Opinion
No. CV 11-1175 PA (SSx)
01-24-2012
UNITED STATES OF AMERICA, Plaintiff, v. DAVID CHAMPION, Defendant.
JUDGMENT AND PERMANENT
INJUNCTION
In accordance with this Court's January 24, 2012 Order granting the Motion for Summary Judgment filed by plaintiff United States of America (the "United States") against defendant David Champion ("Champion"), the Court has concluded that Champion's theories concerning the Government's taxing authority are wrong. Views such as those advanced by Champion have been rejected as frivolous by all courts that have analyzed similar arguments. See generally United States v. Gerads, 999 F.2d 1255 (8th Cir. 1993) (rejecting concept that filing of income tax return is purely voluntary); United States v. Karlin, 785 F.2d 90, 91 (3d Cir. 1986) (rejecting concept that individuals are not "persons" as defined in the Internal Revenue Code); United States v. Studley, 783 F.2d 934, 937 (9th Cir. 1986) (rejecting concepts that wages do not constitute "income" subject to federal income taxation, and noting in dicta that "this argument has been consistently and thoroughly rejected by every branch of the government for decades"). It is therefore hereby ORDERED, ADJUDGED, AND DECREED that upon receiving actual notice of this Judgment and Permanent Injunction:
1. Pursuant to 26 U.S.C. §§ 7402 and 7408, Champion is permanently enjoined from acting in any advisory, consulting, or participatory capacity in any way for any individuals or entities, whether for pay or not, with respect to the individual or entity's federal tax obligations, including but not limited to (a) assisting individuals in becoming "nontaxpayers," (b) assisting individuals in evading their income tax obligations through their "nontaxpayer" status, (c) instructing individuals that they can become, or are, "nontaxpayers," (d) assisting individuals in avoiding reporting their Social Security Numbers, Taxpayer Identification Numbers, or any other identification information that might be disclosed to the IRS by a third party, (e) creating or forming trusts of any kind for individuals, and/or (f) assisting individuals in creating or forming trusts of any kind.
2. Pursuant to 26 U.S.C. §§ 7402 and 7408, and except as otherwise set forth below, Champion is enjoined from acting in any advisory or participatory capacity in any way for any trusts created by or for any of his customers, himself, or any other parties in the past ten years and in which he has assisted in the creation or management in any way during that time, including acting as trustee;
3. Pursuant to 26 U.S.C. §§ 7402 and 7408, Champion and his representatives, agents, servants, employees, and anyone in active concert or participation with him who received actual notice of this Judgment and Permanent Injunction, is enjoined from directly or indirectly:
(A) Organizing or selling tax shelters, plans, or any other arrangements that advise or assist taxpayers to attempt to evade the assessment or collection of such taxpayers' correct federal tax, including but not limited to selling or providing for free to customers any services or assistance whatsoever involving (a) informing taxpayers that they are "nontaxpayers" not subject to federal income taxation, (b) assisting customers in any way in
evading their tax obligations by maximizing their purported "nontaxpayer" status, or (c) the creation, establishment, or maintenance of trusts of any kind;
(B) Engaging in any other activity subject to penalty under 26 U.S.C. § 6700, i.e. organizing or selling a plan or arrangement and making a statement regarding the excludability of income or securing of any other tax benefit, by participating in the plan that they know or have reason to know is false or fraudulent as to any material matter, including but not limited to the following false statements: (a) that there are individuals properly referred to as "nontaxpayers" who are outside the scope of federal income taxation, (b) that individuals should maximize their "nontaxpayer" status by refusing to provide (or refusing to allow others to provide) taxpayer identification information (including Social Security Numbers or Taxpayer Identification Numbers) to the IRS, (c) that the creator of a common law or "pure" trust can transfer his personal or business assets or proceeds into the trust and continue to exercise day-to-day control over the asset or proceeds in question without incurring any federal income tax liability from that activity, (d) that a pure trust need not file a Form 1041 income tax return and therefore is not subject to federal income taxation, and/or (e) that individuals need not comply with IRS summonses;
(C) Engaging in any activity subject to penalty under 26 U.S.C. § 6701, i.e. aiding or assisting in, procuring, or advising with respect to the preparation or presentation of a federal tax return, refund claim, or other document, knowing or having a reason to believe that it will be used in connection with any material
matter arising under the internal revenue laws, and knowing that if so used it would result in an understatement of another person's tax liability; and
