The following is excerpted from a letter to a challenge:
First off, are you saying that the IRS can demand any information they want to, without statutory justification, or will you concede that everybody, including the IRS, is bound by the law, must obey it, and is limited by the statutory limitations on the authorities established therein ? If the IRS is not limited in their demands for information by the Paperwork Reduction Act, why did they provide to OMB the table contained in 26 CFR 602.101, pursuant to its mandate, with that purpose stated in its introduction ? If the Paperwork Reduction Act does not limit the government in its information collection actions (the stated purpose), what was its purpose and what does it do ? †††Or, are you arguing that the IRS is our only unlimited national authority under our government of specific, limited powers?
However, this return requirement is not the only fact that our argument is based on, it is only just one of the many supporting pieces of documentation found in the law, presented on the Web site pages, that the IRS refuses to address in Court and refuses to attempt to rebut with cites of law.
To properly understand the American tax laws, and
understand exactly what happened to
The Relevant Choronological History
1. 1861 - Income tax first appears in American law as an income DUTY (see The Income Duty of 1861), and a Federal Employee Agreement (see The Federal Employment Tax) Iím sure you are aware that duties are imposed on goods leaving the country and not on domestic productivity, and as such, this tax did not affect U.S. citizens domestic earnings, ONLY foreigners and Federal officers and employees. The Federal Judges become the first "tax protesters" by refusing to submit to the tax for 70 years until 1932.
2. 1896 - In Pollock v. Farmers Loan & Trust Co. (1898)) the Supreme Court strikes down an Act of Congress that attempted to expand the application of the income tax and impose it on the interest and dividends from funds on deposit at U.S. banks, ruling that the tax was UNCONSTITUTIONAL because it was a direct tax without apportionment, as required by Article 1 for all direct taxes (Referenced Sections of the Constitution).
3. 1913 - The 16th Amendment is passed and allegedly ratified by 3/4ths of the States, although to this day, the Federal government still will not produce or release for examination the ratification documents supposedly received from the states.
4. 1916 - The Brushaber v. Union Pacific R.R. Co.
(1916) decision rules that the 16th amendment IS constitutional because it is NOT a direct tax, but rather, is an INDIRECT tax that is part of a tariff act, which does not
have to be apportioned because tariffs are one form of an indirect impost under
Article 1, Section 8, Clause 1, which must be uniform, but do not have to be
apportioned. †A tariff is a foreign tax
on foreign goods entering the
"taxes on the manufacture, consumption and
sale of commodities within the country,
on licenses to pursue certain occupations,
and on corporate privileges."
Given this fact, how would income tax in the form of a tariff be applied to income of citizens NOT derived from either foreign activity or these three defined excise taxable activities? Treasury Decision 2313 was issued by the commissioner of the IRS as a result of this Supreme Court decision. It clearly states that non-resident aliens are liable for the tax, and that the income of those nonresident aliens is to be reported on Form 1040. It does NOT say "citizens" or "all persons" because it was properly understood that citizens are not subject to the tax on their own income, but only are made liable by† statute in Section 1461 for the tax that they have collected from the foreign persons from whom moneys have been withheld. Citizens have a RIGHT TO WORK, and our rights cannot be taxed directly, irregardless of the 16th Amendment.
5. 1916 - Stanton v. Baltic Mining Co. (1916)
the Court rules that the 16th Amendment
"CONFERS NO NEW POWERS OF TAXATION"
upon Congress. The 16th Amendment does not create a new authority for the federal government to tax citizens directly and without apportionment under (because it is an indirect tax), according to the Supreme Court itself. So if it was unconstitutional to tax the interest and dividends (of citizens) before the 16th Amendment (according to Pollock), and no new powers to tax are created by the 16th, how can the income tax be constitutionally imposed today on those sources when Pollock has never been overturned or reversed ?
6. 1918 - The 75 year Canadian Tax treaty is signed and Section 213 (Section 22(a) in the 1939 Code - now Section 61) are added to the United States Code, defining the sources of taxable income from the Canadian sources subject to the income tax under the new tax treaty. (see The Proper Application). Income earned in a foreign country under a tax treaty is taxable income, and therefore, is subject to the income tax.
7. 1918 - 1935 The income tax is properly collected, not from all U.S. citizens, but only from those who derive income from the territories or from privileged or licensed activities, as determined by the Supreme Court in Brushaber, The income tax is also properly collected from foreigners earning money in the U.S., from any source, per the instructions issued in Treasury Decision 2313.
1920 - In Eisner v. Macomber, (1920), the Supreme Court, irregardless of the adoption of the 16th Amendment seven years before, †strikes down another Act of Congress that attempted to expand the application of the income tax and impose it on the interest and dividend income of citizens, ruling that the tax was UNCONSTITUTIONAL because it was a direct tax without apportionment, in violation of Article 1, Section 2, Clause 3 and Article 1 Section 9. Clause 4.
