Q And it shows various entries here for money; is that right?
A That's correct. The first line, 8, is taxable interest, line 12 is alimony received, and then line 23 is the total of those two items.
Q And then at, the bottom there is a total figure down there of $23,000?
A Yes. Twenty-three thousand. That's the adjusted gross income.
Q Now, is this the second page of the 1040?
A Yes, sir.
Q And you see that there is some calculations here at the top part?
A That's correct
Q Then at the bottom there are two signatures?
A Yes. The signature, "Your signature" is Lloyd R. Long, and "Spouse's signature," Dana Long.
Q Now, there were schedules attached to the return, were there not?
A Yes, sir.
Q A Schedule C?
A Schedule C, yes.
Q It shows a Mr. Long as a contractor?
A That's correct. Schedule C is a Profit and Loss from a Business.
Q And it shows gross receipts or sales?
A Yes, gross receipts or sales, $30,000.
Q And then there were certain expenses that were taken off?
A That's correct. Travel, $5,514; meals and entertainment, $1,800.
Q Now, attached to the return, do you find these two documents?
A Yes, sir. Those documents are Form 1099. It shows earning from savings and loan association, credit union and bank deposits from AEDC Federal Credit Union, showing that Mr. Long received $748.98. That's the lower document on the large exhibit. The Form 1099 Miscellaneous from Maury County Board of Education, which is the top document on the large exhibit, shows nonemployee compensation of $30,000.
Q Now, going back to the second page or the back page of the 1040 again, at the very bottom there's a line for preparer's signature?
A Yes.
Q Did anyone fill in that space, indicating that someone other than Mr. Long and his wife had prepared this return?
A No, sir. It's blank.
MR. COLLIER: Your Honor, we would offer these. These are summary exhibits 10-A through G, I believe.
MR. BECRAFT: Your Honor, you know, I didn't object to the underlying documents. Now we've got the blowups. I don't have any objection to the use of the Court, but my objection goes to, if they want to offer it into evidence for the purposes of carrying it back into the jury room at a later point in time, I do have a little problem with that. They're large. We've already got the other exhibits in evidence. These are nothing more than blowups of it. And I think to have charts like that back in the jury room would be...
THE COURT: This is S-10?
MR. COLLIER: Yes, Your Honor.
THE COURT: All it is is blowups of Exhibit 10, right?
MR. COLLIER: That's right, Your Honor. That's what the witness testified to.
THE COURT: They're received. (Government Exhibits S-10 A through G were received into evidence.)
MR. COLLIER:
Q Now, were you asked to do a search to see if you could locate the income tax return for the years 1989 and 1990?
A Yes, sir, I was.
Q And what did you find when you searched for those income tax returns?
A In searching the permanent records for tax years 1989 and 1990, I found that there were no returns filed.
Q I'm going to show you Government Exhibits 13 and 14.
A Yes, sir.
Q What are those?
A Government s Exhibit No. 13 is a Certificate of Lack of Record on which it appears to show I researched the permanent record for a return for 1989 for Lloyd and Dana Long. Government Exhibit 14 is a Certificate of Lack of Record to show that I researched and found no return for 1990.
MR. COLLIER: Your Honor, we would offer those two into evidence.
MR. BECRAFT: No objection.
THE COURT: Thirteen and 14 are received. (Government Exhibits 13 and 14 were received into evidence.)
Q Now, we've talked about the years 1986 through 1990. Did your records show whether Mr. Long had filed returns prior to 1986?
A Yes. Our records show that he had filed returns.
Q And when was the first time he had filed a return?
A Pardon me?
Q Do the records show when he first filed a return?
A Yes. The records indicated 1969 the first return was filed.
Q Okay. Now, I'm going to show you, I'm going to hold it up so the jury can't see it, but have you seen this before?
A Yes, sir. I prepared that.
Q What is that? It is a listing by year as to a return filed by Lloyd Long from 1969 to 1990.
Q You prepared this yourself?
A Yes, I did.
Q And you base what is on this upon your own efforts and your own searching?
A And my own search, yes, sir.
MR. COLLIER: We would offer this, Your Honor. This is S-6, I believe.
MR. BECRAFT: Your Honor, my objection here on this is the prosecution is using a lot of -- there's obviously some other public record that forms the foundation for this. It seems like the prosecution wants to use a bunch of big blowups, I guess to take up space in the jury room. There's got to be an underlying document for this. The witness has said, "I searched the permanent record and I pulled it out off the permanent record and made this chart." I think the permanent record ought to be in evidence to prove the accuracy of the chart. I mean, this is a chart prepared for trial.
THE COURT: Well, do you have the -- where are the underlying documents? Do we have the underlying documents?
THE WITNESS: They're on master file tape.
THE COURT: Do you question the accuracy of the information?
MR. BECRAFT: Well, Your Honor, I have one here I'll be talking about with the witness with it. I glanced at the chart, and I think the chart is probably an accurate reflection of the underlying record that I have. My objection is I don't think this is inaccurate information that's on there, but the original record from which it's pulled off -- the witness just testified that she prepared the chart, she looked at some other public record. I'd rather have the public record, the actual public record into evidence rather than another sizable chart.
MR. COLLIER: Mr. Becraft, of course, can offer any record into evidence he wants to. He can subpoena it. Mr. Leonard was shown this document, I would say, at least two weeks ago. He had a chance to look at it. He told me that it was accurate. They had no objection to it.
THE COURT: Well, under Rule 1006, with the summaries, what we're talking about here, my understanding is that one of the requirements is that the underlying documents must be made available.
MR. COLLIER: And they were, Your Honor. I told the defense about this record and where it came from, and they had no problem with it.
THE COURT: In other words, what you're telling me, you're making the representation to me that you have made the underlying documents available to the defense?
MR. COLLIER: Yes, Your Honor.
MR. BECRAFT: Your Honor, my point is that they're not offering that -- they want to keep offering these huge charts, and I don't know whether they're going back into the jury room or not.
THE COURT: Well, okay, let me just say this, do we have any of the underlying documents available here?
MR. COLLIER: I can check and see, Your Honor. (Brief pause.) We think we probably do, Your Honor.
THE COURT: Here's what we should do then. Go ahead and let's, once you collect those let's offer those as an exhibit, a separate exhibit. And then once we have those, then we can, I'll admit the summary, with a special instruction to the jury as I'm required to do with summaries.
