_________________________________________________________________
NO. 91-3350
_________________________________________________________________
IN THE
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
_________________________
UNITED STATES OF AMERICA,
Plaintiff/Appellee,
-vs-
WILLIAM R. BARNES,
Defendant/Appellant.
_________________________
ON APPEALS FROM THE JUDGMENTS OF THE
UNITED STATES DISTRICT COURT FOR
THE WESTERN DISTRICT OF PENNSYLVANIA
_________________________
BRIEF FOR THE APPELLANT
_________________________
JULY 1991
WILLIAM R. BARNES
#03652-068
Morgantown FCI
P.O. Box 1000
Morgantown, WV 26505
_________________________________________________________________
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
UNITED STATES OF AMERICA, )
)
Plaintiff/Appellee, )
)
-vs- ) No. 91-3350
)
WILLIAM R. BARNES, )
)
Defendant/Appellant. )
__________________________________
CERTIFICATE OF INTERESTED PERSONS
William R. Barnes, Appellant herein, certifies that the
following listed persons have an interest in the outcome of this
case. These representations are made in order that the Judges of
this Court may evaluate possible disqualification or recusal.
William R. Barnes Paul J. Brysh, Esq.
#03652-068 Office of the U.S. Attorney
Morgantown FCI 633 U.S. Courthouse
P.O. Box 1000 Pittsburg, PA 15219
Morgantown, WV
___________________________
William R. Barnes
Defendant/Appellant
STATEMENT REGARDING ORAL ARGUMENT
William R. Barnes, Appellant herein, requests that he be
allowed oral argument before this honorable Court as the issue
presented is one of first impression in this Circuit. Before
this honorable Court sets seminal precedent by its resolution of
this case, William Barnes desires to ensure that any unanswered
question in the minds of the Court be thoroughly explored.
___________________________
William R. Barnes
Defendant/Appellant
STATEMENT OF RELATED CASES AND PROCEEDINGS
Williams R. Barnes, Appellant herein, filed a previous
appeal with the Court, United States v. Barnes, No. 90-3357
(Third Circuit), which affirmed the judgment of the District
Court on February 11, 1991.
STATEMENT OF STANDARD OF REVIEW
This argument presents a question of law subject to review
de novo by this honorable Court. U.S. v. Hatch, 919 F.2d 1394,
1396 (9th Cir. 1990).
STATEMENT OF JURISDICTION
William R. Barnes, Appellant herein, states to this
honorable Court as follows:
1. The District Court below exercised jurisdiction of this
cause pursuant to 28 U.S.C. Section 2255.
2. The jurisdiction of this Court to hear this appeal is
pursuant to 28 U.S.C. Section 1291 as this appeal is
taken from the final judgment of the District Court
below.
STATEMENT OF THE ISSUE
The requirement to file Federal individual income tax return
forms is contained in Internal Revenue Service (IRS) regulations
and instructions. As a consequence, said regulations and
instructions are "information collection requests," which must
"display" Office of Management and Budget (OMB) control numbers
before information collection may begin. The IRS has failed to
display such number on any pertinent regulation or instruction
which implements the statutory requirement to file an individual
income tax return form. By law, not only can the information
collection not be engaged in by the IRS, but William R. Barnes
("Barnes") cannot "be subject to any penalty" for the failure to
comply with such unauthorized requests.
Since Barnes was not required to file a return for tax years
1983 through 1986, the necessary condition was never triggered
(i.e., "when a return is required" in 26 U.S.C. Section 6151) and
neither was the concomitant statutory requirement to pay the tax
at the time and place for filing the return. This is the only
statute imposing the requirement to pay the income tax based upon
the filing of a return prior to an assessment and notice and
demand for payment of the tax.
Under these conditions, can the Court impose a "penalty" for
failure to file a Federal individual income tax form and pay said
income tax? It is submitted that the District Court lacked
jurisdiction to punish Barnes by imposing a sentence and
probation on Barnes in the case at bar because of IRS/Treasury
Department's failure to comply with the provisions of the
Paperwork Reduction Act, the Court being divested of such
authority pursuant to 44 U.S.C. Section 3512.
STATEMENT OF THE CASE
(A) Course of Proceedings and Disposition Below.
Barnes was charged by Indictment filed on December 6, 1990,
in the United States District Court for the Western District of
Pennsylvania, with four felony counts of violating 26 U.S.C.
Section 7201 (federal income tax evasion) for the tax years 1983
through 1986. Criminal Docket, Document No. 1 (hereinafter "CD-1".)
Barnes was arraigned on December 29, 1989 and pleaded not
guilty. (CD-W1.) By Order dated December 29, 1989, FPD Joel B.
Johnston was appointed to represent Barnes. (CD-10.)
Trial began in the above said court on April 23, 1990 before
the honorable Gustave Diamond. (CD-46.) Trial lasted five (5)
days and Barnes was found guilty on all counts by the jury. (CD-48.)
On June 1, 1990, the District Court sentenced Barnes to:
(1) five (5) years in prison as to Count One, (2) five (5) years
in prison as to Count Two which runs concurrently with the
sentence of imprisonment imposed on Count One, (3) suspended
sentence of imprisonment with five (5) years probation on Count
Three, (4) community service work at the rate of eight hours a
week for a period of two years during the period of probation,
and (5) suspended sentence of imprisonment with five (5) years
probation as to Count Four which runs concurrently with the
sentence of probation imposed on Count Three. (CD-59.) On
June 1, 1990, Barnes filed a notice of appeal and was docketed
with Third Circuit No. 90-3357. (CD-60.) The District Court's
judgment was executed immediately -- June 1, 1990 -- and Barnes
was taken to Morgantown FCI on June 15, 1990. (CD-61.) The
judgment of the District Court was affirmed by the Third Circuit
Court of Appeals and the mandate issued February 11, 1991. (CD-72.)
Barnes filed a motion to vacate sentence under 28 U.S.C.
Section 2255 on March 20, 1991. (CD-73.) By Order dated March
26, 1991, the government was instructed to file a response within
eleven (11) days of the District Court's order. (CD-74.) The
government's response was entered on April 10, 1991. (CD-75.)
The District Court denied Barnes' motion to vacate by an Order
dated April 18, 1991. (CD-77.)
(B) Statement of Facts.
The Indictment charging evasion of income taxes alleges that
Barnes failed to file federal income tax returns and failed to
pay the tax for the years in question. (CD-1.) The affirmative
act alleged to constitute attempted evasion was the filing of an
"exempt" Form W-4. (CD-1.)
At trial, the government alleged, inter alia, that Barnes
had a duty to file a federal income tax return, specifically Form
1040, and to pay the tax for the years in question. (Record as a
whole.) Barnes testified at trial and admitted that he had not
filed federal income tax returns -- Form 1040 -- for the four
years in question. Defendant presented a defense based upon his
good faith misunderstanding of the law, as a defense to the
willfulness element of the charges. (Reporter's Transcript (RT),
at pages 650-700.)
The jury found Barnes guilty of income tax evasion for all
four years in question.
SUMMARY OF THE ARGUMENT
Barnes was charged on December 6, 1990, with four felony
counts of violating 26 U.S.C. Section 7201 (federal income tax
evasion) for the years 1983, 1984, 1985 and 1986. Due to the
IRS/Treasury Department's failure to comply with the provisions
of the Paperwork Reduction Act of 1980 (PRA), the Federal
government, including the District Court, is lacking jurisdiction
to penalize Barnes for such omissions.
The basis for the government's assertion, that Barnes "did
willfully attempt to evade and defeat the ... income tax due and
owing" for the years 1983, 1984, 1985 and 1986, is the federal
income tax regulations codified within 26 C.F.R. Sections 1.6001-
1, 1.6011-1 and 1.6012-1. These tax regulations constitute
information collection requests which must bear OMB numbers.
Instructions to federal income tax forms likewise constitute
information collection requests which must "display" OMB control
numbers. Cf. 26 C.F.R. Section 1.6012-1(7):
Form 1040A may be filed only by those individuals entitled
to use such form as provided by and in accordance with the
instructions for such form. [Emphasis added.] None of the
federal income tax regulations within 26 C.F.R. improperly
displayed OMB control numbers until March 14, 1985, when Treasury
Decision 8011 (50 FR 10221) was published in the Federal
Register. To date, the instructions to Individual Income Tax
Form 1040 fail to display an OMB control number, in violations of
44 U.S.C. Section 3507(f).
The PRA provides that, before a federal agency may engage in
the collection of information, it must obtain an OMB control
number and "display" such number on the "information collection
request." The PRA specifically defines reporting requirements,
or other similar methods calling for the collection of
information, as "information collection requests." No federal
statute requires the filing of any specific income tax return
form, much less Form 1040; therefore, resort to the IRS
regulations is necessary to determine how to comply with the law.
Furthermore, numerous regulations require the instructions
to determine how to comply with the law. The forms themselves
require the instructions, and the instructions impose reporting
and record keeping requirements independent of the statutes and
regulations. Therefore, the regulations and instructions fall
within the statutory definition of "information collection
requests."
Pursuant to the public protection clause of the PRA:
Notwithstanding any other provision of law, no person shall
be subject to ANY penalty for failing to ... provide
information to any agency if the information collection
request involved was made after December 31, 1981, and does
not display a current control number assigned by the
director, or fails to state that such request is not subject
to this chapter. [Emphasis added.]
No regulation requiring the filing of Form 1040 displays an
OMB control number or a statement of inapplicability of the PRA;
neither do the instructions related to Form 1040. Therefore,
Barnes cannot suffer any penalty for failing to file Form 1040
for 1982, 1983, or 1984.
This Court should not be diverted by anticipated arguments
that it is sufficient for Form 1040 by itself to display an OMB
control number, nor by ill-conceived decisions drawing the same
conclusion. The intent of Congress, as well as the plain
language of the statutory scheme, do not provide that the
provisions of the statute are satisfied by displaying OMB control
numbers only on a "form." Every requirement or reference to the
"display" requirement is related to an "information collection
request." While Form 1040 may fall within the definition of an
"information collection request," it does not require its own
filing. The requirement to file the Form is contained in the
regulations and instructions. The mere existence of Form 1040,
in and of itself, imposes no burden upon the public other than
the time required to fill in the blocks.
