|
SOURCE:
Great IRS
Hoax, section 5.6.13 ______________________________________
"The taxpayer-- that's someone who works for the
federal government but doesn't have to take the civil service
examination."
[President Ronald W. Reagan]
As we explained
earlier in section 5.3.2 and the
preceding section, one must be engaged in a “trade or business”, which
is defined as “the functions of a
public office”, within the “United
States”, which is defined as the District of Columbia, in order to earn
“gross income”.
The only exception to this is
nonresident aliens with income from the District of Columbia under 26
U.S.C. §871(a). This is because:
1. The
income tax under Subtitle A of the Internal Revenue Code is an
indirect
excise tax, as the Supreme Court pointed out repeatedly. See section
5.1.3
earlier for details. The “subject of” all indirect excise taxes are
voluntary “taxable activities” that are privileged and in
many cases licensed. The tax may only be instituted by the agency or government
entity that issues the license or bestows the privilege to the person
who volunteers to be the “licensee”, and the tax is only
enforceable within the legislative jurisdiction of the taxing entity. The “privileged activity” in this
case of the federal income tax under Subtitle A of the Internal Revenue
Code is that of holding “public office” in the U.S. Government.
A “public office” is therefore the only excise taxable
activity that a biological person can involve themselves in that will
make them the subject of the municipal donation program for the District
of Columbia called the Internal Revenue Code.
2. According to
4 U.S.C. §72,
all "public offices" may be exercised ONLY in the District of Columbia
and not elsewhere, except as "expressly provided by law". That is
why the "United States" is defined in Subtitle A of the I.R.C. as the
District of Columbia in
26 U.S.C. §7701(a)(9) and (a)(10). There is also no
provision of law which authorizes "public offices" outside the District
of Columbia other than
48 U.S.C. §1612, and therefore, the I.R.C. Subtitle A Income
tax upon "public offices" can apply nowhere outside the District of
Columbia other than the Virgin Islands. This is also consistent
with the definition of "U.S. sources" found in
26 U.S.C. §864(c)(3), which identifies all earnings originating from
the "United States" as "effectively connected with the conduct of a
trade or business".
3. “Income”
has the meaning it was given in the Constitution, which is “gain and
profit” in connection with an excise taxable activity. Congress is
forbidden to define the word “income” because the Constitution defines
it. This was pointed out by several rulings of the U.S.
Supreme Court, including Eisner v. Macomber,
252 U.S. 189 (1920); So.
Pacific v. Lowe,
247 U.S. 330 (1918); Merchant’s Loan & Trust Co. v. Smietanka,
255 U.S. 509 (1921). Where there is no “taxable activity”,
there can be no “taxable income”.
We covered this earlier in sections 5.6.5
if you want more detail.
4. Because
all "taxpayers" under Subtitle A of the I.R.C. are “public
officers” and work for a federal
corporation called the
“United States” (see
28 U.S.C.
§3002(15)(A)), then they are acting as an “officer or employee of a federal
corporation” and they:
4.1.
Are the proper subject of the penalty statutes, as defined under
26 U.S.C.
§6671(b).
This is true even though the Constitution prohibits “Bills of
Attainder” in
Article 1, Section 10, because the penalty isn’t on the natural
person, but upon the “office” or “agency” he volunteered to maintain in
the process of declaring that he has “taxpable income”.
4.2.
May have the code enforced against you without implementing regulations
as required by 44
U.S.C. §1505(a)(1) and
5 U.S.C. §553(a)(2)
4.3 Are the proper subject for the
criminal provisions of the Internal Revenue Code, which identify
officers of corporations as the only "persons" within
26 U.S.C.
§7343
5.
Earnings not connected with a “trade or business”
under
26 U.S.C. §871(b) and
26 U.S.C. §864 and not originating from
the District of Columbia, which is what “United States” is defined as:
5.1. Are
identified as part of a “foreign estate” in
26 U.S.C.
§7701(a)(31). A foreign estate is not includible in gross income
either, based on the definition of “foreign estate”, BECAUSE it is not
connected with a “trade or business”.
5.2. Are not includable as “gross income”
if paid by a nonresident alien. See
26 U.S.C. §864(b)(1)(A).
Remember: We showed earlier in sections 5.2.13
and 5.6.12 that states of the union are
"foreign countries" with respect to the Internal Revenue Code and all of
their inhabitants are "nonresident aliens".
