Case NO.: 08-12402
UNITED STATES CIRCUIT COURT
FOR THE ELEVENTH CIRCUIT
Amicus Curiae Brief
on Failure To File
& Liability For Income Tax
District Court Case No.: _______________
On Appeal From
The District Court
TAble of ContenTS
American Tobacco Co. v. Patterson.......................................................................................... 20
Boyd v. United States,................................................................................................................ 31
Brushaber v. Union Pacific R.R................................................................................. 6, 10, 13, 14
Haley v. Ohio,............................................................................................................................. 27
Pollock v. Farmer’s Loan & Trust Co................................................................................. passim
Stanton v. Baltic Mining Co............................................................................................. 7, 12, 13
Stumpf v. C.I.R............................................................................................................................. 5
U.S. v Goldenberg, et al............................................................................................................. 25
United States v. Collins................................................................................................................ 5
§ 1441......................................................................................................................................... 17
§ 1442......................................................................................................................................... 17
§ 1443......................................................................................................................................... 18
§ 1461......................................................................................................................................... 19
§ 1463......................................................................................................................................... 23
§ 3403......................................................................................................................................... 20
§ 7701......................................................................................................................................... 15
16th Amendment.......................................................................................................................... 11
Article I, Section 2, Clause 3.......................................................................................................... 6
Article I, Section 8, Clause 1........................................................................................................ 11
Article I, Section 9, Clause 4.......................................................................................................... 6
UNITED STATES CIRCUIT COURT
FOR THE 11th CIRCUIT
CASE NO.: _______
Amicus Curiae Brief On Failure To File
Liability For Income Tax
1) Defendant Snipes has been improperly and erroneously convicted of the three misdemeanor failure to file charges in the trial in the District court. The prosecution failed its duty to document for the jury during the trial, with evidence or by testimony, each and every required element of its case necessary to secure a proper conviction.
2) The prosecution cannot secure a legitimate conviction by presenting a case that does not actually document during the trial a statutory or regulatory requirement that it is alleged the defendant has failed. It is improper for the court to allow the jury to assume such required elements of the case exist in the law, when the prosecution never established such alleged requirements as legal facts during the trial.
3) An individual cannot be properly convicted of a “failure to file” charge unless the jury is actually shown the specific statutory requirements that it is alleged the Defendant has failed, provided together with an explanation of why and how those statutes are properly made applicable to the Defendant. Defendant Snipes has been wrongfully assumed by the jury and the court to be liable, or made liable by the statutes, for the payment of an income tax.
4) The government attorneys improperly left it to the jury to assume that liability for tax existed under the statutes, where none can be shown to exist; and to subsequently assume that a return was required to be made to satisfy that liability, where no statutory requirement can be shown to be applicable to the Defendant; and to assume that Form 1040 was the specific required “return”, when no such actual requirement applicable to Defendant Snipes can be shown in the law for the years in question, and where the law actually shows a different return as being the identified “required” return for the years in question. This conviction is therefore, improperly secured because of those erroneous assumptions that the jury was improperly allowed by the court to make.
5) It was never demonstrated during trial that Defendant Snipes is indeed even a person who is liable by statute for the payment of the income tax. This element of the case, necessary to secure a proper conviction, was not presented as evidence during the trial and, based on the testimonial transcripts of this trial, could only have been improperly assumed by the jury to exist. Assumptions made by a jury are not a proper dejure basis upon which to found or secure a legal conviction.
16th Amendment to the Constitution of the United States of America,
adopted in 1913, together with the income tax provisions of the Underwood
Simmons tariff act of Oct. 3, 1913, the constitutional basis and legal foundation
for our current income tax system, are apparently the two most misunderstood
pieces of legislation in human history.
7) The United States government asserts that in cases like Stumpf v. C.I.R. (1989), from the 9th Circuit, and United States v. Collins (1991), from the 10th Circuit, where the circuit court justices cited Brushaber v. Union Pac. R.R. Co., 240 U.S. 1, 12-19 (1916), and wrote in those decisions that the United States Supreme Court has recognized that the;
"Sixteenth Amendment authorizes a direct nonapportioned tax upon United States citizens throughout the nation, not just in federal enclaves". United States v. Collins, 920 F.2d 619, 629 (10th Cir. 1990), cert. denied, 500 U.S. 920 (1991)
“The sixteenth amendment gives Congress the power to impose an unapportioned direct tax,…” Stumpf v. C.I.R., 865, F.2d 1271 (1989)
8) However, this reading of the Brushaber decision by the 9th and 10th Circuit courts is very obviously erroneous. The Supreme Court’s decision taken in the Brushaber case absolutely did not say that the 16th Amendment authorizes a direct non-apportioned tax. That ruling would have engineered within the Constitution a direct and inherent conflict with pre-existing, un-repealed and un-amended Article I clauses that prohibit direct taxation of the people unless laid in proportion to the Census under;
Article I, Section 9, Clause 4
"No capitation or other direct tax shall be laid, unless in proportion to the Census or Enumeration herein before directed to be taken."
and apportioned to the states for collection under;
Article I, Section 2, Clause 3
"Representatives and direct taxes shall be apportioned among the several states which may be included in this union, according to their respective numbers..."