Conclusively proving Barnes' argument, the IRS acknowledges
its obligation to "display" control numbers in the text of
treasury regulations and in the upper right hand corner of
instructions for return forms, but has chosen to ignore its duty
because this agency disagrees with the law. Barnes can only
conclude that IRS expects to get preferential treatment in the
Federal courts since this agency feels it is above the statutory
mandates of Congress. Barnes does not claim that the PRA
relieves him of any responsibility to pay taxes which may be
owed, but merely that he had no legal obligation to supply
information to the IRS because the "information collection
requests" which require reporting and record keeping have been
rendered nugatory, due to the IRS' failure to comply with the
PRA. Further, Barnes can suffer no "penalty" for not complying
with such unauthorized ("bootleg") requests. Certainly, all the
penalties the Court imposed upon Barnes are prohibited by Section
3512 because Barnes could refuse to comply with a "bootleg"
request by exercising his legal rights under the PRA.
Barnes does assert that the absence of the OMB control
numbers applicable to any tax regulation or instructions
requiring the "making of tax returns," as a matter of law, bars
the imposition of penalties, civil or criminal, for failure to
comply with such information collection requests, as more fully
set forth in the memorandum of points and authorities hereunder.
44 U.S.C. Section 3512.
ARGUMENT
(A) Introduction.
Barnes was charged with four counts of tax evasion for
"failing to make an income tax return ... as required by law ...
[and] failing to pay to the Internal Revenue Service said income
tax ... in violation of 26 U.S.C. Section 7201.
The duty (i.e., supplying information in response to the
paperwork burden) to state specifically all the items of gross
income, deductions and credits at issue instanter is
conspicuously absent from 26 U.S.C. Section 6011(a), which states
in pertinent part:
When required by regulations prescribed by the Secretary any
person made liable for any tax imposed by this title, or for
the collection thereof, shall make a return or statement
according to the forms and regulations prescribed by the
Secretary. Every person required to make a return or
statement shall include therein the information required by
such forms or regulations. [Emphasis added.]
Nevertheless, no form, statute or regulation sets forth any
duty to make and file an income tax return disclosing
specifically the items of Barnes' gross income and any deductions
and credits to which he were entitled. In particular, 26 C.F.R.
Section 1.6011-1 provides:
Each taxpayer should carefully prepare his return and set
forth fully and clearly the information required to be
included therein. Returns which have not been so prepared
will not be accepted as meeting the requirement of the Code.
[Emphasis added.]
Since the duty willfully omitted (according to the
Indictment) -- failing to make a return which includes stating
specifically the items of gross income and any deductions and
credits to which Barnes was entitled -- is absent from the
operative forms, statutes and regulations, the only possible
source for the imposition of the duty to report such items is the
instructions for individual income tax forms, including
instructions for the appropriate schedules.
The left-hand sides of the front and back of 1040 income tax
returns list ten categories of information to be supplied --
"filing status," "exemptions," "income," "adjustments to income,"
"adjusted gross income," "tax computation," "credits," "other
taxes," "payments" and "refund or amount you owe" -- which
repeatedly refer taxpayers to the instructions.
Accordingly, the duty to file an income tax return can only
be fulfilled by following the instructions in preparing a return
"meeting the requirements of the Code." Since no duty exists,
independently of the instructions, to state specifically the
items of gross income and any deductions and credits to which
Barnes was entitled, the request for such information must comply
with the Paperwork Reduction Act before a person can be penalized
for failing to provide the information that is requested by Form
1040 instructions.
Since Congress expressly annulled the Federal court's
jurisdiction when an administrative agency fails to comply
with the Paperwork Reduction Act, the District Court
proceeded without jurisdiction when it imposed penalties on
Barnes. The requirement for any person to file a return is
imposed by the implementing regulations for 26 U.S.C.
Sections 6001, 6011 and 6012 which provide in pertinent
part: Every person liable for any tax imposed by this title
... shall ... make such returns, and comply with such rules
and regulations as the Secretary may ... prescribe.
Whenever in the judgment of the Secretary it is necessary,
he may require any person ... by regulations, to make such
returns ... as the Secretary deems sufficient to show
whether or not such person is liable for tax under this
title .... [Emphasis added.]
Thus, the plain meaning rule applies in the case at bar.
See, e.g., Dickerson v. New Banner Institute, Inc., 460 U.S. 103,
110 (1983), wherein the Supreme Court ruled:
... [I]n determining the scope of a statute, one is to look
first at its language. If the language is unambiguous, ...
it is to be regarded as conclusive unless there is a clearly
expressed legislative intent to the contrary.
Therefore, the Court must conclude that no duty to file tax
forms and provide information arises until forms or regulations
are prescribed by the Secretary. This rule of statutory
construction was exhaustively explained by the Supreme Court in
California Bankers Assoc. v. Shultz, 416 U.S. 21, 45-54 (1974).
Here, the Supreme Court found that Congress has the power to
delegate such authority by a general authorization in a statute,
and the Supreme Court used the Internal Revenue Code as an
example:
The Internal Revenue Code ... contains a general
authorization to the Secretary of the Treasury to prescribe
by regulation records to be kept by both business and
individual taxpayers, 26 U.S.C. [Section] 6001, which has
been implemented by the Secretary in various regulations.
California Bankers, at 45.
Internal Revenue Code Sections 6001, 6011 and 6012, which
relate to requirements to make tax returns, impose reporting
duties only insofar as the Secretary of the Treasury properly
prescribes regulations and reporting forms. Therefore, there can
be no violation of the statute without a corresponding violation
of the implementing instructions, forms and regulations. The
corresponding regulations provide the manner and means to
implement the reporting requirements authorized by these three
sections, without which these sections would be virtually
meaningless. Additionally, the statutes pertaining to income
taxes do not identify or specify the appropriate tax forms or
schedules required to make a legally sufficient tax return. This
information is contained only in the regulations and instructions
to the tax forms.
Criminal penalties for failure to file return forms can only
attach upon violation of regulations promulgated by the
Secretary. See, e.g., United States v. Reinis, 794 F.2d 506, 508
(9th Cir. 1986) (a person cannot be prosecuted for violating the
Currency Transaction Reporting Act, unless he violates an
implementing regulation); United States v. Murphy, 809 F.2d
1427, 1430 (9th Cir. 1987) (the reporting act is not self-
executing and can impose no reporting duties until implementing
regulations have been promulgated).1 As noted, Barnes was
charged with failing to make income tax returns and failing to
pay said income tax. Any person so charged cannot be
successfully prosecuted for violating the statute, unless he
violated the implementing tax regulations which authorize the
Secretary to describe the data which the taxpayer is legally
obligated to provide. See, e.g., California Bankers, 416 U.S. at
26: the [Internal Revenue Code] is not self-executing; absent
action by the Secretary of the Treasury, the reporting
requirements would bear no real significance.
Compliance with the general filing requirements of the Code
necessarily implicates compliance with the more specific
requirements authorized in the implementing regulations and
specified in the instructions to the tax forms. The Tenth
____________________
1. Notably, the Currency Reporting Act tracks the language in
Section 6011(a):
a domestic financial institution ... involved in a
transaction for the payment ... of United States coins
or currency (or other monetary instruments the
Secretary of the Treasury prescribes), in an ... amount
and denomination, or under circumstances the Secretary
prescribes by regulation, the institution and any other
participant in the transaction the Secretary may
prescribe shall file a report ... at the time and in
the way the Secretary prescribes ....
_________________________________________________________________
Circuit recognized as much when it held that "... the provision
of information in 1040 forms is inexorably linked to the
statutory requirement to pay taxes ...." United States v.
Collins, 920 F.2d 619, 630 n. 13 (10th Cir. 1990). [Emphasis
added.]
(B) Statutory and regulatory provisions.
Public Law 96-511, 94 Stat. 2812, the PRA, was enacted into
law December 11, 1980, and is codified at 44 U.S.C. 3501 et seq.2
The PRA requires all agencies to submit all "information
collection requests" to the Director of the OMB for review and
approval, 44 U.S.C. 3507(a), and prohibits agency collection of
information if the "information collection request" does not
display a currently valid OMB control number. 44 U.S.C. 3507(f);
5 C.F.R. 1320.4(a).3 The term "agency" includes the Department
of the Treasury and the IRS. 44 U.S.C. 3502(1); 5 C.F.R.
1320.7(a). The term "information collection request" means:
a written report form, application form, schedule,
questionnaire, reporting or record keeping requirement, or
other similar method calling for the collection of
information.
44 U.S.C. 3502(12). [Emphasis added.]
the method by which an agency communicates the specification
for a collection of information to potential respondents,
including a written report form, application forms,
schedule, questionnaire, oral communication, reporting or
record keeping requirement, or other similar method.
5 C.F.R. 1320.7(l). [Emphasis added.]
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2. All references to 44 U.S.C. shall be referring to those
sections published at 94 Stat. 2812, et seq.
3. All references to 5 C.F.R. 1320 shall mean that regulation
published at 48 Fed. Reg. 13,666, et seq.
_________________________________________________________________
The term "collection of information" means:
the obtaining or soliciting of facts or opinions by an
agency through the use of written report forms, application
forms, schedules, questionnaires, reporting or record keeping
requirements, or other similar methods calling for ...
(A) answers to identical questions posed to, or identical
reporting or record keeping requirements imposed on, ten
or more persons ....
44 U.S.C. 3502(4). [Emphasis added.]
the obtaining or soliciting of information by an agency from
ten or more persons by means of identical questions, whether
such collections of information is mandatory, voluntary, or
required to obtain a benefit. For the purposes of this
definition, the "obtaining or soliciting of information"
includes any requirement or request for persons to obtain,
maintain, retain, report, or publicly disclose information
....
(1) A "collection of information" includes the use of
written report forms, application forms, schedules,
questionnaires, reporting or record keeping requirements,
or other similar methods.
