William J. Benson, the Guru that "Never Was"
By: Bill E. Branscum
Copyright 2002

William J. Benson, is the co-author of a the book, The Law that Never Was, a collaborative effort with “Red” Beckman. To hear him tell it, this investigative research masterpiece, and his $3500 "Reliance Package," (the certified documents he sells in support thereof), are the keys to freedom from taxation.

To hear him tell it, Bill Benson is a Patriot, a former law enforcement officer, previously employed by the Illinois Department of Revenue as a Criminal Investigator, and fired for exposing corruption. He paints himself as a modern day Samuel Adams, leading the charge against unlawful taxation.

Benson's web site, www.thelawthatneverwas.com, has an introductory paragraph that says:

"The authority of the federal government to collect its income tax depends upon the 16th Amendment to the U.S. Constitution, the federal income tax amendment, which was allegedly ratified in 1913. After a year of extensive research, Bill Benson discovered that the 16th Amendment was not ratified by the required 3/4 of the states, but nevertheless Secretary of State Philander Knox fraudulently announced ratification."

Don't encourage your clients to take his word for that. The fact is, this self professed guru of the 16th Amendment hasn't got a clue what the 16th Amendment was all about. You probably don't either, so let me address that first.

First, you must understand where the government actually gets the authority to impose taxes, and why it has absolutely nothing to do with the 16th Amendment. Article I, § 8, Clause 1 of the US Constitution says.

"The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States; . . ."

The United States Constitution gives the Congress the power to "lay" and "collect" taxes which means that Congress can legislate the imposition of taxes and provide for the enforcement mechanisms necessary to collect the tax.

Next, you must understand the background that gives rise to tax protester confusion. Article I, § 2, Clause 3 of the US Constitution says:

"Representatives and direct Taxes shall be apportioned among the several States . . . , according to their respective Numbers . . ."

In other words, the US Constitution provides that, just as Congressional Representatives are distributed throughout the Country based upon Census (apportioned), the revenues generated by "direct" taxes must be distributed throughout the Country based on Census as well. Direct taxes, by definition, are those taxes related to real property - all other taxes are excise taxes including taxes on "wages, tips and other compensation."

Ok, that sets the stage - in 1895, the Congress had the Constitutional authority to impose and collect taxes with the stipulation that all direct (property) tax revenue had to be distributed according to census. Just as a small state with a huge population gets more Congressional Representatives than a huge state with a very small population, the Constitution provides that they get more direct tax revenue as well.

We all know this should not be a problem -- there is no federal "property tax." You, I and everyone else, pay our property tax to the county where we live, and the county spends that money locally; but, and it was a very big BUT in 1895, the federal government does consider income derived from property to be taxable.

What if someone argued that taxing income from property (rent, for example) was the same as taxing the property itself? That is precisely what happened.

In 1895, the United States Supreme Court held that the income tax law, as it was then enacted was unconstitutional, because it taxed income from property, which was the same as taxation of the property itself (a direct tax) which made it unconstitutional since federal tax dollars are not apportioned among the States. See Pollock v. Farmers' Loan & Trust Co. (1895), 157 U.S. 429, 39 L. Ed. 759, 15 S. Ct. 673; Pollock v. Farmers' Loan & Trust Co. (1895), 158 U.S. 601, 39 L. Ed. 1108, 15 S. Ct. 912.

If, taxing income from property was the same as taxing the property itself (and it was, no matter what we think, since the Supreme Court said so), the assertion that the system was unconconstitutional was a "no brainer" because Article 1, § 9, Clause 4, of the US Constitution says:

"No Capitation, or other direct, Tax shall be laid, unless in Proportion to the Census or Enumeration herein before directed to be taken."

Obviously, this created a problem. Anytime the government finds itself doing something the Supreme Court says is unconstitutional, there are two options; stop doing it, or amend the Constitution. In 1913, the 16th Amendment was ratified which says:

"The Congress shall have power to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several States, and without regard to any census or enumeration."

