FedEx Pilot Who Refused To Pay Tax Cleared By Federal Jury

by Mike Godfrey, Tax-News.com, Washington

14 August 2003

A FedEx pilot who refused to pay income tax was cleared of six counts of tax evasion by a federal court in Memphis last week.

Vernice Kuglin refused to pay income tax to the Internal Revenue Service, arguing that the tax agency failed to respond to her letters asking which law required her to pay income tax. Had the pilot been found guilty by the jury, she would have faced a potential 30 year jail term and $1.5 million in fines.

Kuglin wrote to the IRS twice in 1995, but received no response on either occasion. Then in December 1995, she filed a withholding statement asking that no tax be withheld from her salary. Subsequently, the government accused her of filing false W4 forms between 1996 and 2001. During this period it is reported that she earned some $920,000, the normal withholding on which would have equalled about $250,000.

However, defence attorney Larry Becroft convinced the jury that the letters showed a lack of criminal intent on Kuglin's part. "The whole thing could have been resolved if the government had simply answered her questions," Becraft observed. "It didn't happen. I made an argument to the jury that an American has a right to ask the government for answers."

Meanwhile, an IRS spokeswoman was unable to confirm the Revenue's policy on responding to such correspondence, although she stated that it is an unarguable fact that taxes are mandatory, citing information given on the IRS website, and the first sentence of the tax code which states that "a tax is hereby imposed."

Whilst Kuglin herself said after the trial that she felt "justified", the verdict has not established whether she has to make a tax payment.

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