1935 - Social Security begins (Subtitle C -
Employment taxes). Foreigners working in the
1939 - Involvement in World War II begins and there is suddenly lots of new money for the government (and debt for the People), provided by the very same bankers who just 2 years earlier supposedly did not have a penny to loan to farmers and businesses for peace, but suddenly had unlimited billions for a war the America people did not even want to be in.
1942 - The Victory tax is imposed and it is withheld from citizensí wages. (This tax was probably unconstitutionally direct but no one challenged it.)
1944 - Present. The victory tax is repealed and the authority to withhold tax from citizens expires with it, but the withholding of tax continues after the passage of the Current Tax Payment Act, and Form W-4 is modified to include a voluntary request to "claim a number of deductions". †This of course relates to income tax, not Social Security (or employment taxes under Subtitle C). The W-4 is now a voluntary withholding agreement that covers BOTH Employment taxes AND Income taxes, which are withheld at the voluntary request of the citizen on the W-4. However, under the law, only foreign persons and certain federal employees are required to make a "return of income" to the Treasury as a result of their "employment". Additionally, the law provides that the W-2 is to be accepted by the IRS as a SUBSTITUTE FORM 1040 (see Form W-2 Can Substitute For A Form 1040 !!).
Those who voluntarily take a number and provide it
to an employer, voluntarily subject their wages to
the withholding of tax. †As regards the
withholding of Subtitle A income tax by the employer, the tax is not actually imposed
on the wages of any employees under the Subtitle C additions to the code, it is
simply authorized by the employee to be withheld from his or her wages.† This begins the withholding of tax at the
It should be carefully noted that Employers are authorized BY statute to withhold employment taxes under Subtitle C (26 USC 3402) from those who participate in Social Security and have provided a number, but are authorized BY REQUEST (on the W-4 under 26 USC 3402(p)) to withhold Subtitle A INCOME tax from citizens. The statutory authority to withhold income tax is granted to Withholding Agents under Subtitle A, not employers. The definition of a "withholding agent" is provided in Sec. 7701. Withholding Agent & Definitions, where the agent is authorized to deduct and withhold from foreigners, and only foreigners, exactly as the tax was authorized and collected for the first 16 years (1916-1932) of its existence as part of a tariff act.
The last paragraph accurately reflects the legal reality of todayís situation. While you are correct that the tax laws are imposed as "liabilities" NOT filing requirements, the only code sections that exist in the U.S.C. that actually specify or establish liability for tax are Sec. 1461. Liability for Withheld Tax and Sec. 3403. Liability for Tax. If you believe that there is another code section that establishes liability for the income tax, Please cite it now.
If you believe that Sec. 1. Tax Imposed establishes LIABILITY, you need to read it more closely. It imposes a tax on "taxable income", but does not mention liability. If Section 1 creates liability, who is liable ? Where does it say that ? The truth is that 26 CFR 602.101 - The Form Required reveals the true extent of any liability that may be imposed under Section 1 as being limited to a liability for "taxable income", earned in foreign countries under foreign tax treaties, properly made SUBJECT TO A TARIFF !
I generally ask attorneys 3 questions to prove to them that they have been misled by the IRS concerning these income tax laws. The first two are easy, the third has never been answered, BY ANYONE (including the IRS and the Justice Dept or any judge.)
QUESTION: Where are the laws regarding income tax contained in the U.S. Code ? ANSWER: Title 26, Subtitle A. (Subtitle C is Employment taxes NOT Income taxes.)
QUESTION: How many Chapters are there in that Subtitle ? ANSWER: 6 (Chapters 1 - 6)
QUESTION: Where in those 6 chapters do you find the withholding of income tax from American citizens ?
Please respond with a cite of the specific code section that you claim establishes this authority. If you cannot provide a cite of a law from Subtitle A authorizing this, I would expect an admission from you that the law doesnít really say what you thought it did, and that these issues should be investigated and addressed by our government.
(PS. Donít waste too much of your time trying to find this, IT DOESNíT EXIST !)
That lack of authority agrees completely with the big picture of understanding our facts of law create in the minds of jurors that the income tax it is still (basically) a foreign (excise) tax. As a final remark I would point out that in America judges donít decide guilt or throw people in jail, juries do. That being the case, it doesnít really matter whether or not the judges agree with us, it only matters that we are consistently able to convince juries of these legal facts. Actually, the IRS makes it easy, they donít even try to rebut or discredit these facts of law any more, they just hope the jurors will ignore them. They donít.
If you wish to engage in a correspondence with me, I would be happy to do so. Iím certain that we both would probably learn something. However, if you are going to respond, please cite the specific code sections you are referencing and relying on when you make claims so that I may respond directly to your concerns. You could start by citing the code sections requested herein, and providing me with cites of the sections your letter was based on. After eighteen years of research, I am unaware of the laws you have evidently ASSUMED exist. Show them to me in the law, donít just tell me about a mythical belief that is prevalent in America. Iíve heard the myth, but after eighteen years of asking the IRS and Justice Department, and beating them all in court repeatedly, I still ainít seen (or been shown) no laws.