9) In order to preserve the integrity of the Constitution itself, and the force of law in these two original provisions of it, the Court actually states in the Brushaber decision that the conclusion that the 16th Amendment authorizes a direct non-apportioned tax, is an erroneous assumption that is the cause of all the confusion;
“We are of
opinion, however, that the confusion is
not inherent, but rather arises from
the conclusion that the 16th Amendment provides for a hitherto unknown
power of taxation; that is, a power to levy an income tax which, although
direct, should not be subject to the regulation of apportionment applicable to
all other direct taxes. And the far-reaching effect of this erroneous assumption will be made
clear…” Brushaber v. Union Pacific
And, in further denying the proposition that the 16th Amendment authorizes a direct tax:
results that the proposition and the contentions under it, if acceded
to, would cause one provision of the Constitution to destroy another; that is,
they would result in bringing the provisions of the Amendment exempting a
direct tax from apportionment into irreconcilable conflict with the
general requirement that all direct taxes be apportioned. Brushaber v. Union
"...by the previous ruling, it
was settled that the provisions of the 16th Amendment conferred no new power
of taxation but simply
prohibited the previous complete
and plenary power of income
taxation possessed by Congress from the beginning from being taken
out of the category of indirect taxation to which it inherently belonged.." Stanton v. Baltic Mining Co., 240
11) It is important to note that the Court identifies that the power of income taxation being tested in this case, was a “complete and plenary power” that was “possessed by Congress from the beginning”.
12) This statement appears to directly contradict the position and finding of the Court taken in1896 in settling the Pollock v. Farmer’s Loan & Trust, Co. (1895), where the court stated repeatedly;
"... a tax upon property
holders in respect of their estates, whether real or personal, or of the income yielded by such estates,
and the payment of which cannot be avoided, are direct taxes..."
Pollock v. Farmer’s Loan &
Trust Co., 157
“… it is apparent (1) that the distinction between direct and indirect taxation was well understood by the framers of the constitution and those who adopted it; (2) that, under the state system of taxation, all taxes on real estate or personal property or the rents or income thereof were regarded as direct taxes;” Pollock v. Farmer’s Loan & Trust Co., 157 U.S. 429, 573 (1895)
“We are of opinion that the law in question, so far as it levies a tax on the rents or income of real estate, is in violation of the constitution, and is invalid.” Pollock v. Farmer’s Loan & Trust Co., 157 U.S. 429, 583 (1895)
13) Here, we seem to have found an apparent major
conflict between two Supreme Court rulings.
In 1895 in the Pollock case,
legislation taxing income is repeatedly identified by the Court as direct and
unconstitutional, but just twenty years later in the Stanton case, the
justices appear to reverse their Pollock
finding and declare that the power to tax income is now “previous, complete, and plenary”, a
power that was “possessed by Congress
from the beginning”, and that the 16th Amendment simply acted to
prohibit that congressional power of income taxation “from being taken out of the category of indirect taxation to
which it inherently belonged”!
14) How can the Court determine in Pollock that the taxation of income is
direct taxation and then strike down the legislation because it is
unconstitutional, and then determine a short time later in
15) Of course we can resolve this apparent conflict by examining the specific provisions of each of the different pieces of legislation being tested by the Court in the two different cases.