This means one must be
engaged in a “public office” in the District of Columbia in order to
earn “gross income” as a natural person. “Gross income” that meets this
criteria is described in the code simply as “income effectively
connected with a trade or business from sources within the United
States”. This is confirmed by
26 U.S.C.
§7701(a)(31),
which says that an estate that is in no way connected with a "trade or
business" and whose sources of income are outside the District of
Columbia may not have its earnings identified as "gross income" and is a
"foreign estate", which means it is not subject in any way to the
provisions of the Internal Revenue Code:
TITLE 26
>
Subtitle F >
CHAPTER 79 > Sec. 7701.
Sec. 7701. - Definitions
(a)(31)
Foreign estate or trust
(A)
Foreign estate
The term ''foreign estate'' means an estate the
income of which, from sources without the United States [under
26
U.S.C. §871(a)] which is not
effectively connected with the conduct of a trade or business within
the United States [under
26 U.S.C. §871(b)
and
26 U.S.C. §864], is not includible in gross income under subtitle
A.
These critical facts are very carefully concealed by the IRS
in their publications to hide the true nature of the income tax and
instead to make it appear as an “unapportioned direct tax” upon persons
living in states of the Union. If the American people understood on a
large scale:
-
That the
I.R.C. Subtitle A income tax was an “excise tax” upon privileged
"taxable activities" only.
-
Exactly what activity was being taxed.
-
That the
IRS has no jurisdiction within states of the Union against anyone
who does not sign a private agreement with the government by
submitting a W-4 or a 1040 tax return.
. . .then they
would exit the tax system en masse by simply avoiding the activity.
All excise taxes are "avoidable" by avoiding the taxed activity, and
therefore they are completely "voluntary". Therefore, the IRS and our public dis-servants have a vested interest in
hiding and concealing the true nature of the income tax as an “excise
tax” in order to maintain revenues from the income tax. They sold the
truth and your liberty to Satan for 20 pieces of silver. Some things
never change, do they?
“For the love of money is a root of all kinds of
evil, for which some have strayed from the faith in their
greediness, and pierced themselves through with many sorrows.”
[1
Tim. 6:10, Bible, NKJV]
In this section, we will
demonstrate all the evidence we can find that supports these
conclusions, and also show you how the IRS has, with the implicit
collusion and approval of the Congress and the Treasury Department, tried to do the following
within their deceptive publications:
1.
Taken great pains to hide and obfuscate the fact that
Subtitle A of the
Internal Revenue Code is an indirect excise tax upon licensed,
privileged activities. They have done this by burying the sordid truth
deep in regulations that they hope people will never read and which have
been carefully obfuscated over the years to make them virtually
unintelligible for the average American.
2.
Confuse the meaning of the term “trade or business” in their
publications so that everyone thinks they meet this criteria.
3.
Create a false and unsupportable presumption that all people and all
earnings within states of
the Union are connected with a “trade or business in the
United
States".
4.
Create the illusion and deception that
IRC Subtitle A describes a
direct, unapportioned tax upon natural persons that cannot be avoided or
shifted. Once IRS can establish the false presumption Subtitle A as a
direct unapportioned tax, then they:
4.1.
Can label those who choose not to volunteer as “frivolous” or worst yet,
penalize them for filing an accurate return reflecting no “gross income”
because not connected to a “trade or business”.
4.2.
Have a way to exploit the false presumption and ignorance of juries to
claim that those who avoid paying or filing are lawbreakers, even though
they broke no laws and exercised their constitutionally protected choice
not to volunteer to connect their earnings to a “trade or business”.
4.3.
Have an excuse to ignore those who complain that private employers are
forcing them to sign and submit W-4 withholding agreements under duress,
or be denied employment. Instead, they have a presumptuous and mistaken
excuse to say that it isn’t voluntary and that everyone must submit the
form, when in fact, the regulations at
26 CFR §31.3402(p)-1 clearly show
otherwise.