MR. COLLIER: It's Defense Exhibit 17, Your Honor.
THE COURT: Defense Exhibit 17.
MR. COLLIER: Defense Exhibit 17.
THE COURT: That's the master file.
MR. COLLIER: We will offer at this time, not for purposes of showing it to the jury, though, but solely for purposes of establishing the underlying basis for the chart. This is separate from the witness's testimony. But this is an underlying basis. She testified that she looked on the thing and she prepared this herself. This is almost like an oral testimony.
THE COURT: Well, I understand that, but it's based on information in the IRS. Hand this document to Ms. Jeu. Ms. Jeu, do you recognize this?
THE WITNESS: Yes.
THE COURT: What is it?
THE WITNESS: It's a hard copy of the permanent record, the master file.
THE COURT: And the information that's on this chart that Mr. Collier showed you, is that borne out by -- is what's on the chart borne out by what's on that master file?
THE WITNESS: Yes, sir. It shows that he has a period, 1969 through 1986, which is on retention register.
THE COURT: Well, what I'd like to do, if you want the summary in, Mr. Collier, what we'll do is we'll admit the master file and then we'll admit the summary.
MR. COLLIER: Okay.
THE COURT: Okay. So Defense 17 then is received. And ladies and gentlemen, this summary, what we have here, which will be Government Exhibit S-6, and that's, S-6 is received. And I should tell you that the summary itself is not evidence, but it can be used by you in evaluating the evidence in this case. The evidence itself is the master file, which is Exhibit 17, Defense Exhibit 17, which has just been. offered. All right. (Defense Exhibit 17 was received into evidence.) (Government Exhibit S-6 was received into evidence.)
MR. COLLIER: We tender the witness, Your Honor.
THE COURT: Cross-examination?
MR. BECRAFT: Before I proceed, Your Honor, that last exhibit, I have one with the exhibit sticker on it. I would like to substitute the one that has the sticker on it for -- the witness can keep that copy.
THE COURT: Okay. As long as they're the same --
MR. BECRAFT: They offered my exhibit.
CROSS EXAMINATION
MR. BECRAFT:
Q Ms. Jeu, you've testified that you've been with the Internal Revenue Service for some 18 years; is that. correct?
A It will be 18 years in November, yes, sir.
Q And you've been trained to do a particular job, which is work with the criminal investigation branch at the service center, right?
A For the past eight years, yes, sir.
Q That includes, when people like special agent, our special agent here, want to find out something about whether someone has filed some returns, they contact people like you, correct?
A That's correct.
Q And then you've also come to testify. You testify regularly in court in tax matters; is that correct?
A When subpoenaed, sir.
Q And you come to court for the purpose of testifying, like you've done here, that somebody hasn't filed a return or these are the returns that have been filed; is that correct?
A I testify to present the information that's on the permanent record.
Q Now, you've testified in a variety of cases before, have you not?
A Yes, I have.
Q Do you have a judgment, you can tell the jury about how often?
A I have no idea.
Q More than ten?
A Yes.
Q More than twenty?
A Yes.
Q So, a lot?
A In eight years, yes.
Q All right. And to come to court to testify, you have to -- you've used this term "permanent record" several times when Mr. Collier was asking you questions, right?
A Yes, sir.
Q Now, that permanent record is Defense Exhibit No. 17, correct?
A That's correct.
Q Now, in reference to -- let's take a look at this particular chart here. That permanent record that you have in front of you consisting of, I guess about four or five pages, it says "IMF MCC transcript complete" up at the top, right?
A That's correct.
Q Now, on that very first page you can see down here, about the middle of the page it says, "Modules removed to retention register"?
A Yes, sir.
Q And it's got 30 and then a set of numbers, 6912, right?
A Yes.
Q And so when you say that Lloyd Long first started filing returns in 1969, the source for that assertion of fact comes from this page, that 6912, right?
A Yes, sir. The source is here for 69.
Q So, on the very first page, you can go down through here, it says '69, '70, '71, all the way up through '86, and you can see that returns were filed for those years, correct?
A No, sir, not by looking at this first page.
Q Well, why do you make that statement?
A I made this statement to say that '69 through 1986 has an account, there is activity; but from this page I couldn't tell you what is there.
Q Well, but you've said on direct -- you produced this chart right here to show that he filed from '69 to -- well, you've got all way up through '90, but starting out in '69, and produced this chart. Did you consult some other type of information?
A Sir, if you'll notice on Exhibit 17, it states that the years '69 through '86 is on the retention register.
Q Did you consult that retention register?
A I did, sir.
Q So, that's where you got that information, some other document?
A For '69 through '86, yes.
Q And because some other record showed that for '69 through '86 that there was indicators of returns having been filed, that causes this type of data to show up on the face of page 1 of Exhibit 17, correct?
A No, sir, it did not cause it.
Q Well, in any event, this is an accurate depiction that for these years returns were filed; is that correct?
A It's not an accurate picture that the return was filed. I have to look at each individual module to find out what's there, each individual year.
Q Now, let's take a look -- can I take you -- you've offered into evidence -- we don't have here on Exhibit Number 17, besides this number at the bottom of the page, this isn't a printout of the account that relates to the year '86; is that correct?
A That's correct.
Q It starts off with '87?
A Yes, it does.
Q Now, let's ask some questions about '87. I think Exhibit No. 11 is a photocopy of the '87 return; is that correct?
A Yes, sir.
Q Now, up at the top of the page, in the upper right-hand corner there's a set of 13 or 14 digits, correct?
A That's correct.
Q Now, the way you would locate that particular return is you'd pull up this computer file?
A Permanent record.
Q The permanent. And then the first thing you would do is you would look for some type of notation in the computer record as to where you could find that particular return; is that correct?
A The identifying number of the return, yes, would be there.
Q So, you could look at -- can I get you to take a look at the field of information that applies to 1987?
A Yes, sir.
Q Now, down there at the bottom of the page there's 6010; is that correct?
A Yes, it is.
Q The way the service center keeps up with information that flows into it, you put numbers on the documents, right?
A Correct.
Q And then you take the information off the documents and load it into the computer, right?