5 C.F.R. 1320.7(c). [Emphasis added.]
The term "similar method(s)" may include rules, regulations, and
instructions. 5 C.F.R. 1320(7)(c)(1). The term "display" means:
In the case of forms, questionnaires, instructions, and
other written information collection requests individually
distributed to potential respondents, to print the OMB
control number (and, unless OMB determines it to be
inappropriate, the expiration date) in the upper right hand
corner of the front page of the request.
5 C.F.R. 1320.7(f)(1). [Emphasis added.]
In the case of collections of information published in
regulations, guidelines, and other issuances in the Federal
Register to publish the OMB number in the Federal Register
(as part of the regulatory text or as a technical amendment)
and ensure that it will be included in the Code of Federal
Regulations if the issuance is also included there.
5 C.F.R. 1320.7(f)(2). [Emphasis added.]
Clearly then, any regulation or instruction which calls for,
or communicates the specification for ten or more people to
provide facts to the IRS, is an "information collection request"
which must display an OMB control number in the text of the
regulation and in the upper right hand corner of the instruction,
before the IRS may engage in the collection of the requested
information. As it relates to regulations, the following is
OMB's explanation of why an OMB control number must be displayed
in the text of a regulation; this explanation confirms Barnes'
argument:
Most significant [of the changes to 26 C.F.R. 1320.7(f)] was
the addition of the phrase "(as part of the regulatory text
or as a technical amendment)" into subparagraph 7(f)(2) to
indicate more clearly that OMB intends for agencies to
incorporate OMB control numbers into the text of regulations
so that the numbers will appear in the regulations as
published in the Code of Federal Regulations. Publication
of control numbers in the preamble to regulations would not
have accomplished this purpose. This paragraph reflects
current OMB practice.
48 Fed. Reg. 13676 (March 31, 1983). [Emphasis added.]
The regulations promulgated under 26 U.S.C. 6001, 6011, 6012
and 6091 have all been issued in the Code of Federal
Regulations. 26 U.S.C. 6001 imposes both an information
collection requirement and a record keeping requirement upon
those who are made liable for any tax imposed by Title 26 (IR
Code), in accordance with "such rules and regulations as the
Secretary may from time to time prescribe."
26 U.S.C. 6011(a) imposes an information collection
requirement, "when required by regulations prescribed by the
Secretary," upon those who are made liable for any tax imposed by
the IR Code, in accordance with "the forms and regulations
prescribed by the Secretary." [Emphasis added.]
Regardless of "liability," 26 U.S.C. 6011(e), 26 U.S.C.
6012(a) imposes an information collection requirement upon
individuals who have more than the threshold amount of gross
income. While 26 U.S.C. 6012(a) does not refer to regulations,
reference to the regulations is necessary to determine the Form
to be filed, because the statute does not identify the Form to be
used. A regulation, 26 C.F.R. 1.6012-1(a)(6), entitled "Form of
Return," makes the only reference to Form 1040.
Further, the Supreme Court has made clear that the
regulations promulgated by the Secretary implement the
taxing statutes: Congress has given discretion to the
[Secretary] to prescribe by regulation forms of returns and
has made it the duty of the taxpayer to comply. It thus
implements the system of self-assessment which is so largely
the basis of our American scheme of income taxation.
[Emphasis added.]
C.I.R. v. Lane-Wells Co., 321 U.S. 219, 223 (1944).
[Emphasis added.]
All the regulations noted above are incomplete without Form
1040 and its instructions, because the regulations do not set
forth the information an individual is required to furnish on the
Form. While some regulations, such as Temporary Regulation
Section 16.3-1, do set forth the information required to be
furnished on a form, a comparison of that regulation with the
regulations promulgated to implement 26 U.S.C. 6001, 6011 and
6012 clearly shows that the latter regulations do not advise
anyone of the information to be furnished on Form 1040. Indeed,
both 26 U.S.C. 6011 and 26 C.F.R. 1.6011-1(a) specifically direct
that the return shall include therein the information required by
the applicable forms or regulations. Thus, the forms and
regulations duly promulgated are, therefore, "information
collection requests" as defined by the PRA.
26 U.S.C. 6001, 6011 and 6012 only require that a return be
made:
a) Section 6001 -- "shall make such returns ....";
b) Section 6011 -- "shall make a return ....";
c) Section 6012 -- "returns ... shall be made ...."
None of these sections, nor their regulations, mentions the
"filing" of a return. The filing of returns required to be
made under 26 U.S.C. 6001 is provided for at 26 U.S.C. 6091(a),
wherein the Secretary is directed to promulgate regulations
prescribing the place for the filing of returns. The regulations
prescribed by the Secretary are necessary to implement the law
and are, therefore, "information collection requests" as defined
by the PRA.
The filing of returns required under 26 U.S.C. 6011 and 6012
is provided for at 26 U.S.C. 6091(b), wherein returns are to be
made with the Secretary at either an internal revenue district in
which is located the legal residence of the person making the
return, or at a service center servicing said district, "as the
Secretary may by regulations designate." These regulations
prescribed by the Secretary are necessary to implement the law
and are, therefore, "information collection requests" as defined
by the PRA.
Regulation 26 C.F.R. 1.6091-2 pertains to the filing of
income tax returns. Section 1.6091-2(c) directs that, whenever
instructions applicable to income tax returns provide that the
returns be filed with a service center, the returns must be so
filed in accordance with the instructions. The instructions for
Form 1040, under the heading "Where to File," direct the filing
of returns with a service center. Thus, Form 1040 instructions
are an "information collection request" as defined by the PRA.
Further proof that the instructions are information
collection requests is found at 26 C.F.R. 1.6012-1(7), wherein
the IRS requires that "Form 1040A may be filed only by those
individuals entitled to use such form as provided by and in
accordance with the instructions for such form." [Emphasis
added.]
Again, the PRA defines the "collection of information" as
"the obtaining or soliciting of facts or opinions by an agency
through the use of ... reporting or record keeping requirements
... calling for ... answers to identical questions imposed on,
ten or more persons." In Dole v. United Steelworkers of America,
494 U.S. , 110 S.Ct. 929 (1990), the Supreme Court considered
whether agency action constituted a "collection of information."
Under Dole's objective test, an action is a "collection of
information" if it involves "a person maintain[ing] information
for an agency or provid[ing] information to an agency," but not
if it merely involves "disclosure by one party directly to a
third party." Dole, 110 S.Ct. at 937-938.
If Form 1040 instructions satisfy this test, they constitute
a "collection of information" and, thus, they are subject to OMB
review and must display an OMB control number. Accordingly, one
need only to look to the instructions themselves to resolve the
question of whether or not they constitute an information
collection request that is independent of Form 1040.
For example, included within the 47 pages of instructions
for the 1984 Form 1040, there is a specified record keeping
requirement4 at page 18: Keep records of income, deductions,
and credits shown on your return, as well as any worksheets
used to figure them, until the statute of limitations runs
out for that return. Usually this is 3 years from the date
the return was due or filed, or 2 years from the date the
tax was paid, whichever is later. Also keep copies of your
filed tax returns as part of your records. You should keep
some records longer. For example, keep property records
(including those on your own home) as long as they are
____________________
4. "the term 'record keeping requirement' means a requirement
imposed by an agency on persons to maintain specified records."
44 U.S.C. sec. 3502(16).
needed to figure the basis of the original or replacement
property. For more details, get Publication 552,
Record keeping for Individuals and a List of Tax
Publications. [Emphasis added.]
_________________________________________________________________
In contrast, the IR Code and corresponding regulations set forth
nebulous record keeping requirements which lack any requirement to
keep a copy of a filed return or the specific retention period
provided in the instructions.5
Further evidence that the instructions are necessary to file
a proper tax return is provided by the 26 references to the
instructions and 42 references to other related schedules and
forms appearing on the face of the 1984 Form 1040. (Such related
schedules and forms request additional information and require
attachment to Form 1040.) In fact, the only portions of the 1040
Form which do not require the taxpayer to "follow" (i.e. supply
information in conformity with) the instructions are the sections
requiring the taxpayer to provide his name, address, social
security number,6 signature and occupation.7
____________________
5. Cf. Section 7602 delegating authority to the Secretary "[t]o
examine any books, papers, records, or other data which may be
relevant or material" for the purpose of determining the
correctness of any return, tax liability or collection of any
tax liability. Section 6001 provides in pertinent part:
"Every person liable for any tax imposed by this title,
or for the collection thereof, shall keep such records
... as the Secretary may from time to time prescribe."
26 C.F.R. sec. 1.6001-1 provides:
"(a) In general ... any person required to file a return
of information with respect to income, shall keep such
permanent books of account or records, including
inventories, as are sufficient to establish the amount of
gross income, deductions, credits, or other matters
required to be shown by such person in any return of such
tax or information."
6. For the taxpayer who does not have a social security number,
the instructions explain how to obtain one. See 1984 Form
1040 Instructions, at 5.
7. "Not only has the number of individuals required to file a
_________________________________________________________________
Furthermore, the instructions -- not the 1040 Form --
define: (1) who must file (2) who should file (3) which forms
to file (e.g., 1040, 1040-EZ, 1040-A, 1040-ES, 1040NR, W-2, W-2G,
W-2P & 1099, 2106, 2119, 2210, 2441, 3468, 3903, 4136, 4562,
4684, etc.) (4) which schedules (A, B, C, D, E, F, G, SE, etc.)
to file and (5) when to file, including references to filing
extensions that are not defined in the statutes or in the
regulations.
Additionally, the taxpayer must resort to the instructions
for the relevant tax tables, other forms, returns, schedules,
worksheets, and the list of Schedules, Forms and Publications for
completing Form 1040 and referenced throughout the instructions.8
Of course, these other forms, schedules, and publications contain
their own references to still more forms, schedules, and
publications, thereby creating an elaborate web of interrelated
and cross-referenced documents, even for Form 1040EZ (the
instructions for which were 24 pages long in 1990).