If you
read the IRS' Civil and Criminal Actions website at the address below,
you will see that ALL of their propaganda in fact focuses on the above
goals, as we predicted:
http://www.irs.gov/compliance/index.html
The IRS
warned us it was going to try to deceive us by stating in its own
Internal Revenue Manual that you can't rely upon any of its own
publications. The federal courts warned us that the IRS was going to do
this by telling us that we can't rely upon the phone or oral advice of
anyone in the IRS, even if they signed their recommendation under
penalty of perjury! Why didn’t we listen to any of these warnings? See
the surprising truth for yourself:
http://famguardian.org/Subjects/Taxes/Articles/IRSNotResponsible.htm
We must, however, remember what the Supreme Court
said about false presumptions that come from deliberately deceptive IRS
publications and phone advice:
"The power to create [false] presumptions is not a means
of escape from constitutional restrictions,"
[New
York Times v. Sullivan, 376 U.S. 254 (1964)]
This section provides
basic background on how the income tax described in Internal Revenue
Code Subtitle A functions. This will help you fit the
explanation contained in this memorandum into the overall taxation
process. Below is a summary of the taxation process:
1.
The purpose for establishing governments is mainly to protect private
property. The Declaration of Independence affirms this:
“We hold these truths to be self-evident, that
all men are created equal, that they are endowed by their Creator
with certain unalienable Rights, that among these are Life, Liberty
and the pursuit of Happiness.--That to secure these rights,
Governments are instituted among Men, deriving their just powers
from the consent of the governed, -“
[Declaration of Independence, 1776]
2.
Government protects private rights by keeping “public [government]
property” and “private property” separate and never allowing them to be
joined together. This is the heart of the separation of powers
doctrine: separation of what is private from what is public with the
goal of protecting mainly what is private. See:
3. In
law, all rights are “property”.
Property. That which is peculiar or
proper to any person; that which belongs exclusively to one. In the
strict legal sense, an aggregate of rights which are
guaranteed and protected by the government. Fulton Light,
Heat & Power Co. v. State, 65 Misc.Rep. 263, 121 N.Y.S. 536.
The term is said to extend to every species of valuable right and
interest. More specifically, ownership; the unrestricted and
exclusive right to a thing; the right to dispose of a thing in every
legal way, to possess it, to use it, and to exclude every one else
from interfering with it. That dominion or indefinite right of use
or disposition which one may lawfully exercise over particular
things or subjects. The exclusive right of possessing, enjoying, and
disposing of a thing. The highest right a man can have to anything;
being used to refer to that right which one has to lands or
tenements, goods or chattels, which no way depends on another man's
courtesy.
The word is also commonly used to denote
everything which is the subject of ownership, corporeal or
incorporeal, tangible or intangible, visible or invisible, real or
personal, everything that has an exchangeable value or which goes to
make up wealth or estate. It extends to every species of
valuable right and interest, and includes real and personal
property, easements, franchises, and incorporeal hereditaments, and
includes every invasion of one's property rights by actionable
wrong. Labberton v. General Cas. Co. of America, 53 Wash.2d
180, 332 P.2d 250, 252, 254.
Property embraces everything which is or may be
the subject of ownership, whether a legal ownership. or whether
beneficial, or a private ownership. Davis v. Davis. TexCiv-App., 495
S.W.2d 607. 611. Term includes not only ownership and possession but
also the right of use and enjoyment for lawful purposes. Hoffmann v.
Kinealy, Mo., 389 S.W.2d 745, 752.
Property, within constitutional
protection, denotes group of rights inhering in citizen's relation
to physical thing, as right to possess, use and dispose of it.
Cereghino v. State By and Through State Highway Commission, 230 Or.
439, 370 P.2d 694, 697.
[Black’s Law Dictionary, Fifth Edition, p. 1095]
By protecting your
constitutional rights, the government is protecting your PRIVATE
property. Your rights are private property because they came from God,
not from the government. Only what the government creates can become
public property. An example is corporations, which are a public franchise
that makes officers of the corporation into public officers.
4.
The process of taxation is the process of converting “private property”
into a “public use” and a “public purpose”. Below is a definition of
these terms for your enlightenment.
Public use. Eminent domain. The
constitutional and statutory basis for taking property by eminent
domain. For condemnation purposes, "public use" is one which
confers some benefit or advantage to the public; it is not confined
to actual use by public. It is measured in terms of right of public
to use proposed facilities for which condemnation is sought and, as
long as public has right of use, whether exercised by one or many
members of public, a "public advantage" or "public benefit" accrues
sufficient to constitute a public use. Montana Power Co. v. Bokma,
Mont., 457 P.2d 769, 772, 773.
Public use, in constitutional provisions
restricting the exercise of the right to take property in virtue of
eminent domain, means a use concerning the whole community
distinguished from particular individuals. But each and every
member of society need not be equally interested in such use, or be
personally and directly affected by it; if the object is to satisfy
a great public want or exigency, that is sufficient. Ringe Co. v.
