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1
1 IN THE UNITED STATES DISTRICT COURT
2 FOR THE EASTERN DISTRICT OF WISCONSIN
3 --------------------------------------------------------
4 UNITED STATES OF AMERICA,
5 Plaintiff,
6 -vs- Case No. 97-C-207
7 ROBERT R. RAYMOND, individually
and d/b/a Morningstar Consultants,
8 and ROBERT G. BERNHOFT, individually
and d/b/a Morningstar Consultants,
9
Defendants.
10
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11
12 Examination of WAYNE C. BENTSON, taken at
13 the instance of the Plaintiff, under and pursuant to the
14 Federal Rules of Civil Procedure, pursuant to
15 Stipulation by Respective Counsel, before KATHLEEN E.
16 CARTER, a Certified Realtime Reporter, Registered Merit
17 Reporter and Notary Public in and for the State of
18 Wisconsin, at Brown & Jones Reporting, Inc., 312 East
19 Wisconsin Avenue, Suite 608, Milwaukee, Wisconsin, on
20 the 12th day of February, 1999, commencing at 9:29 a.m.
21 and concluding at 12:50 p.m.
22
23
24
25
2
1 A P P E A R A N C E S
2 UNITED STATES DEPARTMENT OF JUSTICE, TAX DIVISION, by
MS. TERESA DONDLINGER TRISSELL,
3 555 4th Street NW,
P.O. Box 7238,
4 Ben Franklin Station,
Washington, DC 20044,
5 appeared on behalf of the Plaintiff.
6 MR. ROBERT R. RAYMOND,
Defendant, appeared pro se.
7
MR. ROBERT G. BERNHOFT,
8 Defendant, appeared pro se.
9 A L S O P R E S E N T
10 MR. STEVEN KRAM,
Internal Revenue Service.
11
* * * * *
12
I N D E X
13
Examination By: Page
14
Ms. Trissell .................................. 3
15 Mr. Bernhoft .................................. 113
16
17 Exhibits: Marked ID
18 No. 1 - Mr. Bentson's Affidavit ............... 3 3
19
20
21
22
23
24
25
3
1 TRANSCRIPT OF PROCEEDINGS
2 (Exhibit No. 1 was marked.)
3 MS. TRISSELL: Let's start with your
4 statement of the missing exhibit to the witness
5 report.
6 MR. BERNHOFT: Yes, we wanted to note for
7 the record that in the fax service of Wayne
8 Bentson's expert witness report there was a
9 reference to an Exhibit A that was RIM Manual 30,
10 parens, 55, end parens, 4.2. Mr. Kram, plaintiff's
11 expert witness, noted in his rebuttal report that
12 that exhibit did not contain that Internal Revenue
13 Manual copy page, and we note for the record that
14 inadvertently it was omitted from the fax, and we
15 intend to supplement the expert witness report to
16 have this exhibit listed and will make it available
17 to Mr. Kram, Ms. Trissell, and we'll put it into
18 the record as an exhibit today.
19 MS. TRISSELL: Okay.
20 WAYNE C. BENTSON, called as a witness
21 herein, having been first duly sworn on oath, was
22 examined and testified as follows:
23 EXAMINATION
24 BY MS. TRISSELL:
25 Q Good morning.
4
1 A Good morning.
2 Q Have you ever had your deposition taken before?
3 A Yes, um-hum.
4 Q How recently was that?
5 A Oh, about six months ago.
6 Q Okay. So you understand that your testimony here
7 today is sworn under oath as though we were in a
8 court of law?
9 A Yes.
10 Q Okay. The court reporter is taking down everything
11 we say, so let's make an effort to have only one
12 person speak at one time, to make it easier for
13 her.
14 Also, if you don't understand any
15 questions I ask you, feel free to ask me to clarify
16 my question, or to restate it, and I'll be happy to
17 do so.
18 A Okay.
19 Q If you need a break at any time, let me know, and
20 we'll take a break at the most convenient time.
21 Do you have a copy of Exhibit 1, your
22 expert witness report in this case?
23 A Well, we should. Let me take a look here. I have
24 Exhibit A.
25 Q Exhibit 1 is --
5
1 A Oh, okay. Exhibit 1 is my affidavit.
2 Q Yes.
3 A Oh, okay. The answer is yes. I misunderstood you.
4 Q If you want to work off the copy you have, that
5 would be fine.
6 A Um-hum. Okay. Exhibit A is simply my affidavit,
7 okay. Government Exhibit A.
8 Q And then if you would just look through Exhibit 1
9 and make sure this is your complete --
10 A The same?
11 Q -- expert witness report with all the attached
12 exhibits, except as Mr. Bernhoft had stated?
13 A Yes, this would be the same.
14 Q Okay. And I will be referring to Exhibit 1 as your
15 expert witness report.
16 A Okay.
17 Q If you would turn to Page 3 of your report.
18 A I have Page 3.
19 Q Okay. Paragraph 2 you state -- I'm going to
20 indicate right there.
21 A Okay.
22 Q -- "26 CFR is to a large extent secret law." Is
23 that correct?
24 A Yes.
25 Q Is that your opinion?
6
1 A Yes.
2 Q What is the basis for that opinion?
3 A The basis for that opinion is basically 26 CFR
4 601.601, which tells us that the "regulations
5 pertaining to 26 USC are authorized by the
6 following officials." The Commissioner, the Bureau
7 of Alcohol, Tobacco and Firearms; the Director of
8 the Bureau of Alcohol, Tobacco and Firearms; Chief
9 Counsel; the Commissioner of Customs; the
10 Commissioner of Narcotics; and unidentified, "any
11 other official to whom authority has been
12 delegated," and there is no way of knowing who that
13 is.
14 Nor is there any way of knowing
15 precisely, or in some cases any section at all,
16 which portions of 26 CFR are regulated by A, B, C,
17 D, E and F with the exception of the Director of
18 the Bureau of Alcohol, Tobacco and Firearms. I do
19 know that he's been delegated to administer
20 Chapters 61 through 80, of 26, and also 35 --
21 Chapters 35 and 40, and 51, 52 and 53.
22 So that much we know, that he does --
23 that the Director of Alcohol, Tobacco and Firearms
24 administers and makes the regulations for those
25 portions. And he's also delegated to administer
7
1 and enforce them by Treasury Order 120-01.
2 But I tried to find out through the
3 Freedom of Information Act what these other
4 officials do, or what portions of the code they --
5 for which they write the regs, and no one has been
6 able or so far has not told me, so -- And we can't
7 even find out who "any other official" is, so I'm
8 lost there.
9 Plus for much of Title 26 the Attorney
10 General is called "the Secretary," and so when you
11 read the term "the secretary," it means the
12 Attorney General. So I asked the Attorney General
13 for a copy of the document indicating that these
14 regulations had been approved by the Attorney
15 General, and they write back and said that the
16 Attorney General didn't approve any of those regs.
17 Even though 18 USC 3613 says they approve them,
18 they're not. So we have the problem perhaps it's
19 the Attorney General of one of the territories or
20 possessions, but I really don't know.
21 Q What did you do first in coming to the opinion that
22 26 CFR is secret law?
23 A I read it.
24 Q And then what did you do?
25 A Well, first of all you find out it's very
8
1 contradictory. Many sections have been repealed,
2 of course, but there appears to be, but it's
3 difficult to tell, that they're still being
4 enforced even though they've been repealed, such as
5 the China Trade Act.
6 The China Trade Act is where we first
7 found failure to file, and failure to file is still
8 in the code, but there's no China Trade Act.
9 That's been repealed.
10 Q What did you do besides reading 26 CFR in coming to
11 your opinion that 26 CFR is secret law?
12 A Well, there's other -- I also have a full book of
13 treasury orders, and treasury orders beginning with
14 No. 150 are all of the treasury orders pertaining
15 to what we call the Commissioner of Internal
16 Revenue. And even though we think that the
17 Commissioner of Internal Revenue administers Title
18 26, the Secretary of the Treasury has said, I have
19 given you all this authority, you have power to do
20 this, and authority, and ding, ding, ding, all
21 these things -- but at the end of that treasury
22 order he says, You cannot use your authority to
23 administer any regulations approved by the
24 Secretary of the Treasury. And yet 601.601 says
25 the Secretary of the Treasury must approve all the
9
1 regulations.
2 So here we have this contradiction where
3 everyone has been taught to believe the
4 Commissioner of Internal Revenue administers this
5 section of law, but the Secretary of the Treasury
6 says, no, he can't administer any regulation
7 approved by the Secretary of the Treasury.
8 So here you have this problem. Who then
9 does administer the regulations. And apparently
10 some of these people do, that I just mentioned,
11 like Chief Counsel, Commissioner of Customs,
12 Narcotics, and any other official, but we don't
13 know what sections of the regulations they
14 administer. So we're kind of stuck.
15 Q So you've mentioned that in forming your opinion
16 that 26 CFR is secret law that you read the CFR and
17 that you read treasury orders. Did you do anything
18 else?
19 A Yes, I have read a lot of IRS manuals, including
20 about 10,000 pages of Manual 3, which is the
21 Operations Manual, which is the -- kind of the
22 foundation manual for everything else, and other
23 publications, other manuals are dependent upon No.
24 3, the Operations Manual.
25 And we find in there, by the way, that
10
1 many returns that we think we have to file are
2 called nontaxable returns, and are classified as
3 nontaxable. Then I've also read Title 31, Title
4 27, 27 CFR, Title -- most of Title 5.
5 And in Title 31 it tells us also, for
6 example, in Chapter 3 -- 31 USC, Chapter 3, is a
7 list of the organizations of the Department of the
8 Treasury, and the Internal Revenue Service or BATF
9 are not so listed on that list of -- official list
10 of organizations.
11 So you have to come to the conclusion
12 that even though we were taught to believe that IRS
13 is an organization of Department of Treasury, it's
14 not in the book. Let me get that out. Give me
15 just a moment.
16 MR. BERNHOFT: Do you mind if Mr. Bentson
17 enters this as an exhibit?
18 THE WITNESS: I think it is.
19 MS. TRISSELL: If it's entered as an
20 exhibit, it's going to have to stay with the
21 deposition.
22 MR. BERNHOFT: Okay. We'll --
23 THE WITNESS: I think we have Chapter 3
24 to give to them, and so we will, and that's the
25 only point I'm going to make. It just says here --
11
1 I just want you to know that I got it out of a real
2 book of 31.
3 BY MS. TRISSELL:
4 Q Would you describe the book you're showing me?
5 A Yes, I'm showing her the United States Code
6 Annotated, 31, which is printed by -- that's on the
7 part that fell out -- West Publishing Company in
8 St. Paul, Minnesota. And it's called Title 31,
9 Money and Finance. Chapter 3 is the official list
10 of organizations of the Department of Treasury, and
11 it lists the Department of Treasury, Treasury of
12 the United States, Bureau of Engraving and
13 Printing, Bureau of the Mint, Federal Financing
14 Bank, Fiscal Service, Office of the Comptroller of
15 the Currency, the United States Customs Service,
16 continuing in office.
17 And there's a second section called the
18 general authority of the Secretary, working capital
19 fund, investment of operating cash, disposing and
20 extending the maturity of obligations,
21 international affairs and authorization,
22 availability of appropriations for certain
23 expenses, advances -- advancements and
24 reimbursements for services.
25 Q If this is going to be made an exhibit later to one
12
1 of the depositions, I don't think you need to read
2 it into the record here.
3 A Okay.
4 Q But if you want to just describe what you have been
5 reading, that would be fine.
6 A Okay. It's Subchapter 1, Organization, of the
7 Department of the Treasury. And what we're getting
8 at is there's an absence of either a Department of
9 Alcohol, Tobacco and Firearms, or an Internal
10 Revenue Service, or a Commissioner of Internal
11 Revenue, or Commissioner of Internal Revenue
12 Service, and so forth. They're not so listed,
13 indicating that they're not a part of the
14 Department of the Treasury. That's what I'm
15 getting at.
16 Q Okay.
17 A And also in that same one we get down to 321, and
18 it says that federal income, estate and gift taxes
19 are just gifts to the United States, the money is
20 gifts and not taxes.
21 Q What's the citation for what you're reading?
22 A That would be 31 USC, Section 321, 2 -- parens 2.
23 Q Can I see it just a minute?
24 A Yes, ma'am.
25 Q Thank you. And the last part you were reading was
13
1 from the Cumulative Annual Pocket Part for 1993; is
2 that right?
3 A That's correct.
4 Q Okay.
5 A Okay. Then other things, for example, in Title 27
6 CFR 250.11, the definition of a Revenue Agent is a
7 Revenue Agent for the Commonwealth Internal Revenue
8 of the Department of the Treasury of Puerto Rico.
9 Q Actually, we'll get to that part of your report in
10 a minute.
11 A Okay. I'm just saying this is why I came to this
12 conclusion about secret law.
13 Q Okay. Is there anything else you relied on in
14 coming to that conclusion that we haven't talked
15 about yet?
16 A Well, in trying to obtain information through the
17 Freedom of Information Act to clear up these blank
18 areas, or foggy, or gray areas, or something, no
19 official that I've contacted, which would include
20 the Attorney General, Department of Justice,
21 Department of Treasury, IRS, BATF, and so on, no
22 one can clear up the problem for me. In other
23 words, I can't -- I've tried to find the so-called
24 secret to expose it or learn whatever it is, and I
25 can't. That's what I'm getting at.
14
1 Q Is there anything else that you did or relied on in
2 coming to your opinion that the CFR is secret law?
3 A That would be about it. At least all I can think
4 of at the moment.
5 Q Okay. In coming to your opinion that 26 CFR is
6 secret law, was it necessary for you to make any
7 assumptions?
8 A No, it's telling us it's secret when it says that
9 part of this is administered by any other official.
10 We don't know who that is, that's a secret.
11 Q So is it your testimony that you made no
12 assumptions in coming to the conclusion that 26 CFR
13 is secret law?
14 A Only to the point where I cannot find a means of
15 filling up these voids, of finding out who is doing
16 what, and I've tried. I've contacted Narcotics,
17 I've contacted Customs, and at least they say they
18 don't have any records that will help me, let me
19 put it that way. So I've made a sincere attempt
20 over a period of time to find out who is doing
21 what, and so far I have been blanked out.
22 Q What assumption would you make when you didn't
23 receive an adequate response to a FOIA request?
24 A They come back, and they tell me they don't have
25 any records indicating that they approved some
15
1 regulations, so that's not an assumption, it's just
2 a denial that they have any records of approving
3 regulations.
4 Q Okay.
5 A So it becomes -- Well, at least our Narcotics
6 Bureau doesn't have any records. Now, there may be
7 something else somewhere, but I haven't been able
8 to find it yet.
9 Q So just so we're clear, you made no assumptions
10 when you came to your conclusion that 26 CFR is
11 secret law?
12 MR. BERNHOFT: I have to object to that,
13 asked and answered. We don't need to be any
14 clearer on the subject. Mr. Bentson has answered
15 the question.
16 THE WITNESS: I --
17 MR. BERNHOFT: Please don't answer the
18 question.
19 MS. TRISSELL: Are you instructing him
20 not to answer?
21 MR. BERNHOFT: I'm going to object and
22 say asked and answered.
