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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