Swan Indictment--Requirement to File Income Tax Returns and Pay Income Taxes
Swan Indictment--Requirement to File Income Tax Returns and Pay Income TaxesLast week I posted the 18 felony counts of the indictment which had been filed against me in federal court in New Hampshire. Here I am posting the beginning of the indictment in which the Government cites the requirements to file income tax returns and to pay income taxes, as well as other items pertaining to me.My case can be followed at my Web site www.stevenswan.com.Steven A. Swan
SUPERCEDING (sic) INDICTMENT
The Grand Jury charges:
At all times relevant to this indictment:
Requirement to File Tax Returns and Pay Taxes1. The Internal Revenue Service is an agency of the U.S. Department of Treasury, responsible for administering and enforcing the internal revenue laws of the United States and collecting income taxes owed to the Treasury of the United States.
2. The internal revenue laws, which are codified in Title 26 of the United States Code, are commonly known as the Internal Revenue Code, or the "Tax Code." Subtitle A of the Tax Code is titled "Income Taxes."
3. Section 1, of Subtitle A of the Tax Code, is titled, "Tax Imposed." Section 1 imposes and income tax liability on the taxable income of all individuals, depending upon the amount of taxable income they received, and their filing status, i.e., Married Individuals Filing Joint Returns, Heads of Households, Unmarried Individuals, and Married Individuals Filing Separate Returns.
4. Taxable income is defined in Section 63, of Subtitle A of the Tax Code, as gross income less any deductions authorized by statute. Gross income is defined in Section 61 of the Tax Code. It defines gross income as "all income from whatever source derived," specifically including but not limited to such items as compensation for services, gross income derived from business, gains derived from dealings in property, interest, rent, royalties, and dividends.
5. Subtitle F of the Tax Code is titled, "Procedure and Administration." Sections 6001, and 6011 through 6012, of Subtitle F of the Tax Code, require and individual to make and file an income tax return in accordance with the forms and regulations prescribed by the Secretary of the Treasury at the time specified by statute if the individual received gross income in a calendar year which equals or exceeds amounts specified by statute and regulations.
6. Sections 6071, 6072, and 6082, of Subtitle F of the Tax Code, set forth the time for filing income tax returns. Generally speaking, unless an extension is granted, an individual who files a tax return on a calendar year basis is required to make and file the return on or before April 15th following the close of said calendar year.
7. Section 6151, of Subtitle F of the Tax Code, requires the payment of any tax due whenever an individual is required under the Tax Code to make and file a return of tax, without assessment or notice and demand from the Secretary of the Treasury or the Internal Revenue Service. In other words, if an individual earned a sufficient amount of gross income to require the individual to make and file a tax return, then the individual is required to pay any tax due when the tax return is first due.
8. Defendant Steven A. Swan ("Swan") was a resident of Auburn, New Hampshire. Beginning in or about 1991, Defendant Swan was a self-employed real estate broker, doing business as Home Pride Real Estate. Beginning in or about 1996, Defendant Swan held himself out as an "Income Tax Consultant and Pro Se Legal Consultant."
9. In 1997 Defendant Swan filed IRS Forms 1040X with the Internal Revenue Service for the years 1993 and 1994 which reported a corrected total tax of $0. The amended returns also claimed refunds of $2,000 and $13,688.65, respectively. For the calendar years 1995, 1996 and 1997, Defendant Swan filed with the Internal Revenue Service IRS Forms 1040 which reported $0 in taxable income and $0 in total tax.
10. In 1996 Defendant Swan filed separate frivolous lawsuits against two Internal Revenue Service revenue officers alleging that they had illegally attempted to collect income taxes from him. The lawsuits were dismissed by two U.S. District Court judges. Defendant Swan’s motions for post-judgment relief were also denied. The U.S. Court of Appeals for the First Circuit upheld these decisions.
11. In 1997 Defendant Swan threatened and sought frivolous criminal prosecution of the Internal Revenue Service employees who had filed notices of liens and levies against the defendant’s property. In addition, Defendant Swan threatened to file and did file frivolous lawsuits against third parties if they complied with said liens and levies. No criminal actions were initiated, and Defendant Swan’s lawsuits were dismissed.
Income Tax Seminars
12 Defendant Swan regularly conducted tax seminars at hotels in or around Manchester, New Hampshire, that purported to teach individuals how to legally stop paying federal income taxes. During the course of said seminars, Defendant Swan told individuals that he had studied the Tax Code and relevant Supreme Court cases. Defendant Swan further represented at his seminars that there was no law that made the income tax mandatory or required individuals to file tax returns. He also stated that the original intent of the 16th Amendment to the United States Constitution was to allow Congress to tax profits of corporations and generally not individuals.
13. Defendant Swan further represented at his seminars that clients who paid estimated federal income taxes or had taxes withheld from their paychecks should file so-called zero income tax returns or amended income tax returns with the Internal Revenue Service reporting that they had received no taxable income in the calendar year in question and had no taxes due, and claiming a refund for the entire amount of any taxes paid during said calendar year.
14. At the conclusion of his tax seminars, Defendant Swan offered his services as a zero income tax return preparer for a fee. Defendant Swan further represented that upon receiving zero income tax returns that claimed refunds for all withheld taxes or taxes previously paid, the Internal Revenue Service frequently rejected the returns and notified the filers of such returns that they were subject to frivolous return penalties unless the returns were corrected. Defendant Swan further advised the individuals who attended his seminars that, if they filed a zero income tax return and received a notice of a frivolous return penalty, he could provide them with a written response to the Internal Revenue Service in an attempt to thwart the collection efforts of the Internal Revenue Service.
Service Rendered by Defendant Swan
15. Beginning in or about 1999 and continuing to on or about April 15, 2002, Defendant Swan prepared more than 200 zero income tax returns for individuals who attended his seminars or who otherwise learned of his services. Collectively, those returns sought tax refunds of more than $800,000. Defendant Swan usually charged his clients $100 per return. Although Defendant Swan received a fee for preparing these returns, he did not sign the returns as a paid preparer as required.
16. If the clients had their zero tax returns rejected by the Internal Revenue Service or their tax refunds were denied, Defendant Swan sold form letters to the clients and instructed them to send the letters to the Internal Revenue Service. The letters contained false and frivolous legal arguments in support of the zero income tax returns filed by the clients.
17. Defendant Swan counseled and advised clients who had received notices of frivolous return penalties or notices of liens or levies to file administrative claims for damages against individual IRS employees in order to "tie up" the Internal Revenue Service and cause "gridlock" in the tax system. Defendant Swan also prepared on behalf of clients letters to the Internal Revenue Service that alleged administrative claims for damages based upon frivolous legal arguments.
18. Defendant Swan counseled and advised clients to submit to their employers Forms W-4, which falsely claimed the clients were exempt from federal income taxes, in order to prevent the employers from withholding federal income taxes from the clients’ paychecks. Defendant Swan also provided assistance to clients who wanted to prepare and submit said Forms W-4.