MR. COLLIER: Your Honor, I'm going to object. This is beyond the scope of direct examination, first. Secondly, the document has already been admitted into evidence. So, I'm not sure what the purpose of this entire line of questioning is. If he wanted to object to the documents, he could have and could've cross-examined the witness before they were admitted. The documents are in evidence now.
MR. BECRAFT: Well, Your Honor, the Government's offered documents and I think I'm entitled to cross-examine them on it. That's all this is.
THE COURT: Well, overruled. Let's move on, though.
MR. BECRAFT:
Q Now, the way you find the return is you look at computer records, see a number down there, and then you ask the people over at the records center to pull it up, right? Right.
Q Now, even though we don't have a field of information here for '86, you looked at '86, saw the numbers that appeared on a computer printout, and you asked the records center to find the documents bearing those numbers, right? That's correct.
Q And they sent them to you?
A Yes.
Q They produced '86, '87 and '88 because that's what you wanted, right?
A They produced '87, '88.
Q I think 12 is '86?
A Yes, '86, '87 and '88, yes, sir.
Q Now, what you did for the years we're dealing with here, '89 through '90, what you did to determine that there hadn't been a return filed is you looked at this particular record, correct?
A That's correct.
Q Now, this is just, this is one that's printed out on August the 13th of '93, correct?
A Yes, sir.
Q Now, the documents, the certificates of lack of record, Exhibits No. 13 and 14, are dated what?
A September 22, 1993.
Q So, you would've gotten probably a printout, the underlying computer record -- those two documents that you have in your hand here, the Certificate of Lack of Record, are made by looking at this type of a document known as the permanent record, Exhibit No. 17, right?
A Yes, that plus I check further for a return that was filed under another SSN or something of this nature which would've been under his name. But I checked to see if there was any return under his name or under any number. There was nothing.
Q Okay. Now, there are two types of transcripts, is that correct, a complete and specific?
A No, sir. There's more than that.
Q Well, at least those two, correct?
A Yes.
Q Now, did you bring with you to court these types of documents that were used to prepare Exhibits No. 13 and 142?
A Not to the courtroom, no, sir.
Q Have you got them in the U.S. Attorney's office?
A Yes, sir.
Q In your purse?
A No, sir.
Q Or briefcase rather. In your possession?
A Yes.
Q And if we pulled those out, they would look like Exhibit No. 17, except maybe with a later date?
A A later date.
Q Now, when the jury takes a look at this document here, we're talking about a lot of symbols, codes; is that correct?
A Yes. It's the permanent record.
Q And you have to -- you're someone that's familiar with the meaning of all these codes; is that correct? Yes, the ones I have to use.
Q Now, the ones you have to use, you had to use one of these symbols of 150, right? You're familiar with transaction -- For the benefit of the jury, a 150 means a return is posted for that year.
Q So, for '86, '87 and '88 you found a 150 appearing on the computer transcript, right?
A Yes. He filed a return for those years.
Q And then you were able to, with the information on the computer record, pull those up. So, you knew he had filed returns, right?
A Yes.
Q Now, we're talking about an absence of records for '89 and '90, correct?
A No. There are records for '89 and '90, but there's no return for '89 and '90.
Q That's the point I meant. And do you draw this conclusion that no returns were filed because there isn't a computer symbol of a 150? Is that right?
A That's correct. That's the only thing that would indicate a return filed.
Q Okay. So, it's the absence of a computer symbol that would indicate the return was not filed. And then from that conclusion you draft the document, Exhibit No. 13 and 14, right?
A I know by looking at the tax years '89 and '90 that there is no tax return filed.
Q Through that process I've just described, right?
A Through the process of me checking the permanent record for any returns filed by Mr. Long.
Q Now, can I get you to take a look at the very front page of Exhibit No. 17?
A Yes, sir.
Q Let's be very specific. You're familiar with the meaning of symbols that appear on here?
A What symbol?
Q well, specifically do you see a symbol called MFR 1?
A Yea, I do.
Q And it takes a book to understand the meaning of that term; is that correct?
A We have many handbooks, sir.
Q And one of those handbooks is called Integrated Data Retrieval document, known as Document Number 6209, right?
A Well, that's not a handbook. That's a document.
Q Okay. But it's a document that -- you've seen the document before yourself, right?
A Yes, sir.
Q And you read and rely upon the document, correct?
A No, sir.
Q Well, it contains the descriptions or meanings of some of the symbols appearing on the permanent record, right.?
A Some of them.
Q Okay. It does have MFR 1; is that correct?
A Pardon me?
Q It does have the meaning of MFR 01, right?
A Yes, it does.
MR. BECRAFT: May I approach the witness, Your Honor?
THE COURT: No. You can hand it to the clerk.
MR. BECRAFT: I'm sorry, Your Honor. I will.
Q Now, Ms. Jeu, can I get you to thumb through the document right there and see if you recognize that as the decoding manual, document 6209?
MR. COLLIER: Your Honor, again I'm going to object.
THE COURT: Yeah. Where are we going with this, Mr. Becraft?
MR. BECRAFT: If the Court wants a side bar, I think --
THE COURT: Yes, I do. Let's go to side bar. (Side bar conference was held outside the hearing of the jury, as follows:)
MR. BECRAFT: I've had her before, Your Honor. But this symbol right here is the one I'm talking about, MFR01. She's told me this stuff before. But the manual she has -- this is a separate manual that's related to this. The meaning for the symbol here on the defendant's permanent record, the symbol is "Return not required to be mailed or filed."
MR. COLLIER. This is beyond the scope of direct examination.
THE COURT: Are you contending that he filed a return?
MR. BECRAFT: No, no, Your Honor. They've admitted that this is the underlying computer record, the permanent record. And when you decode it, there's an admission here. And there's a couple of cases in the shorter trial brief, Your Honor, that I can consider this an admission, a party admission. She knows these. I've had her before. She's identified them, as they all do. They've identified this. I've got a transcript. It's admission --
THE COURT: Admission of what?
MR. BECRAFT: There are two cases that I talk about, one is Van Griffin and the other one I can't remember. But it's an admission, party admission, Your Honor, what this code means here.
THE COURT: An admission by what party?
MR. BECRAFT: The IRS.
THE COURT: An admission about what?