_________________________________________________________________
Federal income tax return increased, but the number of schedules
that must accompany each return and the volume of instructional
material have also multiplied. At one time, a complete Form 1040
consisted of four pages of schedules, for which only two pages of
instructions were provided. In 1976, a complete Form 1040 could
include as many as 17 pages of schedules, and a minimum of 29
pages of instructions were provided to assist the taxpayer in
preparing such a return (Table 3). In addition, Your Federal
Income Tax was available, as were a large number of other tax
information pamphlets discussing topics about which IRS believed
additional instruction was needed." See Final Summary Report of
the Commission of Federal Paperwork (hereinafter Final Report),
10/3/77, at 708.
8. In addition, the 1984 instructions make:
20 references to other Forms, Schedules or Publications,
either to be attached and/or necessary to prepare
Schedule A;
15 references for Schedule B;
49 references for Schedule C:
39 references for Schedule D;
42 references for Schedule E; and
22 references for Schedule SE.
_________________________________________________________________
Furthermore, the instructions -- not the 1040 Form --
contain the required statement informing the person who receives
and responds to the information collection request "why the
information is being collected, how it is to be used, and whether
the responses to the request are voluntary, required to obtain a
benefit, or mandatory," pursuant to 44 U.S.C. 3504(c)(3)(C).9
See, e.g., "Privacy Act and Paperwork Reduction Act Notice," at
page 40 of the 1984 Form 1040 instructions.10
Under the Federal Reports Act (FRA, the predecessor of the
PRA), instructions were deemed to constitute agency information
collection requests. From the PRA's inception in December 1981,
until applicable OMB regulations were promulgated in March, 1983,
Circular A-40 of the FRA controlled agency information collection
activities. Circular A-40 required that agency "Plans" be
approved by OMB and display OMB control numbers (at Attachment A,
Section 2(a)). "Plan" was defined in Circular A-40 (at
Attachment A, Section 1(d)) to include:
Any specific ... guide for the reporting of information ...
which are to be used or be available for use in the
collection of information; any such requirement or
instruction affecting the content, preparation ... of a ...
report form ... which will result in the collection of
information or identical items from 10 or more respondents.
[Emphasis added.]
For the past fifty years, federal agencies have been
required to obtain and display OMB numbers on instructions11.
____________________
9. Section 3504(c)(3) & (C) mandates that OMB shall ensure that
ALL information collection requests contain such a
statement.
10. 1984 Form 1040: "For Privacy Act and Paperwork Reduction
Act Notice, see Instructions" (in the "Filing Status" box).
11. See Regulation A, Addendum, promulgated on February 13, 1943
by the Bureau of Budget pursuant to statutory authority under 44
U.S.C. 3510, at Title I 1(e)(1) & (2) (expressly defining plans
subject to the coverage of the Act as "[a]ny general or specific
_________________________________________________________________
The PRA cannot reasonably be interpreted as exempting instructions
for federal income tax returns.
Had Congress intended so fundamental a distinction, it would
have expressed that intent clearly in the statutory language
or the legislative history. It did not do so, however, and
it is not this Court's function "to sit as a super-
legislature," ... and create statutory distinctions where
none were intended.
American Tobacco Co. v. Patterson, 456 U.S. 63, 72 n. 6
(1982).
Finally, as is fully discussed hereinbelow at "(D)", there
are admissions in IR Manuals that the instructions constitute
information collection requests which must display OMB control
numbers.
In sum, it is clear that Form 1040 alone is not susceptible
to accurate completion without the instructions. Conversely, an
individual who had the instructions, but not the Form, could
accurately compile and provide the required information.12
____________________________________________________________
requirement for the establishment or maintenance of records ...
which are to be used or be available for use in the collection of
information," and "[a]ny requirement or instruction affecting the
content, preparation, return, or use of a plan or report form.")
AND at Title II 2(b) & (c):
(b) Report Forms. Clearance of a report form shall be
evidenced or indicated by printing or inscribing on
each copy so used, in the upper right-hand corner of
the first page, an approval number assigned to it by
the Assistant Director . . .
(c) Plans. Clearance of plans for use in the collection or
recording of information shall be evidenced by printing
or inscribing on each plan so used the following
endorsement or such other device as may be required by
the Assistant Director:
This ... (regulation, order, instruction, or other
requirement) ... has been approved by the Bureau
of the Budget in accordance with the Federal
Reports Act of 1942. [Emphasis added.]
12. "... many taxpayers who are eligible to use the Short Form
1040-A use the much more complex Form 1040 instead .... One
reason for these unnecessary paperwork burdens is that
understanding the instructions for preparing Short Form
1040-A is difficult for many taxpayers." See Final Report
at 679.
_________________________________________________________________
The instructions require records to be maintained, and the
instructions provide the requisite interpretive guidance as well
as the requirements to complete and file the Form. In short, the
instructions and the regulations specify exactly what information
must be disclosed by the taxpayer. It is impossible for
Petitioners to determine and fulfill any duties to file Forms
1040 under the statutes without the specificity provided in the
regulations and the instructions. Neither the regulations13 nor
the instructions pertaining to the requirement to make and file
Form 1040 display an OMB control number, an expiration date, or
explain why they do not.14 Since, as shown above, they are an
integral and implementing part of the reporting plan which calls
for the collection of information respecting the federal personal
income tax, they are required to display an OMB control number
and expiration date, or explain why they do not.
The Public Protection Clause of the PRA states:
Notwithstanding any other provision of law, no person shall
be subject to any penalty for failing to maintain or provide
information to any agency if the information collection
request involved was made after December 31, 1981, and does
not display a current control number assigned by the
Director, or fails to state that such request is not subject
to this chapter.
44 U.S.C. 3512. [Emphasis added.]
See 5 C.F.R. 1320.5; S.Rep.No. 96-930 at 52 reprinted in 1980
U.S.Code Cong. & Admin.News, 6292; and S.Rep.No. 99-347 at 8, 52,
53, 122-24 (1986). The Senate Report repeatedly explains
Congress' intent:
____________________________________________________________
13. 26 C.F.R. 1.6001-1, 1.6011-1, 1.6012-1, 1.6091-1, 1.6091-2;
301.6001-1, 301.6011-1, 301.6012-1 and 301.6091-1
14. 26 C.F.R. 1.860-2 and 1.1441-2 incorporate OMB control
numbers in their text as required by 5 C.F.R. 1320.7(e)(2),
proving that the IRS knows how to comply with the law, and
proving that the IRS has failed to comply with the law, as to the
regulations promulgated under 26 U.S.C. Sections 6001, 6011, 6012
and 6091.
_________________________________________________________________
The bill ... [r]equires all information requests of the
public to display a control number .... Requests which do
not reflect a current OMB control number or fail to state
why not, are "bootleg" requests and may be ignored by the
public.
1980 U.S.Code Cong. & Admin.News, 6242.
[Emphasis added.]
Section 3507(f) declares no agency shall engage in a
collection of information without obtaining from the
Director a control number to be displayed upon the
information collection request. This requirement
complements the provisions of section 3512 on public
protection.
1980 U.S.Code Cong. & Admin.News, 6288.
[Emphasis added.]
S. 1411 also puts in place a public protection provision.
After December 31, 1981, no person will be subject to
penalties or need to comply with any Federal information
collection request which has not gone through the OMB
clearance and approval process. Any agency information
request to the public which does not display a current OMB
control number, or if not, states why not can be ignored.
1980 U.S.Code Cong. & Admin.News, 6300-6301.
[Emphasis added.]
The only collections of information by a Federal agency
which are exempted, and for which a person or persons could
not claim protection under section 3512, are those
collections of information which this chapter does not apply
to and are exempted by section 3518. They are collections
of information:
(1) during the conduct of a Federal criminal investigation or
prosecution, or during the disposition of a particular
criminal matter;
(2) during the conduct of a civil action to which the
United States or any official or agency thereof is a
party, or an administrative action or investigation
involving an agency against specific individuals or
entities;
(3) by compulsory process pursuant to the Antitrust Civil
Process Act; and
(4) during the conduct of intelligence activities as
defined by executive order.
1980 U.S.Code Cong. & Admin.News, 6292-6293. See also
1980 U.S.Code Cong. & Admin.News, 6249, 6254, 6281,
6282, and 6292. [Emphasis added.]
The Senate Report makes it painstakingly clear that the
public protection clause applies to ALL information collection
requests, with a few clearly specified exceptions. The clearance
and final approval or disapproval of all collections of
information have been vested with OMB. The Public Protection
Clause applies, whether the reporting or record keeping is
required by a general or specific statute, regulation, or any
other method:
The fact the collection of information is specifically
required by statute does not, however, relieve an agency of
the obligation to submit the proposed collection for [OMB
approval].
1980 U.S.Code Cong. & Admin.News, 6289.
[Emphasis added.]
Agencies are also to ensure that information collection
requests to nine or fewer persons, as opposed to ten or more
as the term collection of information is applied elsewhere
in the chapter, display a statement to inform the person
receiving the request that the request is not subject to the
clearance requirements of section 3507 of the chapter. This
requirement applies only to collections of information
required by law or to obtain a benefit as opposed to
voluntary requests. The purpose of this requirement to
inform persons is to complement the purpose of section 3512,
the public protection section.
1980 U.S.Code Cong. & Admin.News, 6285.
[Emphasis added.]
Section 3504(c)(3)(A) requires the Director to ensure that
all information collection requests display a control
number. Section 3507(f) declares that an agency shall not
engage in a collection of information without obtaining from
the Director a control number to be displayed. Section
3506(c)(5) requires each agency to ensure that information
collection requests specifically required by law or to
obtain a benefit and submitted to nine or fewer persons
contain a statement to inform the person receiving the
request that the request is not subject to the clearance
requirements of section 3507.
1980 U.S.Code Cong. & Admin.News, 6292.
[Emphasis added.]
The design of the Act was both novel and radical,
giving OMB regulatory and approval discretion over all
broadly defined "collections of information" by Federal agencies,
and rendering ineffectual all non-exempted collections
not approved by OMB. OMB's authority under the Act supersedes
existing laws and regulations, to the extent that any conflicts
arise. The Public Protection clause directs the regulated public
to enforce the Act by refusing to provide information to a
Federal agency "[u]nless the collection of information has been
authorized" under the standards set forth in the Act. All
information collection requests must either display a current
control number or state that the request is not subject to the
Act; otherwise, the Public Protection clause applies.