(D) Directly or indirectly organizing, promoting, marketing, or selling any plan or arrangement that advises or encourages taxpayers to attempt to violate internal revenue laws or unlawfully evade the assessment or collection of their federal tax liabilities, including promoting, selling, or advocating (a) the existence of a class of "nontaxpayers, and/or (b) the use and/or creation of common law or "pure" trusts as a means of eliminating if not greatly reducing their income tax liabilities;
4. Within thirty (30) days of receiving actual notice of this Judgment and Permanent Injunction, Champion shall, in a conspicuous location, post on all of his websites (including but not limited to "www.nontaxpayer.org," "www.davechampionshow.com", and "www.originalintent.org") a copy of this Judgment and Permanent Injunction. Champion shall certify to this Court in writing by filing a declaration under penalty of perjury that he has done so within thirty (30) days of receiving actual notice of this Judgment and Permanent Injunction. This requirement shall also apply to any future website that contains, links to, or advertises information concerning Champion's views and services related to taxation that Champion may obtain, initiate, or begin the operation of while this Judgment and Permanent Injunction remains in effect. Champion shall not knowingly make any statements, written or verbal, or cause or encourage others to make any statements, written or verbal, that misrepresent any of the terms of this Judgment and Permanent Injunction, whether such statements are made on the aforementioned websites or otherwise;
5. Pursuant to 26 U.S.C. § 7402, Champion is hereby required, within thirty (30) days of receiving actual notice of this Judgment and Permanent Injunction, to provide the United States with a list of the names and addresses (to the extent Champion can reasonably ascertain such information) of all: (a) purchasers of Income Tax: Shattering the Myths since its publication, and (b) customers who paid Champion to provide them any tax-related services in the past five years;
6. Pursuant to 26 U.S.C. § 7402, Champion is hereby required, within thirty (30) days of receiving actual notice of this Judgment and Permanent Injunction, to provide a copy of this Judgment and Permanent Injunction by mail or e-mail to all employees, affiliates, associates representatives, agents, and servants, and all persons who have purchased from him any products, services, advice, or publications associated with the tax scheme described in the underlying complaint (where Champion can reasonably ascertain the mailing or e-mail addresses of such individuals). Champion shall certify to this Court in writing by filing a declaration under penalty of perjury that he has done so within thirty (30) days of receiving actual notice of this Judgment and Permanent Injunction;
7. Pursuant to 26 U.S.C. § 7402, Champion shall, within thirty (30) days of receiving actual notice of this Judgment and Permanent Injunction: (a) remove from all existing unsold copies of Income Tax: Shattering the Myths, and any copies of it to be published in the future, the pages advertising his services (as reflected in Schedule A appended to this Permanent Injunction), (b) mail or e-mail to all purchasers of Income Tax: Shattering the Myths since its publication (where Champion can reasonably ascertain the mailing or e-mail addresses of such purchasers) a copy of this Judgment and Permanent Injunction and a separate notification that states:
TO ALL PURCHASERS OF INCOME TAX: SHATTERING THE MYTHS:and (c) include a copy of the above notification and a copy of the Judgment and Permanent Injunction with all copies of Income Tax: Shattering the Myths sold after the date of this Judgment and Permanent Injunction; Champion shall certify to this Court in writing by filing a declaration under penalty of perjury that he has done so within thirty (30) days of receiving actual notice of this Judgment and Permanent Injunction;
Under no circumstances should you rely on the content of Income Tax: Shattering the Myths in determining your federal income tax liability. You should instead seek appropriate professional assistance (e.g. from an attorney, certified public accountant, or otherwise properly licensed and reputable tax return preparer).
8. This Court retains jurisdiction to enforce this Judgment and Permanent Injunction, and that for the purposes of monitoring compliance with its terms, the United States may conduct discovery using the formal procedures described in Fed. R. Civ. P. 30, 31, 33, 34, 36, and 45, or as otherwise provided in the Federal Rules of Civil Procedure, or permitted by this Court;
9. The Court warns the parties, and all of those covered by the terms of the Judgment and Permanent Injunction who receive actual notice of it, that any violation of the terms of this Judgment and Permanent Injunction may result in the imposition of sanctions against the violator, up to and including the initiation of contempt proceedings.
IT IS SO ORDERED.
_________________________
Percy Anderson
UNITED STATES DISTRICT JUDGE
SCHEDULE A
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