MR. BECRAFT: That they've got a code on here that's says return not required to be filed. That's exculpatory. The government is saying he's required to file, but the computer says --
MR. COLLIER: Did he rely on that?
MR. BECRAFT: No.
MR. COLLIER: Then how can it be exculpatory if he didn't rely on it? What you're talking about is the law. Only the Court can tell the jury what the law is.
THE COURT: Is it your contention he was not required to file a return?
MR. BECRAFT: No, I'm not saying that. I'm just saying I find it extremely interesting to represent to these people -- and now that I've learned how to decode these things, their people come along and they tell me, yeah, this means this and this means this, they identify this document, and then they tell me the computer says return not required to be filed. Now, whether or not he relied on it is irrelevant. Most exculpatory evidence is not something that somebody relied upon. It's the documents that come out of the government's possession. This one came out of the government's possession.
THE COURT: I'll tell you what, I find this whole thing to be a whole lot of doublespeak. However, I'll let you ask a few questions about it and then let's move on.
MR. BECRAFT: I will do that, Your Honor. (Side bar conference concluded and proceedings continued in open court, as follows:)
THE COURT: We need to take a recess for about ten minutes. (Brief recess.) (Proceedings were held outside the presence of the jury, as follows:)
THE COURT: We have a slight problem in that Mr. Foster just got word that his father-in-law is very ill and not expected to live, and so I have excused him. He was Number 12. So, we will substitute the first alternate, Ms. Clark, 118. We'll do that when we come back in. That's why we have alternates. All right. So, call the jury back. (Jury returned to courtroom and proceedings continued in their presence, as follows:)
THE COURT: All right. You may proceed.
MR. BECRAFT:
Q Ms. Jeu, right before our break we were discussing certain symbols on Exhibit No. 17, the permanent record?
A Yes.
Q Do you have that in front of you?
A Yes, sir.
Q Now, I handed to you a book a moment ago and asked for you to identify the book for us, please. Did you do so?
A No, sir.
Q You didn't?
A No, I did not say anything of what it was.
Q No, I'm sorry. I didn't mean to -- do you recall that that is a copy of document 6209?
A Yes.
Q Okay. And that's an accurate copy of it, right?
A A what?
Q That is an accurate copy of the manual that you use?
A I could not verify that, sir.
MR. BECRAFT: Your Honor, I'm going to object to that question.
THE COURT: Well, overruled.
A (Continuing.) That's the manual that I use, sir.
Q But there's one for every year. If we had them here, they'd have colors on them that say '87, '88, '89, '90. They're little pamphlet type books about this size, right?
A Yes, it's that size, but it's not the book that I use.
Q Okay. But you're familiar with it, right?
A I'm familiar with it, yes.
Q What book do you use?
A I use the normal procedure handbooks for the Internal Revenue Service.
Q Is that --
A Which there are many. Is one of them a law enforcement manual?
A Yes.
Q Would it be this document right here?
A (Reviewing document.) Yes, this is one of the IRS manuals that's used.
Q Now, regrettably I had my finger on the page, but I think it's Section 4.2, the one I just handed to you. Have you found it?
A 4.2, yes, sir.
Q Okay. Is there a section in there that deals with 1040s?
A Yes.
Q Okay. Could the witness be handed this? On Exhibit No. 17, can I get you to, for the benefit of the jury -- I've handed you a yellow highlighter. Could you highlight on that exhibit the MFR that we're talking about?
A The MFR that you're talking about is not on exhibit -- this book that you've given me on 4.2.
Q I'm sorry. Referring back to Exhibit No. 17, on the very front page. I've asked you a question about the symbol MFR 01.
A Okay.
Q Now, can you just line through that symbol?
A (Witness complies.)
Q Have you done so?
A Yes, sir.
Q Now, speaking about the meaning of that particular symbol, have you found the place in that particular manual that provides the meaning for that?
A No, sir.
MR. BECRAFT: Your Honor, I could find it.
MR. COLLIER: Your Honor, I would object to this. The witness testified that she did not rely upon this document. Her response in regard to this document was this is one of the things that they use. Now he's trying to get her to, I'm not sure what. But he is way far afield.
THE COURT: This document you've got there, did you rely on that at all in determining whether or not a return was filed?
THE WITNESS: No, sir.
THE COURT: Okay.
MR. COLLIER: Withdrawn.
MR. BECRAFT:
Q However, that is a document that you use to provide meanings to the symbols that appear upon the document that you do rely upon, correct? Let me withdraw this. You have relied upon Exhibit No. 17, the permanent record, correct?
A Yes, I have.
Q And to prepare the documents you offered into evidence, you looked at a document like Exhibit No. 17 and you drew conclusions from it, right?
A Yes.
Q And the manual that you have in your hands right now, one of those law enforcement manuals, provides the meanings to all this computer jargon that is not printed in plain English on the document, right?
A No, sir, it does not. It does not, this one book does not tell you what everything is on this.
THE COURT: Does it say anything on there?
THE WITNESS: It tells you transaction codes which is on the individual year, which would be, like a 150 would symbolize a return, a 610 symbolizes a check, money received.
MR. BECRAFT: Your Honor, it'd be quicker if I found the page.
THE COURT: Okay. Come on up here. Find the page. Let's go.
MR. COLLIER: Your Honor, before anything is read out of the book, I'd like to have the witness, if she can do it, and if she can't do it, someone else, authenticate that particular document. So far we have no assurance that is a true and accurate copy of anything that the Internal Revenue Service ever published.
THE COURT: Let's find out what the question is.
MR. BECRAFT:
Q Ms. Jeu, keep your finger on the page that I have. Okay. Now, you're familiar with the symbol that I brought to you attention, is what we call a mail filing requirement, right?
A That's correct.
Q So, you're familiar with that?
A Yes, I am. It tells us what type of return that the taxpayer filed in the year prior so that we can mail a package out to him the following year, a 1040A or 1040, did you use Schedule C. Or if you had individual income, profit and loss there, you'd get a Schedule C. But if you filed a 1040A, you would get a return with just the 1040A in it.
Q Now, the meaning, there's a section that provides the meanings for the mail filing requirements. And that's, I believe, Section 4.2 in the very manual that you have in front of you, correct?
A Right.
Q So, we're in that section?
A Yes, we are.