16) In the Pollock case, the Court is testing a tax on the income, or net profits, of the corporation and its shareholders derived from real estate holdings and the bonds of the city of New York;
“An act to reduce taxation, to
provide revenue for the government, and for other purposes,' passed August 15,
1894, [stating] the company was liable, and that they intended to pay, to the
United States, before July 1, 1895, a tax of 2 per centum on the net profits of
said company for the year ending December 31, 1894, above actual operating and
business expenses, including the income derived from its real estate and its bonds of the city of New York; and that the
directors claimed and asserted that a similar tax must be paid upon the amount
of the incomes, gains, and profits, in excess of $4,000, of all minors and
others for whom the company was acting in a fiduciary capacity. And, further,
that the company and its directors had avowed their intention to make and file
with the collector of internal revenue for the Second district of the city of
New York a list, return, or statement showing the amount of the net income of
the company received during the year 1894, as aforesaid, and likewise to make
and render a list or return to said collector of internal revenue, prior to
that date, of the amount of the income, gains and profits of all minors and
other persons having incomes in excess of $3,500, for whom the company was
acting in a fiduciary capacity.” Pollock v. Farmer’s Loan & Trust Co., 157
17) This tax was laid by the 1894 statute on income derived from real estate and the bonds (of the city of New York). The Pollock court decided that the Federal government had no authority to tax the income derived from the instruments of the State of New York (the bonds of the city of New York), and that the income tax laid in the 1894 statute on income derived from real estate, rents and other properties was an unconstitutionally direct tax on property that could not be sustained as such without apportionment. As ;
“I am of opinion that the whole law of 1894 should be declared void, and without any binding force,-that part which relates to the tax on the rents, profits, or income from real estate, that is, so much as constitutes part of the direct tax, because not imposed by the rule of apportionment according to the representation of the states, as prescribed by the constitution; and that part which imposes a tax upon the bonds and securities of the several states, and upon the bonds and securities of their municipal bodies, and upon on the salaries of judges of the courts of the United States, as being beyond the power of congress; and that part which lays duties, imposts, and excises, as void in not providing for the uniformity required by the constitution in such cases” Pollock v. Farmer’s Loan & Trust Co., 157 U.S. 429, 607 (1895)
18) In stark contrast, when we examine the statutes being tested in the Brushaber case twenty years later, we find an entirely different set of circumstances present in the case and acknowledged by the Court in its decision;
“…, the appellant filed his bill to
enjoin the corporation from complying with the income tax provisions of the tariff act of October 3, 1913.” Brushaber
v. Union Pacific R.R. Co, 240
19) In the very first sentence of this decision we are told that the Court is testing the income tax provisions of a tariff act. The specific tariff act referenced here is the Underwood-Simmons Tariff Act of October 3, 1913. A tariff is one form of an impost, and an impost, of course, is one of the three kinds of indirect taxes the Constitution authorizes the government to lay and collect under;
Article I, Section 8, Clause 1
shall have power to lay and collect taxes, duties, imposts, and excises, … but all duties, imposts and excises shall be
uniform throughout the
20) As an impost in the form of a tariff, the income tax provisions of the Underwood-Simmons tariff act of Oct. 3, 1913, do not constitute a direct tax under the 16th Amendment at all, but an inherently indirect tax under Article 1, Section 8, Clause 1, precisely as identified by the Chief Justice in the Brushaber decision, because all imposts are indirect taxes.
21) The error made by the 10th Circuit court in the Collins case was of course based on its erroneous assumption that the income tax laws were enacted under the 16th Amendment of the Constitution, which says;
"Congress shall have power to lay and collect taxes on income from whatever source derived, without apportionment among the several states, and without regard to any census or enumeration."
22) The language of the amendment does not state that the income tax is to be a direct tax. That must be improperly assumed in the (mis)-reading. The Supreme Court in the Brushaber case understood that if the 16th Amendment is interpreted as authorizing a direct tax, that interpretation would engineer a direct and inherent conflict within the Constitution with the un-repealed and un-amended pre-existing provisions of Article 1 prohibiting direct taxation unless laid in proportion to the census (Art. 1, Sec. 9, Cl. 4) and apportioned to the state governments for collection (Art. 1, Sec. 2, Cl. 3). The Court, however, recognizing that the income tax provisions of the legislation being tested were part of a tariff act, and knowing that a tariff is an impost, and knowing that an impost is an indirect tax under the Constitution (1,8,1), the Court was able to quite easily keep the distinction intact between the two great classes of taxing powers, direct and indirect, and maintain that;
“… the provisions of the 16th Amendment conferred no new power of taxation but simply prohibited the previous complete and plenary power of income taxation possessed by Congress from the beginning from being taken out of the category of indirect taxation to which it inherently belonged.." Stanton v. Baltic Mining Co., 240 US 103, 112-113 (1916) (emphasis added)
results that the proposition and the contentions under it, if acceded
to, would cause one provision of the Constitution to destroy another; that
is, they would result in bringing the provisions of the Amendment exempting a
direct tax from apportionment into irreconcilable conflict with the
general requirement that all direct taxes be apportioned. Brushaber v. Union
23) It is stated conclusively by the Supreme Court in these two cases, Brushaber v. Union Pacific R.R., 240 U.S. 1 (1916) and Stanton v. Baltic Mining Co., 240 US 103 (1916), that the income tax legislation enacted in 1913 is an indirect tax (in the form of a tariff), and is not a nonapportioned direct tax as improperly stated in the Collins decision of the 10th Circuit and the Stumpf decision in the 9th Circuit.
24) There are no intervening authorities in the form of subsequent Supreme Court decisions addressing this matter of whether the income tax is a direct or indirect tax. As an indirect tax, the legislation may only enact and lay a tax in the form of an impost, duty, or excise. The Court states that the income tax provisions being tested in 1916 were the income tax provisions of a tariff act (of Oct. 3, 1913). Then, the Supreme Court conclusively determines that the income tax legislation being tested in these two cases in 1916 is perfectly Constitutional as indirect taxation. Surprisingly, and unknown to most attorneys and judges, those same Underwood-Simmons “income tax provisions of the tariff act” that the Court upheld in 1916, survive intact today as Subtitle A of Title 26, our income tax.
