From the information he learned in meetings, he went to law libraries to confirm whether the information he learned was true and actual court cases concluded that the information he learned at meetings were correct. In 1988 Lloyd started writing a series of letters asking if he was liable and explained he had no business or professional licenses, did not own a corporation and was not an officer of any corporation. He asked if was liable to any revenue tax. He got back a series of letters from the IRS that skirted around the questions and never gave a direct answer yes or no. Lloyd referred to himself as a Citizen of Tennessee and domiciled in Tennessee.
Filing status is a minor issue.
In 1969 Lloyd was assigned the status MFR01 and kept that status from the beginning. MFR01 means not required to file returns. With that status he should not have been prosecuted in the first place. A friend of Lloyd's who also contracted out his labor for compensation repeatedly got letters from the IRS saying he was not required to file returns and Lloyd relied on this in his own defense and not filing returns for the years 1989 and 1990. Lloyd was allowed to argue the law in this case which was unusual because juries are only allowed to judge the facts in the case and the court gives the law as instructions to the jury and the jury is instructed to rely only upon the court for law instruction and takes an oath to rely on the court for its opinion of the law.