ublic
Notice
This memorandum will be
construed to comply with provisions necessary to establish presumed
fact (Rule 301, Federal Rules of Civil Procedure, and attending
State rules) should interested parties fail to rebut any given
allegation or matter of law addressed herein. The position will be
construed as adequate to meet requirements of judicial notice, thus
preserving fundamental law. Matters addressed herein, if not
rebutted, will be construed to have general application. A true and
correct copy of this Public Notice is on file with and available for
inspection at the newspaper responsible for publishing the
instrument as legal notice. The memorandum addresses the character
of the Internal Revenue Service and other agencies of the Department
of the Treasury, and legal application of the Internal Revenue
Code.
1. IRS
Identity & Principal of Interest
In 1953, the Internal
Revenue Service was created by the stroke of a pen when the
Secretary of the Treasury changed the name of the Bureau of Internal
Revenue (T.O. No. 150-29, G.M. Humphrey, Secretary of the Treasury,
July 9, 1953). However, no congressional or presidential
authorization for making this change has been located, so the source
of authority had to originate elsewhere. Research to which IRS
officials have acquiesced suggests that the Secretary exercised his
authority as trustee of Puerto Rico Trust #62 (Internal Revenue)
(see 31
USC § 1321), and as will be demonstrated, the Secretary does, in
fact, operate as Secretary of the Treasury, Puerto
Rico.
The solid link between
the Internal Revenue Service and the Department of the Treasury,
Puerto Rico, was first published in the September 1995 issue of
Veritas Magazine, based on research by William Cooper and Wayne
Bentson, both of Arizona. In October, a criminal complaint was filed
in the office of W. A. Drew Edmondson, attorney general for
Oklahoma, against an Enid-based revenue officer, and in the time
since, IRS principals have failed to refute the allegation that IRS
is an agency of the Department of Treasury, Puerto Rico. In
November, criminal complaints were filed simultaneously with the
grand jury for the United States district court for the District of
Northern Oklahoma, Tulsa, and the office of Attorney General
Edmondson, and both the office of the United States Attorney and IRS
principals have yet to rebut the allegations in that instance
(UNITED STATES OF AMERICA vs. Kenney F. Moore, et al, 95
CR-129C).
By consulting the index
for Chapter 3, Title 31 of the United States Code, one finds that
IRS and the Bureau of Alcohol, Tobacco and Firearms are not listed
as agencies of the United States Department of the Treasury. The
fact that Congress never created a "Bureau of Internal Revenue" is
confirmed by publication in the Federal Register at 36 F.R. 849-890
[C.B. 1971 - 1,698], 36 F.R. 11946 [C.B. 1971 - 2,577], and 37 F.R.
489-490; and in Internal Revenue Manual 1100 at
1111.2.
Implications are
condemning both to IRS and third parties who knowingly participate
in IRS-initiated scams: No legitimate authority resides in or
emanates from an office which was not legitimately created and/or
ordained either by state or national constitutions or by legislative
enactment. See variously, United States v. Germane, 99 U.S. 508
(1879), Norton v. Shelby County, 118 U.S. 425, 441, 6 S.Ct. 1121
(1866), etc., dating to Pope v. Commissioner, 138 F.2d 1006, 1009
(6th Cir. 1943); where the state is concerned, the most recent
corresponding decision was State v. Pinckney, 276 N.W.2d 433, 436
(Iowa 1979).
Another direct evidence
of the fraud is found at 27 CFR § 1, which prescribes basic
requirements for securing permits under the Federal Alcohol
Administration Act. The problem here is that Congress promulgated
the Act in 1935, and the same year, the United States Supreme Court
declared the Act unconstitutional. Administration of the Act was
subsequently moved offshore to Puerto Rico, along with the Federal
Alcohol Administration, and operation eventually merged with the
Bureau of Internal Revenue, Puerto Rico, which until 1938, along
with the Bureau of Internal Revenue, Philippines, created by the
Philippines provisional government via Philippines Trust #2
(internal revenue) (see 31
USC § 1321 for listing of Philippines Trust #2 (internal
revenue)), administered the China Trade Act (licensing & revenue
collection relating to opium, cocaine & citric wines). This line
will be resumed after examining additional evidences concerning IRS
and Commissioner of Internal Revenue
authority.
Further verification
that IRS does not have lawful authority in the several States is
found in the Parallel Table of Authorities and Rules, beginning on
page 751 of the 1995 Index volume to the Code of Federal
Regulations. It will be found that there are no regulations
supportive of 26 USC §§ 7621,
7801,
7802
& 7803
(these statute listings are absent from the table). In other
words, no regulations have been published in the Federal Register,
extending authority to the several States and the population at
large, (1) to establish revenue districts within the several States,
(2) extending authority of the Department of the Treasury [Puerto
Rico] to the several States, (3) giving authority to the
Commissioner of Internal Revenue and assistants within the several
States, or (4) extending authority of any other Department of
Treasury personnel to the several States.
Authority of the
Internal Revenue Service, via the Commissioner of Internal Revenue,
is convoluted in regulations, but makes an amount of sense by citing
various regulations pertaining to the Service and application of the
Commissioner's authority. General procedural rules at 26 CFR §
601.101(a) provide a beginning-point:
(a) General. The
Internal Revenue Service is a bureau of the Department of the
Treasury under the immediate direction of the Commissioner of
Internal Revenue. The Commissioner has general superintendence of
the assessment and collection of all taxes imposed by any law
providing internal revenue. The Internal Revenue Service is the
agency by which these functions are
performed...
The fact that there are
no regulations extending Commissioner of Internal Revenue, or
Department of the Treasury authority to the several States (26 USC §
7802(a)),
has greater clarity in the light of the general merging of functions
between IRS and other agencies presently attached to the Department
of the Treasury. The Commissioner is given responsibility for
issuing rules and regulations for the Code at 26
CFR § 301.7805-1, with approval of the Secretary, but there are
no cites of authority for this CFR subpart, whether Treasury Order,
publication in the Federal Register, or even statute cite. In other
words, there is no actual or effective delegation which vests the
Commissioner with significant independent authority which might be
conveyed to IRS, BATF, Customs or any other Department of the
Treasury agency with respect to powers extending to or affecting the
several States and the population at large.