25) Tariff acts lay tariffs. Tariffs are imposed on and apply to foreign goods and activity, not domestic activity. All imposts, including those in the form of a tariff, must have inherent limitations in their application as a result of their status as an impost (laid on foreign activity).
26) A tariff is a tax, or schedule of rates for a tax, laid or imposed on foreign goods entering the United States, or on foreign activity occurring in the United States. Can we find evidence in the law today of this alleged foreign nature of the income tax, identified by the Supreme Court in its Brushaber decision in 1916? Are there any clear limitations found in the statutes implementing the provisions of the income tax legislation that was enacted in 1913, and that was subsequently tested by the Supreme Court in 1916? The connection is simple, and is in fact identified by the Supreme Court itself in the Brushaber decision opinion;
“2. The act provides for collecting the tax at the source; that is, makes it the duty of corporations, etc., to retain and pay the sum of the tax …” Brushaber v. Union Pacific R.R. Co, 240 US 1, 21 (1916) (emphasis added)
27) Here, the court clearly identifies that the true scheme of the income tax, as provided by the actual legislation of the tariff act, is that of a tax that is collected at the source, by third parties identified as “corporations, etc.”
28) The entire true scheme of the income tax, as it was originally imposed under the actual laws enacted by Congress, and surprisingly, as we will see, exactly as it still exists today under the actual provisions of our current statutes, is described by the Court in this one sentence. The Court identifies that this “…collecting the tax at the source;” is how the income tax is actually collected under the provisions of the statutes because “The act provides…”, and it identifies how the tax is to be collected and paid into the Treasury under the actual laws that were passed into existence, as it “…makes it the duty of corporations, etc., to retain and pay the sum of the tax…”.
29) This entire true and actual scheme of the income tax, of “collecting the tax at the source”, by withholding from payments made to subject persons, under a legislatively created “duty” to “retain and pay the sum of the tax”, before those payments are even made to the subject taxpayer, is clearly laid out in this one sentence.
30) The Opinion of the Court clearly states that the act creates and imposes a legal “duty” on the “... corporations, etc., to retain and pay the sum of the tax”. This legislatively created “duty” of the “corporations, etc.”, identified by the Supreme Court in the Brushaber decision, is defined in the law and has been since the inception of this tax in 1913. Title 26 U.S.C. Section 7701(a)(16) states;
§ 7701 Definitions.
(a) When used in this Title ...
(1). Person. – The term “person” shall be construed to mean and include an individual, a trust, estate, partnership, association, company or corporation.
(16). Withholding Agent. - The term "Withholding Agent" means any person required to deduct and withhold any tax under the provisions of sections 1441, 1442, 1443, or 1461.”
31) This subsection, (a), provides the statutory definition of these and other terms within Title 26 of the United States Code. These are essentially, the same definitions for these terms as existed in 1913 under the original income tax provisions of the tariff act of October 3, 1913 (the Underwood-Simmons Tariff Act). Subsection (a)(16) of Section 7701, defining the Subtitle A income tax Withholding Agent, establishes the complete and entire authority to withhold income taxes from subject persons under the authority of the Subtitle A statutes of Title 26, and has been the only statutory authority for the withholding of Subtitle A income taxes since the inception of the income tax in 1913.
32) The statutorily defined “Withholding Agent” is the entity defined in the income tax laws of Title 26, Subtitle A, with the legal “duty” to “retain and pay the sum of the tax” as identified and stated by the Supreme Court in the Brushaber decision. The “Withholding Agent” is tasked by the statutes with the duty to withhold the income tax at the source, i.e.: from payments made, and then pay over those withheld funds to the Treasury, acting as a tax collector.
33) The definition of the legal term “Withholding Agent” is simple and straight-forward. To understand its complete enacted authority all one need do is read the actual code sections invoked by the statutory definition shown above. The code sections, 1441, 1442, 1443, and 1461, which are the only authorities cited in the statutory definition of the Withholding Agent provided by 7701(a)(16), supra, provide as follows;
§ 1441. Withholding of Tax on Nonresident Aliens
(a) General rule. Except as otherwise provided in subsection (c) all persons, in whatever capacity acting having the control, receipt, custody, disposal or payment of any of the items of income specified in subsection (b) (to the extent that any of such items constitutes gross income from sources within the United States), of any nonresident alien individual, or of any foreign partnership shall deduct and withhold from such items a tax equal to 30 percent thereof, except that in the case of any items of income specified in the second sentence of subsection (b), the tax shall be equal to 14 percent of such item. (emphasis added)
34) Section 1442 states;
§ 1442 Withholding of Tax on Foreign Corporations
(a) General rule. In the case of foreign corporations subject to taxation under this subtitle, there shall be deducted and withheld at the source in the same manner and on the same items of income as is provided in Section 1441 a tax equal to 30% thereof. ....
