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Larken Rose Trial
Day 3
Wednesday, August 10, 2005
9:10 AM we started with a nearly full court room, with 38 supporters of Larkin,
9 IRS agents or court clerk and staff and 2 reporters present.
First thing was the testimony of Witness Donald Pearlman the Special Agent of
the IRS who investigated who in the middle (September) of 2000 had Larken's
case, which was previously under civil investigation and then another agent was
looking at it to see if there were any tax violations by Larken.
He [Witness Donald Pearlman] felt that a search warrant was needed due to the
fact that key evidence might be destroyed, if it hadn't already been done, as
items of income and expense and, as a result, two (2) search warrants were
issued, for his home and Dr. Clayton in Texas.
At Larken's place many items were seized, such as: large number of financial
documents, issues related to tax law and documents, e-mails, hard copy
documents, audio and video recordings. The vast majorities of computer
evidence were copied off of his computers, rather than physically taking them
away.
As a result, he contacted a number of banks and that of the payers of income to
Larken, so that they could establish his income, by original documents. He
requested checks and other documents from Chase Bank. One of the checks is an
over $2,300 check issued to the IRS which on the memo says "abolish the IRS."
With the Raid, they found a letter from a U.S. Senator to another individual
that states that the 861 argument is false. Another document was from another
U.S. Senator, to another individual that essentially states that, the 861
argument, is incorrect. Another document was from a U.S. Senator of Larken's,
which has an answer of the Congressional Research Service, which states that
861 of the code does NOT exempt the income of U.S. Citizens.
Another letter is from anther U.S. Senator that stated that the 861 argument is
false. A constituent of Senator Tom Daschle, says the same thing. A letter
from IRS to another individual states the proper application of the 861
document and another example that notice was given to Larken about the error of
his argument.
Another letter was by Congressman Porter Goss [now the head of the CIA, Ed.]
stating that the 861 argument is false. Another one is from Carl Levin of
Michigan to another one, stating the same. Another was from Senator Kate
Hutchinson to Dr. Tom Clayton, stating that Section 61 makes ALL income
taxable.
Another document is a letter from Congressman Jeff Blame of Arizona to anther
individual that contains a brochure called "The Truth About Frivolous Tax
Arguments". This document specifically states that Section 861 of the code is
a "frivolous argument" and is only to make sure that NO one is double taxed in
U.S. and a foreign country.
Now the Government went over the E-mails that they got from his computer:
An E-mail between Dr. Clayton and Larken. Larken in this e-mail states that he
is "obsessed" with the IRS, since they take such a large amount of his taxes
from him. In another e-mail he states that he started his battle after his
living budget became very tight.
In another e-mail of Larken to Dr. Clayton states that for many people it is
hard to believe that their own government has become a bunch of extortionists'
fraud. In another e-mail between these two, Larken states that, "nothing can
give anyone the power to rule me." In some e-mails Larken used profanities to
describe the IRS or Government.
In another e-mail he calls the IRS an extortionist organization and, "the only
check against the IRS is a million people with guns, standing up to the IRS"
next e-mail stated that he will not stop until the IRS is buried in the history
books. In next e-mail Larken says: "It is time for trial by fire" "IRS agents",
"I will use any dirty trick, scheme or lie that I could make up."
At the raid, Larken said many things to him at the time of the raid. Larken
said that he was able to pay off his home mortgage early by "good budgeting and
not getting robbed." To this agent, that meant not paying income taxes.
Larken said that he got letters from the IRS that his 861 argument is wrong and
he did not feel that they are binding. He said that he would not change his
mind if a jury or judge said that he was wrong. The judge did NOT allow the
tape of this agent and Larken to be played to the jury
Cross examination by Larken started at 10:15 AM.
Agent found nothing deceptive by Larken besides NOT reporting his income and
admitted receipt of compensation for services. Larken interfered with the
administration of the tax laws by operating his web sites. Larken called IRS
agent criminals and providing guidance for people to not file income taxes.
Larken had asked his web site followers to ask their Congressmen and Senators
about the 861 issue and to send those responses to him.
At 10:55 AM, we took a break and resumed at 11:12 AM. The IRS seized over
10,000 e-mails on the raid. Agent Pearlman reviewed hundreds of the e-mails.
Various IRS agents for content reviewed over 1,000 of these e-mails.