23 MS. TRISSELL: Okay.
24 BY MS. TRISSELL:
25 Q If someone would make an assumption that was
16
1 different than any assumptions you may have relied
2 on, would they come to a different conclusion
3 regarding your opinion that 26 CFR is secret law?
4 MR. BERNHOFT: I'm going to ask for a
5 definition of "assumption." I'm unclear as to what
6 you're meaning there, Attorney Trissell.
7 BY MS. TRISSELL:
8 Q Do you understand my question?
9 A No, I really don't. An assumption is -- can be
10 based on a series of very, very good facts or just
11 on an emotion, either one, and I don't know where
12 we are on that.
13 Q Would you look at No. 3 on Page 3.
14 A Okay, I have No. 3.
15 Q Is it your opinion that 26 CFR 601.601 states the
16 information that you have listed there on your
17 report?
18 A Yes, I do.
19 Q Okay.
20 A Although it's not quoted exactly, it's paraphrased.
21 In other words, I don't have the whole paragraph
22 that goes with Commissioner of Bureau of Alcohol,
23 Tobacco and Firearms, and I'm just saying these are
24 the officials identified in 26 CFR 601.601.
25 Q Do you assume, based on the language under Part F,
17
1 "any other official to whom authority has been
2 delegated" -- Do you assume that there is such
3 official out there?
4 A Well, this regulation says that there is "any other
5 official."
6 Q Do you assume that there is another official to
7 whom authority has been delegated?
8 A No, I'm believing what I read.
9 Q So it's not your -- Is it your opinion that there
10 is another official other than those listed in A,
11 B, C, D and E?
12 A Yes.
13 Q Okay. What is the basis for your opinion in Part 4
14 that "any other official" could be the persons you
15 list under A, B, C and D there?
16 A Because they all take part in Title 26. For
17 example, I say that they could be, and I'm not
18 making the -- saying that they are the officials
19 referenced as "any other officials," I'm just
20 saying these could be.
21 Q So it's not your opinion that these are the
22 officials?
23 A No, I'm not saying they are.
24 MR. BERNHOFT: I'm going to object to
25 this line of questioning here. We have -- Point 4
18
1 here -- I'm referring to Expert Witness Bentson's
2 report. It says, "'Any other official' could be
3 any one or more of the following officials that I
4 know to be involved with 26 USC," and then there's
5 several subparts set forth, A, B, C and D, and I'll
6 read the first one to give an example why I'm
7 objecting here. It says, "A, Attorney General. As
8 evidenced by 18 USC 3613." And this continues in
9 Subparts B, C and D.
10 Now, Mr. Bentson has clearly set forth
11 upon what basis he believes these might be the "any
12 other officials," and I believe it's improper to
13 redundantly query him on that fact. Now, if you
14 want to ask him what in 18 USC 36 13 leads him to
15 the opinion that the Attorney General could be "any
16 other official," I think that would be proper, but
17 what we're doing is we're querying information
18 that's clearly set forth in the report, and I
19 object on that basis.
20 MS. TRISSELL: What I'm trying to do,
21 just for your information, is I'm trying to
22 understand what opinions he has given in his
23 report. The report doesn't follow the format of a
24 normal expert report, and so I'm trying to nail
25 down what his opinions are and --
19
1 MR. BERNHOFT: I would object to that
2 characterization of the expert witness report, but
3 I understand what you're saying. But it's very
4 clear to me what he says in Point 4. It's
5 abundantly clear. And, again, if you want to query
6 him as to what in these citations of law Mr.
7 Bentson finds that support his opinion that "any
8 other official" could be these particular
9 referenced officials, then that would be proper,
10 but to query him and have him regurgitate what he
11 clearly states in this report I think is
12 objectionable.
13 MS. TRISSELL: Well, your objection is
14 stated for the record.
15 MR. BERNHOFT: Thank you.
16 BY MS. TRISSELL:
17 Q Do you know whether or not any of these persons
18 listed under Part 4A, B, C or D are the persons
19 referenced in Part 26 CFR 601.601?
20 A No, I don't know that they're the ones who are
21 supposed to be a part of "any other officials."
22 I'm just guessing that they might be.
23 Q Why don't you know whether or not -- Is there a way
24 for you to determine that?
25 A No, because I can't get an official response to an
20
1 inquiry regarding who is or who are these "any
2 other officials," and no one that I have found yet
3 has been able to tell me, which would include the
4 Secretary of the Treasury. But they are identified
5 as people relevant to 26 USC and CFR.
6 So I'm saying that they may be one of
7 those officials, one or more may be "any other
8 officials," but I haven't -- I haven't found a
9 means of finding out exactly who "any other
10 official" is.
11 Q Now, you note under Part 4 that "any other
12 official" could be any other official involved in
13 26 USC. Why did you limit it to the people listed
14 in 26 USC?
15 A Because those are the ones that I know are
16 involved. I have read -- Excuse me. Go ahead.
17 Q Could there be others?
18 A I would -- I would assume there could be others.
19 Q And is that what you say in Part 4, No. 5 -- I am
20 sorry, Page 4, No. 5?
21 A Page 4, No. 5. Yes, "'Any other official' could
22 also be an official not identified." Maybe I --
23 because I was -- I'm taking a guess because they
24 are involved with Title 26, but it could be someone
25 that I have never heard of, because I really do not
21
1 know. And the only things I know are what I can
2 obtain from the official document.
3 Q On Page 4, Part 7, you say, "The term 'Treasury' as
4 referenced in SOR Treasury/IRS 24.030 is also a
5 mystery." What is SOR Treasury that you're
6 referring to there?
7 A Okay. This goes back to the Privacy Act, which
8 requires all agencies to maintain records
9 pertaining to persons, individuals, or whatever, in
10 a system of records, and a system of records is
11 a -- would be similar to like a file. We would
12 call it accounts payable, accounts receivable.
13 They call them system of records, which is a pretty
14 good term.
15 And in that system they have to identify
16 the system for what it is, like it's maintained by
17 what they call Treasury/IRS, and they give it a
18 number, 24.030. And then following that they have
19 to tell us where these records are maintained in a
20 physical location, where you can go to get
21 something out of it, the categories of records
22 that are maintained in the system, their authority
23 to maintain that system of records, and they do
24 quote an authority. They'll cite a certain
25 section, one or more sections of law.
22
1 So I'm saying that in this particular
2 one, 24.030, it says "Treasury/IRS," but I don't
3 know if it's Treasury of the United States, United
4 States Treasury, Department of the Treasury,
5 Department of the Treasury of Puerto Rico, or what.
6 Because it only uses the term "Treasury," period.
7 Q Is it your opinion that the Treasury Department is
8 different than the United States Department of
9 Treasury?
10 A Yes.
11 Q What is the difference?
12 A Well, they're cited in different sections of law.
13 Like the Department of Justice, according to Title
14 5, has a Treasury Department. And at times you'll
15 also see US Treasury Department, which I'm sure
16 also is the same as United States Treasury
17 Department. So you have different names for these
18 treasury things, and they have different authority,
19 and they're also located geographically or with a
20 different official, or in a different department of
21 the government.
22 Q What is the basis for your opinion on Page 4, Line
23 8, that, "There is a Department of the Treasury of
24 Puerto Rico, of which all Revenue Agents are a
25 function"?
23
1 A Okay, there is a paragraph, 27 CFR, Section 250.11,
2 which I didn't bring --
3 Q That's the basis?
4 A Yes. And it specifically states in there that
5 there is a Secretary of the Treasury of Puerto
6 Rico, and it says that Revenue Agents are duly
7 authorized Revenue Agents of the Commonwealth
8 Internal Revenue of the Department of the Treasury
9 of Puerto Rico, and that's in 27.
10 Q Is there any other basis for that opinion?
11 A No, I think it would just be 250.11.
12 Q What is the basis for your opinion in Part 9 that
13 DOJ apparently maintains the Treasury Department?
14 A Because it's referenced in 5 USC, Section 3, about
15 a DOJ Treasury Department. But I also think back
16 on that, and it seems to indicate it, but it's also
17 a little -- little foggy. Because if this is -- I
18 think that occurred in 1950, when it was
19 transferred to DOJ. The law hasn't been changed.
20 And yet I see charts of the Department of Justice,
21 and there isn't anything of Treasury in there. But
22 here is a law that says they have one, but when you
23 see a DOJ organizational chart, there's no Treasury
24 Department. But apparently they have one
25 somewhere. Because 5 USC says so, and Title 5,
24
1 government organization.
2 Q Is there any other basis for that opinion?
3 A That would be the only basis.
4 Q What is the basis for your opinion in the next
5 line, that, "DOJ also maintains a Division of
6 Internal Revenue"?
7 A Because you go back to 5 USC, and I think that's
8 Section 9, that says the -- And that's another
9 thing that's kind of foggy. It says they have one,
10 but you don't know if they still have one, and I
11 can't find, if they don't have it anymore, if it's
12 been transferred out. God, I could read until I go
13 blind, and I can't see if it's transferred out.
14 But part of it is, back in prohibition,
15 where all this started, of course, DOJ was
16 administering prohibition. And in prohibition they
17 had an Internal Revenue, and so forth, that was all
18 a part of them. And you can see where names
19 change, but it doesn't say where it's transferred
20 out. But they consolidate, and all of this
21 consolidation and changing does not make things
22 clear. It -- But you don't know if it's
23 consolidated in a different agency or with DOJ. At
24 least I can't see that, and I have been drawing --
25 I have been following what these changes say, and
25
1 making drawings on a blackboard, and following it,
2 and it still appears to be in DOJ.
3 Q Do you make any assumptions?
4 A No, I try not to make any assumptions. I just try
5 to find -- In 1950 there were so many changes in
6 government, I believe that there were 26
7 reorganizations in one year, which is like trying
8 to follow who goes where and what, and what
9 authority goes with them, and what stayed, and it's
10 an absolute puzzle. And I have not put that puzzle
11 all together yet.
12 Q Is there any other basis? You mentioned 5 USC,
13 Section 9.
14 A That's the only section.
15 Q Okay.
16 (Discussion off the record.)
17 BY MS. TRISSELL:
18 Q What's the basis for your opinion on Page 4 under
19 No. 11 that, "Title 31, Chapter 3, maintains the
20 lawful list of organizations of the Department of
21 the Treasury of the United States"?
22 A Simply because it did and because it is published
23 in Title 31, which, of course, is the United States
24 Code. And we had that list of organizations, and
25 that's -- so I would have to think that's the
26
1 official law.
2 Q So is that a reference to 31 USC --
3 A Chapter 3.
4 Q Is that Section C?
5 A They call it Chapter 3.
6 Q Okay.
7 A And then that's what I was reading, you know, all
8 those -- I started reading off the organizations,
9 you said I didn't have to read them off. That's
10 what I'm referring to.
11 Q Okay. Is there any other basis for that opinion?
12 A Let's see. No, that's it.
13 Q Okay. The second line of No. 11, is the basis for
14 that opinion the same cite?
15 A Yes, because they're simply not listed as
16 organizations of the Department of Treasury.
17 Q What conclusion do you reach from the fact that
18 they aren't listed?
19 A That they belong to some other Department of
20 Treasury.
21 Q Some Department of Treasury other than the
22 Department of Treasury of the United States?
23 A Yes.
24 Q Okay.
25 A Well, wait. That's half true. There would be
27
1 another reason why I don't think they're part of
2 the Department of the Treasury of the United
3 States. Treasury Order 150, dash, is it, 25 --
4 yeah, wherein the Secretary of the Treasury
5 provided a -- what they call, "I hereby confer and
6 impose upon the Commissioner of the Internal
7 Revenue all the rights, privileges, powers" --
8 Q Rather than reading the whole text, if you want to,
9 that's fine --
10 A I'll just summarize it.
11 Q That would be great.
12 A What I'm getting at, the Secretary of the Treasury
13 gave the Commissioner of Internal Revenue,
14 Commissioner of Internal Revenue Service, all these
15 powers and duties, but then he says down here that
16 the "rights, privileges, powers and duties referred
17 to in this order do not include those relating to
18 Treasury decisions and regulations prescribed by or
19 approved by the Secretary of the Treasury."
20 In other words, I look at that, he's
21 saying, "I have given you all this power over here,
22 but you cannot use any of that authority to
23 administer decisions and regulations either
24 prescribed by or approved by the Secretary of the
25 Treasury." So they're doing all this work for
28
1 someone other than the Secretary of the Treasury,
2 which at that time was Acting Secretary John S.
3 Graham.
4 So he says, "You can't do this for me or
5 any of my regulations." So then, because, well,
6 then they have power to do something, so they can
7 do it for someone or something else, and I don't
8 know what that is, but part of it, I think, is
9 going to be Puerto Rico and Virgin Islands.
10 Q So you've mentioned two bases for your opinions in
11 No. 11?
12 A Yes, ma'am, um-hum.
13 Q Are there any others?
14 A Well, there could be, yes. In 48 USC 1421I it --
15 That's the definition of income tax as pertains to
16 Guam, and in Guam they have a -- What do they call
17 them? Not the governor but someone else who runs
18 their income tax thing. The Director of Revenue
19 and Taxation, or something like that. And so if --
20 The Commissioner of Internal Revenue and the
21 Internal Revenue Service actually cooperate on
22 administering the Guam income tax laws. So Guam
23 could be one of those secretaries. But, again,
24 that would be a guess, but it would be based on
25 that part of the law.
29
1 And then, of course, the National
2 Prohibition Act was extended to Puerto Rico and the
3 Virgin Islands in 1937, I believe, and then that
4 law was classified as Title 26 and became the
5 Internal Revenue Code of 1939. So you'd have both
6 Puerto Rico and the Virgin Islands involved in
7 administering the old National Prohibition Act,
8 which is now the Internal Revenue Code.
9 By the way, it came back as the Internal
10 Revenue Code of 1939, stating Section 1, et seq.,
11 all that follows, generally, which leaves again a
12 question about there's obviously something else in
13 there besides the National Prohibition Act. But
14 when you try to find out, okay, just where is the
15 National Prohibition Act exclusively, no one can
16 tell me.
17 Q Is there any other basis for your opinion in Part
18 11?
19 A I think you wore me out. You got it all.
20 Q Okay. Moving on --
21 A Okay.
22 Q -- to Page 5, No. 12.
23 A All right.
24 Q What is the basis for your opinion that the
25 National Prohibition Act is now classified
30
1 generally to Title 26?
2 A That would be -- Oh, there is a mistake in No. 12.
3 And let me tell you why. Instead of "42" that
4 needs to be changed to "48 USC." I'm sorry. I
5 made a type error or a too late at night error, or
6 something.
7 Q Okay.
8 A 48 USC 1402. It states specifically, that part, 48
9 USC 1402, that the Internal Revenue laws, that is,
10 the National Prohibition Act as amended, and all
11 provisions of the Internal Revenue laws relating to
12 the enforcement thereof, are extended and made
13 applicable to the Virgin Islands from and after
14 August 27th, 1935. I said '37 earlier. Obviously,
15 it's 1935.
16 Q Okay.
17 A So then it says in here that the National
18 Prohibition Act as amended and referred to in the
19 text was then classified to the Internal Revenue
20 Code of 1939.
21 Q Is there any other basis for your opinion that the
22 National Prohibition Act is now classified to Title
23 26?
