UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW MEXICO
Srbislav Stanojevich ) PETITIONER ) CASE NUMBER: MC-05-18 MV ) vs. ) SUPPLEMENTA TO OPPOSITION TO ) “MOTION TO STRIKE SURREPLY" The United States, ) Wells Fargo Bank, ) Bank of America, ) Northwest Bank ) RESPONDENTs )
[Respondent's Motion to Dismiss, Doc. 3, filed 4/1/2005]
[Respondent's Supplemental Motion to Dismiss, Doc. 6, filed 5/5/2005]
[Respondent’s Motion to Strike Petitioner’s Surreply, Doc. 15, filed 6/22/2005]
[Petitioner's Motion to File Surreply, Doc. 16 filed 6/22/2005]
[Respondent’s Response to Petitioner's Motion to File a Surreply, Doc 18, 7/22/2005]
Petitioner Srbislav Patriot, Ph.D., hereby respectfully files this SUPPLEMENTA TO OPPOSITION TO “MOTION TO STRIKE SURREPLY.”
1. Petitioner has filed Motion to File Surreply on June 22, 2005. Respondent filed on 7/22/2005 Response to Petitioner's Motion to File a Surreply in which Respondent opposes Petitioner right to file surreply. In addition, Respondent requests court to deny Petitioner to file surreply.
2. However, Respondent did not show any reason based in facts why to deny Petitioner surreply. Respondent is just opposing using broad and general statement of type:
“The replies filed by the government (Docs. 9 and 11) contain no new issues.”
“Moreover, the surreply that Petitioner already filed is moot because it fails to state any new fact or argument, nor does it provide any fact or argument that Petitioner was unable to state in his original response briefs. … Petitioner failed to file a surreply pursuant to local rule, and even if the Court takes a liberal view of his pro se status, the surreply should be denied as failing to address any issue of material fact.”
And yet there are no supporting facts for the above statement. On contrary, Petitioner did document in the Motion to File Surreply (Doc 16, § 2, list (a) though (h)) new material facts that need to be addressed.
3. For example Respondent claims:
“The replies filed by the government (Docs. 9 and 11) contain no new issues.”
If that is true, what was need for Agent Cordova to file second affidavit? Isn’t that contradictory statement in it self, for if the Respondent did not bring new issue then what was the need for the Respondent to file these replay? Just to waist Court’s and Respondent time?
On contrary Petitioner has brought several important issues that need to be addressed.
4. First, Summons to Wells Fargo Bank in the way it was issued does not follow any rule of law. There is no law that authorizes IRS Agent to issue summons to a third-party record keeper in one State for a third-party record keeper and records which are in another State. Summons issued that way creates the jurisdictional confusion and is illegal on its face and should be quashed immediately. Even the Respondent was confused with which court really has the jurisdiction. In the first Respondent’s Motion to Dismiss (Doc. 3) the Respondent clearly understood that summons was issued to Wells Fargo Bank New
Why it took Respondent one month to raise that issue? Because even Respondent was confused with it. And who would not be. Summons like the Wells Fargo Bank summons should not be permitted to be issued and should be pronounced administratively incorrect and illegal on its face. Summons like that opens an avenue for jurisdiction speculation, confusion and uncertainty. The Respondent in all of her responses has not once shown how it can be legal to issue some like that, has not shown any presidents for summons like that, and has not shown the law that authorizes the issuance of summons in such way.
5. Second, the issue of the scope of the summonses to Wells Fargo Bank and Bank of America has been raised in the Petitioner’s surreply. From the scope of the summonses it is clear that Agent Cordova is conducting civil and differed criminal investigation. The applicable law was recently restated in Hoffman vs. United States, 341
“The privilege afforded not only extends to answers that would in themselves support conviction under a federal criminal statute but likewise embraces those which would furnish a link to the chain of evidence needed to prosecute the claimant for a federal crime.”