I can understand how anyone who did not understand the history of this Amendment could read it and interpret it as creating a new power to tax. It didn't; instead, it removed the apportionment requirement that caused the Supreme Court to decree the existing tax laws relating to income derived of property unconstitutional. All the 16th Amendment actually did was allow the Congress to continue taxing all income, from whatever source, without being concerned with apportionment issues.

Don't expect your Clients to take your (or my) word for it. Many of them are devout cult followers totally indoctrinated to believe what some wannabe "Tax Moses" has told them. Fortunately, the US Supreme Court has explained it quite nicely in the case Stanton v. Baltic Mining Co., 240 U.S. 103, 112 (1916), appended as Exhibit 1, where they say:

''[T]he Sixteenth Amendment conferred no new power of taxation but simply prohibited the previous complete and plenary power of income taxation possessed by Congress from the beginning from being taken out of the category of indirect taxation to which it inherently belonged."

So, therein lies the basis for two issues of concern. First, although William J. Benson touts himself as the expert on the 16th Amendment, and offers his diligent "research" in support thereof, his statement that, "the authority of the federal government to collect its income tax depends upon the 16th Amendment . . ." reveals that he doesn't even understand what the amendment was all about and, second, since the 16th Amendment "conveyed no new power," Benson's 16th Amendment ratification related arguments are irrelevant to the power and authority of the US government to tax.

Still, that hardly makes him a monster - it is entirely possible that a person could read the 16th Amendment and conclude that it established the power to tax and therefore believe that a successful assault upon the 16th Amendment could derail the entire income tax system. Frankly, I think Benson genuinely did conclude and believe precisely that - with the emphasis on did. For now, let's reserve judgment upon whether or not he's a monster.

Lets go back to the good old days. To hear him tell it, William J. Benson is a former Criminal Investigator, previously employed by the Illinois Department of Revenue who was fired for exposing corruption. In published reports, newspaper articles, etc., such as the one appended to this report as Exhibit 2, there are references to Benson’s career as:

A criminal investigator for the Illinois Department of Revenue for approximately 10 years, William J. Benson of South Holland, Illinois has been at the vanguard of debate and controversy surround the 16th Amendment for almost two decades.

In this same article, previously referenced as Exhibit 2 , Benson describes the facts and circumstances that ended his, “ten year career as a Criminal Investigator.” To hear him tell it, he was a noble crusader, fired as a consequence of his efforts to expose corruption. Specifically, he says:

“I discovered a great deal of corruption within that department and for that the Director fired me.”

The Court records reflect that there are other sides to his stories.

According to Judge Cudahy, Seventh Circuit Court of Appeals, Benson was an employee of Bethlehem Steel Corporation during the 1960’s when he filed a claim with the Social Security Administration alleging that he had contracted encephalitis and developed a seizure disorder that rendered him completely unable to work. He began receiving disability benefits, and he continued to receive those benefits for approximately twenty years, fraudulently representing that he was entirely unable to perform any work at all. See Exhibit 3.

Ironically, according to the facts as stated by Judge Cudahy, Benson began working for the Illinois Department of Revenue (IDOR) in 1971 as an informant. He is also alleged to have been contemporaneously employed as a bartender in a bowling alley cocktail lounge.

It may seem incredibly incongruous to his disciples that William J. Benson, who currently plays the role of the noble knight errant, and indefatigable supporter of those who seek to evade their tax liabilities, actually began his tax related career as a “snitch,” but that appears to be the case according to Exhibit 4, where Judge Cudahy says:

Beginning in the early 1970's, however, Benson returned to work. He apparently first began working as a bartender at a bowling alley and cocktail lounge . . . In 1971, he joined forces with IDOR as an informant.

Judge Cudahy's characterization notwithstanding, Benson's job is not entirely clear, but it is clear that it related to the problem that Illinois was having related to their state taxes on cigarettes. Evidently, people were circumventing the tax by buying cigarettes in Indiana and trucking them in to Illinois. Benson lived in South Holland, Illinois, which is not far from the Indiana border, and worked out of a squad room on LaSalle Street in Chicago.

In the latter part of 1971, the IDOR apparently adopted an aggressive, proactive policy; they established surveillance operations where they monitored the activities at various Indiana cigarette stands close to the Indiana/Illinois border.