24 A That's all based on 48 USC 1402.
25 (Discussion off the record.)
31
1 BY MS. TRISSELL:
2 Q What is the basis for your opinion that -- as
3 referenced in No. 13, that, "The IMF transcripts
4 relating to both Raymond and Bernhoft are generally
5 Virgin Islands transcripts"?
6 A All right. And that's Internal Revenue Manual
7 30(55)4.2, at (29), and it states specifically that
8 TC 150 means Virgin Islands.
9 Q And is --
10 A Go ahead.
11 Q -- is that the Exhibit A that Mr. Bernhoft was
12 speaking about at the beginning of the deposition?
13 A Yes, it is.
14 Q Okay. Is there any other basis for your opinion?
15 A Well, the fact that also 26 USC is Virgin Islands
16 tax law. There are also whole portions in there
17 that specifically state, I think it's going to be
18 approximately at, what, 935, 936, something like
19 that, is specifically Virgin Islands tax law. And
20 then at 7652 and 53 it states that Title 26
21 contains Puerto Rican and Virgin Islands tax law.
22 So that plus this specific Manual 3, the Operations
23 Manual page that says TC 150 means the Virgin
24 Islands is the basis.
25 Q Is there any other basis?
32
1 A That would be it.
2 Q Okay.
3 A Unless I think of something later.
4 Q If there was a portion of the Internal Revenue
5 manual that stated Transaction Code 150 also means
6 something else, would that change your opinion?
7 A No. I do know where it says something else, it
8 says that TC 150 means a return has been processed,
9 posted to the computer, and assessment made.
10 Q Why wouldn't that change your opinion?
11 A Well, because it means a Virgin Islands return has
12 been processed and posted to the computer.
13 Q Would you be disregarding then that portion of the
14 Internal Revenue Manual that says --
15 A I think what you mean is Document 6209. Am I -- Is
16 that correct?
17 Q I don't know.
18 A Well, let me -- I just happen to have it with me.
19 And it does state that TC 150 means a return has
20 been posted to the computer, and that's going to be
21 Section 8. I went back too far. Section 8, Page
22 9. And, let's see, 150. Yeah, a return has been
23 filed, and liability assessed, but it doesn't tell
24 us what kind of return. In the Operations Manual
25 it says, though, that a TC 150 is a Virgin Islands
33
1 return. But it doesn't change Document 6209 that
2 says the return is filed and liability assessed.
3 It doesn't change that. It just explains further
4 over in Manual 3.
5 By the way, in the back of Document 6209,
6 Section, what, 18, or something -- Section 17,
7 there is a whole chapter here indicating that 6209
8 is based on Manual 3. Page after page of
9 references to Manual 3. And different sections of
10 Manual 3, of course.
11 So it's telling us in Section 17 that
12 Manual 3 is still relevant to Document 6209. And
13 Manual 3 says TC 150 is a Virgin Islands return.
14 6209 says 150 means a return is filed and tax
15 liability assessed. Both are true.
16 Q Did you rely on Document 6209 in forming your
17 opinion as shown in Paragraph 13?
18 A That it means a Virgin Islands return?
19 Q Right.
20 A No, I relied upon Manual 3.
21 Q Okay. What is the basis for your opinion that
22 there is Guam tax law referenced on each IMF?
23 A Okay. 26 CFR 7654-1(ii) -- small I -- states
24 that -- Do you have a question?
25 Q Is this what you're referring to? It's a little
34
1 bit different. There's a citation actually in your
2 report.
3 A No, I better -- Let's go with this, I think. I'm
4 trying to remember the other one offhand. I could
5 be wrong. So let's go with this, (a)(2)(i),
6 (a)(2)(i). Says that Chapters 61 and 62 means a
7 Guam adjusted gross income. And also 48 USC 1421i
8 says that -- Let me quote it.
9 Okay. 1421i. 48 USC 1421i, which is the
10 Guam income tax law, says that Subtitle A,
11 excluding Chapter 2, though, is the Guam income tax
12 law, and Chapters 61 and 62 are part of the
13 Subtitle A that they're referring to. And so when
14 you go to 7654, it says that section is the Guam
15 adjusted gross income and Guam gross income.
16 Q Is there anything else that you relied on in
17 forming this opinion?
18 A Yes. That is principally it, and there's also a
19 specific -- other specific sections of Title 26
20 that indicate that the Guam income tax law has been
21 classified to Title 26, and that's going to be
22 around 9 -- 934 plus or minus a number.
23 Q Is there any other basis for this opinion other
24 than 26 CFR?
25 A Well, yeah, 48 USC 1421i.
35
1 Q Is there any other basis?
2 A No, I would just be relying on those laws.
3 Q What is the basis for your opinion in Paragraph 14
4 that, "SET is a Northern Mariana Islands social
5 security tax"?
6 A Okay. It would be a combination of these three
7 things here. One, that 26 CFR 6017-1, it's called
8 self-employment tax in there -- that if you have
9 self -- as a resident of those four islands, Puerto
10 Rico, Virgin Islands, Guam or the American Samoa
11 group, that if you are a resident there, and you
12 have self-employment -- and you're self-employed,
13 then you're subject to the self-employment tax.
14 And then, in addition to that, Delegation
15 Order No. 164 gives the Assistant Commissioner
16 (International) the authority to administer the
17 social security tax for Health and Human Services,
18 and then at 42 USC 405 it states that the records
19 maintained by the Secretary of Health and Human
20 Services are the records pertaining to
21 self-employment tax for the Northern Mariana
22 Islands.
23 The Assistant Commissioner
24 (International) -- by the way, that's done,
25 Assistant Commissioner then parens International,
36
1 just for that -- is given the authority only to
2 administer the Northern Mariana Islands social
3 security tax, and there is no other Delegation
4 Order for anyone to administer social security tax
5 for the Secretary of Health and Human Services.
6 And I have all the Delegation Orders
7 relevant to that that I can find, which is both
8 Commissioner of Internal Revenue and Assistant
9 Commissioner (International).
10 Q You've referenced 26 CFR, various Delegation Orders
11 and 42 USC. Is there any other basis for your
12 opinion in No. 14 that "self-employment tax is a
13 Northern Mariana Islands social security tax"?
14 A Those would be the three that I rely upon, yes.
15 Q Okay. What is the basis for your opinion in No. 15
16 that, "The property accepted with the return
17 represented a 'gift' to the United States"?
18 A Well, 31 USC 321(d)(2) clearly states that all
19 these -- any federal income, estate or gift tax
20 return, that property accepted with that return is
21 classified as a gift to the United States, and it
22 doesn't say it's a tax at all. Which, by the way,
23 would then compare favorably with the Internal
24 Manual No. 3 that says that there is such a thing
25 as a nontaxable 1040.
37
1 Q Is there any other basis for this opinion expressed
2 in No. 15?
3 A That's all I can think of at the moment.
4 Q What is the basis for your opinion in No. 16 that,
5 "Federal income tax returns are always 'gifts' to
6 the United States"?
7 A Well, that would also be 31 USC 321.
8 Q In No. 16 there's a sentence that begins, "Also,
9 there is no evidence the agency." What agency are
10 you referring to there?
11 A Well, the agency that administers social security,
12 and so forth, is frequently referred to as the
13 Internal Revenue Service. There are several
14 previous agencies, such as the Federal Alcohol
15 Administration, Director Alcohol, Tobacco and
16 Firearms, and the Virgin Islands Bureau of Internal
17 Revenue, all at one time or another have adopted
18 the term "Internal Revenue Service," so Internal
19 Revenue Service is a term applicable to several
20 other agencies.
21 I can't find where any of them can say,
22 "Well, you have to give us a social security number
23 in violation of the law," but they do.
24 Q What is the basis for your opinion that "it is not
25 possible to provide an entirely accurate
38
1 description of the technical meaning of the
2 computer codes displayed on the instant IMF
3 transcripts," as you've listed under No. 1 on Page
4 6?
5 MR. BERNHOFT: Can we make a note that
6 "the instant IMF transcripts" refer to the exhibits
7 attached to Mr. Bentson's witness report --
8 MS. TRISSELL: Sure.
9 MR. BERNHOFT: -- as B, Page 1 of 3; B,
10 Page 2 of 3; B, Page 3 of 3.
11 THE WITNESS: Okay. If it's -- if the
12 6209 is the proper document to decode IMFs, and it
13 says that it is in the 6209, then we know it's all
14 Alcohol, Tobacco and Firearms because on the cover
15 page of the 6209 it does not bear the seal of what
16 we call the Internal Revenue Service, whichever one
17 it was.
18 It actually has a vulture holding a penny
19 scale, and that's the seal of the old Alcohol,
20 Tobacco and Firearms Division. And that's -- We
21 know that by Internal Revenue Publication 480. And
22 that's -- that's the only reference I have to
23 identification of that vulture/penny scale symbol.
24 I guess it is a seal. And the 6209 does not have
25 the Internal Revenue Service, or the Commissioner
39
1 of Internal Revenue, or the Assistant Commissioner
2 (International), none of those seals appear on the
3 6209, just the vulture/penny scale.
4 BY MS. TRISSELL:
5 Q Tell me if this is correct. The basis for this
6 opinion expressed in the first sentence of No. 1
7 has to do with the seals on Document 6209; is that
8 what you're saying?
9 A Yes. Yes. Well, and then also the fact that we
10 know from 48 USC 1402 that the National Prohibition
11 Act was classified to Title 26, and that was
12 alcohol. So we're talking about alcohol laws in
13 Title 26, and all these computer codes, and the
14 basic book, not the only one, but the basic book
15 for understanding those computer codes bears this
16 symbol of the Alcohol, Tobacco and Firearms
17 Division.
18 Q What is the basis for your opinion under No. 2 of
19 Page 6 that the IRS "has admitted to a lack of
20 authority" regarding the items you list there?
21 A Because I've asked them. I have filed Freedom of
22 Information Act requests asking them for a document
23 indicating that they can compel the filing of a
24 gift with the United States, which income tax
25 returns are if they're filed with the federal
40
1 government.
2 See, there are 1040s that are filed with
3 Guam, for example, but if they're filed with the
4 federal government as a federal return, then it's a
5 gift, and they have admitted that they have no
6 authority over the filing of gifts. They cannot
7 compel you to file a gift, they cannot compel you
8 to disclose any information about a gift, they
9 cannot compel a disclosure of a taxpayer
10 identification number, no authority to do anything
11 about a gift.
12 Q Is there any other basis for this opinion listed in
13 No. 2?
14 A No, just that they have answered my request for
15 some kind of a document indicating authority about
16 gifts, they come back and they say there are no
17 other documents.
18 Q What assumptions, if any, do you draw from the fact
19 that your FOIA request didn't produce documents?
20 A Well, they told me that there were no documents.
21 They didn't -- They didn't indicate that they were
22 withholding something. They said, "We've searched,
23 and we have not found anything."
24 Q And so do you conclude from that --
25 A That there are no documents, yes.
41
1 Q And that there is no authority?
2 A They can't come up with a document indicating
3 authority over gifts, no.
4 Q Okay. I believe we've already talked about the
5 basis for your opinion on Page 7, No. 3, is that
6 right, that the IRC is secret law?
7 A Yes, we have.
8 Q Okay. And what is the basis for your opinion on
9 Page 7, No. 4, that, "The only identified official
10 with authority to determine" the items listed there
11 is --
12 A Okay.
13 Q -- the district director?
14 A Okay. A district director, small D, is a district
15 director of the Bureau of Alcohol, Tobacco and
16 Firearms, and that regulation specifically states
17 that if you are required to file or if this
18 district director determines you are required to
19 file, he will send you a notice. He actually has
20 to serve the notice.
21 And there is another document,
22 Publication 676, and it's Notice -- the one I have
23 says, "Notice 555 is your official notice that you
24 are required to file a return." And which compares
25 favorably with 26 CFR 1.6001-1(d), and that
42
1 requires the district director, if he's determined
2 you're required to file a return under Subtitle
3 A -- he sends you a notice, says, "Here, file."
4 Okay. That's what the law says, so that's what I
5 believe.
6 But I distinguish between a District
7 Director, capital D, because a District Director,
8 capital D, is a District Director for what we call
9 the Internal Revenue Service.
10 Furthermore, 6001 is the first set of
11 regulations under Chapter 60, and that is delegated
12 to the Bureau of Alcohol, Tobacco and Firearms by
13 Treasury Order 120-01.
14 Q Is there any other basis for your opinion as
15 expressed in No. 4, Page 7, regarding the District
16 Director?
17 A That would be it.
18 Q Okay. What is the relevance of -- or, why do you
19 have No. 5 in here?
20 A Just because the Supreme Court has said that, you
21 know, if there's some question about the statutes,
22 about taxes, you can't go beyond the clear import
23 of what the law says. If the law says here's what
24 you tax and here's how you tax it, then that's what
25 it is, and you can't stretch it beyond that. It's
43
1 strictly what the law says. And I'm relying upon
2 that Supreme Court decision.
3 Q We've talked about various portions of the CFR,
4 Treasury Orders, Internal Revenue Service manuals,
5 and so on. What other documents did you rely on in
6 producing your expert report?
7 A I think it would just be various codes, US codes,
8 Code of Federal Regulations relating to these codes
9 that are the US codes, and manuals, Treasury
10 Orders, Delegation Orders. There's other things
11 just called orders, not Treasury Orders. I don't
12 know why they make a distinction, but they do.
13 So in reading all of those and various,
14 like Title 5, 31, 19, 22, the laws state these
15 things, and I am complying with the laws as I see
16 them published.
17 Q Did Mr. Raymond and Mr. Bernhoft provide you with
18 any information that you relied on in making your
19 expert report?
20 A Yeah, they gave me their IMFs that they had
21 obtained.
22 Q And are those attached to your expert report?
23 A Yes, they are.
24 Q Okay. Did they give you anything else?
25 A No. I don't think so. Wait a minute. I think I
44
1 should correct that. They gave me a copy of a
2 report by Ben Houck, but I never read it or relied
3 on it. But they sent it to me. But I didn't pay
4 attention to it. Just to make the record 100
5 percent clear, the answer is, yes, I got it.
6 MR. BERNHOFT: I would note for the
7 record that the report of Ben Houck is the original
8 report that was filed in this case by defendants in
9 the United States and defendants stipulated to
10 introduce Mr. Bentson as defendants' expert
11 witness.
12 THE WITNESS: But I didn't -- Not only
13 did I not depend on his report, I haven't read it.
14 BY MS. TRISSELL:
15 Q Okay.
16 A But, yes, they sent it to me.
17 Q Are you familiar with Mr. Houck?
18 A I have met him, I believe, on two occasions.
19 Q Do you consider him an expert in this field?
20 MR. BERNHOFT: I am going to object to
21 that question as being not relevant.
22 THE WITNESS: Not only that but judges
23 usually --
24 MR. BERNHOFT: I am going to direct you
25 not to answer the question.
45
1 THE WITNESS: Okay.
2 MS. TRISSELL: Let's go off the record.
3 (Discussion off the record.)
4 MS. TRISSELL: Back on the record.
5 MR. BERNHOFT: I withdraw that previous
6 objection.