Q Now, flip down to -- does it list forms there and have numbers below it?
A Yes, it does.
Q Now, are you at 1040?
A Yes.
Q Okay. Now, we're dealing with MFR 01, correct?
A That's correct.
Q And that book provides the meaning of MFR 01, correct?
A Yes.
Q And the meaning is?
A The file requirement for 01 is return not required to be mailed or filed.
Q Now, that's the official definition of a symbol that appears on Lloyd Long's permanent record?
A To date, yes.
Q Correct. Now, this particular field, this computer data appears at the very top of the front page on Exhibit No. 17, and then down below it you start off with a year, a field of information?
A Yes.
Q All right. Now, down here at the bottom it says tax period 30-87-12. That means for the year 1987, right?
A Yes. Tax period 30 means Form 1040. That 30 indicates 1040. And 87-12 means the year '87, ending month, year, December.
Q Now, while this stops at the bottom of the page and begins the information, it happens to be down at the bottom of the page, the '87 information, it goes over onto the second page, right?
A Yes.
Q And then after that, the field of information that relates to '87 stops and then we pick up with '88, right?
A Yes.
Q And then we have a field of information on the third page that relates to '88, right?
A Yes.
Q And then after that we have at the bottom page that, we have tax period 30-89-12, one of the years that we're dealing with, right?
A Yes.
Q And then on the following page there's a bunch of computer transactions that relate to that year, right?
A Yes.
Q All right. And then after that we have '90. We also have '91 and '92, correct?
A Yes.
Q And the same document. And this computer symbol, MFR 01, applies to everything that's in this document, correct?
A That applies to the entity module, the name and address of this account, yes.
MR. BECRAFT: Nothing further, your Honor.
THE COURT: Any redirect?
REDIRECT EXAMINATION
MR. COLLIER:
Q Ms. Jeu, had you ever seen this particular book Mr. Becraft gave you this morning? Had you ever seen that book before, that particular book? Not another copy or another version of it.
A I have not seen this book before, sir. I have --
Q Do you know if anything or everything in that book is accurate and true?
A No, I don't.
Q Until you took the stand this morning, Mr. Becraft had never showed it to you?
A No, sir.
Q Now, Mr. Becraft asked you some questions about a code. And I think he said that, according to his book, that code may mean that there was not a requirement to file taxes. You don't mean to tell the jury that Mr. Long is not required to file taxes, do you?
MR. BECRAFT: Your Honor, object to leading.
THE COURT: Overruled.
A Repeat the question.
THE COURT: Repeat the question.
Q Your responses to Mr. Becraft's questions did not mean to leave the jury with the impression that Mr. Long was not required to file his taxes, was it?
A No, sir. The mail file requirement is changed by certain transaction codes or the return that you file. One year you may file a Form 1040A, but the next year you're required to file a Form 1040, then our mail file requirement would change. In the tax year 1989, there are transactions codes. These codes that we refer to as, like the 150 for the return, is in this account. There is a transaction coda there that changed the mail file requirement to 01, which just, it's for -- I really don't know why. That's from programming. But it was programmed to change the mail file requirement. It does not mean that he is not liable for a tax return. Your income would determine whether you're liable for a return.
THE COURT: Okay. Anything else?
MR. BECRAFT: Briefly, Your Honor.
RECROSS EXAMINATION
MR. BECRAFT:
Q Are you telling this jury then that you don't know what the computer -- let me withdraw that. Mr. Long doesn't have access to IRS computers. He can't load information into it, can he?
A No.
Q Everything, all these symbols that show up on the permanent record, it's all in computer language?
A It's for the use within the IRS.
Q And you have to -- the only people that load that type of data into the permanent record are IRS people, right, people that work at the service center, like you?
A Employees of the Internal Revenue Service.
Q And so somebody inside the IRS has entered something into the computer that causes the computer to print out this symbol; is that correct?
A Yes.
Q And in this situation you have no explanation as to why?
A No.
Q You don't know when this happened?
A When his account was referred from collection to examination, a transaction, this is a reaction from a transaction code that was input to refer his account to examination.
Q But you don't know when it happened?
A No, sir.
Q It just appears there? The computer says so?
A It appears after it's been input, yes.
Q But it has been input and the computer prints out this symbol?
A Yes.
Q And you don't know the reason why?
A No.
MR. BECRAFT: Nothing further, Your Honor.
THE COURT: Anything else from this witness?
MR. BECRAFT: No, Your Honor.
THE COURT: You may step down, ma'am. You're free to leave. (Witness excused.)
MR. COLLIER: Call Mike Geasley.
MICHAEL DEAN GEASLEY, called as a witness at the instance of the Government, having been first duly sworn, was examined and testified as follows:
DIRECT EXAMINATION
MR. COLLIER:
Q Please state your name for the record.
A Michael Dean Geasley.
Q And how are you employed?
A I'm a special agent with the Internal Revenue Service.
Q And what position do you hold with the Internal Revenue Service?
A I'm a special agent.
Q I'd like to direct your attention back to July of last year, of 1992. Did you have an occasion to speak to the defendant in this case, Mr. Lloyd R. Long?
A I did, sir.
Q And did you have a conversation with him regarding his filing tax returns?
A I did, sir.
Q And did he tell you about when he first started filing tax returns?
A He did.
Q And what did he say?
A He said approximately 1969.
Q Did he tell you when he stopped his filing income tax returns?
A He did, sir. He said 1988.
MR. COLLIER: We tender the witness, Your Honor.
CROSS EXAMINATION
MR. BECRAFT:
Q That was so short, Mr. Geasley, I didn't catch the last statement. You say he stopped when?
A In 1988.
Q Okay. Now, was there a reason why you had a conversation with him in July of '92?
A Yes.
Q About the investigation of this case?
A Yes, sir, that's correct.
Q So, you asked for a meeting with him?
A No, sir.
Q Did he ask for a meeting with you?
A He did.
Q So, before this conversation you had been issuing summonses, right?
A It's possible.
Q Okay. well, is that your recollection?
A I believe I did. I don't know the time on that.
Q When you do that, you send a copy to people like Lloyd Long?
A In certain cases third-party --
Q So, somehow, some way that we don't recall right now, he knew that you were investigating him by July of '92?