6. Third, the issue of the way the summonses request the records violates Petitioner right to defend him and due process has been raised. The 26 USC § 7609(b)(1) defines two issues when the rights of the parties summoned are concerned. They are right to intervene and right to quash as stated in 26 USC § 7609(b)(1) and § 7609(b)(2):
§ 7609. Special procedures for third-party summonses
(b) Right to intervene; right to proceeding to quash
(1) Intervention
Notwithstanding any other law or rule of law, any person who is entitled to notice of a summons under subsection (a) shall have the right to intervene in any proceeding with respect to the enforcement of such summons under section
(2) Proceeding to quash
(A) In general Notwithstanding any other law or rule of law, any person who is entitled to notice of a summons under subsection (a) shall have the right to begin a proceeding to quash such summons not later than the 20th day after the day such notice is given in the manner provided in subsection (a)(2). In any such proceeding, the Secretary may seek to compel compliance with the summons.
In Reisman v. Caplin, 375 U.S. 440 (1964) regarding third party record-keeper Supreme Court said:
“Also in any such procedures, third parties may intervene to protect their interests, or in the event the taxpayer is not a party to the summons before the hearing officer, he, too, may intervene.”
Furthermore, in Reisman v. Caplin Supreme Court said:
“This Court has never passed upon the rights of a party summoned to appear before a hearing officer under 7602. However, the Government concedes that a witness or any interested party may attack the summons before the hearing officer. There are cases among the circuits which hold that both parties summoned and those affected by a disclosure may appear or intervene before the District Court and challenge the summons by asserting their constitutional or other claims.” (emphasis added)
This clearly confirms the rights of interested party, in this case the records owner (The Petitioner), even though the interested party is not the party that was summoned. In addition, it confirms the right of interested party to be present at summons hearing with summoned third party record-keeper and hearing office.
If the District Court orders the enforcement of the summons that implies that the Wells Fargo Bank representative will have to appear with records in question in front of the hearing office. So the summoned party can be sanctioned for not appearing or for not producing the records, however, it cannot be sanctioned for not answering or not giving the records. Supreme Court has clarified in Reisman v. Caplin that:
“Should the challenge to the summons be rejected by the hearing examiner and the witness still refuse to testify or produce, the examiner is given no power to enforce compliance or to impose sanctions for noncompliance.” (emphasis added)
And Supreme Court has clarified that further in Reisman v. Caplin:
“On the other hand, in tax enforcement proceedings the hearing officer has no power of enforcement or right to levy any sanctions. It is true that any person summoned who ‘neglects to appear or to produce’ may be prosecuted under 7210 and is subject to a fine not exceeding [375 U.S. 440, 447] $1,000, or imprisonment for not more than a year, or both. However, this statute on its face does not apply where the witness appears and interposes good faith challenges to the summons. It only prescribes punishment where the witness ‘neglects’ either to appear or to produce. ... It is sufficient to say that noncompliance is not subject to prosecution thereunder when the summons is attacked in good faith.” (emphasis added)
Production of records implies bringing records to the summons hearing. It does not imply sending them through the mail. A party can be compelled to response but not how to response or what to respond with. This has been also confirmed in Masat v. USA 755 F.2d 985 (1984):
“The taxpayer then has the right to intervene and begin a proceeding to quash the summons or, if a proceeding to enforce it has been commenced, to intervene in a proceeding to enforce it… Of course, if there is a pending proceeding, the taxpayer protects his position by intervention in that proceeding.” (emphasis added)
It is important to recognize that Congress has not given enforcement power to the hearing officer or to the delegate of the Secretary. Requesting records through the mail IRS Agent Cordova is taking away Petitioner right to defend himself by intervening in enforcement proceedings as guaranteed by26 USC § 7609(b)(1).
7. This Court must uphold the protection of Petitioner rights as noted:
“Due process requires that life, liberty or property not be deprived by adjudication unless preceded by notice and an opportunity for a hearing appropriate to the nature of the action. The opportunity to be heard is the fundamental requisite of due process of law. This opportunity is wholly worthless without notification of the occasion requiring it to the person whose rights are affected so that he may decide for himself whether to appear or default.” Capitol Federal Savings Bank v. Bewley. 795 P.2d 1051, 1053 (Okla.1990).
“Due process is violated by the mere act of exercising judicial power upon process not reasonably calculated to apprise interested parties of the pendency of an action.” Bailey v.
8. Forth, the Petitioner keeps on asking the Respondent and the Agent Cordova what law makes the Petitioner liable for the income tax. Petitioner has on several occasions asked Agent Cordova in writing, and he is asking the same question the Respondent if they can explain this to the Petitioner:
You have implied that I am a tax payer. I am not a lawyer so can you please inform me and help me understand by giving me the factual time line when, where, why and how I have become a tax payer?