7 MS. TRISSELL: So what was the question?
8 THE WITNESS: I was going to ask you to
9 restate it.
10 (Above-pending question read.)
11 THE WITNESS: Let me put it this way. I
12 consider people experts when they're judged to be
13 an expert like a US District Court Judge or
14 something like that, if they've been officially
15 recognized as an expert. I don't -- I don't go
16 around determining whether people are expert or not
17 because I think that's kind of within the province
18 of the courts.
19 BY MS. TRISSELL:
20 Q Are you familiar with the work of other people in
21 this field, who have analyzed this type of
22 transcript?
23 A No, I am not. I assume there are others, but I am
24 not aware of them.
25 Q So you haven't looked at approaches that other
46
1 people have used in analyzing these transcripts?
2 A No, I haven't.
3 Q Have you looked at any literature that discusses
4 approaches to be used in analyzing IMF transcripts?
5 A Only what I write about it.
6 Q You haven't looked at other literature?
7 A Uhn-uhn.
8 Q Okay. Are you aware if there is other literature?
9 A I'm not aware of any. I'm not saying there isn't
10 any. I'm just not aware of any, and I probably
11 wouldn't read it even if I received it unless I
12 really thought the guy was, you know, fantastic.
13 The reason is, is 1997 I was inducted into
14 International Who's Who for my expertise, and I'm
15 the only one in the book. So I -- Maybe it's just
16 looking at myself, so I have a problem saying,
17 well, yeah, somebody else knows more than I do, but
18 if they could convince me that they knew something
19 more, I would probably listen, but -- but I haven't
20 so far.
21 Q Are there people in this field who analyze IMF
22 transcripts who criticize the method that you
23 follow?
24 A I have no idea. Let me put it this way. I have
25 testified as an expert on these transcripts and
47
1 what the codes mean in several US District Courts.
2 Q We're going to go over that later.
3 A Okay. We'll wait then.
4 Q And if you feel like you haven't had an opportunity
5 to put all that in the record, you will have that
6 chance.
7 A Okay.
8 Q Would you turn to Exhibit A, Page 2 of 3.
9 A Okay. Exhibit A. I'm sorry. I have got B. A, 2
10 of 3, okay.
11 Q What's the basis for your opinion that another
12 person is using the -- Robert G. Bernhoft's social
13 security number?
14 A He has a "VAL-1" posted to his transcript, and
15 6209, Section 13, it says when you see that, it
16 says that there's two people using the -- that
17 social security number.
18 Q Can you show me on Exhibit B what you're talking
19 about?
20 A On Exhibit B. B what? You mean the VAL? Is that
21 what you're looking for?
22 Q Yeah.
23 A Okay. B2, on Page 3.
24 Q Just point it out on your document.
25 A And I'll point it out to you specifically. It's
48
1 right here, VAL-1.
2 Q V, like Victor, A-L?
3 A Yes, right --
4 Q Okay.
5 A Right there, um-hum.
6 Q Okay. Is there any other basis for that opinion?
7 A That's the only opinion. That's the only basis.
8 Q Okay. What is the basis for your opinion that --
9 I'm looking at Exhibit A, Page 2, again.
10 A Okay.
11 Q -- that, "The last year for which a return was
12 filed was 1994 relevant to a self-employed resident
13 of the Virgin Islands"?
14 A Okay. Now, that's on Bernhoft. Okay. He has a TC
15 150 over on the left-hand side down about
16 two-thirds of the way on the page. He has SFR 150.
17 That's going to be TC 150, Virgin Islands return,
18 the TC 150.
19 Q Actually, if I could, I am going to have you on
20 Exhibit 1 just circle what you're pointing to.
21 Wherever it was.
22 A You have to go back. No.
23 Q You can highlight it.
24 A Okay. Right there.
25 Q Go ahead and mark it.
49
1 A Okay. That's the 150. That means the Virgin
2 Islands. And, I'm sorry, what was the rest of your
3 question?
4 Q That was it, relevant to self-employed resident of
5 the Virgin Islands.
6 A Okay. That's -- Then he has adjusted gross income
7 here. Oh, okay. Then we would go to the
8 regulation at 26 CFR 6017-1 that says that
9 self-employed residents of the Virgin Islands,
10 Guam, Puerto Rico, and American Samoa file Form
11 1040. And with this 150 it goes over here to
12 indicate that he filed Tax Class 2, which is a 1040
13 return.
14 Q Okay. Is there any other basis for that opinion?
15 A That would be the basis.
16 Q What is the basis for your opinion that the SFR
17 nontaxable 1040 indicated zero tax?
18 A Okay. To the right of that "150" we have several
19 digits indicating the date, and then we have "0.00"
20 further to the right, and that's the amount of tax
21 assessed. And that's zero in this case.
22 Q Is there any other basis for that opinion?
23 A That's the only basis.
24 Q Okay. What's the basis for your opinion that the
25 Guam adjusted gross income of 19,080.00 is shown on
50
1 the transcript?
2 A Okay. Let me pick this up and show it to you. We
3 have over here on the right-hand side "AGI," and if
4 we are going to go back to the Publication 6209,
5 Section 1 would tell us that AGI means adjusted
6 gross income.
7 Then when we go to the code, Chapter 61
8 and 62 is going to be adjusted gross income for
9 Guam.
10 Q Is there any other basis for that opinion?
11 A That's the opinion, that's the basis.
12 Q Okay. What is the basis for your opinion that the
13 transcript shows Northern Mariana Islands
14 self-employment social security tax?
15 A Okay. Just below the adjusted gross income by one,
16 two, three, four, five lines we have "SET." Again
17 if we went to Document 6209, Section 1, it would
18 tell us that the acronym SET means self-employment
19 tax. And 42 USC 405 says that the Secretary of
20 Health and Human Services maintains all the records
21 pertaining to self-employment tax. Then also at
22 6019, or 26 CFR 1.6019, says that self-employment
23 in the Virgin Islands, and so on, is where the
24 self-employment tax is.
25 And there's also a page out of Manual 3,
51
1 which I don't have with me, the Operations Manual,
2 which states that people who are self-employed on
3 these islands are those subject to self-employment
4 tax.
5 Q Is there any other basis for that opinion?
6 A That's all I can think of at the moment.
7 Q I'm going to ask you to circle the AGI that you
8 referred to there.
9 A Okay, we're going to circle AGI. Circled.
10 Q Okay. What is the basis for your opinion that
11 Bernhoft was referred to Examination Group 1316 on
12 11/25/95?
13 A Okay. And that would be somewhere -- Let's see
14 where I got the Bernhoft transcript. There must be
15 a 420 somewhere, or a 421. And for what year -- Do
16 you know what exhibit we're looking at there,
17 ma'am?
18 MR. RAYMOND: Go to B1.
19 THE WITNESS: B1. Okay. Thank you.
20 Okay. And that date would have been 11-25, 1925.
21 There is a Transaction Code 420. Would you like me
22 to --
23 BY MS. TRISSELL:
24 Q Go ahead and circle that.
25 A -- circle that?
52
1 Q Yeah.
2 A Okay. And then with that, over to the right and as
3 part of that 420, we have AIMS, which means Audit
4 Information Management System, and then a series of
5 documents indicating a -- well, a number, a
6 sequence of numbers indicating where the audit
7 documents are maintained, and so on. And that's to
8 the immediate right of the 420. 420 means you can
9 refer to examination for audit.
10 Q What is -- Is there any other basis for that
11 opinion?
12 A No, that would be -- I take that back. If you go
13 up a little higher, it has 425, which actually
14 means that they've discontinued an audit, but it
15 also has their Source Code 24, and that's where the
16 organization comes in. I think it says
17 Organization 1316. Is that what we're talking
18 about?
19 Q Yes.
20 A So it would be just above that, 425, which is also
21 an examination code, and it gives us the
22 organization number, 1316, at that point. Would
23 you like that circled?
24 Q Yes.
25 A Okay. 425 is circled, along with the organization
53
1 code, and so on.
2 Q What documents or manuals did you rely on in coming
3 to these conclusions?
4 A The 425 would be in two manuals, both Document 6209
5 and what they call the AIMS manual, which I think
6 is 42, but that may not -- I may be a little wrong
7 on that, but my heart is in the right place here.
8 Anyway, the AIMS Manual for Audit. And so it would
9 be the combination of the two.
10 Q Okay. What is the basis for your opinion that --
11 just the next part of that paragraph regarding the
12 refusal to file an international tax return with
13 the Assistant Commissioner (International)?
14 A Okay. Let me find where I said that. You're
15 looking on my Exhibit A/2/3 or --
16 Q Yeah, just the second part of that first sentence
17 that starts "Bernhoft." Second line.
18 A Oh, okay. I think it's going to be Source Code 24.
19 Q Would you go ahead and circle that.
20 A Yeah, I have -- Well, I can circle it specifically
21 also as well. It's also part of the AIMS circle.
22 Q That's part of what you already --
23 A It's a subpart, yeah.
24 Q Okay.
25 A Now, a Source Code 24 like that is the reason
54
1 they're doing something. And so you have to go to
2 6209, it tells you what the source code means, and
3 you'll also find the same thing in the AIMS manual.
4 Q Okay. What is the basis for your opinion that
5 there is no evidence the Revenue Agent sent notices
6 requesting Bernhoft to file a return?
7 A There's nothing in here saying -- you know, nothing
8 showed up saying that we sent you a notice, a 555
9 notice, saying you're required to file.
10 Q Okay. Is there any other basis for that opinion?
11 A No. It's the absence of the code indicating --
12 It's the absence of the code indicating that they
13 did not send him a notice.
14 Q What is the basis for your next opinion that, "The
15 Puerto Rican Revenue Agent alleged Bernhoft owed
16 estate taxes"?
17 A Okay. 3,000. All right. That's going to be
18 Transaction Code 300. And 300 is an estate tax.
19 And we find that in the Operations Manual 3.
20 Q Is there any other basis for that opinion?
21 A No, but -- And those are executed by Revenue
22 Agents, and Revenue Agents all are Puerto Rican
23 Revenue Agents.
24 Q How do you know that?
25 A By 27 CFR 250.11, the definition of a revenue
55
1 agent. By the way, and we've scanned -- we have
2 all this on computer and on CD, and you scan for
3 it, and that's the one and only time that a
4 definition of a revenue agent appears. And I mean
5 scan, I mean all 50 codes.
6 Q The United States Code?
7 A Yes, ma'am.
8 Q Okay. Or the -- Are you talking about the code or
9 the regulations?
10 A Both.
11 Q What is the basis for your opinion that penalties
12 and interest related to alcohol, tobacco and
13 firearm taxes were asserted?
14 A All right. The penalties, I think, are going to be
15 all at 160, 170 and 198, I believe. And all those
16 penalties are classified between Chapters 61 and 80
17 in both the regulations and the code. Therefore,
18 they would have to be BATF penalties.
19 Q Is there any other basis for that opinion?
20 A That would be the basis.
21 Q You reference in your report TO 120-01. What is
22 that?
23 A That is a Treasury Order which established the
24 Bureau of Alcohol, Tobacco and Firearms by, I
25 believe, an Assistant Secretary of the Treasury, or
56
1 acting, or something, back in 1972, and that
2 Treasury Order says that we're creating this Bureau
3 of Alcohol, Tobacco and Firearms and transferring
4 to BATF the administration and enforcement of
5 Chapters 61 through 80.
6 Q What is the basis for your opinion that a regular
7 lien has been filed relevant to a nontaxable SFR?
8 It's on Exhibit A, Page -- it says Page 1 of 3, but
9 I think it should be 3 of 3.
10 MR. BERNHOFT: I can point you.
11 THE WITNESS: Can you find it?
12 Underneath here?
13 BY MS. TRISSELL:
14 Q Look at mine.
15 A Okay. I need to find the lien code. Okay. In
16 Exhibit B, Page 2 of 3, of the Bernhart (sic) IMF.
17 You want me to circle that for you?
18 Q Yes, please.
19 A Okay. Right here. In the center of the page
20 almost.
21 Q And what did you do with that code? Or, did you
22 look at something to determine what that code
23 meant?
24 A Well, it means a lien, and it is a Tax Class 4
25 lien. If there's a digit following the word
57
1 "lien," then it means a lien has been filed. If
2 it's -- You can have the word "lien" and nothing
3 there, which means the word "lien" appears but
4 there is no lien in force unless there is a number
5 following it, and then we have a document locater
6 number following the word "lien," which tells us
7 where this document is filed.
8 Q Did you rely on any -- What's the basis for your
9 opinion that you've got to have a number to follow
10 the "lien"?
11 A I think it's come out in US District Court
12 testimony, not only by myself but some other people
13 who were testifying in District Court, about the
14 meaning of these codes, and they said that you had
15 to have some kind of a number following the word
16 "lien" to indicate a lien had actually been filed,
17 just the word "lien" by itself does not indicate a
18 lien has been filed.
19 Q Is there any other basis for this opinion?
20 A That's my basis.
21 Q Okay. What's the basis for your opinion that Mr.
22 Bernhoft is not required to file a return?
23 A There is nothing to indicate that he's been served
24 a 555 or subsequent notice from the District
25 Director requiring him to file. And besides all
58
1 your filing requirements, the identification of
2 forms that are to be filed, where to file, when to
3 file, how to file, are all classified between
4 Chapters 61 through 80, which is delegated to the
5 Bureau of Alcohol, Tobacco and Firearms, and that
6 most of the code is delegated either to Guam,
7 Northern Mariana Islands, American Samoa, Virgin
8 Islands or Puerto Rico, and he has not been
9 involved in any kind of a taxable activity in any
10 of those geographical areas.
11 Q Is there any other basis for that opinion?
12 A That would be the basis.
13 Q And what is your basis for your final opinion in
14 Exhibit A that, "The agency alleges Bernhoft owes
15 estate taxes"?
16 A Estate taxes? All right.
17 Q The last sentence.
18 A Okay. We go down to Exhibit B, Page 3 of 3 of the
19 Bernhart transcript, we have MF STAT 21, and so
20 forth, and 26. That's an assertion of an estate
21 tax from 6209.
22 Q Would you go ahead and circle those on Exhibit 1.
23 A I'll be glad to.
24 Q And is there any other basis for that opinion?
25 A That's the only basis.
59
1 Q Okay. Keep it.
2 A Keep it? Okay.
3 MS. TRISSELL: Let's go off the record.
4 (Discussion off the record.)
5 MS. TRISSELL: Let's go on the record and
6 put that on. Just to summarize our discussion,
7 Exhibit 1 has two pages regarding the affidavit on
8 Mr. Raymond. The first of those pages has three
9 sentences of an old paragraph which shouldn't be
10 included. So, basically, the whole page that's
11 marked Exhibit C, Page 1 of 1, can be disregarded,
12 and the page after that can be remarked Exhibit C,
13 Page 1 of 1.
14 MR. BERNHOFT: Yes. Thank you.
15 BY MS. TRISSELL:
16 Q Do you have Exhibit 1 there? There it is.
17 A Oh, your Exhibit 1? Yes. Yes, I do.
18 Q I'm going to ask you if you would -- On the page
19 following the page marked Exhibit C, Page 1 of 1 --
20 A Okay. Page following C, 1 of 1, okay.
21 Q I'm going to ask you if you would mark on the
22 bottom of that exhibit, "C, Page 1 of 1." And when
23 we refer to Exhibit C, let's refer to that page.