As the regulations to the PRA make clear:
Whenever a member of the public is protected from imposition
of a penalty under this section for failure to comply with a
collection of information, such penalty may not be imposed
by an agency directly, by an agency through judicial
process, or by any person through judicial or administrative
process.
5 C.F.R. 1320.5(d). [Emphasis added.]
Pursuant to 44 U.S.C. 3512, Barnes cannot be punished for
failing to comply with the regulations requiring Form 1040 to be
made, nor for failing to comply with the instructions requiring
Form 1040 to be filed at the Service Center. Without these
regulations, the claimed statutory duty upon Barnes to make or
file Forms 1040 is not implemented. Without the instructions,
the administrative discretion exercised by the Secretary, as part
of his delegated obligation to implement the making and filing
requirements for Forms 1040, is undisclosed and, accordingly,
Barnes may ignore any duty the instructions may state to make or
file a federal income tax return, Form 1040, at the Service
Center. Furthermore, even if the statute were self-
implementing, and even if the statute did impose a duty to file
Form 1040 specifically, the Senate Report makes it clear that any
information collection request associated with such statute must
still display an OMB control number to be valid. 1980 U.S.Code
Cong. & Admin.News, 6289. Since Form 1040 is not self-
explanatory, Barnes could not fill out the Form without resorting
to the instructions. The Final Report of the Paperwork
Commission came to the same conclusion:
The regulations dealing with the individual income tax are
not straightforward enough to be used by the average
taxpayer to complete tax returns without any other guidance.
Because neither the tax code nor the regulations provide the
kind of information taxpayers need to report their tax
obligations with relative ease, a third and fourth set of
documents (instructions with the tax forms and plain-
language publications) are issued every year by IRS.
Final Report, at 793-794. [Emphasis added.]
Additionally, to fill out Form 1040 correctly, information
must be transferred to the Form from records. Without the
regulations under Section 6001, the statutory record keeping
requirement is not implemented. In the absence of an OMB control
number within the text of the regulations promulgated under
Section 6001, Barnes was not required to keep the records
necessary to fill out the Form, and cannot be punished for
failing to so supply that information on the Form. Further,
26 U.S.C. 6151 provides in pertinent part that:
when a return of tax is required under this title or
regulations, the person required to make such return shall,
without assessment or notice and demand from the Secretary,
pay such tax to the internal revenue officer with whom the
return is filed, and shall pay such tax at the time and
place fixed for filing the return.
This is the only statute imposing a requirement to pay the income
tax based upon the filing of a return prior to an assessment, and
prior to a notice and demand for payment of the tax.
It is immediately apparent that the statutory requirement
for paying the tax is inextricably intertwined with Sections
6001, 6011, 6012, and 6091. Since Barnes was allowed by 44
U.S.C. 3512 not to file a return (i.e., not required to file) for
tax years 1983, 1984, 1985 and 1986, the necessary condition
(i.e., "when a return is required" in Section 6151) was never
triggered, and neither was the concomitant statutory requirement
to pay the tax at the time and place for filing the return. The
Tenth Circuit has just recently recognized this principle when it
stated:
We recognize that because defendant was charged with tax
evasion and not failure to file tax returns, he technically
was not being prosecuted for failure to provide information
.... But because the provision of information in 1040 forms
is inexorably linked to the statutory requirement to pay
taxes, and defendant failed to file such forms, the [PRA]
was applicable to such conduct.
U.S. v. Collins, 920 F.2d 619, 630 n.13 (10th Cir.
1990).
Since the IRS did not comply with the PRA and since,
therefore, Barnes cannot be subject to ANY penalty for failure to
file or pay, the government and this honorable Court are without
jurisdiction to impose any penalty. Finally, knowledge of the
provisions of the PRA is not necessary to the issue raised.
Section 3512 speaks in terms of a prohibition of any penalty for
failure to comply, not in terms of reliance. As the Ninth
Circuit has held:
The magistrate rejected appellants' PRA defense, holding
that because the defendants "did not rely upon the [PRA]" in
refusing to submit a [form required by a regulation], they
"should not be permitted to rely upon that defense." ... We
reverse the magistrate on this ground; just as ignorance of
the law is not an excuse for violating it, knowledge and
reliance is not a prerequisite for asserting an affirmative
defense to a criminal prosecution.
U.S. v. Smith, 866 F.2d 1092, 1094 (9th Cir. 1989).
44 U.S.C. 3512 admits of no exceptions. Accordingly, all
penalties imposed against Barnes by the District Court must be
vacated so as to "give effect to the literal language of a
statute." Lampert v. United States, 854 F.2d 335, 338 (9th Cir.
1988); see also Tennessee Valley Authority v. Hill, 437 U.S.
153, 194-195 (1978):
Our individual appraisal of the wisdom or unwisdom of a
particular course consciously selected by the Congress is to
be put aside in the process of interpreting a statute. Once
the meaning of an enactment is discerned and its
constitutionality determined, the judicial process comes to
an end. We do not sit as a committee of review, nor are we
vested with the power of veto ....
... in our constitutional system the commitment to the
separation of powers is too fundamental for us to pre-empt
congressional action by judicially decreeing what accords
with "common sense and the public weal." Our Constitution
vests such responsibilities in the political branches.
(C) Court application of the PRA
Court interpretation of the PRA is just now evolving as it
relates to the issue presented by Barnes. The first case, of
which Barnes is aware, which interprets the PRA and which relates
to the instant issue, was Cameron v. I.R.S., 593 F.Supp. 1540,
1555 (N.D. Ind. 1984), aff'd 773 F.2d 126 (7th Cir. 1985).15 In
Cameron, Mr. Cameron brought a pro se suit against the IRS and
its agents, seeking injunctive relief and damages for attempts to
assess taxes against him, and for attempts to levy against his
wages and property. One of the allegations he raised was that
"the forms used by the IRS are illegal and therefore void because
____________________
15. The OMB number issue was not addressed by the Seventh
Circuit in its decision.
_________________________________________________________________
they carry no Office of Management and Budget number and do not
state whether filling out the form is voluntary or not."
Cameron, 593 F.Supp. at 1544. The Court's entire decision on
this issue states:
Plaintiff claims that he did not have to file a return
because the IRS forms did not contain an Office of
Management and Budget (O.M.B.) number on them in violation
of 44 U.S.C. Section 3512, which requires the affixation of
an O.M.B. number to any "information collection request."
As defendants point out, however, the chapter creating the
requirement specifically does not apply to the collection of
information during the conduct of an administrative action
or investigation involving an agency against specific
individuals or entities. 44 U.S.C. Section
3518(c)(1)(B)(ii). The process of assessment and collection
of taxes quite appropriately falls under this exception to
Section 3512. Therefore, plaintiff's claim would fail on
this count.
Cameron, 593 F.Supp. at 1556.
The form numbers were not identified in the opinion;
however, since Forms 1040 have displayed OMB numbers since the
enactment of the PRA, and since Cameron complained that the IRS
forms did not contain OMB numbers, it is obvious that the Cameron
decision is pure dictum, and not stare decisis, as to the issue
raised herein by Barnes.
The second case is Snyder v. I.R.S., 596 F.Supp. 240, 250
(N.D. Ind. 1984). Not only was this case decided by the same
judge who ruled in Cameron, but the whole issue of missing O.M.B.
numbers was addressed summarily as follows:
Plaintiff also briefly mentions the lack of an "O.M.B."
number on certain IRS documents. Plaintiff gives no reason
why this fact should matter. However, this court notes that
it has previously held that IRS documents do not need to
carry O.M.B. numbers to be valid under 44 U.S.C. Section
3512. Cameron v. IRS, 593 F.Supp. 1540 (N.D.Ind. 1984).
That allegation is simply meritless.
Snyder, 596 F.Supp. at 250.
Whatever the "forms" or "documents" complained of in these
two cases, the courts have uniformly rejected the concepts that
Form 1040 does not need to display an OMB control number, or that
these decisions have any application to whether regulations or
instuctions must display control numbers. Smith, 866 F.2d at
1099 n.8 (decisions "were based on conclusory reasoning or
provisions of PRA not raised here. Whatever the merits of those
cases, they are not relevant to our examination of the [agency]
regulations at issue here."); Dole, 110 S.Ct. at 933 ("typical
information collection requests include tax forms."); Collins,
920 F.2d at 630 n.12 (Dole calls into question the holding of
Cameron and Snyder that PRA does not apply to IRS forms); U.S.
v. Crocker, 753 F.Supp. 1209, 1215 (D.Del. 1991) ("We do not
agree that this exemption covers IRS 1040 forms, since not simply
one specific individual but all income earners are required to
complete tax returns.").
In U.S. v. Tedder, 787 F.2d 540, 542 (10th Cir. 1986), the
Tenth Circuit held that tax forms were not information collection
requests under the PRA because the filing of income tax returns
were obligatory. However, in Collins, 920 F.2d at 631 n.12, and
in opposition to the Sixth Circuit in Wunder, the Tenth Circuit
recognized that it had erred and held that Tedder was superseded
by the Supreme Court's analysis of the Paperwork Reduction Act in
Dole. The Collins Court expressly recognized that,
... because the provision of information in 1040 forms is
inexorably linked to the statutory requirement to pay taxes,
and defendant failed to file such forms, the Paperwork
Reduction Act [is] applicable to such conduct.
Id., at 631 n. 31. [Emphasis added].
Thus, the Tenth Circuit's examination of the Paperwork Reduction
Act is, a fortiori, applicable to the instant case.