A I'd gone out to his house and interviewed him on January -- excuse me, February 5th of '92.
Q Oh, okay. That's how you knew of it?
A Yes, sir.
Q Now, on this particular occasion did he initiate the conversation or set up the meeting with you?
A I'm sorry, in which...
Q I'm sorry. I'm confusing. Who requested this July 1992 meeting?
A Mr. Long did.
Q Okay. And where was the meeting?
A It was held at the Federal Building in Winchester, Tennessee.
Q And the two of you showed up at the designated time and designated place, had a conversation for how long?
A Probably about an hour. And it was more than just the two of us.
Q And did he seem to be, in this conversation, hiding anything from you?
A No, sir.
Q And he told you his position, his beliefs?
A To a certain degree.
Q He didn't hide the fact from you that he started filing in '69?
A No, sir.
Q And that's accurate, right?
A I believe it is.
Q And he didn't hide from you the fact that he stopped filing in 1988, did he?
A No, sir.
Q I mean, he freely admitted it?
A We had already had a conversation, yes.
Q Oh, okay. So, he had already previously mentioned the same thing to you on prior occasions?
A No, sir.
Q So, this was the first time he told you he hadn't filed since '88?
A Yes, sir, that's correct.
Q And isn't it true that for the year 1989 when you started investigating this case, you saw that Mr. Long had freely sent to the IRS copies of his 1099s for the year 1989?
MR. COLLIER: Your Honor, I object to that. That's beyond the scope of direct examination. If he wants to make this witness his own, he can in his own case.
MR. BECRAFT: I'll withdraw it, Your Honor. There's no point. It'll be covered on our case.
THE COURT: Okay.
MR. BECRAFT:
Q Now, did he discuss with you certain reasons why he didn't file?
A I believe he did.
Q Did you get the impression that he had anything to hide?
A No, sir.
MR. BECRAFT: Nothing further, Your Honor.
THE COURT: Okay. You can step down, Mr. Geasley. (Witness excused.)
THE COURT: Next witness.
MR. COLLIER: Call Virginia Sherard
VIRGINIA SHERARD, called as a witness at the instance of the Government, having been first duly sworn, was examined and testified as follows:
DIRECT EXAMINATION
MR. COLLIER:
Q Please state your name for the record.
A Virginia Sherard. S-h-e-r-a-r-d.
Q And in what city and state do you reside?
A I live in Rocky Face, Georgia.
Q And are you employed at this time?
A Yes. I'm an Internal Revenue agent.
Q And would you explain to the members of the jury what your duties are as an Internal Revenue agent?
A I examine individual, corporate and partnership returns to determine the correct tax liability.
Q And how long have you been so employed?
A I've been a revenue agent for about three years.
Q And could you give the members of the jury some idea of your educational background that you achieved before you were employed by the Internal Revenue Service?
A I have a bachelor's degree in economics from the College of William and Mary.
Q Now, once you were employed by the Internal Revenue Service, did you receive any training to assist you in your duties?
A Yes, I did. I started out as a tax auditor. I was a tax auditor for eleven years. During the course of my employment with Internal Revenue Service, I've received diversity facility training, I've had advanced corporation training, I've had expert witness training, quality process improvement training.
Q Now, during the course of your employment with the Internal Revenue Service, have you been required to learn what the filing requirements are for various individuals?
A Yes, I have.
Q Why is that? Why do you need to know that?
A We need to know what the filing requirements are in order to determine, number one, whether we should request a tax return from someone who has not filed. Also, when we publicize during filing season, we need to be able to tell people who needs to worry about filing a tax return and who doesn't.
Q Do the filing requirements change from year to year?
A Yes, they do.
Q Now, have you prepared some charts to assist the jury with your testimony regarding the filing requirements for 1989 and 1990?
A Yes, I have.
Q I'd like to show those to you. They're Exhibit S-7.
MR. COLLIER: Your Honor, can she leave the witness stand?
THE COURT: Sure.
Q The Exhibit S-7, using this exhibit would you explain to the jury what the filing requirements were for 1989 and 1990?
A In 1989, the filing requirements for a person filing a joint income tax return was $9,200. The reason it was $9,200 is because it's made up of two things. It's made up of what's called the standard deduction for a person filing a joint return which was $5 200 in that year. And it's made up of two exemption amounts: one for the husband, one for the spouse. Both of those were $2,000. So, $5,200 plus $2,000 plus $2,000 is $9,200. So, if you're filing a joint return for that year, if you made under $9,200 you were not required to file a tax return unless you wished to receive a refund of your income tax withholdings. For 1990, the filing requirement was $9,550. Again, that was made up of two things: the standard deduction for that year, which was $5,450. You can tell it went up that year. And two exemption amounts. The exemptions that year were $2,050. So, $5,450 plus $2,050 plus $2,050 is $9,550. I'd like to point out to you that this is for married people and filing a joint return. There were also other filing requirements that were lower. In other words, if you made even lower income you wouldn't have to file. This is the most generous filing requirement. If you were a single person, the filing requirement was only $5,100, and if you were a head of household it was $6,450, in 1969. So, this chart shows you the most beneficial filing status and filing requirements.
Q Now, I believe that you have sat throughout this trial, have you not?
A Yes, sir.
Q And you've heard the evidence in this case?
A Yes, sir.
Q I'm going to show you what's been marked as S-8. What is that?
A This is a summary of Lloyd R. Long's gross income from 1989. If you'll notice Maury County, we received a great deal of testimony and also documents admitted into evidence which show that as an instructor at the Saturn plant there was $47,750 in contract labor income. You heard testimony, Grower's Chemical Corporation, also received documents, that showed commissions for being a sales representative in 1989 was $742.50. You also heard testimony and received documents that show from AEDC Federal Credit Union there was interest income of $810.91. The total gross income was $49,303.41. And if you'll notice, compare it to the other exhibit, this is more than five times the required filing amount.
Q Now I'll show you S-9.
A For 1990, you heard testimony and also received documents and evidence, from Maury County, being an instructor at the Saturn plant, contract labor income was $48,675, and interest income from AEDC federal Credit Union of $843.02, means total gross income is S49,518.02. Again, this is more than five times the filing requirement for 1990.
Q Ms. Sherard, based upon your training and experience and your knowledge, and also the evidence that you've just testified to in these charts, can you tell us whether Mr. Long was required to file an income tax return for 1989?
