Last week a Federal Express pilot won a battle with the IRS over the popular tax protester issue of where it states in the law that people are required to pay income taxes. A federal court in Memphis ruled in favor of Vernice Kuglin who has refused to pay federal income tax for nearly a decade.
The issue decided by the Memphis jury was actually not whether or not Ms. Kuglin owed taxes on $920,000 of income earned in the years 1996 to 2001. While Ms. Kuglin has refused to pay tax on that money and has been subjected to criminal charges by the IRS for tax evasion and filing false W-4 forms on which she indicated that she didn't owe any income tax, the case was decided on the simple fact that the IRS did not respond to Ms. Kuglin's correspondence.
This all began in 1995 when Ms. Kuglin wrote a letter to the IRS asking where in the law it states that she is required to pay federal income tax. The IRS never responded to her letter. Additional requests for information were mailed by Ms. Kuglin, and the IRS failed to respond. "The whole thing could have been resolved if the government had simply answered her questions," said Larry Becraft, one of Ms. Kuglin's attorneys.
The jury in the U.S. District Court for the Western District of Tennessee ruled that, according to information on federal tax forms, the IRS is required to cite various code sections before asking for taxpayer information. Because the IRS never responded to Ms. Kuglin's questions about the tax laws, the jury ruled against the IRS on all six counts of tax evasion and filing false W-4 forms.
No ruling was made as to whether Ms. Kuglin is required to make a tax payment. Should she fail to pay taxes for the years in question, the IRS may pursue a civil suit. "I think it is safe to assume the IRS will attempt civil collection, but she is not guilty of tax evasion," said Robert Bernhoft, another of Ms. Kuglin's attorneys.
Mr. Becraft added in an interview with Fox News, "I would anticipate here that the IRS is probably going to be sending her a 90-day letter for the six years that were the subject of the indictment. And that might be coming in the next couple of months."