(b) Exemption. Subject to such terms and conditions as may be provided by regulations prescribed by the Secretary, subsection (a) shall not apply in the case of a foreign corporations engaged in trade of business in the United States if the Secretary determines that the requirements of subsection (a) impose an undue administrative burden and that the collection of the tax imposed by section 881 on such corporation will not be jeopardized by the exemption.
(c) Exception for certain possessions corporations. For purposes of this section, the term "foreign corporation" does not include a corporation created or organized in Guam, American Samoa, the Northern Marianna Islands, or the Virgin Islands or under the law of any such possession if the requirements of subparagraphs (A), (B), and (C) of section 881(b)(1) are met with respect to such corporation.
Section 1442 only authorizes the withholding of income tax from foreign corporations.
35) Section 1443 states;
§ 1443 Foreign Tax Exempt Organizations
(a) Income subject to section 511. In the case of income of a foreign organization subject to the tax imposed by section 511, this chapter shall apply to income includible under section 512 in computing its unrelated business taxable income, but only to the extent and subject to such conditions as may be provided under regulations prescribed by the Secretary.
(b) Income subject to section 4948. In the case of income of a foreign organization subject to the tax imposed by section 4948 (a), this chapter shall apply, except that the deduction and withholding shall be at the rate of 4 percent and shall be subject to such conditions as may be provided under regulations prescribed by the Secretary.
36) Section 1443 specifies provisional treatment for some foreign organizations that are partially tax exempt.
37) Title 26 U.S.C. Section 1461 is the last code section referenced in the statutory definition of a Withholding Agent as provided by 26 U.S.C. § 7701(a)(16). It explicitly states;
Every person required to deduct and withhold any tax under this chapter is hereby made liable for such tax and is hereby indemnified against the claims and demands of any person for the amount of any payments made in accordance with the provisions of this chapter. (emphasis added)
38) 26 U.S.C. Section 1461 clearly says that the Withholding Agents are made liable for the payment of the income taxes that they have withheld from other persons. It does not make the Withholding Agent liable for the payment of tax on his own income. Under the provisions of code sections 1441, 1442, and 1443, the only persons subject to the withholding of income tax are all foreign. So where is the statute in Subtitle A granting the authority to collect an income tax, by withholding from payments or in any other manner, from American citizens? Or even from resident aliens? They don’t exist because that authority is not granted because the income tax is a tariff laid on foreign activity in the United States. Under the Constitution the federal government is allowed to tax foreign activity in the United States, but still, even after the passage of the 16th Amendment, may not tax citizens, their property, their earnings, or the fruits of their labor in the form of income, directly.
39) As regards this simple reading of the establishment of statutory liability;
“In all cases involving statutory construction, a court's starting point must be the language employed by Congress, and it would be assumed that the legislative purpose is expressed by the ordinary meaning of the words used; thus, absent a clearly expressed legislative intention to the contrary, that language must ordinarily be regarded as conclusive.” American Tobacco Co. v. Patterson, 456 US 63
40) The “persons” made subject to the withholding of income tax from their payments are all foreign of course because these legislative provisions are the “income tax provisions of the tariff act of Oct. 3, 1913” that the Chief Justice White refers to in the first sentence of the Brushaber decision. A tariff is a foreign tax, being one form of an impost, and only persons involved in foreign activity are subject to the payment of a tariff, which is broadly categorized as a foreign tax. The power to lay tariffs on foreign imports and activity is a “complete and plenary” indirect power to tax that has been possessed by Congress from the beginning under Article 1, Section 8, Clause 1 of the Constitution, again, precisely as identified by the Supreme Court in the Stanton decision.
41) There is no other code section anywhere in Subtitle A, besides Section 1461, making any other person or party liable for the payment of any Subtitle A income tax. In fact, the only other code section in all of Title 26 that specifies that any other person or party is liable for the payment of the income tax is Title 26 U.S.C. § 3403, from Subtitle C of Title 26, which states;
§ 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.
42) Again, we find that the statutes are consistent. In the Subtitle C provisions adopted in 1944, just like in the Subtitle A provisions adopted in 1913 and tested 1916, we find again that it is the tax collector who is made liable in the statutes for the payment of the income tax. In Subtitle A, the Withholding Agent is made liable for the payment of the income tax that he has withheld from other persons, and in Subtitle C it is the employer, another “person” acting in the capacity of a “tax collector”, that is made liable for the payment of the tax that he has also withheld from other persons, his participating employees in this case.
43) Sections 1461 and 3403 are the only statutes in all of Title 26 that make any persons liable for payment of the income tax. By making only the tax collectors, acting in the capacity of a either a “Withholding Agent” or an “employer”, liable by statute for the payment of the (withheld) income tax, the statutory scheme for the collection and enforcement of the income tax as enacted in 1913 is kept entirely indirect, and therefore, as found by the courts, is constitutional.