In Action Alliance of Sr. Citizens of Philadelphia v. Bowen,
846 F.2d 1449 (D.C. Cir. 1988), vacated 110 S.Ct. 1329,
reaffirmed on remand in Action Alliance of Sr. Citizens of
Greater Philadelphia v. Sullivan, 930 F.2d 77 (D.C.Cir. 1991),
the D.C. Circuit addressed the extent of OMB authority under the
PRA. In Action Alliance, the Plaintiff had sued the Secretary of
Health and Human Services for excluding a certain provision from
an agency regulation; such exclusion resulted from an OMB
memorandum disapproving such provision of the regulation. Action
Alliance, 846 F.2d at 1449. The D.C. Circuit held that the PRA
does not exempt, but in fact "plainly contemplates" collection of
information by legislative rules, which must have OMB approval
and display an OMB control number. Action Alliance, 846 F.2d at
1454. Further, the D.C. Circuit described as "pure pettifoggery"
a claim that a required record is not an information collection
request because it is not actually requested to be given to the
agency. The D.C. Circuit stated:
Appellants cannot seriously believe that in enacting the
[predecessor to the PRA] Congress was concerned solely or
primarily with private parties' cost of mailing data to
Washington; it is the record-keeping and data-gathering
that constitute the burden. Moreover, OMB and its
predecessor, the Bureau of the Budget, have interpreted the
statutory term "collection of information" for nearly half a
century to encompass "[a]ny general or specific requirement
for the establishment or maintenance of records ... which
are to be used or to be available for use in the collection
of information."
Action Alliance, 846 F.2d at 1453-54.
[Emphasis by the court.]
In U.S. v. Smith, 866 F.2d 1092 (9th Cir 1989), the Ninth
Circuit held that a criminal conviction cannot be based upon
failure to file a form required by a regulation, if the
regulation did not display an OMB number. In Smith, the
defendants were convicted of working a mining claim without
having sought, filed for, or having a Plan of Operations, as
required by Forest Service regulations which implemented the
statutory scheme. Smith, 866 F.2d at 1094 & 1098. In remarkably
clear and concise language, the Ninth Circuit determined that any
"agency regulations that require disclosure of information to the
government and that call for the disclosure or reporting of
information through answers to standardized (identical)
questions" are "information collection requests within the
meaning of the PRA." Smith, 866 F.2d at 1098-99. Therefore, the
Court held that Section 3512 precluded "any penalty" for the
failure to comply with the statutory filing requirement
implemented by the regulations, including criminal conviction.
Smith, 866 F.2d at 1099.
The most recent Supreme Court decision relating to the PRA
was Dole, 110 S.Ct. at 929. In Dole, the Court held that the PRA
does not authorize the OMB to review and countermand regulations
mandating disclosure by regulated entities directly to third
parties ("disclosure rules"). 110 S.Ct. at 931-38. Dole merely
discussed and distinguished regulations which require that
information be supplied to a federal agency, from regulations
which require a regulated entity to provide information to a
third party. Except for statements by the Supreme Court in
dicta, Dole actually gives little guidance to the instant
question. Barnes, however, believes it is notable that the
Supreme Court has made interchangeable use of the terms
"information collection requests" and "regulations".
In U.S. v. Wunder, 919 F.2d 34 (6th Cir. 1990), the Sixth
Circuit held that only the tax return itself (Form 1040) must
contain an OMB control number. The decision of the Sixth Circuit
is not well considered and is in clear conflict with the intent
of Congress. In Wunder, the defendant raised an argument that he
had ineffective assistance of counsel. Wunder, 919 F.2d at 37.
As part of this argument, Wunder claimed that his counsel's
failure to raise the "implications of the [PRA]" rendered
ineffective his counsel's assistance. Wunder, 919 F.2d at 38.
In the Wunder case, two of the years complained of were not
subject to the provisions of the PRA because they involved
information collection requests prior to December 31, 1981.
Wunder, 919 F.2d at 37. The Wunder Court summarily concluded,
without citation to statutory, regulatory, or case authority,
that:
As for the 1981 return, it did display the appropriate
control number, and the regulations do not need a number
because the requirement to file a tax return is mandated by
statute, not by regulation. Defendant was not convicted of
violating a regulation but of violating a statute which
required him to file an income tax return. See 26 U.S.C.
Sections 6012 and 7203. The Paperwork Reduction Act,
therefore, does not apply to the statutory requirement, but
only to the forms themselves, which contained the
appropriate numbers.
Wunder, 919 F.2d at 37.
The first, and most notable error is that the Wunder Court
ignores the clear language, as stated above, of the legislative
history, to wit:
The fact the collection of information is specifically
required by statute does not, however, relieve an agency of
the obligation to submit the proposed collection for [OMB
approval].
1980 U.S.Code Cong. & Admin.News, 6289.
[Emphasis added.]
The legislative history clearly demonstrates that ALL
information collection requests must be submitted to the OMB for
determinations required by the PRA (burden on public, etc.) and
be assigned a control number, whether mandatory or voluntary.
Congress clearly intended that the OMB be able to monitor all
burdens imposed upon the public, even those imposed directly by
Congress in statutes. In this manner, Congress would be informed
of the burdens on the public of all information collection
requests, including those imposed by Congress themselves, when
the OMB presents their yearly report to Congress pursuant to 44
U.S.C. 3514.
Also as discussed above, 26 U.S.C. 6012 requires the making
of "returns with respect to income taxes." However, nowhere in
the IR Code is this phrase defined, nor is the word "returns"
defined anywhere in the IR Code. Also, nothing in the IR Code
requires that a Form 1040 be used or filed for any purpose.
Additionally, 26 U.S.C. 6012, as discussed above, does not
require the filing of such returns; Section 6091 does.
Therefore, it is impossible to comply with the purported filing
requirements contained in the IR Code without the implementing
regulations and instructions. Without the regulations and
instructions, it is impossible to determine and fulfill any
duties to file under the IR Code. The regulations, forms,
instructions, schedules, directives, etc., are inexorably linked
to the statutory scheme.
The Wunder Court's superficial and conclusory opinion would
result in destroying the PRA statutory scheme. While saying the
only thing that matters is that Congress has mandated the filing
of "a tax return," it affirmed a conviction where "Forms 1040"
were introduced into evidence. The Wunder Court misses the
intent and proscriptions of the PRA. The question is not whether
or not some statute requires the filing of some undefined return;
the question is whether or not the regulations and instructions
promulgated by the IRS are "information collection requests"
that, absent an OMB control number properly displayed, may be
ignored by Barnes with impunity.
Barnes contends that Wunder was not convicted of violating a
statute, as the Sixth Circuit alleges, unless the proof at trial
convinced a jury that, based upon the statute alone, Wunder
should have known how to make a return and where to file whatever
return he made.
In Smith, 866 F.2d at 1092, the 9th Circuit considered this
question in detail, unlike Wunder, and determined that the
regulation requiring a miner to file a plan of operations was an
information collection request which must bear an OMB Control
Number, notwithstanding the statutory filing requirement. Again
in Hatch, 919 F.2d at 1394, the 9th Circuit noted that the Forest
Service had failed to comply with the PRA in issuing regulations
for implementing 16 U.S.C. 551, and reversed a conviction for
failure to comply with such regulations. Indeed, the government
conceded that the two regulations in question did not display an
OMB Control Number "as required by 44 U.S.C. 3507(f)." Hatch,
919 F.2d at 1395-96.
As the 9th Circuit pointed out:
[t]he Congressional directive in regard to the procedure to
be followed in the issuance of agency regulations must be
strictly complied with, since the issuance of regulations is
in effect an exercise of delegated legislative power ....
Unless the prescribed procedures are complied with, the
agency (or administrative) rule has not been legally issued,
and consequently it is ineffective.
Hatch, 919 F.2d at 1397. [Emphasis added.]
The scholarly analysis of the 9th Circuit makes clear that the
question is simply whether the regulations, instructions, and
rules implementing the requirements of the IR Code are, or are
not, "information collection requests." It was the Wunder
Court's opinion that, since the requirement to file is statutory,
and the defendant was charged with violating that statute, the
only thing that must bear an OMB Control Number is the Form
itself (conveniently the only information collection request for
which the IRS complied with the law). This opinion is just not
well reasoned, nor is it consistent with the statutory and
regulatory provisions of the PRA.
In promulgating the final rules for the PRA, 5 C.F.R. Part
1320, the OMB devoted at least six pages to this very issue. See
48 Fed. Reg. 13666-70, 13676 (March 31, 1983). The following
excerpts are particularly pertinent:
It is not possible to argue that OMB clearance authority is
confined to forms and similar instruments ....
Many reporting requirements are enforced by means of forms,
but other reporting requirements and virtually all
record keeping requirements are imposed by other means,
including ... -- most significantly -- regulations.
Moreover, many forms are themselves specifically contained
in regulations, either as part of the regulatory text or as
an appendix.
An exemption for regulations would result in a large and
unwarranted loophole in the Act -- a loophole including all
forms published in regulations, virtually all record keeping
requirements .... Such a result would fly in the face of
the announced congressional intention ....
A distinction between reporting requirements in rules and
those in forms -- with only the latter covered -- would also
breed confusion, especially for the public. Many forms are
published in the Code of Federal Regulations as part of a
rule; others are cross-referenced in rules; others closely
follow regulatory specifications.
48 Fed. Reg. 13667 (March 31, 1983). [Emphasis added.]
One of the stated purposes for displaying a control number
in regulations was to make it unnecessary for courts to strike
down, under Section 3512, a regulatory scheme that depends on
collection of information by means of regulation. 48 Fed. Reg.
13669 (March 31, 1983). This constitutes an express
acknowledgement by OMB of the correctness of Barnes' position
asserted herein.
The Committee on Governmental Affairs also acknowledged the
correctness of Barnes' position when it reported favorably on
OMB's final rules stated above:
OIRA's [OMB's Office of Information and Regulatory Affairs]
task was further complicated in June 1982 when the Justice
Department's Office of Legal Counsel issued an opinion
limiting the applicability of the Paperwork Reduction Act to
reporting and record keeping requirements specifically
contained in rules in effect at the time of the Act's
passage. The opinion construed the term "collection of
information requirement" as used in section 3504(h) of the
Act, to establish a class of information requests totally
distinct from "information collection requests," a term
defined by the Act and used in sections 3507, 3512, and
elsewhere to establish paperwork clearance, public
protection, and other requirements.
The Committee's 1984 report concluded that a consequence of
the Justice Department's construction would be to gut the
public protection clause (section 3512) as it applies to
requirements contained in rules existing at the time of
enactment of the Federal Paperwork Act.