24 All right?
25 A Gotcha.
60
1 Q All right.
2 A So marked.
3 Q All right.
4 MR. BERNHOFT: Clarity.
5 BY MS. TRISSELL:
6 Q What is the basis for your opinion that another
7 person is using the Robert Raymond social security
8 number?
9 A That would be the VAL symbol on the transcript.
10 Q Would you circle that on the Raymond transcript,
11 please.
12 A So circled.
13 Q And is there any other basis for that opinion?
14 A That would be the only one.
15 Q Okay. What is the basis for your opinion that the
16 last year in which a return was filed was '94,
17 which was the Form 1040 relevant to a Virgin
18 Islands resident?
19 A Okay. The last return filed indicator is down
20 about one-third from the top of the page on the
21 left-hand side just above those series of
22 asterisks, and it says, "LSTRET-1944," and that
23 means last return filed is for the year 1944.
24 Would you like me to circle that?
25 Q Yes, please.
61
1 MR. RAYMOND: 1994.
2 THE WITNESS: What did I say?
3 MR. RAYMOND: 44.
4 THE WITNESS: Thank you for correcting
5 me. 1994.
6 MR. RAYMOND: I wasn't paying -- I wasn't
7 filing any forms in '44, you can count on that.
8 THE WITNESS: All right. And that it was
9 a -- We have a TC 150, meaning Virgin Islands. And
10 it's Tax Class 2, which is not a taxable return.
11 You want me to circle the "2" for you?
12 BY MS. TRISSELL:
13 Q Sure.
14 A Okay.
15 Q What did you rely on in determining what the "150"
16 means and what the "2" mean?
17 A Okay. The "150" would go back to Operations Manual
18 3, the page that's already been introduced
19 indicating that TC 150 is a -- means Virgin
20 Islands. And the "2" would also go to Manual 3.
21 Manual 3 explains that only a Tax Class 6 return is
22 taxable. If you want, I'll briefly explain tax
23 classes.
24 Q Sure.
25 A Everything that's filed is given a tax class
62
1 numbered zero through 9, the ten classes, and,
2 however, there's also true tax class, of which
3 there are less than 9, but 2 is never considered
4 a -- There's nothing -- Let me put it this way.
5 There's nothing I can find to indicate Tax Class 2
6 is a taxable return. But a Tax Class 6 1040 would
7 be taxable, and there is such a thing as a Tax
8 Class 6 taxable return.
9 Q Is there anything else you relied on for this
10 opinion?
11 A That would be it.
12 Q What is the basis of your opinion that the tax
13 indicated is $7,303?
14 A Okay. About two and a half inches to the right of
15 the "TC 150" we have the number 7, comma, 303 --
16 303.00, and that would be the amount of tax that he
17 reported to be paid. And then also over to the far
18 right we have just a line, two lines below that to
19 the right -- it says, "Tax Per T/P," meaning
20 taxpayer, we have 7,303.00.
21 Q Okay.
22 A Would you like that circled?
23 Q No.
24 A Okay.
25 Q What is the basis for your opinion that the Guam
63
1 adjusted gross income is 42,000?
2 A Just below the "Tax Per T/P," the next line
3 printed, it says, "AGI 42,926.00," and adjusted
4 gross income is a reference to Chapter 62 of
5 Subtitle A, which is the Guam income tax.
6 Q Chapter 62 of what?
7 A Subtitle A of Title 26 and 26 CFR.
8 Q Is there any other basis for that opinion?
9 A That's the only opinion. That's the only basis.
10 Q And what's the basis for your opinion that the
11 Northern Mariana Islands self-employment social
12 security tax is about $4,900?
13 A Okay. Just below the term "Taxable Income," which
14 will be one, two, three, four, five, six, seven
15 lines from the bottom, it has "SET," hyphen,
16 "$4,907.00." Self-employment tax, relying upon 26
17 CFR 6017-1, that's -- and 42 USC 4205, that's
18 Northern Mariana Islands self-employment tax.
19 Q Is there any other basis for that opinion?
20 A That's the basis.
21 Q Okay. What is the basis for your opinion that Mr.
22 Raymond owed estate taxes? I guess the opinion is
23 that the Revenue Agent alleged that he owed estate
24 taxes.
25 A Yeah. On Exhibit D, 4 of 4, for the Raymond IMF,
64
1 for the year 1994, ending in December, we have MF
2 STAT Codes 20, 54, 48, 56, 22 and 26, and all of
3 those are references to an estate tax.
4 Q Okay. What is your basis for determining that
5 those are references to an estate tax? Did you
6 refer to something?
7 A Yes, that's also in Manual 3, that says MF STAT
8 codes like that are estate taxes.
9 Q Is there any other item that you referred to in
10 making this determination?
11 A No, that's the only place I know of that says that
12 they are estate taxes.
13 Q Okay. What's the basis for your opinion that a
14 regular lien was filed relevant to a nontaxable
15 SFR?
16 A Okay. Mr. Raymond has a lien indicator just up a
17 little bit from the center of the page of Exhibit
18 D, Page 1 of 4, where it has, "Lien," dash, "4,"
19 and then a document locater number indicating the
20 Tax Class 2. Tax Class 2, of course, is
21 nontaxable. And "Lien" with a number following
22 meaning a lien has been filed.
23 Q Is that the same basis we've already discussed with
24 reference to Mr. Bernhoft?
25 A Yes, it is.
65
1 Q Okay. And what's your basis for the opinion that
2 Mr. Raymond made several payments of approximately
3 $218?
4 A Okay. Go over to Exhibit D, Page 2 of 4, and we
5 have a Transaction Code 670, several -- and it's
6 repeated, and 670 is a payment, and that's in
7 Document 6209. Would you like me to tell you what
8 page in Document 6209 means that 670 is a payment?
9 Q No, that's fine.
10 A Okay.
11 Q Was there any other basis for that opinion?
12 A No, just Document 6209.
13 Q Okay. Have you completed your work on the Raymond
14 and Bernhoft expert opinion reports?
15 A Everything that I have done has been put into the
16 affidavit. And I have not been asked to do
17 anything additional.
18 Q Okay.
19 MR. BERNHOFT: We just note for the
20 record that we would reserve the right to
21 supplement the actual expert witness report if
22 something comes up, and that would be subject to
23 your objection, I suppose, and whatnot.
24 BY MS. TRISSELL:
25 Q You have no plans to supplement the report at this
66
1 time, do you?
2 MR. BERNHOFT: Mr. Bentson wouldn't know
3 whether I would or wouldn't.
4 MS. TRISSELL: I'm asking if he has any
5 plans to.
6 MR. BERNHOFT: Yeah, but he's not going
7 to have any plans to supplement the expert witness
8 report unless I would ask him to because he is in
9 my employ, so that would be a party decision. You
10 can ask me.
11 MS. TRISSELL: I am wondering if he wants
12 to supplement his report at this time.
13 MR. BERNHOFT: Okay. That's a different
14 question. Okay.
15 THE WITNESS: No, I think what we needed
16 to supplement is get that exhibit thing
17 straightened out, as we've done, but I don't have
18 any additional plans at the moment.
19 MR. BERNHOFT: If I might, I wasn't
20 trying to be difficult there. What I thought you
21 meant there was that Mr. Raymond and I as parties
22 reserve the right to have Mr. Bentson give expert
23 opinions with respect to additional matters.
24 Specifically we've requested those IMF transcripts
25 from some of the deponents, and if in fact we do
67
1 get a motion to compel granted by the court and we
2 get those IMFs, we would reserve the right to have
3 Mr. Bentson testify about those transcripts.
4 That's what I thought you were referring to, and
5 that would be a party decision. I apologize if
6 that came off as argumentative.
7 BY MS. TRISSELL:
8 Q Let's go over your work history.
9 A Okay.
10 Q What is your present employment status?
11 A I'm not employed doing anything except when people
12 like Mr. Bernhoft and Raymond ask me to do some
13 work for them, is all I do.
14 Q Okay. Are you retired?
15 A No.
16 Q What work have you done in the past?
17 A Okay. Basically my history was one involved in
18 what we call power transmission, but it was
19 industrial other than automotive or truck or
20 something, but it had to do with providing
21 manufacturing equipment for various things.
22 Q Do you still do that type of work?
23 A No. I got out of that in 1972.
24 Q How long did you do power transmission work?
25 A From '52 to '72.
68
1 Q What jobs did you hold during that time, starting
2 with 1952?
3 A I worked for the Central Supply Company in Fresno,
4 California, and then I moved to Phoenix and went to
5 work for what was called Harris Bearing.
6 Q When was that move?
7 A In 1960.
8 Q How long did you work for Harris Bearing?
9 A Until 1965. Then I worked for -- That was in
10 Phoenix. And I stayed in Phoenix and worked for a
11 place in Los Angeles called Metropolitan Supply.
12 Q How long did you work for Metropolitan Supply?
13 A Until 1972.
14 Q How did your work at Central Supply relate to the
15 work that you did on this case, if at all?
16 A Absolutely no relationship whatsoever.
17 Q How did your work at Harris Bearing relate to the
18 work you did on this case?
19 A No relationship.
20 Q How did your work at Metropolitan Supply relate to
21 the work you did on this case?
22 A No relationship.
23 Q Were you employed after 1972?
24 A No.
25 Q How did you earn a living after 1972?
69
1 A Basically, I just -- I got involved -- I got in
2 trouble with this Puerto Rican/Virgin Islands
3 agency called Internal Revenue Service over a man
4 by the name of Bill Rehnquist. And Bill is now
5 Chief Justice of the Supreme Court. And I was
6 threatened by the IRS that if I were to give some
7 testimony for him, to clear him of some false
8 charges, that they were going to audit me, and so
9 forth. I really didn't think they were going to.
10 I thought they can't do that. But it started.
11 And so I -- I decided that I needed to
12 learn about the agency, so I started using the
13 Freedom of Information Act, and other people wanted
14 me to help them with Freedom of Information Act
15 requests, and so forth, and so that's how I got
16 here.
17 Q What was your relationship with Chief Justice
18 Renquist in 1972?
19 A We really didn't have a relationship. I happened
20 to know him, but just -- Let me put it we were
21 friendly but not friends at that -- We weren't
22 enemies. We just -- I would just see him at
23 certain functions and say hello, that's all.
24 But he was accused of doing some things
25 in 1962, and I could prove that he was not there to
70
1 do them, and, therefore, that's how my testimony
2 was provided to the Senate Judiciary Committee.
3 Q What was he accused of doing?
4 A He was accused of preventing racial minorities from
5 voting.
6 Q And so you testified in front of the Senate
7 Judiciary Committee?
8 A My testimony was provided to them, but it went
9 through the FBI. I didn't want to go to
10 Washington. You know, I'm not that dumb. So I
11 just -- I just went to the FBI. They allowed me to
12 do that, and just give it to the FBI in Phoenix,
13 and then they -- It was kind of fun. They stayed
14 open late at night for me.
15 MR. BERNHOFT: Service with a smile.
16 BY MS. TRISSELL:
17 Q Did they take your testimony under oath?
18 A Oh, yes. Yes. I had two -- Let's see, the FBI
19 agent in charge was there, and a couple of his
20 assistants. In 1986 I had to do it a second time.
21 And a couple of retired or former US Attorneys, one
22 Republican, one Democrat, John Conlon, a former
23 congressional Representative, and my wife was there
24 doing her knitting.
25 Q Now, how did you come to know that Mr. Renquist was
71
1 unable to do these things he was charged with
2 doing?
3 A Okay. I was at that place, and I kept a record of
4 everyone who entered the premises, a written
5 record. And that was in 1962, and in 1971, when he
6 was nominated, I just still happened to have the
7 record.
8 Q Is this at Harris Bearing, or what place are you
9 talking about?
10 A Well, no, it was a voting place, a voting precinct
11 in Phoenix.
12 Q Oh, so you were one of the like voting --
13 A I was a voting official, yeah.
14 Q I got you. Okay.
15 A I didn't keep a record thinking that he was ever
16 going to be nominated to the Supreme Court. I
17 didn't have a clue in '72 (sic) what would happen
18 to him in '71, you know. I just --
19 Q What was his relation with the voting precinct?
20 A I really don't know. I couldn't tell you that.
21 It's just that he was accused of it, and I
22 thought -- You know, I went down in the basement, I
23 actually found this file folder with all that stuff
24 in it from back then, and here was my little
25 handwritten list of everybody who entered the
72
1 precinct, and so I just went with that to the FBI
2 and, "Here, you know, this is it." I couldn't
3 prove where he was, by the way. I couldn't say he
4 was doing this, that or the other thing. I had no
5 idea. I only know that he was not there. That was
6 all.
7 Q Okay. And you said something about someone from an
8 agency threatened you?
9 A Yeah, I received, I think, four telephone calls
10 from someone saying that they were from the
11 Internal Revenue Service, and that if I were to
12 provide this testimony, that they were going to
13 audit me, and so on and so forth. And I know it
14 sounds a little childish, but I didn't believe
15 them, I thought, "They can't do that."
16 MR. BERNHOFT: Silly you.
17 THE WITNESS: Silly me. And then in
18 19 -- Let's see, I think it was February of '73 the
19 audits started and all that.
20 BY MS. TRISSELL:
21 Q How were you earning your living after 1972?
22 A Just doing FOIA work for other people, and so on.
23 Q And how long did you earn your living by doing FOIA
24 work?
25 A Still am.
73
1 Q And how does that FOIA work relate to the work you
2 did on this case?
3 A Well, in doing the FOIA work, I was getting
4 information about the agency, I was trying to find
5 out what this agency is, and so forth, so I started
6 obtaining the manuals. And then in 1975 we had the
7 Privacy Act, which required agencies to maintain
8 records in a system of records, and I obtained a
9 copy of those system of records, and I started
10 making a Privacy Act request for almost every one.
11 Some, obviously, would never be relevant, like they
12 were about employees and their medical plans. Of
13 course, I didn't ask for anything like that.
14 But we came to this one called IMF, and I
15 thought, gee, that looks interesting. So I
16 requested a copy of the IMF pertaining to myself.
17 It was denied. I appealed it. And then they
18 decided -- The denial was based on the fact that
19 IRS believed that it was a record just maintained
20 for internal use. And so we decided to have a
21 conference about it. I went to the conference, and
22 my sophisticated defense was, "It has my name on
23 it, so I'm entitled to a copy." And the man in
24 charge of disclosures said, "He's right, give him a
25 copy."
74
1 So I get this thing, and it's like, "So
2 what, it's all in code." So then I had to begin
3 the process of finding out what it told me, what
4 the codes meant. That actually started out first
5 like a line at a time off the page, because I had
6 no idea that we had this -- what is it, a 500 page
7 book or something. I had no concept of the size of
8 the book. And -- Or the name of it, or the
9 identity of it, anything.
10 So I was just, "Send me a copy of the
11 document that indicates what so-and-so means." And
12 they would do it. They would send me -- They might
13 take everything off that page except what that code
14 meant, but that's correctly answering the request.