Los Angeles County, 262 U.S. 700, 43 S.Ct. 689, 692, 67 L.Ed. 1186.
The term may be said to mean public usefulness, utility, or
advantage, or what is productive of general benefit. It may be
limited to the inhabitants of a small or restricted locality, but
must be in common, and not for a particular individual. The use
must be a needful one for the public, which cannot be surrendered
without obvious general loss and inconvenience. A "public use" for
which land may be taken defies absolute definition for it changes
with varying conditions of society, new appliances in the sciences,
changing conceptions of scope and functions of government, and other
differing circumstances brought about by an increase in population
and new modes of communication and transportation. Katz v. Brandon,
156 Conn. 521, 245 A.2d 579, 586.
See also Condemnation; Eminent domain.
[Black's Law Dictionary, Sixth Edition, p. 1232]
__________________________________________________________________________________________
“Public purpose. In the law of
taxation, eminent domain, etc., this is a term of classification to
distinguish the objects for which, according to settled usage, the
government is to provide, from those which, by the like usage, are
left to private interest, inclination, or liberality. The
constitutional requirement that the purpose of any tax, police
regulation, or particular exertion of the power of eminent domain
shall be the convenience, safety, or welfare of the entire community
and not the welfare of a specific individual or class of persons
[such as, for instance, federal benefit recipients as individuals].
“Public purpose” that will justify expenditure of public money
generally means such an activity as will serve as benefit to
community as a body and which at same time is directly related
function of government. Pack v. Southwestern Bell Tel. & Tel. Co.,
215 Tenn. 503, 387 S.W.2d 789, 794.
The term is synonymous with governmental
purpose. As employed to denote the objects for which taxes may be
levied, it has no relation to the urgency of the public need or to
the extent of the public benefit which is to follow; the
essential requisite being that a public service or use shall affect
the inhabitants as a community, and not merely as individuals.
A public purpose or public business has for its objective the
promotion of the public health, safety, morals, general welfare,
security, prosperity, and contentment of all the inhabitants or
residents within a given political division, as, for example, a
state, the sovereign powers of which are exercised to promote such
public purpose or public business.”
[Black’s Law Dictionary, Sixth Edition, p. 1231, Emphasis added]
5.
The federal government has no power of eminent domain within states of
the Union. This means that they cannot lawfully convert private
property to a public use or a public purpose within the exclusive
jurisdiction of states of the Union:
“The United States have no constitutional
capacity to exercise municipal jurisdiction, sovereignty, or eminent
domain, within the limits of a State or elsewhere, except in cases
where it is delegated, and the court
denies the faculty of the Federal Government to add to its powers by
treaty or compact.‘”
[Dred Scott v. Sandford, 60 U.S. 393, 508-509 (1856)]
6.
The Fifth Amendment prohibits converting private property to a public
use or a public purpose without just compensation if the owner does not
consent, and this prohibition applies to the Federal government as well
as states of the Union. It was made applicable to states of the Union
by the Fourteenth Amendment in 1868.
Fifth Amendment - Rights of Persons
No person shall be held to answer
for a capital, or otherwise infamous crime, unless on a presentment
or indictment of a Grand Jury, except in cases arising in the land
or naval forces, or in the Militia, when in actual service in time
of War or public danger; nor shall any person be subject for the
same offence to be twice put in jeopardy of life or limb; nor shall
be compelled in any criminal case to be a witness against himself,
nor be deprived of life, liberty, or property, without due
process of law; nor shall private property be taken for public use,
without just compensation.
[United States Constitution, Fifth Amendment]
If the conversion of private property to public property is done without
the express consent of the party affected by the conversion and without
compensation, then the following violations have occurred:
6.1.
Violation of the Fifth Amendment “takings clause” above.
6.2.
“Conversion” in violation of 18 U.S.C. §654.
6.3.
Theft.
7.
Because taxation involves converting private property to a public use,
public purpose, and public office, then it involves eminent domain if
the owner of the property did not expressly consent to the taking:
Eminent domain. The power to take
private property for public use by the state, municipalities, and
private persons or corporations authorized to exercise functions of
public character. Housing Authority of Cherokee National of Oklahoma
v. Langley, Okl., 555 P.2d 1025, 1028. Fifth Amendment, U.S.
Constitution.