The link between IRS and
the Bureau of Alcohol, Tobacco and Firearms is significant as the
tie with the Bureau of Internal Revenue, Department of the Treasury,
Puerto Rico, is through this door. Reorganization Plan No. 3 of
1940, Section 2, made the following change:
§ 2. Federal Alcohol
Administration
The Federal Alcohol
Administration, the offices of the members thereof, and the office
of the Administrator are abolished, and their function shall be
administered under the direction and supervision of the Secretary of
the Treasury through the Bureau of Internal Revenue in the
Department of the Treasury.
Again, the Federal
Alcohol Administration Act of 1935 was declared unconstitutional in
1935, and the operation thereafter transferred off shore to Puerto
Rico. The name of the Bureau of Internal Revenue was changed to the
Internal Revenue Service in 1953 (cite above), then the Bureau of
Alcohol, Tobacco and Firearms, a division of the Internal Revenue
Service, was seemingly separated from IRS (T.O. 120-01, June 6,
1972). In relevant part, the order reads as
follows:
1. The purpose of this
order is to transfer, as specified herein, the functions, powers and
duties of the Internal Revenue Service arising under law relating to
Alcohol, Tobacco, Firearms and Explosives including the Alcohol,
Tobacco, and Firearms division of the Internal Revenue Service, to
the Bureau of Alcohol, Tobacco and Firearms herein after referred to
as the Bureau which is hereby established. The Bureau shall be
headed by the Director of the Alcohol, Tobacco and Firearms herein
referred to as the Director...
2. The Director shall
perform the functions, exercise the powers and carry out the duties
of the Secretary and the administration and the enforcement of the
following provisions of law:
A. Chapters 51 and 52
and 53 of the Internal Revenue Code of 1954 and Section 7652 and
7653 of such code insofar as they relate to the commodity subject to
tax under such chapters.
B. Chapter 61 to 80
inclusive to the Internal Revenue Code of 1954 insofar as they
relate to activities administered and enforced with respect to
chapters 51, 52, 53. (emphasis added)
Transfer of functions
and duties of IRS to BATF relative to Internal Revenue Code Subtitle
F (chapters 61 to 80) is important where the instant matter is
concerned as the only regulations published in the Federal Register
applicable to the several States are under 27 CFR, Part 70 and other
parts of this title relating exclusively to alcohol, tobacco and
firearms matters. However, the charade doesn't end there. In
Reorganization Plan No. 1 of 1965 (5
USC § 903), the original Bureau of Customs, created by Act of
Congress in 1895, was abolished and merged under the Secretary of
the Treasury.
In a Treasury Order
published in the Federal Register of December 15, 1976, the
Secretary of the Treasury used something of a slight of hand to
confuse matters more by determining, "The term Director, Alcohol,
Tobacco, and Firearms has been replaced with the term Internal
Revenue Service."
Obviously, it is
impossible to replace a person with a thing when it comes to
administrative responsibility. However, the order demonstrates that
IRS and BATF are one and the same, merely operating with
interchangeable hats. Therefore, definitions and designations
applicable to one are applicable to the
other.
Revenue Agent. Any
duly authorized Commonwealth Internal Revenue Agent of the
Department of the Treasury of Puerto
Rico.
Secretary. The
Secretary of the Treasury of Puerto Rico.
Secretary or his
delegate. The Secretary or any officer or employee of the
Department of the Treasury of Puerto Rico duly authorized by the
Secretary to perform the function mentioned or described in this
part.
In the absence of any
other definition describing revenue officers and agents, the
Secretary, or the Department of the Treasury, definitions above are
uniformly applicable to all IRS and BATF departments, functions and
personnel. In fact, it will be found that even petroleum tax
prescribed in Subtitle D of the Internal Revenue Code applies only
to United States territorial jurisdiction exclusive of the several
States and to imported petroleum. BATF has authority only with
respect to firearms, munitions, etc., produced outside the several
States and the first sale of imports.
The two delegations of
authority to the Commissioner of Internal Revenue thus far located
tend to reinforce conclusions set out above. Treasury Department
Order No. 150-42, dated July 27, 1956, appearing in at 21 Fed. Reg.
5852, specifies the following:
The Commissioner
shall, to the extent of the authority vested in him, provide for the
administration of United States internal revenue laws in the Panama
Canal Zone, Puerto Rico and the Virgin
Islands.
On February
27, 1986 (51 Fed. Reg. 9571), Treasury Department Order No. 150-01
specified the following:
The Commissioner
shall, to the extent of authority otherwise vested in him, provide
for the administration of the United States internal revenue laws in
the U.S. Territories and insular possessions and other authorized
areas of the world.
To date only
three statutes in the Internal Revenue Code of 1986, as currently
amended, have been located that specifically reference the several
States, exclusive of the federal States (District of Columbia,
Puerto Rico, Guam, the Virgin Islands, etc.): 26 USC §§ 5272(b),
5362(c)
& 7462.
The first two provide certain exemptions to bond and import tax
requirements relating to imported distilled spirits for governments
of the several States and their respective political subdivisions,
and the last provides that reports published by the United States
Tax Court will constitute evidence of the reports in courts of the
United States and the several States. None of the three statutes
extend assessment or collections authority for IRS or BATF within
the several States.
IRS is contracted to
provide collection services for the Agency for International
Development, and case law demonstrates that the true principals of
interest are the International Monetary Fund and the World Bank
(Bank of the United States v. Planters Bank of Georgia, 6 L.Ed
(Wheat) 244; U.S. v. Burr, 309 U.S. 242; see 22 USCA § 286,
et seq.). In other words, IRS seemingly provides collection services
for undisclosed foreign principals rather than collecting internal
revenue for the benefit of constitutional United States government
operation. To date, IRS principals have failed to dispute the
published Cooper/Bentson allegation that the agency, via these
foreign principals, funded the enormous tank and military truck
factory on the Kama River, Russia.