15 They did the right thing. So then the next time I
16 would say, "Okay, send me a copy of the page that
17 indicates what this code means, but I want the
18 whole page." They would comply. Okay. Gee, then
19 I realized that there's -- the pages are numbered
20 differently but -- So I said, "Well, okay." The
21 third request was like, "I want a copy of the page
22 that tells me what this code means, and I want the
23 ten pages prior to and the ten pages following."
24 They complied.
25 And then I realized what they're talking
75
1 about are sections, or chapters, or something, so I
2 would get like the whole section. And that took up
3 the balance of the '70s, I think. And about 1982,
4 thereabouts, I was able to obtain a complete copy
5 of the 6209. And I thought, "Wow."
6 So I sat down, and I simply read it
7 through line by line four times before I made any
8 judgments or tried to use it. Because in using a
9 6209, you frequently have to go from Section 13 to
10 Section 2, to Section 4, to Section 12 to find out
11 what this is really all about. After a while, of
12 course, you don't have to do that, but at first you
13 do. You have to study the acronyms, and you have
14 to study about document locater numbers, and that's
15 quite a study. And all of these other things.
16 So I just -- I just read it through four
17 times before I started to try to use it. Okay.
18 Here we go.
19 And -- But an IMF is not the crown of
20 what you need. It's really just kind of a starting
21 point. Because it's like a road map explaining to
22 you what other activities are taking place within
23 the agency concerning this person. So then you
24 have to go and then obtain the records about
25 something else. Or either about the lien, the
76
1 audit, the criminal investigation, whatever we're
2 doing.
3 Q Is there any other way that you earned a living
4 between 1972 and now other than doing FOIA work?
5 A Yeah, I did some janitor work for a while. The
6 reason, I could do that at night, or in the
7 evening, and it let me go to law libraries and
8 study or do these other things during the day, and
9 that worked out very well.
10 Q Did that work relate in any way to the work that
11 you've done in this case?
12 A Not a bit. No, cleaning toilets has nothing to do
13 with IMFs.
14 Q Have you written any articles regarding
15 interpretation of transcripts?
16 A Any articles?
17 Q Articles, books, dissertations?
18 A Well, books, yes. Actually, I call it a manual.
19 But, no, that's not how to decode them. I haven't
20 done that. I've just -- I put out some books on
21 how to use the Freedom of Information Act. First
22 of all, there's so much stupid information floating
23 around about how to do it, and they were doing
24 everything except what the regulations required.
25 And I understand that the agency could make
77
1 regulations. In fact, the code says -- or, the
2 Congress said that each agency will make
3 regulations about how to make a request. And so
4 that's what you do. That's what Congress
5 authorized.
6 And the regulations, by the way, I do not
7 feel that they're unreasonable, or unjust, or
8 anything. I think they're all quite simple, easy
9 to comply with, straightforward, just do this. So
10 I wrote a manual about FOIA, but I haven't -- I
11 don't think I've written anything about how to use
12 the codes. I put on a couple of classes telling
13 people how to decode.
14 Q I'll get to that.
15 A Okay.
16 Q When did you write the book on FOIA?
17 A Oh, the first one was back in -- sometime in the
18 '70s. I don't remember what year.
19 Q And have you revised that or written another one?
20 A Well, I've revised it several times.
21 Q Okay. Have you written any other articles, books
22 or dissertations that relate to the work you've
23 done in this case?
24 A Well, let's see, I took part in a -- A guy by the
25 name of Bill Cooper was putting out a newspaper, or
78
1 newsletter, or something, and I provided him some
2 information that he published. We did that
3 jointly. And I think I provided more exhibits than
4 anything else but --
5 Q Was that information related to FOIA or related to
6 transcript interpretation?
7 A Neither one.
8 Q What was it?
9 A It was just about some things about IRS, IRSs,
10 plural.
11 Q What courses have you taken that relate to the work
12 you've done in this case?
13 A Absolutely none.
14 Q What courses have you taught that relate to the
15 work that you've done in this case?
16 A I just had a couple of classes of people who wanted
17 to learn how to use the 6209, so I provided them
18 with 6209 and 676, AIMS, and 1100, I think. Those
19 four go into the class. And so that they
20 understand what these codes mean and how to
21 correctly decipher them.
22 Q Was that course sponsored by an institution of
23 higher learning or --
24 A No, just somebody in an area says, "I have got some
25 people here who want to learn, would you come," and
79
1 the answer is yes. I don't even go out and seek
2 them or ask somebody -- I do not go out and seek
3 students for this. It's just somebody calls me and
4 says they want to do it, then I do it.
5 Q Were educational credit hours offered --
6 A No.
7 Q -- with any -- with respect to any of these
8 courses?
9 A No. They either catch on or they don't. And some
10 of them don't, by the way.
11 Q What speeches have you given on topics that relate
12 to the work you've done on this case?
13 A Speeches. Gosh. I did one in Cincinnati last
14 September. Must have been September because the
15 weather was halfway decent. And there might have
16 been something at some time earlier, but I don't
17 recall. I'm not going to say I didn't, but I just
18 can't recall anything else about the subject.
19 Q So it's a rare occurrence that you give a speech --
20 A Yeah.
21 Q -- on the area?
22 A Yeah. Yeah.
23 Q Okay. Are there any professional organizations or
24 societies that you joined that relate to the work
25 you've done on this case?
80
1 A Yes, I'm a member of the American Society of Access
2 Professionals, which consists mostly of the
3 disclosure officers of the various federal
4 agencies. But they publish some good information
5 about disclosure laws, and Supreme Court decisions
6 pertaining to certain disclosure laws, and what can
7 and cannot be released, so it's a help in knowing
8 what is available or not available. And I've gone
9 to some of their conventions, and so forth.
10 Also, I was invited by the American Bar
11 Association to attend the 25th anniversary
12 convention about the Freedom of Information Act in
13 Washington, DC, a few years ago. I felt pretty
14 good the American Bar Association knew about me and
15 sent me an invitation.
16 MR. BERNHOFT: That's very impressive.
17 BY MS. TRISSELL:
18 Q Did you attend?
19 A Sure.
20 Q Did you speak or give a lecture?
21 A No. No. I didn't speak, uhn-uhn.
22 Q Are there any other professional organizations or
23 societies that you're a member of that relate to
24 the work you've done on this case?
25 A International Who's Who.
81
1 Q Any others?
2 A That's it. I'm really not much of a joiner. I
3 have gone for years without belonging to anything,
4 and then I -- but I did join the American Society
5 of Access Professionals. I suppose that's been
6 close to ten years.
7 Q Have you done any studies that relate to the work
8 you've done on this case?
9 A I don't know what you mean by "studies." I study
10 more than you'd ever believe, but it's not an
11 official course.
12 Q Anything -- I'm thinking any studies as a noun,
13 like a written document. Not necessarily something
14 that was published, but a finding or research
15 study?
16 A Well, I study material provided by the American
17 Society of Access Professionals when they have
18 something.
19 Q But you yourself haven't created any?
20 A No. And then there's people who put out -- and
21 their only job is to like create -- they don't
22 create, but they gather and publish decisions about
23 the Freedom of Information Act. And, by the way, I
24 shall let you know that you'll see Bentson versus
25 Commissioner in those, and I'm Bentson.
82
1 Q Is that --
2 A I love suing those dirty bastards. You understand.
3 And I win.
4 Q Was that a FOIA-related suit?
5 A Yes, ma'am.
6 Q All right. Let's talk about the depositions you've
7 given in the last seven years.
8 A I'm also equating a deposition with being examined
9 or cross-examined in court. Is that --
10 Q Let's separate them out, and do depositions first,
11 and then we'll talk about testimony in court
12 proceedings or judicial proceedings.
13 A Okay.
14 Q So you're being deposed now.
15 A Yeah. I was deposed in Phoenix about four, five
16 months ago.
17 Q What case was that?
18 A It was a civil case. I believe at this time,
19 because it's unsettled, I don't really want to --
20 I'll tell you just, you know, it's happening, but I
21 don't want to go further than that. If it's okay,
22 I'll consider it private.
23 Q Is it a -- Does your testimony relate to the work
24 that you did in this case?
25 A No.
83
1 Q Okay. When you say it's private, is it private to
2 you?
3 A Yeah.
4 Q Okay. I'm more interested in depositions where you
5 were testifying in a manner similar to what you did
6 here today.
7 A I don't think I've done any depositions about --
8 comparable to this, no.
9 Q Okay. This was your first deposition as an expert
10 witness?
11 A I would say yes. Now, wait. If you're in --
12 before a grand jury, that would be testimony in a
13 type of court, not a deposition; is that right?
14 Q Right. But grand jury testimony shouldn't be
15 disclosed.
16 A Well, I understand, but I was just going to say
17 that that wouldn't be a deposition, that would just
18 be testimony in a type of court proceeding,
19 wouldn't it?
20 Q Yeah.
21 A So I've had that, so that's not a deposition.
22 Q That's not a deposition. So let's just run through
23 your depositions and make sure there aren't any
24 others. We've talked about this one. We've talked
25 about the one in Phoenix. When were the other
84
1 times -- When were the other times you have been
2 deposed?
3 A I don't think there are any other actual
4 depositions. I was -- When you said depositions
5 before, I was equating it with also testifying in
6 court, and you say you want to separate those out.
7 Q Okay. Let's go now to court testimony. When was
8 the last time you testified in court?
9 A Indiana, bankruptcy court, just about two years
10 ago. And Indiana's weather is almost as nice as
11 Milwaukee's.
12 Q That was 1998, '7?
13 A '7.
14 Q Do you know what the name of that case was?
15 A Yes, as a matter of fact, I do. Here it is. The
16 guy's name is Carl Carson, and the case number is
17 96-71580BHL-13, February of 1997.
18 Q Do you have a copy of your testimony in that case?
19 A No, I don't.
20 Q What was the substance of your testimony?
21 A The substance of the testimony was to talk about
22 taxes, what the code required about filing, and
23 paying, and liability, et cetera.
24 Q Did you interpret any transcripts during that
25 testimony, or as the basis for any of the testimony
85
1 you gave?
2 A I don't think so. But it might have been. I
3 testified for a long time. And, of course, it's
4 bankruptcy court, so the judge asks questions. But
5 I -- I don't think a transcript was discussed. Not
6 to my recollection.
7 Q On whose behalf did you testify?
8 A His name was Carl Carson.
9 Q So the plaintiff in the suit called you?
10 A Um-hum.
11 Q Okay. And what was the nature of the lawsuit?
12 A Bankruptcy.
13 Q Was it an adversary proceeding?
14 A I have no idea. It was just -- It was not the
15 first proceeding. It had gone for a while, and he
16 asked me to come testify about some things, and I
17 did, that's all.
18 Q Do you know what the court was trying to
19 determine --
20 A No.
21 Q -- in the bankruptcy?
22 A (Witness shakes head.)
23 Q Okay. Did you determine that Mr. Carson did not
24 owe any taxes?
25 A I don't know if we talked about how much he owed or
86
1 not. I don't -- Basically, I went through Chapter
2 61 through 80 for the most part for the court.
3 Q Of title what?
4 A Of Title 26 CFR and 26 USC. That was the primary
5 basis of my testimony. And too much has happened
6 since to probably give you any more detail and do
7 it accurately.
8 Q So were you basically interpreting the United
9 States Code and Code of Federal Regulations?
10 A That or just repeating them.
11 Q What else was I going to ask. Oh, were you
12 qualified as an expert witness?
13 A Yes.
14 Q And what was the area of your expertise?
15 A Well, the judge asked me some questions about what
16 I did, and what I had done, so on and so forth, and
17 I explained how I had read the entire Title 26, the
18 code from cover to cover, and then I read the
19 regulations from cover to cover. I was prepared to
20 go on, and he said, "Well, anybody that's read the
21 entire code is an expert in this court," and that
22 was the end of it, so I went ahead and testified.
23 Q What was -- Do you remember the judge?
24 A No, I don't.
25 Q Okay.
87
1 A I assume that those were his initials on this
2 thing, though.
3 Q BHL?
4 A Yeah. That often is the identification of the
5 judge to which the case is assigned.
6 Q Did anyone challenge your qualification as an
7 expert witness in that proceeding?
8 A Well, there was an Assistant US Attorney there, and
9 I don't think she did, no.
10 Q All right. What other times have you testified in
11 court?
12 A In Tucson. Oh, are we going back. I'm going to
13 say about 1980, plus or minus some years, if you
14 want it right on the head, for example. And the
15 man's name was De Ment, and that, I believe, was a
16 Freedom of Information Act case.
17 Q How do you spell the guy's name?
18 A Capital D, small E, space, capital M, small E-N-T.
19 Q How did that testimony relate to the work you did
20 in this case?
21 A Well, I think that is part of a Freedom of
22 Information Act lawsuit.
23 Q Was that in federal court?
24 A Yes, in Tucson.
25 Q Were you qualified as an expert witness?
88
1 A I don't know whether I was qualified as an expert
2 or a fact witness. And in these cases it's been
3 both, and it usually doesn't make any difference
4 because my testimony is, "The book says this," and
5 so on, which some judges consider to be a fact
6 witness. But some have been fact and some have
7 been expert.
8 There was another case down in Tucson --
9 You know, maybe -- maybe that was expert, but I'm
10 not real sure, so I'm not going to say it was
11 classified as an expert. I think I testified for
12 someone else down there by the name of Burns,
13 B-U-R-N-S, and maybe I was determined to be an
14 expert in that case, but I'm not really sure. That
15 was also way too long ago. We're talking almost 20
16 years, gee. And you were, what, a gleam in your
17 daddy's eye 20 years ago?
18 Q You know how to flatter.
19 A You learn something in 68 years, huh?
20 And then there have been, let's see, a
21 case in Michigan.
22 Q Let's focus --
23 A Okay.
24 Q -- finish up with the De Ment case. You said you
25 don't know if you were qualified as an expert?
89
1 A Yeah, I don't recall whether he said expert or not.
2 Q Do you have a copy of your testimony?
3 A No, I don't.
4 Q Did anyone challenge your qualifications to testify
5 as an expert?
6 A Yeah, maybe, but I don't -- I don't recall if they
7 challenged or not.
8 Q And the Burns case, that was also in --
9 A In Tucson.
10 Q In federal court?
11 A Yes.
12 Q Do you know what time period?
13 A Early '80s.
14 Q Do you know how the case was captioned?
15 A It was a complaint for injunctive relief relative
16 to the Freedom of Information Act.
17 Q Burns versus?
18 A Commissioner of Internal Revenue.
19 Q Was that also a FOIA-related case?
20 A Yes.
21 Q Were you qualified as an expert in that case?
22 A I think I was. But I really am not sure. You
23 know, half the time when the judge -- he mumbles,
24 and I can hardly figure out what he's saying
25 anyway, so -- But I went ahead and testified either
90
1 as fact or expert, whatever it was.
2 Q Do you have a copy of your testimony?
3 A No, I don't.
4 Q What was the substance of your testimony?
5 A That he was entitled to certain documents that he
6 had requested.
7 Q Was that testimony based again on 26 CFR and 26
8 USC?
9 A Well, it was based -- No, it was basically based on
10 Internal Revenue Manual 1272, which is the
11 disclosure manual, and 5 USC 552 and 552A.