In March 1973, Robert Allphin became the Director of IDOR and adopted a hard line “zero tolerance” policy. During his administration, Tax Act violators were arrested and their vehicles were confiscated. By all appearances, the IDOR was outrageously overzealous in their enforcement activities resulting in lawsuits and legislation intended to reign them in. Ironically, the same William J. Benson that we now see preaching tax protestations was named as a defendant in at least four of these lawsuits. See Exhibit 5.

On November 1, 1974, Benson matriculated from being a paid informant, to being an independent contractor. He entered into a one-year written employment contract with the Department to "undertake projects requiring personal and technical services as assigned by the Department of Revenue concerning pending investigations." as evidenced by Exhibit 6, the contract provided that Benson was to be paid $750 per month and further stated: "It is expressly agreed that for liability insurance purposes only, William Benson will be considered an employee rather than an independent contractor.”

According to Benson, he was later fired for trying to expose corruption; the state told a different story. The state alleged that Benson was terminated from employment because he attempted to extort a Department of Revenue job from Allphin and they submitted various affidavits asserting that Allphin, at the time he decided to terminate Benson, did not know of Benson's disclosures to the press and various law enforcement officials. They also produced allegedly contemporaneous notes of Benson's attempts to extort a permanent position with the Department of Revenue. See Exhibit 7.

On July 21, 1976, after he was fired, Benson filed an affidavit with the state trial-court judge. In the affidavit, he stated that he had been told by his superiors at the IDOR to disregard the April 1974 injunction, and to distort his testimony at the contempt hearing. Benson claimed further that IDOR records had been destroyed and that others had been withheld or altered in violation of the state court's production order. See Exhibit 7b.

This seems curious. Benson paints a picture in which he is a crusader who could not be stifled from exposing corruption and was fired as a consequence. Yet, after he was terminated, he filed an Affidavit alleging that at the behest of his supervisors, he committed perjury upon direct examination intended to uncover this very same corruption.

Benson also alleges that in addition to firing him, his supervisors (Allphin and Rummel) maintained a campaign of harassment against him. For example, they caused information to be sent to the Social Security Administration and the Internal Revenue Service to encourage them to investigate and prosecute him.

In this regard and in retrospect, Benson’s position suffers from the fact that, whomever it was that turned him in, and for whatever reason, he was guilty of fraudulently collecting Social Security benefits and tax evasion as evidenced by the fact that he was indicted and convicted.

The trial court records reflect that Benson was fully aware that he was perpetrating a fraud upon the Social Security Administration. A co-worker testified that he had contacted the SSA anonymously and determined that he would be required to pay back $20,000. In addition, he was collecting disability benefits from Bethlehem Steel and accepting a deferred payment disability benefit from Metropolitan Life Insurance. When the SSA began investigating Benson, he tried to convince SSA Investigators that his position with IDOR was part of a rehabilitation program when he knew it was not and ultimately sought refuge in the defense, "If he was guilty of fraud, others were too." See Exhibit 8.

In December 1989, a jury in the federal criminal tax evasion case convicted Benson of two misdemeanor counts of willful failure to file a federal tax return, 26 U.S.C. § 7203, and one felony count of willful tax evasion, 26 U.S.C. § 7206. Judge Paul E. Plunkett sentenced Benson to one-year terms on counts I and II (misdemeanors), and a four-year term on count III (felony). All three jail sentences were to run concurrently. See Exhibit 9.

Following his conviction, Benson filed a flurry of post-trial motions in Case No. 87 CR 278, United States Of America v. William J. Benson, Defendant, United States District Court for the Northern District of Illinois, Eastern Division. The Decision and Order, as reported at 1990 U.S. Dist. LEXIS 2631, is appended to this report as Exhibit 10. It provides a great deal of information about the case, including the fact that on March 6, 1990, all the motions were all denied.

On May 29, 1990, Benson began serving his sentence. Fortunately for him, he was sentenced before the current sentencing guidelines went into effect so he was to become eligible for parole after serving one third of his sentence, with credit for "good time." Benson was scheduled to be paroled on September 27, 1991. See Exhibit 11 .