The Internal Revenue
Service, a foreign entity with respect to the several States, is not
registered to do business in the several
States.
2.
Preservation of Due Process Rights
The Internal Revenue
Service has for years been protected by statutory courts both of the
United States and the several States, with the latter operating in
the framework of adopted uniform laws which ascribe a federal
character to the several States. Both operate under the presumption
of Congress' Article IV jurisdiction within the geographical United
States (the District of Columbia, Puerto Rico, etc.), both
accommodate private international law under exclusively United
States treaties on private international law, and both operate in
the framework of admiralty rules to impose Civil Law (see both
majority & dissenting opinions variously, Bennis v. Michigan,
U.S. Supreme Court No. 94-8729, March 4, 1996) , which is repugnant
to both state and national constitutions (see authority of
Department of Justice as representative of the "Central Authority"
established by U.S. treaties on private international law at 28
CFR § 0.49; also, "conflict of law" as a subcategory to
"statutes" in American Jurisprudence). However, this house of cards
will shortly fall as Cooperative Federalism, known as Corporatism
well into the 1930s, has been thoroughly documented and is rapidly
being exposed via state and United States appellate courts and in
public forum.
In reality, the Internal
Revenue Code preserves due process rights, but the statute has been
dormant until recently:
[Sec.
7804(b)]
(b) PRESERVATION OF
EXISTING RIGHTS AND REMEDIES.
-- Nothing in
Reorganization Plan Numbered 26 of 1950 or Reorganization Plan
Numbered 1 of 1952 shall be considered to impair any right or
remedy, including trial by jury, to recover any internal revenue tax
alleged to have been erroneously or illegally assessed or collected,
or any penalty claimed to have been collected without authority, or
any sum alleged to have been excessive or in any manner wrongfully
collected under the internal revenue laws. For the purpose of any
action to recover any such tax, penalty, or sum, all statutes,
rules, and regulations referring to the collector of internal
revenue, the principal officer for the internal revenue district, or
the Secretary, shall be deemed to refer to the officer whose act or
acts referred to in the preceding sentence gave rise to such action.
The venue of any such action shall be the same as under existing
law.
The reorganization plans
of 1950 & 1952 were implemented via the Internal Revenue Code of
1954, Volume 68A of the Statutes at Large, and codified as title 26
of the United States Code. Savings statutes have been in place since
the beginning, but generally not understood by the general
population or the legal profession. The statute set out above is
easier to comprehend when references are consolidated. Further, the
dependent clause "including trial by jury" relates to a
constitutionally-assured right, not a remedy, so it should be moved
to the proper location in the sentence. Finally, the matter of venue
is important as "existing law" is constitutional and common law
indigenous to the several States. In the absence of legitimate
federal law which extends to the several States, those who operate
under color of law, engage in oppression, extortion, etc., are
subject to the foundation law of the States. Venue is determined by
the law of legislative jurisdiction.
Citing "including trial
by jury" preserves the full slate of due process rights included in
Fourth, Fifth, Sixth, Seventh and Fourteenth Amendments to the
Constitution for the united States of America and corresponding
provisions in constitutions of the several States. The example
represents the class.
Additionally, note that,
(1) actions may issue against bogus assessments as well as
collections, and (2) § 7804(b),
unlike § 7433,
does not presume that the complaining party is a "taxpayer".
Finally, there is 26 CFR, Part 1 regulatory support for
§ 7804 where there are no regulations published in the Federal
Register in support of § 7433
(see Parallel Table of Authorities and Rules, beginning on page
751 of the Index volume to the Code of Federal Regulations).
Therefore, §
7804(b) preserves rights and determines the nature of civil
actions for remedies in the several States. When straightened out,
applicable portions of § 7804(b) read as
follows:
Nothing in [the
Internal Revenue Code] shall be considered to impair any right,
[including trial by jury], or remedy, [***], to recover any internal
revenue tax alleged to have been erroneously or illegally assessed
or collected ... The venue of any such action shall be the same as
under existing law.
The necessity of due
process is implicitly preserved by 28
USC § 2463, which stipulates that any seizure under United
States revenue laws will be deemed in the custody of the law and
subject solely to disposition of courts of the United States with
proper jurisdiction. In other words, even if IRS had legitimate
authority in the several States, the agency would of necessity have
to file a civil or criminal complaint prior to garnishment, seizure
or any other action adversely affecting the life, liberty or
property of any given person, whether a Fourteenth Amendment
citizen-subject of the United States or a Citizen principal of one
of the several States. Due process assurances in the Fifth and
Fourteenth Amendments do not equivocate -- administrative seizures
without due process can be equated only to tyranny and barbarian
rule. Further, even regulations governing IRS conduct acknowledge
and therefore preserve Fifth Amendment assurances at 26
CFR § 601.106(f)(1).
(1) Rule I. An
exaction by the U.S. Government, which is not based upon law,
statutory or otherwise, is a taking of property without due process
of law, in violation of the Fifth Amendment to the U.S.
Constitution. Accordingly, an Appeals representative in his or her
conclusions of fact or application of the law, shall hew to the law
and the recognized standards of legal construction. It shall be his
or her duty to determine the correct amount of the tax, with strict
impartiality as between the taxpayer and the Government, and without
favoritism or discrimination as between
taxpayers.
Even officers, agents
and employees of United States agencies are assured due process
where garnishment is concerned (5
USC § 5520a), so the notion that IRS has authority to execute
garnishment and other seizures via the private sector without due
process is clearly absurd. In the English-American lineage, due
process has always been deemed to mean trial by jury under rules of
the common law indigenous to the several States; the de jure people
of America are not subject to admiralty or administrative
tribunals.
Where officers, agents
and employees of the Internal Revenue Service are concerned, there
can be no plea of ignorance concerning the necessity of due process
as the Handbook for Revenue Agents, at paragraph 332: (1), provides
the following:
During the course of
administratively collecting a tax, an occasion may arise where
service of a levy or a notice of levy is not adequate to seize the
property of a taxpayer. It cannot be emphasized too strongly that
constitutional guarantees and individual rights must not be
violated. Property should not be forcibly removed from the person of
the taxpayer. Such conduct may expose a revenue officer to an action
in trespass, assault and battery, conversion,
etc.