In the United States, the power
of eminent domain is founded in both the federal (Fifth Amend.) and
state constitutions. However, the Constitution limits the
power to taking for a public purpose and prohibits the exercise of
the power of eminent domain without just compensation to the owners
of the property which is taken. The process of exercising the power
of eminent domain is commonly referred to as "condemnation", or,
"expropriation".
The right of eminent domain is
the right of the state, through its regular organization, to
reassert, either temporarily or permanently, its dominion over any
portion of the soil of the state on account of public exigency and
for the public good. Thus, in time of war or insurrection, the
proper authorities may possess and hold any part of the territory of
the state for the common safety; and in time of peace the
legislature may authorize the appropriation of the same to public
purposes, such as the opening of roads, construction of defenses, or
providing channels for trade or travel. Eminent domain is the
highest and most exact idea of property remaining in the government,
or in the aggregate body of the people in their sovereign capacity.
It gives a right to resume the possession of the property in the
manner directed by the constitution and the laws of the state,
whenever the public interest requires it.
See also Adequate compensation; Condemnation;
Constructive taking; Damages; Expropriation; Fair market value; Just
compensation; Larger parcel; Public use; Take.
[Black’s Law Dictionary, Fifth Edition, p. 470]
8.
The Fifth Amendment requires that any taking of private property
without the consent of the owner must involve
compensation. The Constitution must be consistent with itself. The
taxation clauses found in Article 1, Section 8, Clauses 1 and 3 cannot
conflict with the Fifth Amendment. The Fifth Amendment contains no
exception to the requirement for just compensation upon conversion of
private property to a public use, even in the case of taxation. This is
why all taxes must be indirect excise taxes against people who provide
their consent by applying for a license to engage in the taxed
activity: The application for the license constitutes constructive
consent to donate the fruits of the activity to a public use, public
purpose, and public office.
9.
There is only ONE condition in which the conversion of private property
to public property does NOT require compensation, which is when the
owner donates the private property to a public use, public purpose, or
public office. To wit:
“Men are endowed by their
Creator with certain unalienable rights,-'life, liberty, and the
pursuit of happiness;' and to 'secure,' not grant or create, these
rights, governments are instituted. That property [or income]
which a man has honestly acquired he retains full control of,
subject to these limitations: First, that he shall not use it to his
neighbor's injury, and that does not mean that he must use it for
his neighbor's benefit [e.g. SOCIAL SECURITY, Medicare, and every
other public “benefit”]; second, that if he devotes it to a public
use, he gives to the public a right to control that use; and third,
that whenever the public needs require, the public may take it upon
payment of due compensation.”
[Budd v. People of State of New York, 143 U.S. 517 (1892)]
The above rules are
summarized below:
Table 1: Rules for converting private
property to a public use or a public office
|
# |
Description |
Requires consent of owner to be taken from owner? |
|
1 |
The owner of property justly acquired
enjoys full and exclusive use and control over the property.
This right includes the right to exclude government
uses or ownership of said property. |
Yes |
|
2 |
He may not use the property to injure the
equal rights of his neighbor. For instance, when you murder
someone, the government can take your liberty and labor from you
by putting you in jail or your life from you by instituting the
death penalty against you. Both your life and your labor are
“property”. Therefore, the basis for the “taking” was violation
of the equal rights of a fellow sovereign “neighbor”. |
No |
|
3 |
He cannot be compelled or required to use
it to “benefit” his neighbor. That means he cannot be compelled
to donate the property to any franchise that would “benefit” his
neighbor such as Social Security, Medicare, etc. |
Yes |
|
4 |
If he donates it to a public use, he gives
the public the right to control that use. |
Yes |
|
5 |
Whenever the public needs require, the
public may take it without his consent upon payment of due
compensation. E.g. “eminent domain”. |
No |
10. You
and ONLY you can authorize your private property to be donated to a
public use, public purpose, and public office. No third party can
lawfully convert or donate your private property to a public use, public
purpose, or public office without your knowledge and express consent.
If they do, they are guilty of theft and conversion, and especially if
they are acting in a quasi-governmental capacity as a “withholding
agent” as defined in 26 U.S.C. §7701(a)(16).
10.1. A
withholding agent cannot file an information return connecting your
earnings to a “trade or business” without you actually occupying
a “public office” in the government BEFORE you filled out any tax form.
10.2. A
withholding agent cannot file IRS form W-2 against your earnings if you
didn’t sign an IRS Form W-4 contract and thereby consent to donate your
private property to a public office in the U.S. government and therefore
a “public use”.