12 Q Okay. I don't think I asked you the substance of
13 your testimony in the De Ment case.
14 A I'm sure that was also the Freedom of Information
15 Act and whether or not he was entitled to a certain
16 document.
17 Q And do you know how the De Ment case was captioned?
18 A Well, I'm sure it would have been De Ment versus
19 Commissioner of Internal Revenue.
20 Q Okay. You also mentioned Michigan as a place
21 you've testified?
22 A Yeah, that was a criminal tax case. And I hardly
23 did any testimony there. God, the US Attorney
24 asked me about everything except what I did.
25 Q Who called you as a witness?
91
1 A Larry Becraft, a lawyer from Alabama.
2 MR. BERNHOFT: Huntsville, I believe.
3 THE WITNESS: Right, Huntsville, Alabama.
4 BY MS. TRISSELL:
5 Q How do you spell his last name?
6 A B-E-C-R-A-F-T.
7 MR. BERNHOFT: His formal Christian name
8 is Lowell H. Becraft.
9 BY MS. TRISSELL:
10 Q Do you remember how the case was captioned?
11 A No, I never saw, but I'm going to assume it's going
12 to be United States of America versus whatever that
13 man's name was.
14 Q What was the substance of your testimony?
15 A I have been trying to remember. And I don't know
16 what questions I got asked in that that were of any
17 significance. That was a long time ago, too. I
18 really don't -- I don't think it was about the
19 Freedom of Information Act, though. It was
20 something else. But it might have been associated
21 with it perhaps.
22 Q Do you remember what time period this was?
23 A A long time ago.
24 Q In relation to the De Ment and the Burns case was
25 it before or after?
92
1 A After.
2 Q Okay. Were you qualified as an expert witness in
3 that -- in the Becraft case?
4 A I don't know whether the judge said one way -- He
5 would have said one or the other, but I don't
6 recall.
7 Q Do you have a copy of your testimony from that
8 case?
9 A No, I don't.
10 Q Did anyone challenge your qualifications to be an
11 expert witness?
12 A I think I was voir dired for a while by the
13 Assistant US Attorney, I'm sure.
14 Q Were you aware if they filed a formal motion to
15 strike you as an expert?
16 A Not to my knowledge, but I don't know.
17 Q Okay. We've spoke about four court cases where
18 you've testified. Are there any others?
19 A Yeah, there's one in Baltimore, Maryland, about
20 several years ago. I don't recall his name either.
21 United States of America versus someone.
22 Q Approximately when was that case?
23 A Early '90s.
24 Q What was the substance of your testimony?
25 A I think that was about a transcript that the
93
1 government had introduced.
2 Q Were you qualified as a witness -- an expert
3 witness in that case?
4 A You know, I think I was, because the judge said
5 something about he could give us his opinions or
6 something. I think that would indicate an expert.
7 But, you know, I -- There's only one time --
8 Although there have been several when I know I was
9 considered an expert, there was only one time I
10 really remember a judge saying -- or, two times,
11 the bankruptcy case and then with Judge Finesilver
12 in Denver, Colorado. Then, no, there's another
13 judge in Colorado who said the same thing, that I
14 could give the court his opinion, that I was an
15 expert. But they said it so loud and hard, you
16 know, you could still hear it.
17 Q So in Baltimore you were allowed to testify but --
18 A Sometimes I could give an opinion and sometimes
19 not. So any time that the judge said I had an
20 opinion, I am sure I would have had to be qualified
21 as an expert in the judge's opinion. Otherwise you
22 can't give the opinion.
23 Q I'm more interested in when the judge actually
24 qualified you as an expert rather than when he just
25 said your opinion can be given.
94
1 A Like I said, I don't remember all of them. Some
2 did and some did not. Probably about half and
3 half.
4 Q And in Baltimore the judge didn't qualify you
5 specifically as an expert?
6 A I think he did. I think so. But I'm not positive.
7 Q Okay. Do you have a copy of your testimony in that
8 case?
9 A No.
10 Q Who called you as a witness in that case in
11 Baltimore?
12 A Okay. A well-known lawyer out of Washington, DC,
13 who will tell you that he lives right across the
14 street from the Supreme Court, and he's written
15 some books on the JFK assassination. Anyone
16 remember his name? You live in DC, don't you?
17 Don't you know all the lawyers there?
18 Q There are far too many.
19 A I can't think of his name.
20 Q If it comes to you --
21 A Yeah, I'll be glad to tell you.
22 Q Okay. All right. You mentioned a case in Denver,
23 Colorado?
24 A Um-hum.
25 Q What time period was that case?
95
1 A Oh, early '80s, I think. Yeah. That was
2 Kilpatric, the largest criminal tax case in the
3 history of the United States.
4 Q United States versus Kilpatric?
5 A Yeah. Kilpatric, I think it was.
6 Q Were you -- Who called you as a witness?
7 A I'm going to wish I had taken a memory lesson on
8 names after today. I can't think of the lawyer's
9 name, but if I can, I'll be -- I'll let you know.
10 Q Did you testify on behalf of Mr. Kilpatric?
11 A Of Kilpatric, yeah. The lawyer called me in to
12 testify. And, God, I loved it. It was just
13 before -- It was a bench trial, you know, and so
14 the judge was asking me most of the questions, and
15 he got through questioning me, and he had said,
16 "Okay, I'm ready to give" -- "make my decision."
17 And the US Attorney stands up and says, "Your
18 Honor, the government would like to examine Mr.
19 Bentson." The judge says, "No," he says, "I've
20 been questioning him, and I'm satisfied with his
21 answers." And the US Attorney, being at least --
22 at least a carload minus, you know, a full deck,
23 stands up and argues with the judge, and the judge
24 just about cut him to ribbons. I just sat on the
25 witness stand and watched the guy bleed. He said,
96
1 "I told you no."
2 Q Was this Judge Finesilver?
3 A No, that wasn't Finesilver. That was someone else.
4 And they acquitted the guy, so I really felt good.
5 Finesilver was a case about an airline
6 pilot, and the judge -- I was testifying pretrial,
7 yeah, like 15 minutes before the trial was to
8 commence, about what the government gave to the
9 defendant on discovery in relationship to what the
10 judge ordered them to provide. And I --
11 Q So you weren't testifying during the trial, were
12 you?
13 A I would call it pretrial, but it was relevant to
14 the trial.
15 Q It was more a hearing on a discovery dispute?
16 A Yeah, and the judge specifically -- I remember that
17 real clear, because he said, "Well, we'll consider
18 him an expert, and he can give us his opinions if
19 he wants to." And he was very clear -- that was a
20 real clear, "He is an expert," and the case was
21 dismissed for lack of proper discovery to comply
22 with the judge's order.
23 Q Were any of these other cases that we talked about,
24 in Indiana, Tucson, Tucson, Michigan, and
25 Baltimore -- Were you testifying in any of those
97
1 cases on a motion or discovery dispute rather than
2 the merits of the trial itself?
3 A No, I think that the only one about discovery was
4 the case about the airline pilot before Judge
5 Finesilver, and the others were -- I would often
6 testify about what an IMF or some other transcript
7 would say, in that nature.
8 Q You just mentioned that Judge Finesilver was
9 involved in the Kilpatric case?
10 A No, Finesilver was involved with the airline pilot,
11 whatever his name was, and a different judge was
12 the Kilpatric case.
13 Q Okay. So the Kilpatric case was not the one that
14 regarded the discovery dispute?
15 A No. No. Kilpatric I was testifying about what a
16 lot of transcripts said. The -- In that case the
17 court ordered the agency to give the defendant
18 these IMF transcripts concerning all of the
19 witnesses. And so I was on the witness stand
20 telling them what the transcript said about not
21 only Kil -- I think Kilpatric was also involved --
22 what it said about the witnesses.
23 Q What was the United States versus Kilpatric about?
24 A It was a tax case, criminal tax case. He was
25 selling tax shelters pertaining to oil, shale, or
98
1 something like that, in the Colorado area, and so
2 on. And it was -- God, you talk about big money,
3 hundreds of millions.
4 Q Do you have a copy of your testimony in that case?
5 A No, I don't.
6 Q Okay. Were you qualified as an expert witness in
7 the Kilpatric case?
8 A The answer is, I think so.
9 Q Are you sure?
10 A No, I'm not sure.
11 Q Okay. What other testimony have you given in
12 court?
13 A Okay. I testified in the Alan Stang case in Los
14 Angeles.
15 Q How do you spell Stang?
16 A S-T-A-N-G.
17 Q When was that?
18 A I knew that was the next question. I've been
19 trying to figure it out. I am going to say late
20 '70s.
21 Q What was the substance of your testimony?
22 A We were trying to obtain additional transcripts
23 about Mr. Stang, and my testimony was related to
24 why we should have these additional transcripts.
25 Q Was that FOIA related?
99
1 A Not FOIA related, no. It would have been discovery
2 related.
3 Q Were you testifying at the actual trial on the
4 merits or in relation to a discovery motion?
5 A Well, it was -- It would have been a discovery
6 motion made during the trial.
7 Q Okay. Do you remember how that case was captioned?
8 A I suppose the United States of America versus
9 Stang, would be my guess.
10 Q Okay.
11 A And then there was an appeal thing up in
12 Sacramento. A doctor had already been convicted
13 for failure to file, and yet he had a transcript
14 which said he did file. Went back to discover that
15 for the years in question he literally did file,
16 but he thought he hadn't, so he told the court he
17 didn't, and why he didn't have to, and he was
18 convicted, so he wanted to go back and get a new
19 trial based on the transcript, but it was too late.
20 The judge was right in denying that.
21 Q Were you qualified as an expert witness in United
22 States versus Stang?
23 A Stang? Way too long ago to remember. I don't
24 know.
25 Q Do you have a copy of your testimony?
100
1 A No, I don't.
2 Q Okay. What other cases have you testified?
3 A The one in Sacramento I just mentioned, and there
4 was one in Indiana, too. I don't remember the
5 guy's name even. I don't remember. And then again
6 that was just testifying about the transcript.
7 Q When was the Sacramento case?
8 A Early '80s.
9 Q And when was the Indiana case?
10 A Late '70s.
11 Q What was the substance of your testimony in the
12 Sacramento case?
13 A That the transcript -- He was trying to get a new
14 trial, and had made a motion for reconsideration, I
15 think, or something like that.
16 Q Do you remember the guy's name?
17 A No.
18 Q Were you qualified as an expert in that case?
19 A The answer is, I think so.
20 Q Are you sure?
21 A No.
22 Q Okay. What was the substance of your testimony in
23 the Indiana case?
24 A Just a -- taking off of a transcript, explaining
25 what an IMF transcript said.
101
1 Q Were you qualified as an expert in that case?
2 A I don't recall.
3 Q Just to summarize, you're sure that you were
4 qualified as an expert witness in the Indiana
5 bankruptcy case, Carson versus IRS?
6 A Yes.
7 Q And also in the airline pilot case in Denver,
8 Colorado?
9 A Yes.
10 Q Are there any others?
11 A I think Kilpatric was expert.
12 Q You're sure it was?
13 A I'm pretty sure. Let's run that one up to like 95
14 percent sure or something.
15 Q Okay.
16 A And --
17 Q And are there any others that you say you're sure
18 you're qualified as an expert?
19 A I don't think I should say I'm sure of them.
20 Q Okay.
21 A I'm sure there were others, but I don't know which
22 ones. I don't recall anymore.
23 Q Okay. Any other court testimony?
24 A Oh, yeah. There have been about 16, 18 cases. Oh,
25 there's a bankruptcy case in Dallas, Texas, for a
102
1 guy, and I don't remember his name, I'm sorry, or
2 the bankruptcy judge, and the judge there said I
3 was an expert. I forgot about that one.
4 Q Was it an adversary proceeding or what was the
5 issue before the court?
6 A It was just bankruptcy something. I don't know
7 what kind of a hearing it was.
8 Q Do you remember the debtor's name?
9 A No, I don't.
10 Q Do you remember the judge's name?
11 A No.
12 Q Do you remember the time period?
13 A Yeah, probably about later '80s.
14 Q What was the substance of your testimony?
15 A Again to transcribe a computerized transcript.
16 Q Do you mean explain it and explain the codes?
17 A Yes, um-hum.
18 Q Okay. Do you remember who called you as a witness?
19 A The debtor.
20 Q Were your expert qualifications challenged?
21 A I'm going to say I don't think so.
22 Q Any other cases where you have been qualified as an
23 expert witness?
24 A Probably, but I don't remember what they are. I
25 don't even remember all the cases now.
103
1 MS. TRISSELL: Okay. I have got maybe 15
2 more minutes. I just want to plow ahead, if that's
3 all right.
4 (Discussion off the record.)
5 BY MS. TRISSELL:
6 Q Let's get back on the record. Do you have copies
7 of any sworn testimony that you've given?
8 A No, I don't, uhn-uhn.
9 Q Let's go over your educational background. Did you
10 graduate from high school?
11 A No.
12 Q Do you have a GED?
13 A No.
14 Q Do you have any sort of formal education?
15 A Well, just up to about 11 -- 11, not quite 12
16 years.
17 Q Okay.
18 A I have a lot of other technical education, but it's
19 not related to taxes or the Freedom of Information
20 Act. I don't have any technical outside -- I have
21 other technical education relating to products in
22 which I have been involved.
23 Q Would that relate to your previous employment that
24 we talked about?
25 A Yes.
104
1 Q Okay. Did you attend high school through the 11th
2 grade?
3 A Um-hum. And a little more.
4 Q Okay. What high school?
5 A Fresno High School in California.
6 Q What education do you have related to FOIA?
7 A I read all the rules and regulations pertaining to
8 the agencies that I wish to access. And then court
9 cases about what documents are or are not
10 available, or under certain circumstances, or
11 whatever.
12 Q Have you ever taken any classes on FOIA?
13 A I have no idea who could teach me anything.
14 Q So that's a no?
15 A That's a no.
16 Q Okay.
17 A No, I'm the one in International Who's Who.
18 Q What's your educational background related to IRS
19 transcript interpretation?
20 A I just have their -- everything that I know of
21 that's available relating to agency manuals and
22 publications, and I have studied those, and
23 studied, and restudied, and researched, and
24 cross-referenced, and you name it, I've done it.
25 Q Is it a fair statement that you're self-educated
105
1 related to IRS transcript interpretation and FOIA?
2 A Very self-educated.
3 Q Okay. Have you read Mr. Kram's report?
4 A Yes.
5 Q Do you disagree with any portions of that report?
6 A Well, a little bit. He -- Much of my report he
7 didn't have an opinion about, so I guess we both
8 agree on those sections. Before I would make any
9 more, I would have to read his report and refresh
10 my memory a little bit. Have we got a copy of it?
11 If you want to discuss it, can I read it over?
12 Q Absolutely.
13 MR. RAYMOND: You're going to mess up my
14 exhibits now that I have in order.
15 MS. TRISSELL: I am sorry.
16 MR. RAYMOND: There is both of them.
17 MR. BERNHOFT: Okay. Right. Right.
18 MS. TRISSELL: Let's go off the record.
19 (Discussion off the record.)