The provision
acknowledges the Supreme Court decision in Larson v. Domestic and
Foreign Commerce Corp. 337 U.S. 682 (1949).
In sum, the mandate for
due process, meaning initiatives through judicial courts with proper
jurisdiction, is clearly antecedent to imposition of
administratively-issued liens, except where licensing agreements
obligate assets, or seizures, whether by garnishment, attachment of
bank accounts, administrative seizure and sale of real or private
property, or any other initiative that compromises life, liberty or
property.
3.
Current Internal Revenue Code & Internal Revenue Code of 1939
Are Same
Consult 26 USC §§ 7851
& 7852
to verify that the Internal Revenue Code of 1954, as amended in
1986 and since, simply reorganized the Internal Revenue Code of
1939. Read § 7852(b)
& (c), then read the balance of §§ 7851
& 7852
for best comprehension.
The importance of making
this connection rests on the fact that the Internal Revenue Code of
1939 was merely codification of the Public Salary Tax Act of 1939.
There was no general income tax levied against the population at
large in 1939 or since. The Public Salary Tax Act of 1939, which in
the Internal Revenue Code of 1939 incorporated the Social Security
tax activated after 1936, was premised on the notion that working
for federal government is a privilege. Income and related taxes
prescribed in Subtitles A & C of the current Internal Revenue
Code have never been mandatory for anyone other than officers,
agents and employees of the United States, as identified at 26 USC §
3401(c),
and agencies of the United States, identified at § 3401(d),
particularized at 5 USC §§ 102 & 105.
The privilege tax is an
excise rather than direct tax -- the Sixteenth Amendment,
fraudulently promulgated in 1913, did not alter or repeal
constitutional provisions which require all direct taxes to be
apportioned among the several States (Constitution, Article I §§ 2.3
& 9.4). In Eisner v. Macomber, 252 U.S. 189 (1918), Coppage v.
Kansas, 236 U.S. 1, and numerous decisions since, the United States
Supreme Court has repeatedly affirmed that for purposes of income
tax, wages and other returns from enterprise of common right are
property, not income. In fact, returns from enterprise of common
right are fundamental to all property, and the sanctity is preserved
as a fundamental common law principle dating to signing of the Magna
Charta in 1215.
The nature of Subtitles
A & C taxes is revealed at 26
CFR § 31.3101-1: "The employee tax is measured by the amount of
wages received after 1954 with respect to employment after
1936..."
In other words, the wage
is not the object, but merely the measure of the tax. This verbiage
constitutes so much legalese in an effort to circumvent the duck
test, but the fact that taxes collected by the Internal Revenue
Service fall into the excise category was confirmed by the
Comptroller General's report following the initial effort to audit
IRS (GAO/T-AIMD-93-3). It is further suggested at 26 CFR §
106.401(a)(2), where the regulation concedes that, "The descriptive
terms used in this section to designate the various classes of taxes
are intended only to indicate their general
character..."
By referencing the
Parallel Table of Authorities and Rules, cited above, it is found
that the definition of "gross income" is still preserved in Section
22 of the Internal Revenue Code of 1939, thus cementing the link
between the Code of 1939 and Subtitles A & C of the Code of
1954, as amended in 1986 and since. The Internal Revenue Code of
1939 merely codified the Public Salary Tax Act of 1939. This link is
further confirmed in Senate Committee On Finance and House Committee
On Ways and Means reports No. H.R. 8300 (1954, Internal Revenue
Code), in which § 22 of the Internal Revenue Code of 1939 and § 61
of the Internal Revenue Code of 1954 (current code) were solidly
linked. Both reports stipulate that the current definition of "gross
income" is intended to be constitutional.
This intent is
articulated at 26
CFR § 1.61-1(a): "Gross income means all income from whatever
source derived, unless excluded by law."
An "Act of Congress" is
policy, not law, and per definition located in Rule 54, Federal
Rules of Criminal Procedure, has only local application in the
District of Columbia and other United States territories and insular
possessions unless general application is manifestly expressed: Rule
54(c) -- "'Act of congress' includes any act of Congress locally
applicable to and in force in the District of Columbia, in Puerto
Rico, in a territory or in an insular
possession."
Where the Internal
Revenue Code of 1954 is concerned (Vol. 68A, Statutes at Large, p.
3), the legislation is in fact styled, "An Act" "To revise the
internal revenue laws of the United States."
As demonstrated above,
wages and other returns from enterprise of common right are exempt
from direct tax by fundamental law, and the regulation for the
current Internal Revenue Code definition for "gross income" clearly
articulates the fundamental law exemption.
The exemption as it
pertains to the several States is demonstrated by referencing the
Parallel Table of Authorities and Rules (Index volume to the CFR, p.
751 of the 1995 edition): There are 26 CFR, Part 1 regulations
listed for 26 USC §§ 61 & 62, the latter being the definition
for adjusted gross income, but there is no 26 CFR, Part 1 or 31
regulation for 26 USC § 63, the definition for taxable
income.
While definitions for
gross and adjusted gross income are clearly antecedent to the
definition of taxable income, they have no legal effect if there is
no taxing authority -- adjusted gross income which is not taxable
within the several States is of no consequence where the federal tax
system is concerned.
Further, on examination
of 26
CFR § 1.62-1, pertaining to "adjusted gross income", it is found
that subsections (a) & (b) are reserved so the published
regulation is incomplete, with "temporary" regulation § 1.62-1T
serving as the current authority defining "adjusted gross
income." Temporary regulations have no legal
effect.
Definitions at § 3401,
Vol. 68A of the Statutes at Large (the Internal Revenue Code of
1954), make it clear that, (§ 3401(a)(A)), "a resident of a
contiguous country who enters and leaves the United States at
frequent intervals..," is a nonresident alien of the United States
(citizens and residents of the several States included), and the
exclusion from "wages" extends even to citizens of the United States
who provide services for employers "other than the United States or
an agency thereof"(§3401(a)(8)(A)).