A Mr. Long was required to file an income tax return for 1989.
Q And can you tell us whether Mr. Long was required to file an income tax return for 1990? He was required to file for 1990.
MR. COLLIER: We tender the witness, Your Honor. We would offer those exhibits into evidence that this witness testified to, S-7, S-8 and S-9.
MR. BECRAFT: No objection.
THE COURT: All right. Ladies and gentlemen of the jury, S-7, S-B and S-9 are received. I should mention to you at this time that these are summaries. Summaries themselves are not evidence, but are to be used, can be used by you, if you wish, in evaluating the evidence. (Government Exhibits S-7, S-8, and S-9 were received into evidence.)
CROSS EXAMINATION
MR. BECRAFT:
Q Ms. Sherard, you don't know Lloyd Long, do you?
A No, I do not.
Q So, before today, Lloyd Long was just a name. And if we hadn't already identified him for you as this gray-haired fellow over here, you wouldn't even know who he was, right?
A Yes, sir.
Q Never even talked to him, right?
A Yes, sir.
Q You've been brought in to testify and summarize the evidence that's been offered, correct?
A Yes, sir.
Q You testified on direct that you've been -- well, let me back up. Did you say that you had a bachelor's in economics from...
A College of William and Mary.
Q And when did you graduate?
A 1979.
Q That was in economics?
A Yes, sir.
Q And I take it sometime after 1979 or within a month or two you went to work for the IRS?
A Yes, sir.
Q Did you work with the IRS before you got out of school?
A No, sir.
Q So, the first time you started was then?
A Yes, sir.
Q So, you've been with them some 14 years?
A Yes, sir.
Q Have you always been stationed in Georgia?
A I spent a year in Atlanta and I've been in Chattanooga since 1980.
Q So, you work here?
A I work in the Chattanooga office.
Q Now, in school did you have any particular training in tax law?
A No, sir.
Q Did you take accounting courses?
A I did take accounting courses.
Q So, when you say you had a bachelor's degree in economics, part of those courses, I don't care how many, but you at least covered a lot of -- well, you had basic accounting and you know how to engage in accounting work?
A Yes, sir.
Q And accounting is something that you need in order to do your work for the IRS, right?
A Yes, sir.
Q And those accounting principles that you've learned are used by you because you examine returns on a regular basis; is that correct?
A Business returns, yes, sir.
Q Okay. How about individuals?
A Accounting skills are not as necessary for individual returns. In fact, the requirement for being a tax auditor who examines only individual returns is only two semesters of accounting.
Q Okay. So, when we're talking about the accounting that applies for an individual, it's real basic?
A Very basic.
Q If you can add and subtract and deal with figures, you can do it, right?
A Hopefully.
Q Now, what training have you had -- I think you've testified that, you know, it's your conclusion that Mr. Long is required to file for these two years. Have you studied the Internal Revenue Code?
A Yes, sir.
Q And since you didn't study it in school, then I take it at some stage of your work for the Internal Revenue Service you picked up training in this area; is that correct?
A Yes, sir.
Q Can you describe for the jury how thorough that training is, how often you have training, what type of classes you've taken?
A When I came on as a tax auditor I received six weeks basic tax auditor training. We have refresher courses similar to the types of courses that we offer during our volunteer income tax assistance, free to the public. As a revenue agent I received six weeks of intensive training in corporate and partnership law.
Q Can you give the jury just a rough ballpark figure how, over the last 14 years how many classes you've attended, a guesstimate?
A IRS classes?
Q Yeah.
A Probably about one a year.
Q And these would be for, the first one was six weeks?
A (Moving head up and down.)
Q And how long would, approximately, the rest of them be?
A The revenue agent class was about six weeks and the refresher classes are several days each year.
Q So, total classroom time in 14 years would amount to maybe tour or five months of studying?
A That sounds good.
Q And that includes course materials that the IRS prepares, right?
A Yes, sir.
Q Study of the code?
A Yes, sir.
Q Study of the tax regulations, right?
A Yes, sir.
Q So, you've acquired through your training with the IRS an expertise in this field?
A Yes, sir.
Q And you have to have this expertise to do what you do, which is examination of business returns?
A Yes, sir.
Q Which are a lot more complicated than an individual?
A Generally so.
Q And here in this case, what we're talking about here with these charts and everything else, that's real basic, right?
A Yes, sir.
Q Now, you've sat through this case and it's been real quick. We haven't had a whole lot of items of income. You've produced these charts, and you've taken those figures from basically the 1099s that have been offered into evidence, right?
A I believe there were also checks and ledgers offered into evidence.
Q Well, the checks add up to what the 1099 is. You don't have any doubt about that, right?
A No, sir.
Q Okay. And so you used the 1099s as the items that were providing the broad base figures, when you added them up?
A To come up with the gross income figure, yes.
Q And for '89, you said the filing requirement was $9,200, right?
A Yes, sir.
Q And for '90 it was what?
A $9,505.
Q $9,505. Now, that is, those two figures, according to what you said on these charts, we're dealing in a ballpark figure for both these years, forty-nine thousand plus, right?
A Yes, sir.
Q And let's call it nine thousand as the filing requirement. Right?
A Yes, sir.
Q And so, how much he made exceeded the filing requirement, so you've reached this conclusion that he was required to file a return, right?
A Yes, sir.
Q Now, that opinion of yours, that's based upon a study of the Internal Revenue Code; is that correct?
A Yes, it is.
Q And I don't want to know the substance of it, but can you at least inform us, can you give us a number in the code that would deal with this subject matter, of filing?
A I can.
Q Just give us the number.
A Code 6012.
Q Now, that's the one that directly relates to the filing requirement, right?
A Yes, sir.
Q Now, it doesn't say, if we pull it out right now here, it wouldn't say the nine-thousand-dollar figures, right?
A No, sir.
Q Okay. Those nine thousand figures come from some other place; is that correct?
A It comes from reading the entire text of Code Section 6012A.
Q It depends upon what?
A I believe the code section states that any individual shall file an income tax return if his gross income exceeds his exemption amount.
Q Now, so we'd have to refer to other parts of the code?
A Yes, sir.
Q To determine what those exemption amounts are, right?