10.3. That
donation process is accomplished by your own voluntary self-assessment
and ONLY by that method. Before such a self-assessment, you are a
"nontaxpayer" and a private person. After the assessment, you become a
"taxpayer" and a public officer in the government engaged in the "trade
or business" franchise. That donation process is described in 31
U.S.C. §321(d):
10.4. In
order to have an income tax liability, you must complete, sign, and
“file” an income tax return and thereby assess yourself:
“Our system of taxation is based upon
voluntary assessment and payment, not distraint.”
[Flora v. U.S., 362
U.S. 145 (1960)]
By assessing yourself,
you implicitly give your consent to allow the public the right to
control that use of the formerly PRIVATE property donated to a public
use.
10.5. IRS
Forms W-2 and W-4 are identified as Tax Class 5: Estate and Gift Taxes.
Payroll withholdings are GIFTS, not taxes.
TITLE 31 >
SUBTITLE I >
CHAPTER 3 >
SUBCHAPTER II > § 321
§ 321. General authority of the Secretary
(d)
(1) The Secretary of the Treasury may accept, hold, administer,
and use gifts and bequests of property, both real and personal, for
the purpose of aiding or facilitating the work of the Department of
the Treasury. Gifts and bequests of money and the proceeds from
sales of other property received as gifts or bequests shall be
deposited in the Treasury in a separate fund and shall be disbursed
on order of the Secretary of the Treasury. Property accepted under
this paragraph, and the proceeds thereof, shall be used as nearly as
possible in accordance with the terms of the gift or bequest.
(2) For purposes of the Federal income, estate, and gift
taxes, property accepted under paragraph (1) shall be considered as
a gift or bequest to or for the use of the United States.
They don't become “taxes”
and assessments until you attach the Form W-2 "gift statement" to an
assessment called a Form 1040 and create a liability with your own
self-assessment signature. IRS has no delegated authority to convert a
“gift” into a “tax”. That is why when you file the IRS Form 1040, you
must attach the W-2 gift statement. See:
10.6. The
IRS cannot execute a lawful assessment without your knowledge and
express consent because if they didn't have your consent, then it would
be criminal conversion and theft. That is why every time they do an
assessment, they have to call you into their office and present it to
you to procure your consent in what is called an "examination". If you
make it clear that you don’t consent and hand them the following, they
have to delete the assessment because it's only a proposal. See:
There is no way other
than the above to lawfully create an income tax liability without
violating the Fifth Amendment takings clause.
If you assess yourself, you consent to become a “public officer” and
thereby donate the fruits of your labor as such officer to a public use
and a public purpose.
11. The
IRS won't admit this, but this in fact is how the de facto unlawful
system currently functions:
11.1. You
can’t unilaterally “elect” yourself into a “public office”, even if you
do consent.
11.2. No
IRS form nor any provision in the Internal Revenue Code CREATES any new
public offices in the government.
11.3. The
I.R.C. only taxes EXISTING public offices lawfully exercised ONLY in the
District of Columbia and in all places expressly authorized pursuant to
4 U.S.C. §72.
12.
Information returns are being abused in effect as “federal election”
forms.
12.1.
Third parties in effect are nominating private persons into public
offices in the government without their knowledge, without their
consent, and without compensation. Thus, information returns are being
used to impose the obligations of a public office upon people without
compensation and thereby impose slavery in violation of the Thirteenth
Amendment.
12.2.
Anyone who files a false information return connecting a person to the
"trade or business"/"public office" franchise who in fact does not
ALREADY lawfully occupy a public office in the U.S. government is guilty
of impersonating a public officer in criminal violation of 18 U.S.C.
§912.
13. The
IRS Form W-4 cannot and does not create an office in the U.S. government, but
allows EXISTING public officers to elect to connect their private
earnings to a public use, a public office, and a public purpose. The IRS
abuses this form to unlawfully create public offices, and this abuse of
the I.R.C. is the heart of the tax fraud: They are making a system that
only applies to EXISTING public offices lawfully exercised in order to:
13.1.
Unlawfully create new public offices in places where they are not
authorized to exist.
13.2.
Destroy the separation of powers between what is public and what is
private.
13.3.
Institute eminent domain over private labor using false third party
reports. Omission in preventing such fraud accomplishes involuntary
servitude in violation of the Thirteenth Amendment, 42 U.S.C. §1994, and
18 U.S.C. §1581.
13.4.