4. The Employer or Agent is
Liable
Volume 68A of the
Statutes at Large, the Internal Revenue Code of 1954, makes it
perfectly clear who is "liable" for payment of Subtitles A & C
taxes:
SEC. 3504. ACTS TO BE
PERFORMED BY AGENTS.
In case a fiduciary,
agent, or other person has the control, receipt, custody, or
disposal of, or pays the wages of an employee or group of employees,
employed by one or more employers, the Secretary of his delegate,
under regulations prescribed by him, is authorized to designate such
fiduciary, agent, or other person to perform such acts as are
required by employers under this subtitle and as the Secretary or
his delegate may specify. Except as may be otherwise prescribed by
the Secretary or his delegate, all provisions of law (including
penalties) applicable in respect to an employer shall be applicable
to a fiduciary, agent, or other person so designated, but, except as
so provided, the employer for whom such fiduciary, agent, or other
person acts shall remain subject to the provisions of law (including
penalties) applicable in respect to
employers.
The liability is further
clarified at Vol. 68A, Sec. 3402(d):
(d) TAX PAID BY
RECIPIENT. -- If the employer, in violation of the provisions of
this chapter, fails to deduct and withhold the tax under this
chapter, and thereafter the tax against which such tax may be
credited is paid, the tax so required to be deducted and withheld
shall not be collected from the employer; but this subsection shall
in no case relieve the employer from liability for any penalties or
additions to the tax otherwise applicable in respect to such failure
to deduct and withhold.
These provisions from
Vol. 68A of the Statutes at Large comply with and verify liability
set out at 26 CFR, Part 601, Subpart D in general. Further,
territorial limits of application are made clear by the absence of
regulations supporting 26 USC §§ 7621,
7802,
etc., which are the statutes authorizing establishment of internal
revenue districts and delegations of authority to the Commissioner
of Internal Revenue and assistants. The fact that the liability
falls to the "employer" (26 USC § 3401(d))
and/or his agent, with no compensation for serving as "tax
collector," narrows the field to federal government entities as
"employers" if for no other reason than the population at large is
not subject to the edict of government officials. As a matter of
course, government cannot compel performance where the general
population is concerned. The subject class that has "liability" for
Subtitles A & C taxes is the "employer" or his agent, fiduciary,
etc., as specified above.
The matter is further
clarified in Sections 3403 & 3404 of Vol. 68A, Statutes at
Large:
SEC. 3403. LIABILITY
FOR TAX.
The employer shall be
liable for the payment of the tax required to be deducted and
withheld under this chapter, and shall not be liable to any person
for the amount of any such payment.
SEC. 3404. RETURN
AND PAYMENT BY GOVERNMENTAL EMPLOYER.
If the employer is the
United States, or a State, Territory, or political subdivision
thereof, or the District of Columbia, or any agency or
instrumentality of any one or more of the foregoing, the return of
the amount deducted and withheld upon any wages may be made by any
officer or employee of the United States, or of such State,
Territory, or political subdivision, or of the District of Columbia,
or of such agency or instrumentality, as the case may be, having
control of the payment of such wages, or appropriately designated
for that purpose.
The territorial
application, and limitation, is made clear by definitions in Title
26 of the Code of Federal Regulations, as
follows:
§ 31.3121(3)-1 State,
United States, and citizen.
(a) When used in the
regulations in this subpart, the term "State" includes the District
of Columbia, the Commonwealth of Puerto Rico, the Virgin Islands,
the Territories of Alaska and Hawaii before their admission as
States, and (when used with respect to services performed after
1960) Guam and American Samoa.
(b) When used in the
regulations in this subpart, the term "United States", when used in
a geographical sense, means the several states (including the
Territories of Alaska and Hawaii before their admission as States),
the District of Columbia, the Commonwealth of Puerto Rico, and the
Virgin Islands. When used in the regulations in this subpart with
respect to services performed after 1960, the term "United States"
also includes Guam and American Samoa when the term is used in a
geographical sense. The term "citizen of the United States" includes
a citizen of the Commonwealth of Puerto Rico or the Virgin Islands,
and, effective January 1, 1961, a citizen of Guam or American
Samoa.
Definition of the terms
"includes" and "including" located at 26 USC § 7701(c) provides the
limiting authority which the above definitions, beyond constructive
application, are subject to:
(c) INCLUDES AND
INCLUDING. -- The terms "includes" and "including" when used in a
definition contained in this title shall not be deemed to exclude
other things otherwise within the meaning of the term
defined.
Two principles of law
clarify definition intent: (1) The example represents the class, and
(2) that which is not named is intended to be omitted. In the
definition of "United States" and "State" set out above, all
examples are of federal States, and are exclusive of the several
States, with the transition of Alaska and Hawaii from the included
to the excluded class proving the point. This conclusion is
reinforced by the absence of regulations which extend authority to
establish revenue districts in the several States (26 USC § 7621),
authority for the Department of the Treasury [Puerto Rico] in the
several States (26 USC § 7801),
and no grant of delegated authority for the Commissioner of Internal
Revenue, assistant commissioners, or other Department of the
Treasury personnel (26 USC §
7802 & 7803).
5.
Lack of Regulations Supporting General Application of
Tax
Here again, the Parallel
Table of Authorities and Rules is useful as it demonstrates that
Subtitles A & C taxes do not have general application within the
several States and to the population at large. The regulation for 26
USC § 1 refers to 26 CFR § 301, but that amounts to a dead end --
there is no regulation under 26 CFR, Part 1 or 31 which would apply
to the several States and the population at large. Further, there
are no supportive regulations at all for 26 USC §§ 2 & 3, and of
considerable significance, no regulations supporting corporate
income tax, 26 USC § 11, as applicable to the several
States.