Following the denial of his post-trial motions, Benson filed a Motion for Reconsideration in Case No. 87 CR 278, United States Of America v. William J. Benson, Defendant, United States District Court for the Northern District of Illinois,
Eastern Division. The Decision and Order, as reported at 1991 U.S. Dist. LEXIS 2178 is appended to this report as Exhibit 12 . This document provides further information regarding the background of this situation, and establishes that Benson’s Motion for Reconsideration was denied on January 18, 1991, along with his renewed Motion for Bail Pending Appeal.

Benson appealed his felony convictions related to tax evasion, see Case 90-1572, reported at 941 F.2d 598, United States of America, Plaintiff-Appellee, v. William J. Benson, Defendant-Appellant.

On September 3, 1991, the Seventh Circuit reversed Benson's convictions and remanded for a new trial on all charges. The Decision and Order is appended to this report as Exhibit 13 .

On September 4, 1991, the day after the opinion was issued, Benson was released from prison on bond. At that point in time, Benson had served 467 days in federal prison and was scheduled for parole later that month.

In February 1994, Benson was retried and convicted again on the same three counts. Judge John F. Grady sentenced Benson to the same concurrent terms of one year for his count II misdemeanor, and four years for his count III felony conviction. For the count I misdemeanor, Judge Grady sentenced Benson to five years probation to run consecutive to the sentences imposed on count II and III. Judge Grady also imposed a criminal fine together with the costs of prosecution, the latter totaling $ 4,083, pursuant to 26 U.S.C. §§ 7201, 7201. See Exhibit 14

Curiously, Benson and his criminal defense attorney never claimed during his sentencing hearing before Judge Grady that because Benson had already served more than 365 days in jail for his three concurrent sentences, the double jeopardy clause precluded the Judge Grady from entering a probation sentence on Count I, a misdemeanor.

On November 10, 1994, Benson began serving his second four-year sentence. Because he had already served 467 days, and because his sentence was imposed under pre-guideline rules, Benson was only required to serve an additional 18 days in prison.

To hear Benson tell it, the government is afraid to deal with him, but it sure doesn't look that way to me. Now, I ask you - those of you who have been feds, or been involved in fed task forces - how many times have you seen the federal government decline to prosecute serious offenders because they weren't serious enough? It always comes down to, how many dollars involved, or how many pounds/kilos. Can you imagine the federal government going thru all the gyrations that accompany a criminal prosecution just to make someone serve eighteen days?

On November 28, 1994, Benson was paroled again. William J. Benson was 67 years old. Personally, I would have thought that Benson would have had enough of this by now - I would have been wrong.

Benson once again appealed his felony convictions related to tax evasion, even though he had already served his time. See Case 94-2214, reported at 67 F.3d 641, United States of America, Plaintiff-Appellee, v. William J. Benson, Defendant-Appellant, appended to this report as Exhibit 15 .

On May 19, 1995, Benson’s appeal of his 1994 conviction was heard by the US Court of Appeals for the 7th Circuit. For some reason, neither Benson, nor his attorney, raised the issue regarding the probation order entered by Judge Grady. His second appeal was limited to his convictions on Counts II and III.

On October 6, 1995, The US Court of Appeals for the Seventh Circuit affirmed his second conviction and sentence, rejecting Benson's sufficiency of the evidence and jury instruction arguments. See United States v. Benson, 67 F.3d 641, 642 (7th Cir. 1995), previously referenced as Exhibit 15.

Benson responded to the affirmation of his 1994 conviction by filing a Petition for Rehearing, see Case 94-2214, reported at 74 F.3d 152, United States of America, Plaintiff-Appellee, v. William J. Benson, Defendant-Appellant, appended to this report as Exhibit 16.

On January 18, 1996, The US Court of Appeals for the Seventh Circuit denied Bensons Petition for Rehearing as stated in the previously referenced Exhibit 16 .

On July 30, 1997, Benson was released from parole for his four-year sentence at which time the five-year probationary period to which he had been sentenced by Judge Grady began. In February 1998, less than seven months into Benson's probation, Assistant U.S. Attorney Safford filed a motion to have Benson's probation revoked for various probation violations according to Exhibit 17.