44) Not because the Constitution now allows direct taxation of the people under the 16th Amendment as erroneously claimed by the United States Justice Department, but because the statutes only actually implement a very indirect tax that is collected and paid by third-party tax collectors who shift the burden of the tax they pay by withholding the tax from other, third-party persons who are made subject by law to the withholding of the tax.
45) The Title 26 statutes do not make the sovereign people themselves the direct subject taxpayers of the income tax, it correctly recognizes the true and proper role of the Sovereign in any system of taxation, and makes them the tax collectors, as sovereign citizens are the “etc.” referenced in the “duty of the corporations, etc.” quote referred to in the Brushaber decision cited above.
46) By injecting this third party, the Withholding Agent, into the scheme for “collecting the tax at the source”, the burden to pay the income tax is shifted by withholding from the payer of the tax - the tax collector, the Withholding Agent, to the actual taxed subject and real taxpayers - the non-resident aliens and foreign corporations that are the proper taxed subjects of the federal government under the Subtitle A provisions of the tariff act, and, under the Constitution.
injection of this third party, the Withholding
Agent, into the Subtitle A income tax collection scheme of “collecting the tax at the source”, keeps the
income tax indirect because the tax
is collected by a third party – the Withholding
Agent, and the burden is shifted from that third party to the subject
foreign taxpayer through withholding. Under the actual provisions of the
statutes, the tax is not collected
directly by the government from the subject taxpayer, but is collected
indirectly by the third party Withholding
Agents. Under the actual provisions of the statutes,
the sovereign American citizens and corporations are not taxed directly and are
not cast in the role of subject taxpayers, but rather are empowered as tax collectors. It is the subject foreign non-resident persons,
individuals and corporations, that are actually cast
in the role of the subject taxpayers by the language of the
statutes implementing the “income tax
provisions of the tariff act of
48) Additionally, Section 1463 clearly states who is to be penalized if the tax is not properly withheld and paid into the U.S. Treasury as proscribed by these statutes;
§ 1463. Tax paid by recipient of income
the tax so required to be deducted and withheld shall not be collected from such person; but this section shall in no case relieve such person from liability for interest or any penalties or additions to the tax otherwise applicable in respect of such failure to deduct and withhold. (emphasis added)
49) This code section says that it is the Withholding Agents who are responsible for and must pay the penalties, interest, and additions to tax that are due on the tax that was not properly withheld, reported, and paid into the Treasury. It is not the taxpayer who is penalized by any of these penalties or additions by this statute, it is the tax collector, or Withholding Agent, who is penalized. Again, this keeps the tax and its enforcement under the statutes, indirect.
50) The analogy one can very quickly and easily make is that of a sales tax collected by the stores in the fifty states. The sales tax is an indirect tax that is not imposed on any person, per se, but on certain transactions. When it is imposed on a transaction it is collected by a third party, the tax collector, the store. It is not collected by the government itself from the taxpayer. The government deals only with the tax collector, not the taxpayer.
51) And, it is the store, the tax collector, that is made liable for the payment of the tax to the Treasury, not the customers – the actual taxpayers. Finally, if the tax collector fails the duty to collect the tax as required, it is again the tax collector, and not the taxpayer, that is punished for that failure, and made liable for penalties, fines, and additions to tax thereby incurred. The collection of the federal income tax is obviously properly effected under the true provisions of the Subtitle A statutes in exactly the same indirect manner.
52) It is clear that under the true provisions of the statutes of Subtitle A, the income tax is a tax that is collected indirectly at the source by withholding. Under the provision of the statutes, it is the tax collector in the form of the Withholding Agent who is made liable for the payment of the tax. Having withheld the money as tax from payments made to other persons, the tax collector is made liable by statute for the payment of the tax so that he is legally obligated to make payment of the withheld collected funds over to the U.S. Treasury. Again, in the provisions of the statues under § 1463, it is the tax collector who is punished for a failure to pay, not the taxpayer, and these facts again work to keep the whole scheme of the income tax legislation, together with all of the provisions for the enforcement of the income tax, indirect and constitutional;
The primary and general rule of statutory construction is that the intent of the lawmaker is to be found in the language that he has used. He is presumed to know the meaning of the words and the rules of grammar. U.S. v Goldenberg, et a!., 16S U.S. 95, 102 (l897). (emphasis added)
53) The government has failed the legal requirement to establish that Defendant Snipes is, or ever was, liable by statute for the payment of any income tax on his own earnings, or that he ever withheld any tax from subject persons for which he would have been made liable under Sections 1461, 1463, or 3403. If the government cannot show any statutory liability of the Defendant for the payment of tax, then it cannot sustain an allegation that there was a requirement to file that could have been failed as the basis for a conviction. Defendant is wrongfully convicted.