In March 1983, OIRA issued a rule establishing procedures to
implement the Act (5 CFR Part 1320) as it pertains to
collection of information. Under broad authority granted to
the OMB Director to carry out the Act's purposes, OIRA
asserted its authority to review paperwork requirements
contained in regulations. Control numbers were assigned for
all information requirements contained in rules. However,
the applicability of the public protection clause to this
class of paperwork requirements was not resolved, and
statutory clarification was -- and is -- needed.
S.Rep.No. 99-347 at 8 (1986). [Emphasis added.]
The first change is needed to clarify the applicability of
chapter 35 of title 44 to reporting and record keeping
requirements contained in rules that were in effect at the
time of the Paperwork Reduction Act's enactment. The
Department of Justice, in a 1982 opinion, seized upon the
term "collection of information requirement" in section
3504(h) to infer that such requirements were to be
completely distinguished from "information collection
requests," the term generally used in the rest of the Act.
"Collection of information requirements" should be construed
instead as a subset of "information collection requests,"
circumscribed by the provisions of section 3504(h) when they
appear in proposed rules, but otherwise subject to the Act's
requirements for all "requests."
... Nowhere was it suggested that the language of section
3504(h) was in any way to restrict the scope of OMB's review
of reporting and record keeping requirements contained in
rules not published for notice and comment. Adding the
phrase "collection of information requirement" to the
definition of the term "information collection request"
ensures that the two terms are treated the same way under
the Act except as provided in section 3504(h). This makes
it clear, for example, that the public protection clause
(section 3512), the three-year limit on OMB approvals
(section 3507(d)), and the fast-track emergency clearance
authority (section 3507(g)) apply to "collection of
information requirements."
S.Rep.No. 99-347 at 52 (1986). [Emphasis added.]
When PRA was re-authorized by Congress in 1986, Congress
clarified what the term "collection of information requirement"
was intended to mean when the act was passed in 1980. Thus, 44
U.S.C. 3502 was amended by inserting "collection of information
requirement," after "reporting or record keeping requirement," in
paragraph (11). Congress expressed indignation at attempts by
federal agencies (specifically the OLC opinion of June 1982) to
limit the scope of the PRA's requirements and to limit the
assurances which the law was intended to provide the public.
This indignation was forcibly stated by Senator Lawton Chiles:
The Committee amended the definition of "information
collection request" to include the term "collection of
information requirement," a term used in section 3504(H) in
the act. This amendment clarifies what the term "collection
of information requirement" was intended to mean when the
act was passed in 1980. A specific intent of this amendment
is to establish that the legal opinion issued by the Justice
Department in June of 1982 provides an invalid
interpretation of the law.
I have previously characterized this opinion as a flagrant
example by unelected officials in the bowels of the Federal
office building to rewrite and change a law passed by
Congress and signed by the President. (Congressional
Record, July 1, 1982.) It is an opinion which serves to
distort and change the congressional intent expressed in the
Paperwork Reduction Act. Moreover, the opinion causes mores
problems that it purports to solve.
According to the opinion, its conclusion is based on, among
other things, a thorough analysis "... of the language and
history of the act's other provisions, and the statute's
general scheme ...." The clarifying amendment to the
definition of information collection request makes clear
that not only did the opinion reach a false conclusion, it
also was based on a selective and false analysis of language
and legislative history. Despite its 56 pages, and 101
footnotes, the analysis of the opinion is so flawed, it
should not be relied upon for any future efforts to
interpret the statute.
The opinion misconstrues the general scheme of the statute.
The law was intended to be comprehensive in its coverage of
federally sponsored "collections of information."
Exemptions to this coverage, either by agency or by class of
information were specifically set out in the definitions of
section 3502 or the savings provisions of section 3518. The
notion the law was dedicated primarily to "Forms,
questionnaires, and surveys" and not to other instruments
such as reporting, record keeping, and disclosure
requirements which are means to carry out federally
"sponsored collections of information" is a fundamental
misreading of what the law states, what the Congress of 1980
intended, and what this Committee affirms in the amendments
of 1986 contained in title VI of S. 2230.
S.Rep.No. 99-347 at 122 (1986). [Emphasis added.]
The Supreme Court, in describing the Public Protection
clause of the PRA, stated that:
While the grammar of this text can be faulted, its meaning
is clear: the public is protected under the [PRA] from
paperwork regulations not issued in compliance with the Act
.... [Emphasis added].
Dole, 110 S.Ct. at 937. [Emphasis added.]
Support for Barnes's position, that the regulations are
"information collection requests," can also be found at 26 C.F.R.
601.9000 and 602.101. These regulations, since March 14, 1985,
list the OMB Control Numbers that have been assigned to some of
the regulations complained of by Barnes. The 1990 Request for
OMB Review filed by the IRS requests that numerous regulations
"that are associated with Form 1040" be granted continued OMB
approval. (Exh. 254-260). The fact that the IRS has sought and
received OMB approval for these regulations belies the Wunder
Court's opinion that regulations do not require OMB approval. Of
course, Barnes notes that not all regulatory information
collection requests associated with Form 1040 have been approved,
that none of them properly displays an OMB Control Number, and
that they were not even improperly published until 1985.
Also, the Notice of OMB Action approving the 1981 IRS
request supports Barnes' argument that the regulations and
instructions are information collection requests. (CD-73.) The
Notice clearly states that:
This number and expiration date must appear in the upper
right-hand corner of ... the first page of the regulation, manual
or other document incorporating the information collection unless
other instructions are in the "Remarks" below. [Emphasis added.]
No contrary instructions appear in the "Remarks." The Notice
also states:
Important: Because this information collection has been
approved, please send to the O.M.B. as soon as available:
One copy of the final printed (or otherwise reproduced)
report form, or reporting or record keeping requirement,
transmittal letter, instructions, and any document being
sent to each respondent.
(CD-73.) [Emphasis added.]
The Notice of OMB Action dated October 4, 1990, (CD-73)
demonstrates that the OMB holds the same position today, namely,
the OMB Number must be "displayed in accordance with 5 CFR 1320"
-- page 1; instructions included as information collections --
Remarks; and, reporting and record keeping requirements and
instructions included -- Important comment.
Barnes' argument is further supported by the fact that the
IRS has properly displayed OMB control numbers in their
regulations in the past. 26 U.S.C. 860(h) imposes a filing
requirement and the regulation implementing the statute, 26
C.F.R. 1.860-2, designating, inter alia, the Form to be used and
the information required to be contained on the Form, displays an
OMB Control Number.
26 U.S.C. 1441 imposes a withholding requirement upon all
persons who pay, or control, items of income of nonresident
aliens. Section 1441(b) defines items of income. Although the
statutory language is self-explanatory, the regulation
implementing the statute, 26 C.F.R. 1.1441-2, displays an OMB
control number.
As further support for Barnes' argument, a copy of the trial
testimony (offer of proof) by Michael J. Horowitz on September
11, 1990 was submitted to the District Court. (CD-73, App. 36-
62.) Mr. Horowitz was the general counsel and chief legal
officer of the Office of Management and Budget, starting in 1981,
and was responsible for the promulgation of the regulations under
the PRA. As such, Mr. Horowitz's testimony is the official
agency interpretation of the PRA and is entitled to deference by
the courts. The testimony of Mr. Horowitz concurs that
regulations and instructions for Form 1040 are within the scope
of the PRA and are required to display an OMB control number.
Indeed, explicit testimony by Mr. Horowitz recognized that OMB
approval of a Form does not thereby exculpate the regulation from
also having OMB approval.
Additionally, a copy of the "Report on Research" of Arnold
Strasser was attached as support for Barnes' position. (CD-
73, App. 63-69). Mr. Strasser is an Information Consultant
who wrote the OMB Information Collection Review Handbook and
who, when employed by OMB, was the principal author of the
regulations implementing the PRA, designed the Forms
currently used to request OMB approval of information
collection requests, directed the work of OMB employees in
their oversight of agency activities pursuant to the PRA,
and personally approved and disapproved collection of
information requests from the Treasury. His "Report"
clearly documents Barnes' position that the OMB control
number must be printed in the regulations and in the
instructions for federal income tax forms. Mr. Strasser
states: Each Notice [from OMB to the IRS] contains one of
the following printed requirements below the statement of
approval and the expiration date thereof:
"THIS NUMBER AND EXPIRATION DATE MUST APPEAR IN THE
UPPER RIGHT-HAND CORNER OF THE FIRST PAGE OF THE REPORT
FORM OR THE FIRST PAGE OF THE REGULATION, MANUAL, OR
OTHER DOCUMENT INCORPORATING THE INFORMATION COLLECTION
UNLESS OTHER INSTRUCTIONS ARE IN "REMARKS" BELOW"
or
"THE OFFICE OF MANAGEMENT AND BUDGET CONTROL NUMBER
MUST BE DISPLAYED IN ACCORDANCE WITH 5 CFR 1320.
UNLESS OTHERWISE PROVIDED IN "REMARKS," EXPIRATION
DATES MUST ALSO BE DISPLAYED AS REQUIRED BY 5 CFR
1320."
The significance of the approval of the instructions is
evident from the fact that many (for some people - perhaps
most) of the 3 terms used on the form are "defined terms"
the meaning of which are not necessarily the same as used in
ordinary speech. Hence, the Form 1040 is not self contained
and cannot be completed without scrutiny of the instructions
....
Section 1320.7(c) of the regulations states that:
(1) A "collection of information" includes the use of
circulars, directives, instructions, bulletins ...
Hence, unless otherwise waived by OMB (under the authority
of 5 C.F.R. 1320.20(d)) IRS is required to display OMB
control numbers and expiration dates of those numbers on the
first page of each collection of information -- which term
includes instructions.
That IRS and OMB recognize the full coverage of Form 1040
instructions as collections of information is documented in
the OMB "Notice" dated 9/29/89. In the remarks section of
the "Notice" OMB states "Approved with the following
conditions: 1) the instructions for line G of Schedule F
will be clarified to make it easier for a taxpayer to
determine whether the election applies to the taxpayer, and
2) early in 1990 IRS will discuss with OMB ways in which the
Form 1040 package can be improved for the 1990 tax year. We
also note the changes made at OMB's suggestion to page three
of the instructions restoring the useful section, "How to
Use This Instruction Booklet." [Emphasis added.]