Again, this is the same William J. Benson who would have it believed that the government fears meeting him in a courtroom.

In October 1998, during the probation revocation hearing before Judge Grady, Benson 's attorneys argued for the first time that Judge Grady's earlier imposed probation sentence violated Benson's Fifth Amendment double jeopardy rights. Specifically, Benson argued that the probation sentence on count I was improper because he had already served a one-year term associated with Count I, while awaiting the resolution of his first appeal.

On March 18, 1999, just a few days prior to Benson’s seventy-second (72nd) birthday, and approximately twenty months into his probation, Judge Grady agreed with Benson and vacated his probation. See Exhibit 18 .

Note that this was the first time Benson actually “won” in any criminal court proceeding he had been involved in. While he could, perhaps, claim a victory in winning his appeal of his initial three count criminal conviction, all he gained was another trip through the system, and another three count conviction resulting in the unlawful imposition of a four thousand dollar fine and five year period of probation with regard to an offense that he had previously been convicted of, and served his time for.

In fact, I am not sure that this could be viewed as much of a “win” either. All he got was an acknowledgement that he had been unlawfully fined and sentenced to an extended period of probation. By that time, he had paid most of the fine and served a twenty-month probationary period for nothing.

Armed with the foregoing information, as well as the corroborating documents, you should have no trouble convincing your Clients that there is another version of his story that differs rather dramatically from the way in which he tells it. Nevertheless, some might argue that this does not disprove his claim that his 16th Amendment ratification issues are a viable defense in tax cases. After all, William J. Benson assures everyone that the courts have never considered his evidence that IRS knows they cannot allow to see the light of day.


Perhaps the best way to deal with this is to allow your Clients to read for themselves, and see what has happened to those who trusted William J. Benson to give them tax advice.

Appendix 1 : Wayne Wojtas’ Experience with “Reliance” on Benson (1985)

Appendix 2: Kenneth L. Thomas’ Experience with “Reliance” on Benson (1986)

Appendix 3: Daniel T. Arthurs’ Experience with “Reliance” on Benson (1986)

Appendix 4: Mark & Laura Sato's Experience with “Reliance” on Benson (1989)

Appendix 5: Marvin D. Miller's Experience with “Reliance” on Benson (1989)

Now, I suppose that someone, somewhere, may have a Client of uncommon generosity, desperate to give their pal Benson the benefit of the doubt. These are, after all, people who were capable of believing that they could convince a federal judge to declare our entire tax system unconstitutional just because some huckster said so.

"Perhaps," one such person might say, "the failures of William J. Benson's arguments are unknown to him. Perhaps, nobody who believed him, trusted him, and spent their money on his package of worthless paperwork ever let him know what happened. Maybe, just possibly, Benson honestly believes that his research has never been presented to a court in a case of first impression."

For that person, the William J. Benson true believer, I have saved the best for last.

Appendix 6: George and Marion House's Experience with “Reliance” on Benson

As evidenced by the House Appendix, it's been almost twenty years since the 16th Amendment ratification issue was presented in federal court. It was, in fact, certified as a case of "first impression," and William J. Benson appeared armed with the very documents that he claims have never been considered. The record is clear - he personally introduced and explained them and the Court was not persuaded.

Finally, have your Client's review Benson's experience relying on his own documents. Benson attempted to argue his 16th Amendment ratification issue in his own case. As evidenced by Exhibit 19, the Court was not persuaded.

Since then, time and time again, people have appeared before judges to adamantly, vehemently, insist that they must consider the "evidence" that they bought from William J. Benson, assured that it had never seen the light of day. The cited examples are only a few.

Like some sort of “Jim Jones” wannabe tax expert/evangelist, William J. Benson preaches poison. He urges his cult following to believe in him, have faith in him, pay him the $3500 he charges for his “Reliance Package” and “drink the Kool Aid,” depending upon his box of documents to protect them.

I welcome your comments, questions and suggestions.

© Copyright 2002 - Bill E. Branscum. All Rights Reserved.