54) In conclusion it is clear that the Brushaber (and Stanton) decisions of 1916, upholding the constitutionality of the income tax legislation enacted under the Underwood-Simmons tariff act of Oct. 3, 1913, did not reverse or contradict the Pollock decision of 1896 in any way at all. They all go hand in hand together, co-existing in complete harmony without conflict because they address entirely different aspects of the government’s constitutional powers to tax. One upholds the constitutional prohibition on direct taxation of the people without apportionment, which prohibition still exists even after the adoption of the 16th Amendment, and the other case(s) uphold(s) the power of the federal government to tax indirectly through imposts, duties, and excises, as provided by Article 1, Section 8, Clause 1.
55) In fact, in 1920, seven years after the adoption of the 16th Amendment, the Court resurrects the Pollock ruling in the Eisner v. Macomber decision, where it again strikes down as unconstitutionally direct, yet another attempt by Congress to directly tax dividends as income, this time, under the 16th Amendment.
“Thus, from every point of view we
are brought irresistibly to the conclusion that neither under the Sixteenth Amendment nor otherwise has Congress power
to tax without apportionment a true stock dividend made lawfully and in good faith, or the accumulated profits behind it, as income of the stockholder.”
Eisner v. Macomber,
56) TheCourt knew that the income tax must be either an indirect tax, laid in the form of an impost, duty or excise, or a direct tax, that is still required by the Constitution to be laid in proportion to the census and apportioned to the States for collection. There are no other options. As a Constitutional tax, the income tax may only be one or the other, direct or indirect, or it is not a legitimate application of the taxing powers.
“The inherent and fundamental nature and character of a tax is that of a contribution to the support of the government, levied upon the principle of equal and uniform apportionment among the persons taxed, and any other exaction does not come within the legal definition of a 'tax.'” Pollock v. Farmer’s Loan & Trust Co., 157 U.S. 429, 599 (1895)
57) This Amicus Curiae Brief identifies very clearly in the law an indirect implementation for the collection of the income tax through the legislatively created duty of the Withholding Agents to retain and pay the sum of the tax, precisely as identified by the Supreme Court in the Brushaber decision taken in 1916, when it said the income tax legislation of the tariff act was constitutional. Since there is clearly an indirect scheme implemented in the law for the collection of the Subtitle A income tax as an indirect tax, and since there are no intervening authorities, it simply cannot be that there is also a scheme of direct implementation of the tax imposed through a direct assessment equated with wages and earnings, made by mandatory complete disclosures effected through the filing of Form 1040 return, with direct payments to the Treasury made by the taxpayers, and enforced collection with interest, penalties, and additions to tax directly imposed by the IRS on the citizens without judicial involvement, with criminal incarceration provided to those who deign to question the de-facto operations of the “system” as Mr. Snipes has merely done. That “system” is not the constitutional system of indirect taxation approved by the Supreme Court in 1916 under the 16th Amendment and the “income tax provisions of the tariff act of Oct. 3, 1913”. Was the entire legislative act really just a ruse, intended to be used across time to deceitfully begin taking directly from the mouth of labor the bread it has earned, in the name of tax?
58) The income tax can only be either direct or indirect, it cannot be both. That is why there is no liability for tax established anywhere in the statutes except for Section 1461, which indirectly establishes the liability of the Withholding Agents for the tax that they have collected by withholding from the subject foreign taxpayers. And that is why neither the Internal Revenue Service nor the U.S. Justice Department can show any law or statute that makes an American citizen liable for the payment of income tax on his or her own income. It doesn’t exist in the statutes because that would be unconstitutionally direct taxation without apportionment, and the Supreme Court knew in the Brushaber decision to read into the law only what is actually printed in the law, and nothing more. The courts must not read into the law things that are simply not there;
"To rely upon conjecture, either in favor of or against the accused, is not justice. It is not due process of law by any definition." Haley v. Ohio, 332 U.S. 596, 615-616 (1948)
59) The United States Courts must not allow the government to continue in its de-facto enforcement operations that are herein shown to be far removed from a legitimate and dejure application of the law. The United States Courts must not allow the government to continue to erroneously and wrongfully enforce the provisions of the income tax legislation as though it were a direct tax without apportionment, when the tax is not implemented by the actual provisions of the legislation in that manner at all, and that argument was specifically rejected by the Supreme Court in its controlling decision.
60) The United States Courts must not allow the government to continue to assume that direct personal liability for income tax exists, when in fact no statutory liability for tax has been shown, and none can be shown to exist that would be applicable to Defendant Snipes. Without a showing by the government of liability founded in statute in the Defendant’s name, or legal capacity, there can be no legitimate conviction of Defendant Snipes for a failure to file misdemeanor charges.
