Seventh Circuit Will Not Let Tax Protester Blame His Lawyer For Conviction

Besides my interest in the case (tax protestation), there are some very good "resources" mentioned (cf Russell Haynes, IRS digest of common tax protestor arguments with citation to court cases striking them down, Daniel Evans catalog refuting many tax protester theories and Here is the Law That Makes the Average American Liable for the Income Tax).

James Stuart thought that Peter Hendrickson had “cracked the code” – the Internal Revenue Code, that is. Joe Kristan would characterize it as finding the tax fariy – that magical sprite who make your taxes go away painlessly while your sucker friends send checks to the tax man. Hendrickson’s book is available on Amazon if you would like to check it out for yourself. You’ll be out twenty bucks even for a used copy, so you might want to check out some of the one star reviews. There is a free copy pdf copy available online. There are also quite a few videos in which Hendrickson explains his theories. Before you get too caught up in the concepts, I should caution you that like Peter Hendrickson, himself, Mr. Stuart has done (is still doing) federal time for tax crimes.

The Trial According to the Bureau of Prisons Inmate Locator, Mr. Stuart is at a reentry facility in Chicago and is due to be released in mid-January. The Seventh Circuit just refused to overturn a District Court decision denying him a new trial. He was arguing ineffective assistance of counsel. Here are some of the high points.

During opening statements Stuart’s trial counsel asserted the theory of Stuart’s defense: Stuart believed that he owed no taxes. He explained that Stuart thought that the money he earned from his family business, New Age Chemical, was not income and that the United States had no authority to tax income. Stuart had adopted these views after reading a book called “Cracking the Code,” which urges people to resist paying income taxes, but his counsel told the jury that Stuart learned his ideas from his fellow church patrons. Counsel described Stuart as a curious, determined, and “kooky, not criminal” person. Only after he received no response to his inquiries from the IRS, the Secretary of the Treasury, or his accountants about his tax ideas, counsel mused, did Stuart begin to refrain from paying income tax.

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It might have worked, but of course it didn’t. And that is why Mr. Stuart was arguing ineffective assistance of counsel. The District court did not buy it and the Seventh Circuit is not having any of it either.

And in this case trial counsel’s decision not to call Stuart to testify was reasonable. Stuart’s far-fetched, tax-protesting ideas were already presented to the jury through his letters to the IRS, and his emails and conversations with the accountants. They were also reinforced during opening statements and closing arguments. Calling Stuart to testify would not have added to this information but might have further alienated the jury.

Seventh Circuit Will Not Let Tax Protester Blame His Lawyer For Conviction