Dear Willie:

 

The IRS has seized my business equipment and I cannot function.  If they sell it, I am dead meat.  What do I do?

 

Sincerely, Distressed

 

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Dear Distressed:

 

Great to hear from you.  Quit worrying.  You need to go down and file a Chapter 11 Petition right away.  You can then call the IRS and ask your Revenue Officer to return the property.  He will probably be a jerk and refuse to to do it. Then you can file a motion to return the property.  Use the sample text that follows in your motion.  Good Luck. Remember you have to file all past returns.  Chapter 11 can keep them at bay a long time.  You will have to make current tax payments so you don't get kicked out for bad faith. 

 

 

 

           

Sample Motion

 

Comes the petitioner in the above-entitled action and requests that this honorable Court order the IRS to return the following items:

 

 

            List items here with serial numbers etc.

 

           

            11 USC Section 542 (a) states as follows:

 

            "...an entity, other than a custodian, in possession, custody, or control, during the case of property that the trustee may use, sell or lease...shall deliver to the trustee, and account for, such property or the value of such property, unless such property is of inconsequential value or benefit to the estate."

 

 

            In United States v. Whiting Pools, Inc., 462 US 198; the Supreme Court issued a sweeping opinion which seems to encompass virtually all property of consequential value to the estate.  The Court held that 11 USC Section 542 extends even to secured property.

 

            Since it is impossible for the petitioner to reorganize and pay his debts without the equipment the IRS has taken, the debtor respectfully requests that this honorable Court order the IRS to return the seized property.

 

(type this in motion form.  Be sure to give the property forms to the IRS.  Serve the United States Attorney for your region, the civil division and also serve the district director and the collection officer.  You can do it by certified mail.  Then get to work on the returns.

DUPLICITY AND IRC SECTION 7201

 

           

   Within Section 7201 there are two distinct crimes.  There are (A) Evasion of assessment (concealing income) and (B) Evasion of payment (concealing assets).

 

           The wording of the standard form of indictment for tax evasion contains elements of both A and B.  This is duplicity (Duplicity is defined as the joining in one count of two or more offenses.  See 1 Wright, Federal Practice an Procedure, Section 142 (2nd Ed. 1982); Moore's Federal Practice, Section 8.03 (2d Ed. 1984).) and at least three circuit courts have agreed.  Certain affirmative acts will support A but not B and vice versa.  An affirmative act is necessary for a fraud conviction.

 

           Title 26 U.S. C. Section 7201 provides, in pertinent part that, "any person who willfully attempts in any manner to evade or defeat any tax imposed by this title or the payment thereof shall, in addition to other penalties provided by law, be guilty of a felony...."; the United States Supreme Court has recognized that this statute defines two distinct crimes: the willful attempt to evade or defeat the assessment of the tax; and the willful attempt to evade or defeat the payment of that tax.  Sansone v. United States, 380 U.S. 343 (1980).  See also United States v. Dack, 747 F.2d 1172, 1174 (7th Cir. 1984); United States v. Voorhies, 658 F.2d 710, 713 (9th Cir. 1981).

 

           Each count of the Indictment charges the defendant with violating both of the distinct crimes which come under the ambit of Title 26 , U.S.C. 7201.  Each count charges the defendant with evading assessment by stating that he violated Section 7201 "by failing to make an income tax return."  Each count charges the defendant with evading assessment by stating that he violated Section 7201 “by failing to make an income tax return."  Each count charges the defendant with evading payment in stating that he violated Section 7201 "by failing to pay to the Internal Revenue Service the said income tax."  The counts do not specify which of these offenses the defendant committed; accordingly, one can only assume that each count charges the defendant with both offenses.

 

           If the government wishes to charge two or more offenses in the same indictment, they must be charged in a separate count for each offense.  Duplicity impinges on the accused's Constitutional rights.  If a defendant is acquitted on a duplicitous indictment, there is a risk of double jeopardy because the court cannot know which crime, if any, he was acquitted of.  If a defendant is convicted on a duplicitious indictment, it is possible that he was convicted without a unanimous jury verdict on any individual crime within the court, thus violating the Defendant's Sixth Amendment right to know the charges against him.  See United States v. Murray, 618 F.2d 892, 896 (2nd cir. 1980);  United States v. Starks, 515 F.2d 112, 116 (3rd Cir. 1975);  United States v. Pavlovski, 574 F.2d 933 (7th Cir. 1978);  United States v. Orzechowski, 547 F.2d 978.  986 (7th Cir. 1976);  United States v. Geberding, 471 F.2d 55, 59 (8th Cir. 1973);  United States v. Aquilar, 756 F.2d 1418.  n.2 (9th Cir. 1985).

 

          In the present case, as has been determined by the Supreme Court, Title 26 Section 7201 describes two distinct offenses. Each count of the Indictment charges the defendant with both offenses.  As such, the Indictment is improperly duplicitous.  Such duplicity if allowed to go uncorrected would violate the defendant's constitutional rights under both the Fifth and Sixth Amendments of the United States Constitution.

 

          As you can see, it could be very important to raise this argument if your receive an indictment under Section 7201 of the Internal Revenue Code.