Where the instant matter
is concerned, regulations supporting
26 USC § 6321, liens for taxes, and § 6331, levy and distraint,
are under 27 CFR, Part 70. The importance here is that Title 27 of
the Code of Federal Regulations is exclusively under Bureau of
Alcohol, Tobacco and Firearms administration for Subtitle E and
related taxes. There are no corresponding regulations for the
Internal Revenue Service, in 26 CFR, Part 1 or 31, which extend
comparable authority to the several States and the population at
large.
The necessity of
regulations being published in the Federal Register is variously
prescribed in the Administrative Procedures Act, at 5 USC § 552
et seq., and the Federal Register Act, at 44 USC § 1501
et seq. Of particular note, it is specifically set out at 44
USC § 1505(a), that when regulations are not published in the
Federal Register, application of any given statute is exclusively to
agencies of the United States and officers, agents and employees of
the United States, thus once again confirming application of
Subtitles A & C tax demonstrated above. Further, the need for
regulations is detailed in 1 CFR, Chapter 1, and where the Internal
Revenue Service is concerned, 26 CFR §
601.702.
The need for regulations
has repeatedly been affirmed by the Supreme Court of the United
States, as stated in California Bankers Ass'n. v. Schultz, 416 U.S.
21, 26, 94 S.Ct. 1494, 1500, 39 L.Ed.2d 812
(1974):
Because it has a
bearing on our treatment of some of the issues raised by the
parties, we think it important to note that the Act's civil and
criminal penalties attach only upon violation of regulations
promulgated by the Secretary; if the Secretary were to do nothing,
the Act itself would impose no penalties on anyone ... The
government argues that since only those who violate regulations may
incur civil and criminal penalties it is the regulations issued by
the Secretary of the Treasury and not the broad, authorizing
language of the statute, which is to be tested against the standards
of the 4th Amendment...
Because there is a
citation supporting these statutes applicable under Title 27 of the
Code of Federal Regulations, it is important to point out that,
"Each agency shall publish its own regulations in full text," (1
CFR § 21.21(c)), with further verification that one agency
cannot use regulations promulgated by another at 1
CFR § 21.40. To date, no corresponding regulation has been found
for 26 CFR, Part 1 or 31, so until proven otherwise, IRS does not
have authority to perfect liens or prosecute seizures in the several
States as pertaining to the population at large.
6.
Misapplication of Authority
Part 72 of Title 27
CFR contains the regulations relative to the personal property
seized by officers of the Internal Revenue Service or the Bureau of
Alcohol, Tobacco and Firearms as subject to forfeiture as being
used, or intended to be used, to violate certain Federal Laws; the
remission or mitigation of such forfeiture; and the administrative
sale or other disposition, pursuant to forfeiture, of such seized
property other than firearms seized under the National Firearms Act
and firearms and ammunition seized under title 1 of the Gun Control
Act of 1968. For disposal of firearms and ammunition under Title 1
of the Gun Control Act of 1968, see 18
U.S.C. 924(d). For disposal of explosives under Title XI
of Organized Crime Control Act of 1970, see 18
U.S.C. 844(c).
The only other
comparable authority thus far found pertains to windfall profits tax
on petroleum (26
CFR § 601.405), but once again, application is not supported by
regulations applicable to the several States and the population at
large.
Where the provision for
filing 1040 returns is concerned, the key regulatory reference is at
26
CFR § 601.401(d)(4), and this application appears related to
"employees" who work for two or more "employers", receiving
foreign-earned income effectively connected to the United States.
The option of filing a 1040 return for refund is mentioned in
instructions applicable to United States citizens and residents of
the Virgin Islands, but to date has not been located elsewhere.
Reference OMB numbers for § 601.401,
listed on page 170, 26 CFR, Part 600-End, cross referenced to
Department of Treasury OMB numbers published in the Federal
Register, November 1995, for foreign
application.
The fact that 1040 tax
return forms are optional and voluntary, with special application,
is further reinforced by Delegation Order 182 (reference 26 CFR §§
301.6020-
1(b) & 301.7701). The Secretary or his delegate is
authorized to file a Substitute for Return for the following: Form
941 (Employer's Quarterly Federal Tax Return); Form 720 (Quarterly
Federal Excise Tax Return); Form 2290 (Federal Use Tax Return on
Highway Motor Vehicles); Form CT-1 (Employer's Annual Railroad
Retirement Tax Return); Form 1065 (U.S. Partnership Return of
Income); Form 11-B (Special Tax Return - Gaming Services); Form 942
(Employer's Quarterly Federal Tax Return for Household Employees);
and Form 943 (Employer's Annual Tax Return for Agricultural
Employees).
The "notice of levy"
instrument forwarded to various third parties is not a "levy" which
warrants surrender of property. The Internal Revenue Code, at §
6335(a), defines the "notice" instrument by use -- notice is to be
served to whomever seizure has been executed against after the
seizure is effected. In short, the notice merely conveys
information, it is not cause for action. The term "notice" is
clarified by definition in Black's Law Dictionary, 6th Edition, and
other law dictionaries. Use of the "notice of levy" instrument to
effect seizure is fraud by design.
Proper use of the
"notice" process, administrative garnishment, et al, is specifically
set out in 5 USC § 5514, as being applicable exclusively to
officers, agents and employees of agencies of the United States (26
USC § 3401(c)). Even then, however, the process must comply with
provisions of 31 USC § 3530(d), and standards set forth in §§ 3711
& 3716-17. In accordance with provisions of 26 CFR, Part 601,
Subpart D, the employer, meaning the United States agency the
employee is employed by, is responsible for promulgating regulations
and carrying out garnishment.
Even if IRS was the
agency responsible for collecting from an "employee," due process
would be required, as noted above, so authority to collect would
ensue only after securing a court order from a court of competent
jurisdiction, which in the several States would mean a judicial
court of the State. In law, however, there is no authority for
securing or issuing a Notice of Distraint premised on non-filing,
bogus filing, or any other act relating to the 1040 return. See
United States v. O'Dell, Case No. 10188, Sixth Circuit Court of
Appeals, March 10, 1947. In G.M. Leasing Corp. v. United States, 429
U.S. 338 (1977), the United States Supreme Court held that a
judicial warrant for tax levies is necessary to protect against
unjustified intrusions into privacy. The Court further held that
forcible entry by IRS officials onto private premises without prior
judicial authorization was also an invasion of privacy.