20 BY MS. TRISSELL:
21 Q Let's go on the record. And you're under oath.
22 A Okay.
23 Q Have you had a chance to review Mr. Kram's expert
24 witness report?
25 A Yes, I did. I just read the two of them, um-hum.
106
1 Q On which points do you disagree with his report?
2 A Well, he doesn't qualify any of his statements, he
3 just says, "I think this is wrong or that is
4 wrong." But he doesn't come back with a manual or
5 a section of the law or regulations that would
6 indicate that I'm incorrect.
7 Q Do you disagree with his report when it says that
8 portions of your report are wrong?
9 A Tell me what page -- Where are we?
10 Q For example, when he says on Page 2, the second
11 paragraph, under "Findings" --
12 A Okay.
13 Q -- that one of your statements is erroneous?
14 A Okay. The TC 150 indicates a Virgin Islands
15 transcript. He says that's erroneous. Yes, I
16 disagree with him.
17 Q Okay. Do you disagree with his statement that, "A
18 TC 150 is used to assess the original tax or
19 establish a tax account"?
20 A I agree with that.
21 Q Do you agree with the next sentence?
22 A I agree with that.
23 Q Do you agree with the last sentence on the second
24 paragraph there under "Findings"?
25 A You mean the acronym AGI, that --
107
1 Q Where it says, "This is indicated on Pages 8 and
2 9"?
3 A No, I agree.
4 Q Okay. Okay. Turning to Page 3, do you agree with
5 the first paragraph on Page 3?
6 A "AGI refers to adjusted gross income and is
7 indicated on all Individual Master File accounts
8 after the TC 150 is posted to the account." No, I
9 say it pertains only to Guam as per the law.
10 Q Is that the only part of that statement that you
11 disagree with?
12 A No, it indicates the source, and the source would
13 supposedly be the Guam -- Guam tax.
14 Q Okay. Going to the next paragraph, starting with,
15 "Item 14 SET" -- Do you agree with his conclusion
16 that the SET is a Northern Mariana Islands social
17 security tax is an incorrect statement?
18 A Yes, that is incorrect.
19 Q Okay. Actually, let's redo that whole part.
20 A Meaning I disagree with what he says when I say
21 "incorrect."
22 Q That's exactly what I meant.
23 A No, I'm always perfect and right. You understand.
24 Q Yes. The self -- Do you agree with his statement,
25 "Self-employment tax is primarily due from
108
1 individuals"?
2 A Yes.
3 Q Okay. Do you agree with his statement, and I'm
4 only reading the first portions, but you have the
5 report in front of you, "It is reported on the
6 individual tax return filed with the IRS"?
7 A Partially true. Most people report what they think
8 is self-employment tax, but it really isn't, but
9 it's characterized as self-employment tax. That's
10 because they don't know any better.
11 Q Do you agree with Mr. Kram's final statement in
12 that paragraph, the amount of self-employment tax
13 is then forwarded to the Secretary?
14 A I would say it could be. I don't know if it is. I
15 have not found anything that says that it's
16 forwarded, but I wouldn't be surprised.
17 Q Why do you disagree with his conclusion that the
18 SET is not a Northern Mariana Islands social
19 security tax?
20 A Well, because Title 42 says it is.
21 Q Is there any other reason?
22 A Just because the law says so.
23 Q Okay. Any other portion of the law that you rely
24 on --
25 MR. BERNHOFT: Could we go off the record
109
1 real briefly?
2 MS. TRISSELL: Sure.
3 (Discussion off the record.)
4 BY MS. TRISSELL:
5 Q Is there any other reason why --
6 A The law says so, is the only reason.
7 Q Okay. Have we previously talked about this?
8 A Yes.
9 Q Okay. Do you agree with Mr. Kram's statement that
10 there's no basis for the statement that another
11 person is using Mr. Bernhoft's social security
12 number?
13 A No, I think he's wrong. And he doesn't put in a
14 document indicating that I'm wrong.
15 Q Okay. Do you base your disagreement on the reasons
16 we previously talked about?
17 A Yes.
18 Q Any other reasons?
19 A No.
20 Q Okay. Do you agree with Mr. Kram's conclusion that
21 he -- that there are "no irregularities on the 1994
22 tax account of Robert Bernhoft"?
23 A Well, I don't know what he means by an
24 irregularity. I am just saying this is what the
25 tax account says. And that's, you know --
110
1 Q Looking at the second affidavit of Mr. Kram, which
2 concerns the Raymonds, would your --
3 A I thought we were just looking at Raymond.
4 Q We were looking at Bernhoft.
5 A I was looking at Raymond.
6 Q Well, I was just going to ask would your answers be
7 the same with respect to Mr. Raymond.
8 A Yes. I believe they're basically the same; aren't
9 they?
10 Q I believe they are.
11 A Yeah, same answers.
12 Q What is your opinion of Mr. Kram's qualifications?
13 A Most of his qualifications have to do with
14 accounting, which would have nothing to do with
15 transcribing a transcript. He says he has some
16 on-the-job experience with transcripts, and I guess
17 he does.
18 Q Have you ever formally studied the law?
19 A Well, I have studied --
20 Q Meaning gone to law school or --
21 A No. No.
22 Q Do you have an accounting background?
23 A No, I have a math background.
24 Q Does your expert witness report discuss what
25 compensation you're being paid for providing expert
111
1 testimony and the report?
2 A No.
3 Q Are you being compensated for that?
4 A All I have got so far is a couple of reasonably
5 good meals, an airplane ticket and a hotel room.
6 Medium hotel room, I might add.
7 MR. RAYMOND: Was it too small?
8 THE WITNESS: With a small bed.
9 MR. BERNHOFT: It's the Hilton Marc
10 Plaza.
11 BY MS. TRISSELL:
12 Q Are you going to be compensated?
13 A We haven't discussed it.
14 Q Okay. Do you expect that you will get some money
15 for it?
16 A I don't know. We haven't even talked about it. I
17 have no idea.
18 Q Do you intend to ask for some?
19 A No.
20 Q And is your home address listed in your expert
21 witness report?
22 A Yes, it is.
23 Q And is that still correct?
24 A Yes.
25 Q Okay. Those are --
112
1 A That's not a mailing address. That's a --
2 Q Probably we should get a street address.
3 A Okay. Well, it's not a real street address. It's
4 a sort of street address. And the reason is, I
5 live way out in the country, and we have a sign
6 that says Claxton, but it's not a county street
7 sign, it's just that somebody decided to call this
8 little quarter long piece of dirt road, dusty,
9 Claxton, and made a sign at home and painted it, so
10 we've all called it Claxton. I don't even know
11 where the 160 Claxton comes from, but everybody
12 sort of adopted a number up -- There's about --
13 There's about six or seven of us living on this
14 thoroughfare, and we have sort of adopted these
15 numbers. Well, if you're going to be 170, I'll be
16 160, that -- You know, very official.
17 Q Um-hum. So what number are you?
18 A I'm -- I call myself 160.
19 Q Okay.
20 A But if -- I don't think it's official, or I have
21 never been notified that that's an official
22 address. And I really don't care whether it is or
23 not. I have decided I live at 160, and if someone
24 wants to change it, then go to court.
25 Q Okay. And you state that you didn't look at the
113
1 previous expert witness report, right?
2 A Of Mr. Kram?
3 Q No, of Houck.
4 A No, I didn't.
5 MS. TRISSELL: Okay. Those are all my
6 questions.
7 THE WITNESS: Okay.
8 MS. TRISSELL: Go ahead.
9 THE WITNESS: It's quarter to 1:00. You
10 people don't eat lunch, or what?
11 MR. BERNHOFT: Should we -- Do you
12 want -- I don't have much cross. I have a little
13 bit.
14 MS. TRISSELL: I'd prefer to just go
15 through it.
16 MR. BERNHOFT: Let's. Shall we? We can
17 get this completed.
18 MR. RAYMOND: We're going to feed you.
19 EXAMINATION
20 BY MR. BERNHOFT:
21 Q I want to clarify a couple things in your
22 testimony, Mr. Bentson.
23 A I'll try to sit up straight before I pass out.
24 Q Thank you.
25 MR. RAYMOND: We'll pick you up again.
114
1 BY MR. BERNHOFT:
2 Q It's my understanding that Document 6209 is only a
3 general handbook, and that for specific information
4 and current instructions the document to be relied
5 on is Internal Revenue Manual 3; am I correct?
6 A That's correct. In fact, it says so in the first
7 page of 6209, that it's kind of a reference manual,
8 and then you go to the back of the book, it tells
9 you to rely on Manual 3.
10 Q Approximately how many years have you been studying
11 Individual Master File transcripts?
12 A I obtained the first one in the late '70s sometime.
13 Let's see. The Privacy Act was a 1975 law. I
14 think I obtained a system of records let's say
15 maybe a year after that, and then I started making
16 Privacy Act requests for what I thought would be
17 the right system of records, so that would be '76
18 or '77, in that neighborhood. And I was denied the
19 IMF, then, of course, they give an extension, you
20 appeal, appeal extension, and blah, blah, blah, and
21 it drags on for a few months, and I ended up in
22 Washington talking about it, and won.
23 Q Is that where you had the conference that you
24 previously testified to?
25 A Oh, yes. 1111 Constitution Avenue.
115
1 Q Do you know who was present at that conference?
2 A Oh, some Disclosure Officers and myself.
3 Q About how many pages are there in Internal Revenue
4 Manual 3?
5 A About 20,000 literally.
6 Q How many have you read?
7 A About 10,000. I might say I have worn out two eyes
8 reading all this crap.
9 Q You testified previously that you could recall
10 three instances where a judge had explicitly
11 qualified you as an expert witness, the Denver
12 airline pilot case, the Kilpatric case in Colorado,
13 and the Dallas bankruptcy case?
14 A Yeah.
15 Q And perhaps to a 95 percent reasonable certainty
16 the Indiana bankruptcy case?
17 A Yes.
18 Q In the other cases that you talked about that you
19 testified in, did you give opinion testimony in
20 those courts?
21 A In some of them, yes.
22 Q Of the remaining court cases that you testified in,
23 where the judge did not explicitly qualify you as
24 an expert witness, what percentage did you give
25 opinion testimony in and what percentage did you
116
1 give fact testimony in?
2 A I'd estimate probably about half and half.
3 Q Did you ever do any military service?
4 A Yes.
5 Q Where was that?
6 A I was in the Marine Corps for four years.
7 Q From what time period?
8 A April of '48 to April of '52.
9 Q What division?
10 A Marine Corps. Oh, I was in the First Marine Air
11 Wing.
12 Q First Air Wing?
13 A Um-hum.
14 Q And how did you separate from the military?
15 A I was discharged.
16 Q Honorably?
17 A Very, very honorably. Very, very honorably. You
18 won't believe this, but I have two good conduct
19 medals, and that's as many as you can get in four
20 years.
21 Q To your knowledge how many Departments of the
22 Treasury are there?
23 A Okay. You actually have the Department of the
24 Treasury, you have a Treasury Department, you have
25 a Treasury of the United States and a United States
117
1 Treasury. I found that so far. That many I know
2 about.
3 Q You made reference to the possible existence of a
4 Treasury Department of Puerto Rico. Is that also a
5 different Treasury Department?
6 A I would think so but -- simply because of the name,
7 and there's a -- in 27 CFR 250.11 it says that
8 there's a Department of the Treasury of Puerto
9 Rico.
10 Q You said that you read Title 26?
11 A Yes.
12 Q You read all of Title 26?
13 A Yes.
14 Q You mentioned that you read 26 CFR. You read all
15 of 26 CFR?
16 A Oh, yes. When you go to reading all the CFR
17 regulations for Title 26, you are now committed to
18 doing an enormous quantity of reading.
19 Q Did you read 27 CFR?
20 A I don't think -- I know -- I would say yes. That's
21 not very big. Yes.
22 Q What other titles of the US code have you read?
23 A 5, 19, 22, 48, 27, 31, and probably -- I think I
24 read sections of 46, not the whole thing, only
25 those relating to the definition of the word
118
1 "taxpayer," and related cross-reference things.
2 Oh, Title 28, Title 18. 28 not in total, but in
3 part. And the same with Title 18. Not in total,
4 in part. I guess that's about it.
5 MR. BERNHOFT: We're done.
6 THE WITNESS: You got any recross?
7 MS. TRISSELL: No recross. Do you
8 understand your rights with respect to the
9 transcript? Let me go over them with you. You
10 have a right --
11 THE WITNESS: You mean to examine it and
12 see if I got -- want to make --
13 MS. TRISSELL: To read and sign or to
14 waive your signature. And you can look at the
15 transcript that's produced, and read it, and make
16 any typo changes, you know, small changes.
17 THE WITNESS: Okay.
18 MS. TRISSELL: If you make substantive
19 changes, I will have the right to come back and
20 reexamine you on those changes. Or you can waive
21 that right and the transcript will be produced
22 as -- will stand as it's produced by the court
23 reporter.
24 THE WITNESS: I'll just -- I'll tell you
25 what I would do, just to make sure that I
119
1 understand it, I'll probably wait and take a look
2 at it. It isn't that I think you're a crook, it's
3 just that you never know if there's some really
4 little thing. I really don't. I really think
5 you're trying to do it honestly, but just in case
6 there's a flaw or something.
7 MS. TRISSELL: So then you'll read and
8 sign?
9 THE WITNESS: I'll read it, yeah.
10 MR. BERNHOFT: Read and sign, good.
11 MS. TRISSELL: We're done.
12 (Proceedings concluded at 12:50 p.m.)
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120
1 STATE OF WISCONSIN )
) SS:
2 COUNTY OF MILWAUKEE )
3
4
5 I, KATHLEEN E. CARTER, a Certified
6 Realtime Reporter, Registered Merit Reporter and Notary
7 Public in and for the State of Wisconsin, do hereby
8 certify that the above deposition of WAYNE C. BENTSON
9 was recorded by me on the 12th day of February, 1999,
10 and reduced to writing under my personal direction.
11 I further certify that I am not a
12 relative or employee or attorney or counsel of any of
13 the parties, or a relative or employee of such attorney
14 or counsel, or financially interested directly or
15 indirectly in this action.
16 In witness whereof I have hereunder set
17 my hand and affixed my seal of office at Milwaukee,
18 Wisconsin, this 22nd day of February, 1999.
19
20
21
_________________________________
22 Notary Public
In and for the State of Wisconsin
23
24
My Commission Expires: March 18, 2001.
25
121
1 STATE OF WISCONSIN )
) SS:
2 COUNTY OF MILWAUKEE )
3
4 I, WAYNE C. BENTSON, do hereby certify
5 that I have read the foregoing transcript of
6 proceedings, taken the 12th day of February, 1999, at
7 Brown & Jones Reporting, Inc., 312 East Wisconsin
8 Avenue, Suite 608, Milwaukee, Wisconsin, and the same is
9 true and correct except for the list of corrections
10 noted on the annexed page.
11 Dated at______________________________
12 this_________day of________________, 1999.
13
14
15
16 _____________________________
WAYNE C. BENTSON
17
Subscribed and sworn to before me
18
this________day of_____________, 1999.
19
20
21 __________________________________
Notary Public
22
My commission expires:
23
24
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