A Yes, sir.
Q Off the top of your head do you know what they are?
A The exemptions are at 151, Code Section 151.
Q So, to determine this you'd have to -- would 151 say these figures?
A I believe so.
Q Okay. And they're probably changed every year?
A Generally.
Q Does Congress do that, to your understanding?
A To my understanding, yes, sir.
Q So, it's your understanding --you're not trying to tell the jury that, you know, that section -- that your opinion is based on Section 6012, right?
A I am saying that my opinion is based on Code Section 6012.
Q And that requires you to look at another section of the code, Section 151?
A (Moving head up and down.)
Q And once someone has done that, they would learn the filing requirements?
A You cut me off a little bit on Code Section 6012A. It states that a person shall file an income tax return if their gross income exceeds the exemption amount. Then it lists certain exceptions. And the exceptions are for married filing jointly, other filing statuses, and the standard deduction amount.
Q We're not dealing with an exception here, right?
A Right.
Q We're just dealing with the general rule, right?
A (Moving head up and down.)
Q Are these the only two that, the laws that your opinion is based upon?
A I'm sorry?
Q I don't mean to say laws. That's a slip of my tongue. We're talking about your opinion about the law.
A I'm not sure what your -- could you restate that?
Q Yes, I surely will. My question to you, I didn't mean to invade the province of the Court by talking about laws. We're talking about your opinions. But these are the only two laws that relate to this obligation to file a return, right? In your opinion?
A Code Section 6012, the exemption section and then the section that would state the standard deduction amount.
Q Which is 151?
A The exemption amount is 151. The standard deduction amount code section slips my mind for the moment.
Q Well, whatever it was.
A Whatever it was.
MR. BECRAFT: All right. Nothing further, Your Honor.
THE COURT: Anything else?
MR. COLLIER: No redirect, Your Honor. the Government rests.
THE COURT: You may step down. You're free to leave. (Witness excused.)
MR. BECRAFT: Just as a matter of record, I realize that at this stage of the trial, at the conclusion of the Government's proof there would be time for me to file a Rule 29. However, based upon the proof that's come in thus far, I don't have that argument yet, and it will depend upon -- I will have a Rule 29 after the defendant testifies.
THE COURT: Okay.
MR. BECRAFT: Is the Court ready to proceed?
THE COURT: Ready to proceed.
MR. BECRAFT: Defense calls Lloyd Long.
THE CLERK: Do you solemnly swear the testimony you're about to give is the truth, the whole truth, and nothing but the truth, so help you God?
MR. LONG: Your Honor, I'm not certain that I know the whole truth and nothing but the truth, but it is my solemn intent to tell the truth as I know it from my perspective.
THE COURT: Do you understand that you have an obligation here to tell the truth?
THE WITNESS: Yes, sir.
THE COURT: All right.
LLOYD RAYMOND LONG, called as a witness in his own behalf, having been first duly sworn, was examined and testifies as follows:
DIRECT EXAMINATION MR. BECRAFT:
Q State your name, please.
A Lloyd Raymond Long.
Q You're the defendant in this case, right?
A Yes, sir.
Q Are you married?
A Yes, sir.
Q What's your wife's name?
A Dana, D-a-n-a. Named after her father, Dan.
Q She's the lady back here in the red sweater, right?
A Yes, sir.
Q Do you have any kids?
A Got two children.
Q And they are?
A Kelly is 18, my son, and my daughter is 15, Wendy.
Q And they're here?
A Wendy is not. She had to have some pictures made today at school.
Q Now, Mr. Long, I'd like to ask a few basic questions about your background.
A All right.
Q Can you tell the jury about when you were born, where, what type of schooling you've had, elementary and high school?
A Sure. Like I say, I'm Lloyd Long. I was born in Winchester, Tennessee, which is west of here, just across Monteagle Mountain. I grew up in a little community, little farming community called Alto, went to a little three-teacher elementary school where our principal had -- we knew what the golden rule was, but; he had one other rule. He said, "Just do right." That was his rule. So, went on from there to Franklin County High School, where I majored in agriculture. I met my wife in high school. We graduated. As I recall, we were king and queen of the Harvest Festival. That was fun, you know. We went on from there to --
Q Can I stop you right there? When did you graduate?
A 1966.
Q All right. And you were born in '48, right?
A '48.
Q So, you're what right now, agewise?
A Seventeen. Oh, you mean --
Q Right now.
A I'm 45. I'm sorry.
Q I didn't catch that.
A There's too many times here.
Q Okay. When you graduated from high school what did you do?
A Went to MTSU college.
Q From what year to what year?
A From '66 through '72.
Q Did you obtain any degrees?
A I graduated from MTSU in 1970 with a bachelor's degree, with a major in agriculture and a minor in industrial education.
Q What did you do -- that was in '70?
A '70.
Q What did you do after then?
A Well, my wife also graduated with a teacher's degree in elementary education. So, she took a job there in Murfreesboro, and I stayed and worked on my master's. Then I graduated from MTSU with a master's degree, or MAT, master of arts and teaching degree, in 1972.
Q I didn't -- this is my fault. You just said you were married at that time, right?
A We got married in our junior year. We dated for six years.
Q So, that would be in what, '69?
A '69, '68.
Q Now, after you got your master's degree, can you tell the jury basically what you've done, various jobs, where you've lived, since then, all the way up through today?
A We left MTSU and I took a job in Sumner County, which is Hendersonville, which is Johnny Cash country. And I was hired to set up the first trades and industrial program in Hendersonville High School and in all of Sumner County. That was when the vocational education was just coming into Tennessee, and especially in a lot of counties they were building comprehensive schools. So, we moved to Hendersonville. I set up the program there. Taught there for one year. I got an opportunity then to transfer to Gallatin, which is still in Sumner County. And at this particular point I got the opportunity to write the specifications and order all the equipment for the new shop that they were putting in at the new high school, which for a shop teacher that's a dream because you get to order the kind of equipment you want. You get to order everything. So, the next year I moved to Gallatin and set up that program. And somewhere in that period of time my son was born. And I taught there for about four years, which is five years total. And as my little boy got older, I think he was about three, we were living in a subdivision. And growing up in the country like I did, I felt the need to move back home. I wanted him to have the opportunity to grow up in the country like I did.