7.
Liability Depends on a Taxing Statute
General demands for
filing tax returns, production of records, examination of books,
imposition and payment of tax, etc., are of no consequence to the
point a taxing statute (1) defines what tax is being imposed, and
(2) the basis of liability. In other words, even if the Internal
Revenue Service was a legitimate agency of the United States
Department of the Treasury and had authority in the several States,
the Service would have to be specific with respect to what tax was
at issue and would have to demonstrate the tax by citing a taxing
statute with the necessary elements to establish that any given
person was obligated to pay any given tax.
This mandate has been
clarified by the courts numerous times, with the matter definitively
stated by the Tenth Circuit Court of Appeals in United States v.
Community TV, Inc., 327 F.2d 797, at p. 800
(1964):
Without question, a
taxing statute must describe with some certainty the transaction,
service, or object to be taxed, and in the typical situation it is
construed against the Government. Hassett v. Welch, 303 U.S. 303, 58
S.Ct. 559, 82 L.Ed.858
In other words, to the
point Service personnel produce the statute which mandates a certain
tax and which specifies, "... the transaction, service, or object to
be taxed..," the burden of proof lies with the Government, with the
consequence being that no obligation or civil or criminal liability
can ensue to the point a taxing statute that meets the above
requirements is in evidence.
This conclusion is
supported by the statute which provides the underlying requirements
for keeping records, making statements, etc., located at 26 USC §
6001:
Every person liable
for any tax imposed by this title, or for the collection thereof,
shall keep such records, render such statements, make such returns,
and comply with such rules and regulations as the Secretary may from
time to time prescribe. Whenever in the judgment of the Secretary it
is necessary, he may require any person, by notice served upon such
person, or by regulations, to make such returns, render such
statements, or keep such records, as the Secretary deems sufficient
to show whether or not such person is liable for tax under this
title. The only records which an employee shall be required to keep
under this section in connection with charged tips shall be charge
receipts, records necessary to comply with section 6053(c), and
copies of statements furnished by employees under section
6053(a).
The control statute for
Subtitle F, Chapter 61, Subchapter A, Part I, concerning records,
statements, and special returns, clearly returns the matter to the
"employee" defined at § 3401(c), and the "employer" defined at §
3401(d). In general, however, (1) the Secretary must provide direct
notice to whomever is required to keep books, records, etc., as
being the "person liable," or (2) specify the person liable by
regulation. In the absence of notice by the Secretary, based on a
taxing statute which makes such a person liable according to
provisions stipulated in United States v. Community TV, Inc.,
Hassett v. Welch, and other such cases, or regulations which
specifically set establish general liability, there is no
liability.
Sec. 6001 also exempts
"employees" from keeping records except where tips and the like are
concerned. This is consistent with constructive demonstration that
"employers" rather than "employees" are required to file returns, as
opposed to paying deducted amounts as income tax returns,
constructively demonstrated in a previous section of this memorandum
and specifically articulated in 26 CFR § 601.104. Clarification via
26 USC § 6053(a) is as follows:
(a) REPORTS BY
EMPLOYEES. -- Every employee who, in the course of his employment by
an employer, receives in any calendar month tips which are wages (as
defined in section 3121(a) or section 3401(a)) or which are
compensation (as defined in section 3231(e)) shall report all such
tips in one or more written statements furnished to his employer on
or before the 10th day following such month. Such statements shall
be furnished by the employee under such regulations, at such other
times before such 10th day, and in such form and manner, as may be
prescribed by the Secretary.
Unraveling § 6001
straightens out the meaning of § 6011, which requires filing
returns, statements, etc., by the person made liable (§ 3401(d)), as
distinguished from the person required to make returns (payments) at
§ 6012 (§ 3401(c)). Even though a person might be a citizen or
resident of the United States employed by an agency of the United
States, and thereby be required to return a prescribed amount of
United States-source income, he is not the person liable under §
6011 and attending regulations.
The "method of
assessment" prescribed at 26 USC § 6303 is therefore dependent on
the taxing statute and must rest on authority specifically conveyed
by a taxing statute which prescribes liability where the Secretary
(1) has provided specific notice, including the statute and type of
tax being imposed, or (2) supports assessment by regulatory
application. In the absence of one or the other, an assessment by
the Secretary is of no consequence as it is not legally
obligating.
The requirement for the
Secretary to provide notice to whomever is responsible for
collecting tax, keeping records, etc., is clarified at 26 CFR §
301.7512-1, particularly (a)(1)(i), relating to "employee tax
imposed by section 3101 of chapter 21 (Federal Insurance
Contributions Act)," and (a)(1)(iii), relating to "income tax
required to be withheld on wages by section 3402 of chapter 24
(Collection of Income Tax at Source on Wages)..." The person liable
is the employer or the employer's agent, and of particular
significance, it is this "person" who is subject to civil and
particularly criminal penalties (26 CFR § 301.7513-1(f); 26 CFR §§
301.7207-1 & 301.7214-1, etc.). Officers and employees of the
United States are specifically identified as being liable at 26 USC
§ 301.7214-1.
The matter of who is
required to register, apply for licenses, or otherwise collect
and/or pay taxes imposed by the Internal Revenue Code is ultimately
and finally put to rest under "Licensing and Registration", 26 USC
§§ 301.7001-1, et seq. Each of the categories so addressed has
liability based on some particular taxing statute which creates
liability.
8.
The Necessity of Administrative Process
The requirement for a
specific taxing statute, with 26 USC § 6001 clearly providing the
first leg in necessary administrative procedure to determine
liability, was addressed at length in Rodriguez v. United States,
629 F. Supp. 333 (N.D. Ill. 1986).
Presuming (1) the
Secretary has provided the necessary notice, or (2) a regulation
prescribes general application which makes any given person liable
for a tax and requires tax return statements to be filed, each step
in administrative process prescribed by 26 USC §§ 6201, 6212, 6213,
6303 and 6331 must be in place for seizure or any other encumbrance
to be legal.