Without establishing this first there is not question of any potential tax liability. Petitioner could not find any law that makes him liable for income tax. In the recent case
Petitioner was willing to meet with Agent Cordova discuss this in greater length for as stated above the Petitioner is not a layer or CPA and wants to make sure that he does not brakes any laws or fails to file any returns that are required by law. However, Agent Cordova has refused to meet with the petitioner and discuss this.
To the Petitioner best knowledge and understanding it appear that Agent Cordova is operating on some a priory assumptions that he is not willing or unable to explain to the Petitioner. The Petitioner did not make any tax liabilities he is trying to avoid. Petitioner did not fail to pay any taxes now due and owing. Petitioner did not fail to file any returns required by law. Petitioner has not knowingly or willfully broken any laws. Petitioner does not have any intention of breaking any laws. Petitioner is a law abiding human being, did not receive any taxable income, or for that meter any income at all, and does not owe any taxes now due.
9. Without first establishing what make Petitioner liable to file any income tax returns, or what makes Petitioner liable for income tax there can not be any prima facie case. The closest that the Petitioner can see that the Respondent ever attempted to establish Petitioner tax liability was in Respondents Motion to Dismiss (Doc. 3, p. 3) in one sentence:
“All citizens of the
First, the Petitioner is not
“For eighty years, the Supreme Court has recognized that the Sixteenth Amendment authorizes a direct non-apportioned tax upon
There are numerous supreme Court cases that completely contradict above statement. Without going into grater discuss on this, fat this is beyond the scope of this brief, which can be done if needed, just to mention few. To start with Brushaberv. Union Pac. R.R., 240
“The Sixteenth Amendment was obviously intended to simplify the situation and make clear the limitations on the taxing power of Congress and not to create radical and destructive changes in our constitutional system.”
“... the confusion is not inherent, but rather arises from the conclusion that the 16th Amendment provides for a hitherto unknown power of taxation; that is, a power to levy an income tax which, although direct, should not be subject to the regulation of apportionment applicable to all other direct taxes. And the far reaching effect of this erroneous assumption will be made clear by generalizing the many contentions advanced in argument to support it ...”
“... it manifestly disregards the fact that by the previous ruling it was settled that the provisions of the 16th Amendment conferred no new power of taxation..”
Bowers v. Kerbaugh-Empire co.. 271
“The Sixteenth Amendment declares that Congress shall have power to levy and collect taxes on income, ‘from whatever source derived’ without apportionment among the several states, and without regard to any census or enumeration. It was not the purpose or effect of that amendment to bring any new subject within the taxing power.” (emphasis added)
Peck v. Lowe. 247
“The Sixteenth Amendment, although referred to in argument, has no real bearing and may be put out of view. As pointed out in recent decisions, it does not extend the taxing power to new or excepted subjects, ...”
Doyle v. Mttchell Bros.. 247
“An examination of these and other provisions of the Act (The 16th Amendment) make it plain that the legislative purpose was not to tax property as such, or the mere conversion of property, but to tax the conduct of the business of corporations organized for profit upon the gainful returns from their business operations.” (emphasis added)
Elsner v. Macomber., 252
“The 16th Amendment must be construed in connection with the taxing clauses of the original Constitution and the effect attributed to them before the amendment was adopted.”
“As repeatedly held, this did not extend the taxing power to new subjects ...”
Evans v. Gore., 253
“Does the Sixteenth Amendment authorize and support this tax and the attendant diminution; that is to say, does it bring within the taxing powers subjects theretofore excepted? The court below answered in the negative; and counsel for the government say: ‘It is not, in view of recent decisions, contended that this amendment rendered anything taxable as income that was not so taxable before’.”
And the list goes on and on.
WHEREFORE, the Petitioner Srbislav Patriot, respectfully requests that the Petitioner’s Motion to File Surreply filed on June 22, 2005 be granted.
CERTIFICATE OF SERVICE: I hereby certify that on or about this date a true copy of this foregoing pleading was mailed via certified mail to the Respondent.
Date: August 2, 2005
___________________________________
Petitioner, pro se Srbislav Patriot Ph.D.
Address: 3100 Jane Pl NE #M105
Albuquerque, New Mexico 87111