tax Court and District Court processing the Appeals under IR Code Sections 6320 and 6330. These appeals are brought as a result of the fact that no documentation is presented to the taxpayer as the law specifically requires of the Examination Agent (regarding authorization to change 1040 Forms or to issue a letter to employers telling them to disregard the employee's "Exempt" Forms W-4), and the Appeals Function- required to present verification from the secretary and to allow the taxpayer the right to raise any relevant issue with respect to the unpaid tax, (including challenges to the existence of the underlying liability), in the Collection Due Process Hearings. The laws as written in the Code and Regulations are clear. The public cannot accept the Appeals Officer's or the Examination Agent's word for anything. The public is not to depend on Court precedence either. (Exhibit H.)
Internal Revenue Code Section 7852. Other applicable rules: (a)Separability clause. If any provision of this title, or the application thereof to any person or circumstances, is held invalid, the remainder of this title, and the application of such provision to other persons or circumstances, shall not be affected thereby. (b)Reference in other laws to Internal Revenue Code of 1939. Any reference in any other law of the United States or in any Executive order to any provision of the Internal Revenue Code of 1939 shall, where not otherwise distinctly expressed or manifestly incompatible with the intent thereof, be deemed also to refer to the corresponding provision of this title.
IR Code Section 7852(a) shows that the use of "precedent" the Doctrine of Stare Decisis cannot be applied in tax cases. And, as defendants have pointed out again, all of the mandatory provisions regarding the liability and payment of the income tax were expressly and purposely removed in the enactment and writing of the 1954 Code, Subparagraph (b) of Section 7852 above warns the public and the Government employees to read and understand the legislative intent of the changed provisions of the Code. So, when Mr. Evan's uses various Court Decisions to justify the actions brought against these Defendants, he is committing fraud against Defendant's and the Court in this case. Further, this Court should notice Exhibit I, Conner v. United States, 303 F. Supp. 1187 (1969), where that Court made a judgment for taxpayers, noting:
1.Internal Revenue (key) 2: There must be gain before there is "income" within Sixteenth Amendment. USCA Const. Amend. 16, See publication Words and Phrases for other judicial constructions and definitions. 2.Internal Revenue (key) 301. Under Internal Revenue Code of 1954, if there is no gain, there is no "income". 26 U.S.C.A. (I.R.C. 1954) Section 61(a).
The Court in U.S. v. Conner also recognized "income in it's Constitutional Sense" as distinguished in Commissioner of Internal Revenue Glenshaw Glass Co., and as already fully covered by Defendants in their pleadings in this case. Therefore, this Court cannot hold differently in light of all of Defendant's pleadings and in observance of the Government's failure to answer or to rebut Defendants defense.
The Government's Failure To Deny The Trapping Of Defendants.
The Government's attorney did not deny Defendant's statement that the Court's Order as written serves as a trap to set up Defendants and tens of thousands of other citizens for future criminal prosecutions. The Court's Order reflects exactly what the Department of Justice prescribed in its language to this Court, and does not consider or reflect acknowledgment of Defendants assertions that the Government made no attempt to remedy the alleged violations of Internal Revenue Laws before moving to this Court, when there were countless numbers of opportunities presented to the Government to do so. (Defendants pleaded:) This Defendant, by attempting to comply with the Order as written, believes that she is trapped into making a "confession" that her activities are "knowingly false and fraudulent", and that her compliance could be used against her by the Government Attorneys on Appeal of this case and in all of the other cases working and pending concurrently. The way it is written, that Defendants must refrain from any activities that they know to be false and fraudulent, is the trap because the Defendants do nothing that they know to be false and fraudulent and the Government has never before claimed that they did. By complying, the Court is imposing subordination of perjury, since none of the activities or teachings shared with individuals are based on anything except the law and regulations and the government's own manuals and materials, Defendants do nothing that they know to be false or fraudulent. So, Defendant asks this Court to Order that Compliance with the Court's Order of June 13, 2003, will not be used as an admission of the "knowingly false and fraudulent" language contained in that Order. The Order serves as Governmental entrapment as written, and Defendant feels it important to make this record for the Appellate Court at this time.
Therefore, the Defendants assert that if indeed the Government believed that Defendants were in violation of the Internal Revenue Laws, as asserted in this case, the Government has sat on its rights too long to come now prosecuting this case against them. It was the responsibility of the Internal Revenue Service employees to make an assertion that the "zero income" tax return was false and fraudulent, and, they never did. The Federal District Court and the United States Tax Court Judges never called the "zero income" tax return "false and fraudulent". No Notice was given to Defendants that they may be subject to the Penalty Statutes, 6700 and 6701, and, the provisions of Code section 7408. The Defendants to this date have not received an answer as to why no Government employee including the I.R.S., the D.O.J., the Congressional Representatives, and the Judges have not attacked the attachment to the "zero income" tax return, convincingly demonstrating contributory negligence on the part of the Government employees involved and also making the Government's Complaint irrelevant due to fraud and laches.
Government's Failure To Respond To Defendant's Pleadings Constitutes Admission.
Defendants ask this Court to take Judicial Notice that:
Under Rule 8(d) of the Federal Civil Judicial Procedure and Rules,
Effect of Failure to Deny. Averments in a pleading to which a responsive pleading is required, other than those as to the amount of damage, are admitted when not denied in the responsive pleading. Averments in a pleading to which no responsive pleading is required or permitted shall be taken as denied or avoided. The Government has a legal and moral duty to respond to the Defendants pleadings: 1.Lack of Constructive Notice when there were countless numbers of opportunities afforded the Government to do so. 2.Failure to inform Defendants that they might be subject to penalty Statutes 6700 and 6701 and to follow through with procedural requirements of Code Section 6751. 3.Failure to respond to Defendant's averments regarding the "trap" being set in this case for Defendants and tens of thousands of other citizens as the word "frivolous" is being redefined to mean "fraudulent" in order to move to the Federal Grand Jury for indictments and to incarcerate Defendants and others based upon the new meaning of the word. 4.Failure to deny that Internal Revenue Service employees do not hew to the laws when conducting Examinations and Collection Due Process Hearings, which result in Judicial Appeals as the laws instruct the taxpayers to do and for which the Government now complains. 5.Failure to deny that the Government's delay allowed tens of thousands of individuals to be involved with the filing of the "zero income" tax return, showing that the Government comes to this Court in bad faith, constituting contributory negligence, and causing a severe injustice to work against Defendants and their customers.
Based upon the issues of law and of fact outlined above, Defendants are entitled therefore to relief from the Court's order of June 13, 2003, on the Court's own Motion under these circumstances where it is duty bound in the interest of substantial justice and fair play.
In the alternative, Defendants demand a hearing to be set where they can make an accurate record of these facts to perfect their Appeal by making Oral Argument.
Dated this: July 14, 2003.
____________________________, Cynthia L. Neun, Defendant in Proper person _____________________________, Lawrence N. Cohen, Defendant in Proper person
CERTIFICATION OF SERVICE
IT IS HEREBY CERTIFIED that service of the foregoing REBUTTAL OF GOVERNMENT'S RESPONSE TO DEFENDANT'S MOTION FOR RECONSIDERATION has been made by placing a copy in United States mail on July 14, 2003 to Evan J. Davis, Tax Division, U.S. Department of Justice, PO Box 7238 Ben Franklin Station, Washington, DC. 20044.