Here again, regulations
published in the Federal Register are significant, with provisions
of 5 USC § 552 et seq., 44 USC § 1501 et seq., 1 CFR, Chapter I, and
26 CFR, Part 601 all supporting the mandate for regulations to be
published in the Federal Register before they have general
application. It will be noted by referencing the Parallel Table of
Authorities and Rules, beginning on page 751 of the 1995 Index
volume to the Code of Federal Regulations, that application by
regulation to the several States is only under Title 27 of the Code
of Federal Regulations, or that there are no regulations published
in the Federal Register. The following entries, or non-entries, are
found:
26 USC § 6201
Assessment authority 27 CFR, Part 70
26 USC § 6212 Notice of
deficiency No Regulation
26 USC § 6213
Restrictions applicable to deficiencies; petition to Tax
Court
No
Regulation
26 USC § 6303 Notice and
Demand for Tax 27 CFR, Part 53, 70
26 USC § 6331 Levy and
distraint 27 CFR, Part 70
The assessment authority
under 26 USC § 6201, in relevant part as applicable to Subtitles A
& C taxes, are as follows:
(a) AUTHORITY OF
SECRETARY. -- The Secretary is authorized and required to make the
inquires, determination, and assessments of all taxes (including
interest, additional amounts, additions to the tax, and assessable
penalties) imposed by this title, or accruing under any former
internal revenue law, which have been duly paid by stamp at the time
and in the manner provided by law. Such authority shall extend to
and include the following:
(1) TAXES SHOWN ON
RETURN. -- The secretary shall assess all taxes determined by the
taxpayer or by the Secretary as to which returns or lists are made
under this title.
(3) ERRONEOUS INCOME TAX
PREPAYMENT CREDITS. -- If on any return or claim for refund of
income taxes under subtitle A there is an overstatement of the
credit for income tax withheld at the source, or of the amount paid
as estimated income tax, the amount so overstated which is allowed
against the tax shown on the return or which is allowed as a credit
or refund may be assessed by the Secretary in the same manner as in
the case of a mathematical or clerical error appearing upon the
return, except that the provisions of section 6213(b)(2) (relating
to abatement of mathematical or clerical error assessments) shall
not apply with regard to any assessment under this
paragraph.
(b) AMOUNT NOT TO BE
ASSESSED. --
(1) ESTIMATED INCOME
TAX. -- No unpaid amount of estimated income tax required to be paid
under section 6654 or 6655 shall be assessed.
(2) FEDERAL EMPLOYMENT
TAX. -- No unpaid amount of Federal unemployment tax for any
calendar quarter or other period of a calendar year, computed as
provided in section 6157, shall be assessed.
(d) DEFICIENCY
PROCEEDINGS. --
For special rules
applicable to deficiencies of income, estate, gift, and certain
excise taxes, see subchapter B. [emphasis
added]
The grant of assessment
authority with respect to taxes prescribed in Subtitles A & C is
limited to provisions set out above even where the Service might
have authority relating to those made liable for the tax, meaning
the "employer" specified at 26 USC § 3401(d). Clearly, returns made
either by the agent of the United States agency required to file a
return, or the Secretary, are to be evaluated mathematically, and
errors are to be treated as clerical errors, nothing more. The
Secretary has no authority to assess estimated income tax
(individual estimated income tax at § 6554; corporation estimated
income tax at § 6655), or unemployment tax ( § 6157). For all
practical purposes, the trail effectively ends here.
9.
The Impossibility of Effective Contract/Election
In order for there to be
an opportunity for a nonresident alien of the United States (a
Citizen of one of the several States) to elect to be taxed or
treated as a citizen or resident of the United States, one or the
other of a married couple, or the single "individual" making the
election, must be a citizen or resident of the United States (26 USC
§ 6013(g)(3)). Some party must in some way be connected with a
"United States trade or business" (performance of the functions of a
public office (26 USC § 7701(a)(26)). A nonresident alien never has
self-employment income (26 CFR § 1.1402(b)-1(d)). In the event that
a nonresident alien is an "employee" (26 USC § 3401(c)), the
"employer" (26 USC § 3401(d)) is liable for collection and payment
of income tax (26 CFR § 1.1441-1). And in order for real property to
be treated as effectively connected with a United States trade or
business by way of election, it must be located within the
geographical United States (26 USC § 871(d)).
Provisions cited above
preclude any and all legal authority for Citizens of the several
States, or privately owned enterprise located in the several States,
to participate in federal tax and benefits programs prescribed in
Subtitles A & C of the Internal Revenue Code and companion
legislation such as the Social Security Act which provide benefits
from the United States Government, which is a foreign corporation to
the several States.
Summary &
Conclusion
This memorandum is not
intended to be exhaustive, but merely sufficient to support causes
set out separately. The most conspicuous conclusions of law are that
Congress never created a Bureau of Internal Revenue, the predecessor
of the Internal Revenue Service; Subtitles A & C of the Internal
Revenue Code prescribe excise taxes, mandatory only for employees of
United States Government agencies; the Internal Revenue Service,
within the geographical United States where the Service appears to
have colorable authority, is required to use judicial process prior
to seizing or encumbering assets; and the law demonstrates that
people of the several States, defined as nonresident aliens of the
self-interested United States in the Internal Revenue Code, cannot
legitimately elect to be taxed or treated as citizens or residents
of the United States. If a Citizen of one of the several States
works for an agency of the United States or receives income from a
United States "trade or business" or otherwise effectively connected
with the United States, the employer or other third party
responsible for payment is made liable for withholding taxes at the
rate of 30% or 14%, depending on classification, and is thus "the
person liable" and may be subject to Internal Revenue Service
initiatives, with administrative initiatives, where seizure and/or
encumbrance actions are concerned, subject to judicial
determinations by courts of competent jurisdiction.
Under penalties of
perjury, per 28 USC § 1746(1), I attest that to the best of my
knowledge and understanding, all matters of law and fact presented
herein are accurate and true.
__________________________________
___________________________
Dan Meador
Date
-
*****
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