Larken had Agent Pearlman go over and/or read the other parts of these e-mails,
to put the quotation from these e-mail IN CONTEXT by reading additional parts
of these mails. Of course, Pearlman was evasive in his answers and would not
easily answer the simple "Yes" or "No" answers that Larken asked him.
At 12 noon, Special Agent Pearlman's testimony is over. A former IRS agent told
us Agent Pearlman was ONLY testifying in a way they were trained to do and that
he came across as though he learned his training well. When it was to his
advantage, he expressed himself with good memory and completeness. When it was
to his disadvantage, he would hedge and ask questions and be evasive. It was
annoying to hear his testimony.
At 12:22 PM, the next witness, Maureen MacDormett, who is an IRS Revenue Agent
took the stand. She examined some of the documents that were seized in the
raid of Larken Rose's home. She was a summary witness. A summary Witness's
job is to add up all the evidence that the government has produced (Pay stubs,
1099, checks, bank records, witness testimony) to add it all up and figure out
how much income the person (in this case, Larken) made, in during the years in
question.
It is difficult to listen to this because it is all evidence that Larken has
admitted to and this witness's testimony is so repetitive of admitted evidence
that just drags on and on unnecessarily. An example is asking her for a
definition of the "medical transcription business" when this was done with a
prior witness, Art Thompson. Also asking for the methodology of arriving at the
income was repeated. This tends to make slow go even slower!
At 2:15 PM, we returned from lunch and Judge Baylson gave a discourse to the
jury about the Bell case letting them know this case was NOT directly relevant
to Larken's willfulness to file case.
Larken's defense begins with his standby counsel Larry Becraft, questioning the
first witness, Larken Rose. Starting with general background questions. More
supporters of Larken have come since this morning. The number of his present
supporters is now up to 56 people, with 9 IRS agents present and two reporters.
The courtroom is almost full now.
Why did he not file? He had never seen the law before. Starting sometime in
1997 he began looking at and researching the law and became convinced it was a
mistake and would be wrong to sign and file a return.
During the years through 1996 they filed and paid income taxes.
In 1997 he first began hearing different views about the income tax. He looked
into many and found out they were NOT valid. How did he look into them? On
the internet he was able to look up the law and found the flaws in them. In
1997 they were both working long hours and made about $40,000 and taking
$10,000 of that for taxes. This motivated him to look into this.
In middle of 1997 he looked at the IRS Code and regulations and the 861 issue on
Federal Government's web site, after he read an article by Thurston Bell. After
reading the current IRS codes and regulations, eventually he got interested in
the roots of the law and its history. Larken felt that by understanding the
seed, hopefully he would better understand the tree.
Then he went to the actual law libraries (not online) so that he could find the
old tax laws. He wanted to confirm or refute the accuracy of Thurston Bell's
Article. The indexes of the Code lead him to Section 861 about the sources of
income.
#1: The first regulations he read was that of 1939 about the "Meaning of
Income."
#2: Then he looked at the regulation on "exclusions to income." These two (2)
regulations helped him develop the belief that there IS income that is excluded
because of the Constitutional limitations on government power.
Exhibit #3: Next he read the 1924 Income Tax Regulation (Article 71) which also
stated that there is "some income" that is excluded from taxation due to the
fundamental law. Then he looked at the Black's law dictionary for a term that
says:
". . .when law apply to a specific issue, it necessarily excludes others not
mentioned."
Then in the 1917 Gould decision, he understood that government can NOT tax you
beyond what the law allows and if there is any doubt, it MUST be ruled in favor
of the citizen.
#7: Exhibit says that "not only Congress has the power to tax, but the power to
regulate commerce," which means Congress can tax foreign commerce.
#11: An IRS regulation came across it in Bell's article in 1997.
#12 ??? ??? ??? ??? ??? ??? ??? ???
??? ??? ???
Section 1 and 61 regulations and index tell you to go to Section 861 for a
determination of what is taxable or not.
#17: 1040 Income Tax Form says that we must report our foreign source income,
but does NOT mention domestic source income.
The first report on his research, written in 1998, was only twelve (12) pages
long and by 2000 had grown to sixty (60) pages. He met Dr. Thomas Calyton in
2000 and Thomas Clayton told him that they should have their own web site
www.taxableincome.net (http://www.taxableincome.net/) .
Judge ruled that tomorrow Larken can show at least five (5) minutes of his
video, WITHOUT sound, but not at the same moment that he is talking about it.
We finished today at 4:30 PM.
Yours in truth, freedom and justice,
Peymon, Ross, Harry and Ken</pre>
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