Further, the Department of Justice has taken the position
that regulations are within the purview of the Federal Reports
Act (FRA), the predecessor to the PRA. On June 11, 1990, the
U.S. Department of Justice, through its Appellate Attorney
Marleigh D. Dover, filed its "Brief for Appellees on Remand" in
Action Alliance, 930 F.2d 77, arguing that "[b]ecause the
proposed regulation required that recipients collect and analyze
information, and make that information available to the
government[,] it was a 'collection of information' within the
meaning of the FRA." Finding the argument of the Department of
Justice persuasive, the D.C. Circuit found the same to be true
under the PRA. Action Alliance, supra. [Emphasis added.]
The President of the United States also confirmed Barnes'
position when signing the PRA into law. President Carter stated:
The act I'm signing today will not only regulate the
regulators, but it will also allow the President, through
the Office of Management and Budget, to gain better control
over the Federal Government's appetite for information from
the public. For the first time it allows OMB to have the
final word on many of the regulations issued by our
Government. It also ensures that the public need not fill
out forms nor keep records which are not previously approved
by OMB. [Emphasis added.]
Presidential Documents, Administration of Jimmy Carter,
December 11, 1980, at 2795. [Emphasis added.]
Based upon the facts and analysis above, Barnes submits that
Wunder was wrongly decided to the extent it holds that
regulations are not "information collection requests." Barnes
further submits that any other decision similarly flawed in its
analysis is also wrongly decided. Barnes contends that
regulations and instructions requiring (1) the compilation of
data and (2) the making and filing of Form 1040 are --
independently -- "information collection requests" subject to the
requirements of the PRA, and must properly display an O.M.B.
control number.
In Hatch, 919 F.2d at 1394, the Ninth Circuit ruled that an
information brought contrary to Section 3512 fails to state an
offense, which information can be challenged at any time during
the pendency of the proceedings. Hatch was charged with
unlawfully and knowingly constructing a road without
authorization and without an approved operating plan, as required
by Forest Service statutes and implementing regulations. Hatch,
919 F.2d at 1395-96. A week before sentencing, Hatch filed a
motion to dismiss the information on the grounds that it failed
to charge an offense because of the government's non-compliance
with the PRA. Hatch, 919 F.2d at 1395. The District Court
denied the motion and observed that, had it been raised at trial,
Hatch would have prevailed. Hatch, 919 F.2d at 1396. The Ninth
Circuit found that an agency's failure to comply with the PRA
renders an information or indictment fatally defective for
failing to charge an offense (a "jurisdictional defense"), and
reversed the conviction. Hatch, 919 F.2d at 1398 & 1396.
In Crocker, 753 F.Supp at 1211-1216, the District Court of
Delaware held that instructions to Form 1040 do not constitute
"information collection requests." In Crocker, 753 F.2d at 1210,
the issue was raised by oral motion that the prosecution for tax
evasion and for failure to file is violative of the PRA.
Crocker's argument, however, only concerned itself with the
instructions for Form 1040, and therefore has no application to
Barnes' argument with respect to IRS regulations. The Crocker
decision relies incorrectly upon its determinations that:
(1) instructions are not "rules requiring information to be
sent," Id. at 1216,
(2) "the Collins court found that the 1040 forms involved
contained OMB control numbers, and held that they
comply fully with the PRA," Id. at 1215, and
(3) "no benefit would be gained from an OMB review of the
instruction booklets," Id. at 1216.
These pronouncements by the Court demonstrate the
insufficiency of the oral argument before it. According to the
Crocker Court's analysis -- and the proscriptions of the PRA --
all instructional materials (i.e., regulations, instruction
manuals and tax pamphlets) should be eliminated as unnecessary
burdens.
As already demonstrated by Barnes, the instructions are
"information collection requests" under the PRA which "require"
Forms 1040 to be "sent" to the IRS Service Center. The OMB
currently does review the instructions for Form 1040, thereby
belying the court's contention that no benefit would be gained by
such a review. Because neither the argument nor the decision in
Crocker are well considered, this Court should not attribute any
weight to them in the instant cases.
As previously noted, should the Court seriously consider the
Crocker decision to be controlling on grounds that no benefit
would be gained by an OMB review of the instruction manual, then
all instructional material -- including instruction manuals and
tax pamphlets -- should be ordered immediately withdrawn as
"unnecessary burdens." The purpose of the PRA was to eliminate
paperwork burdens that were not necessary. See 126 Cong.Rec.
6212 (1980): "this bill provides for the implementation of a
very important concept: That the Federal Government should treat
information as a resource, not a free good ...." (remarks of Rep.
Horton). "It would be a startling irony if OMB's power were
lacking in precisely the case where the need for its exercise was
greatest -- where an agency compels the costly generation of data
that it never bothers to study." Action Alliance, 930 F.2d 77,
80 (D.C.Cir. 1991).
(D) The IRS is aware of its obligation to display OMB
control numbers on the subject regulations and
instructions.
Even beyond the notification to the IRS by the clear and
unambiguous language of the PRA and its regulations, the IRS has
acknowledged that its forms, instructions, rules, regulations,
and other similar methods constitute "information collection
requests" requiring both OMB approval and display of an OMB
control number. The IR Manual contains the following party
admissions:16
(1) The Paperwork Reduction Act of 1980 requires all government
agencies to obtain OMB approval for all Information
Collection Requests (ICRs). An ICR is any requirement to
record, maintain, provide or report information. This
includes any form, notice, letter, stuffer, questionnaire,
survey, manual instruction, record keeping requirement or
other oral or written means by which identical requests of
information are made from 10 or more persons, whether the
response is voluntary or mandatory. [Emphasis added.]
(2) An OMB clearance number and expiration date are used to
identify all ICRs subject to the Paperwork Reduction Act
____________________
16. See U.S. v. Van Griffin, 874 F.2d 634, 638 (9th Cir. 1989)
(government manuals admissible as party admissions under
Fed.R.Evid. 801(d)(2)(D)).
_________________________________________________________________
that are cleared by OMB. Starting January 1, 1982, all ICRs
must include the clearance number and expiration date.
IR Manual (10)260, Section 167.4 (4-2-85), Internal
Audit Handbook, at (10)260-57; Addendum. [Emphasis
added.]
(1) Public Law 96-511, "Paperwork Reduction Act of 1980,"
requires that public use forms and documents must be
submitted to the Office of Management and Budget (OMB) for
approval before the form or document may be issued ....
(b) Upon approval, OMB assigns an OMB Number and Expiration
Date to each item ....
(d) Effective 1/1/82, the OMB Number and Expiration Date
must be on the item ....
(3) The items which carry OMB information can be classified into
two categories as follows:
(a) Information Collection Requests (ICRs) -- An ICR is a
form (letter, notice, etc.) which is used to request
information from ten or more taxpayers, whether
mandatory or voluntary, necessary to carry out the
Internal Revenue laws of the United States. Each ICR
is assigned a unique OMB Number. ICRs include, but are
not limited to:
1 major tax forms and instructions;
2 public use forms;
3 C, (SC), and (SC/SP) letters;
4 draft and dictated letters; and
5 CP notices ....
(7) OMB requires that the OMB Number and Expiration Date, when
required, appear in the upper right corner of the document.
[Emphasis added.]
IR Manual 35(44)1.6 (1-1-88), Correspondence, at
35(44)0-4 to 0-6; Addendum. [Emphasis added.]
(1) If the regulations or proposed regulations include a
provision that requires taxpayers to keep records or to
report information to the IRS, the Paperwork Reduction Act
requires that the regulations be approved by the Office of
Management and Budget (OMB) before they may be promulgated
as final or temporary regulations ....
IR Manual (39) 317, Section 338.2 (10-12-88),
Regulations Drafting Handbook, at (39)317-19; Addendum.
[Emphasis added.] Note that the Regulations Drafting Handbook
Manual Transmittal originated in the Office of Chief Counsel,
IRS.
The above IR Manual provisions are party admissions by the
IRS that it fully understands the duty imposed upon it by the
PRA.
(E) Barnes' position is not contrary to the public fisc.
Barnes does not argue that Section 3512 precludes the
collection of the amount of tax that may be due from him or any
other person. The IRS can collect all tax that is lawfully due
by exercising their audit and tax assessment procedures civilly
against Barnes or any other person, individually. 44 U.S.C.
3518(c)(1)(B)(i) & (ii) specifically allows for collection of
information under such circumstances without the necessity of OMB
approval.
Barnes merely asserts that, when the IRS does determine a
person's tax liability in a manner consistent with the PRA, the
IRS cannot impose ANY penalty for the failure to comply with
information collection requests which do not satisfy all the
requirements of the PRA.
CONCLUSION
Barnes has clearly demonstrated that the IRS/Treasury
Department has failed to comply with the provisions of the law
requiring it to display OMB control numbers on the instructions
and regulations associated with 26 U.S.C. 6001, 6011, 6012, 6091,
and 6151. In the absence of such compliance, the public
protection clause of 44 U.S.C. 3512 deprives the United States of
jurisdiction to penalize Barnes in ANY manner for failing to file
Forms 1040 or to pay any tax that might have been shown on such
form. In the absence of jurisdiction to penalize, both the
IRS/Treasury Department and the District Court are barred by the
PRA from imposing any of the penalties under 26 U.S.C. 7201 --
"notwithstanding any other provision of law."
Dated this ____ day of July, 1991.
Respectfully submitted,
_______________________
William R. Barnes
#03652-068
Morgantown FCI
P.O. Box 1000
Morgantown, WV 26505
ADDENDUM
CERTIFICATE OF SERVICE
IT IS HEREBY CERTIFIED that a true and correct copy of the
foregoing document was placed with the United States Postal
Service, postage prepaid, on this the ____ day of July, 1991, and
addressed as follows:
PAUL J. BRYSH, Esq.
Office of the United States Attorney
633 United States Post Office and Courthouse
Pittsburg, PA 15219
______________________
William R. Barnes
# # #
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U.S.A. v. William R. Barnes