61) Chief Justice Fuller in the Pollock decision laid out a clear understanding of the matter before him:
“Ordinarily, all taxes paid primarily by persons who can shift the burden upon someone else, or who are under no legal compulsion to pay them, are considered indirect taxes;” Pollock v. Farmer’s Loan & Trust Co., 157 U.S. 429, 558 (1895)
“The income tax law under consideration is marked by discriminating features which affect the whole law. It discriminates between those who receive an income of $4,000 and those who do not. It thus vitiates, in my judgment, by this arbitrary discrimination, the whole legislation. Pollock v. Farmer’s Loan & Trust Co., 157 U.S. 429, 596 (1895)
62) His words ring as truly prophetic, as we are certainly confronted today with all of the same aspects of the income tax that he confronted and rejected in his day. Chief Justice Fuller further pursues this issue,
“The legislation, in the discrimination it makes, is class
legislation. Whenever a distinction is made in the burdens a law imposes or in
the benefits it confers on any citizens by reason of their birth, or wealth, or
religion, it is class legislation, and leads inevitably to oppression and
abuses, and to general unrest and disturbance in society. It was hoped and
believed that the great amendments to the constitution which followed the late
Civil War had rendered such legislation impossible for all future time. But the
objectionable legislation reappears in the act under consideration.” Pollock v. Farmer’s Loan & Trust Co., 157
125) And, in recognition of the long since forgotten constitutional limitations on the federal power to tax,
“There is no such thing in the theory of our national
government as unlimited power of taxation in congress. There are limitations,
as he justly observes, of its powers arising out of the essential nature of all
free governments; there are reservations of individual rights, without which
society could not exist, and which are respected by every government. The right
of taxation is subject to these limitations. Citizens' Savings Loan Ass'n v.
“Although there have been from time to time intimations that there might be some tax which was not a direct tax nor included under the words 'duties, imposts, and excises,' such a tax for more than one hundred years of national existence has as yet remained undiscovered, notwithstanding the stress of particular circumstances has invited thorough investigation into sources of revenue.” Pollock v. Farmer’s Loan & Trust Co., 157 U.S. 429, 557 (1895)
126) And finally,
“Here I close my opinion. I could not say less in view of questions of such gravity that go down to the very foundation of the government. If the provisions of the constitution can be set aside by an act of congress, where is the course of usurpation to end? The present assault upon capital is but the beginning. It will be but the stepping-stone to others, larger and more sweeping, till our political contests will become a war of the poor against the rich,-a war constantly growing in intensity and bitterness. 'If the court sanctions the power of discriminating taxation, and nullifies the uniformity mandate of the constitution,' as said by one who has been all his life a student of our institutions, 'it will mark the hour when the sure decadence of our present government will commence.' If the purely arbitrary limitation of four thousand dollars in the present law can be sustained, none having less than that amount of income being assessed or taxed for the support of the government, the limitation of future congresses may be fixed at a much larger sum, at five or ten or twenty thousand dollars, parties possessing an income of that amount alone being bound to bear the burdens of government; or the limitation may be designated at such an amount as a board of 'walking delegates' may deem necessary. There is no safety in allowing the limitation to be adjusted except in strict compliance with the mandates of the constitution, which require its taxation, if imposed by direct taxes, to be apportioned among the states according to their representation, and, if imposed by indirect taxes, to be uniform in operation and, so far as practicable, in proportion to their property, equal upon all citizens. Unless the rule of the constitution governs, a majority may fix the limitation at such rate as will not include any of their own number.” Pollock v. Farmer’s Loan & Trust Co., 157 U.S. 429, 607 (1895 (emphasis added)
127) The court should note that all of these arguments identified by Justice Fuller remain unaffected by the adoption of the 16th Amendment, according to the Supreme Court, which said in the Stanton decision that the 16th Amendment “conferred no new power of taxation”, and that the income tax that is laid in statute by the act tested “is inherently indirect”;
128) This court has a clear duty to overturn the conviction of Defendant Snipes on the three misdemeanor failure to file charges that he has been wrongfully convicted of. The government failed at trial to introduce any statute as evidence that could have been relied upon by the jury to know as a proper fact of law that the Defendant was liable for tax under the provisions of the statutes. This critical element of the case was allowed to be assumed to exist by the jury, in violation of the due process requirements.
"It is the duty of the courts to be watchful for the Constitutional rights of the citizen and against any stealthy encroachments thereon" Boyd v. United States, 116 U.S. 616, 635
129) Unless the government establishes during the trial, by statutory or testimonial evidence, that the Defendant was actually liable by law for the payment of tax, and was in fact required by law to file a specific form, and identifies that specific form in the law for the jury, there cannot be a legitimate conviction under a failure to file charge. Proper convictions are not made by persuading a jury to assume laws and requirements serving as critical, foundational elements of a case exist, when in fact they do not, and are not demonstrable under a dejure application of the statutes.
130) To secure a proper conviction, these critical elements of the case must be demonstrated as evidence at trial. The Courts cannot allow the nation’s juries to assume, rightfully or wrongfully, that these critical elements of a case exist in the law if the prosecution fails to establish them through the introduction of proper evidence during the trial.
131) Defendant Snipes is wrongfully convicted for lack of a showing during trial of any statutory liability for tax for the specific years in question, and this court now has a duty to overturn the erroneous and wrongfully secured conviction, and return these proceeding to the District court for a new trial on these charges.