Destroy the separation of powers between the federal and state
governments. Any state employee who participates in the federal income
tax is serving in TWO offices, which is a violation of most state
constitutions.
13.5.
Enslave innocent people to go to work for them without compensation,
without recourse, and in violation of the thirteenth amendment
prohibition against involuntary servitude. That prohibition,
incidentally, applies EVERYWHERE, including on federal territory.
14. The
right to control the use of private property donated to a public use to
procure the benefits of a franchise is enforced through the Internal
Revenue Code, which is the equivalent of the employment agreement for
franchisees called “taxpayers”.
The above criteria
explains why:
1.
You cannot be subject to either employment tax withholding or employment
tax reporting without voluntarily signing an IRS Form W-4 .
Title 26:
Internal Revenue
PART 31—EMPLOYMENT TAXES AND COLLECTION OF INCOME TAX AT SOURCE
Subpart E—Collection of Income Tax at Source
Sec. 31.3402(p)-1 Voluntary withholding agreements.
(a) In general.
An employee and his employer may
enter into an agreement under section 3402(b) to provide for the
withholding of income tax upon payments of amounts described in
paragraph (b)(1) of §31.3401(a)–3, made after December 31, 1970.
An agreement may be entered into under this section only with
respect to amounts which are includible in the gross income of the
employee under section 61, and must be applicable to all such
amounts paid by the employer to the employee. The amount to
be withheld pursuant to an agreement under section 3402(p) shall be
determined under the rules contained in section 3402 and the
regulations thereunder. See §31.3405(c)–1, Q&A–3 concerning
agreements to have more than 20-percent Federal income tax withheld
from eligible rollover distributions within the meaning of section
402.
(b) Form and duration of agreement
(2) An agreement under section 3402 (p) shall be
effective for such period as the employer and employee mutually
agree upon. However, either the employer or the employee may
terminate the agreement prior to the end of such period by
furnishing a signed written notice to the other. Unless the
employer and employee agree to an earlier termination date, the
notice shall be effective with respect to the first payment of an
amount in respect of which the agreement is in effect which is made
on or after the first "status determination date" (January 1, May 1,
July 1, and October 1 of each year) that occurs at least 30 days
after the date on which the notice is furnished. If the employee
executes a new Form W-4, the request upon which an agreement under
section 3402 (p) is based shall be attached to, and constitute a
part of, such new Form W-4.
______________________________________________________________________________________
26 CFR §31.3401(a)-3 Amounts deemed wages under voluntary
withholding agreements
(a) In general.
Notwithstanding the
exceptions to the definition of wages specified in section 3401(a)
and the regulations thereunder, the term “wages” includes the
amounts described in paragraph (b)(1) of this section with respect
to which there is a voluntary withholding agreement in effect under
section 3402(p). References in this chapter to the
definition of wages contained in section 3401(a) shall be deemed to
refer also to this section (§31.3401(a)–3).
(b) Remuneration
for services.
(1) Except as provided in subparagraph (2) of this
paragraph, the amounts referred to in paragraph (a) of this
section include any remuneration for services performed by an
employee for an employer which, without regard to this section, does
not constitute wages under section 3401(a). For example,
remuneration for services performed by an agricultural worker or a
domestic worker in a private home (amounts which are specifically
excluded from the definition of wages by section 3401(a) (2) and
(3), respectively) are amounts with respect to which a voluntary
withholding agreement may be entered into under section 3402(p). See
§§31.3401(c)–1 and 31.3401(d)–1 for the definitions of “employee”
and “employer”.
2.
The courts have no authority under the Declaratory Judgments Act, 28
U.S.C. §2201(a) to declare you a franchisee called a “taxpayer”. You
own yourself.
Specifically, Rowen seeks a declaratory judgment
against the United States of America with respect to "whether or not
the plaintiff is a taxpayer pursuant to, and/or under 26 U.S.C. §
7701(a)(14)." (See Compl. at 2.) This Court lacks jurisdiction
to issue a declaratory judgment "with respect to Federal taxes other
than actions brought under section 7428 of the Internal Revenue Code
of 1986," a code section that is not at issue in the instant action.
See 28 U.S.C. § 2201; see also Hughes v. United States, 953 F.2d
531, 536-537 (9th Cir. 1991) (affirming dismissal of claim
for declaratory relief under § 2201 where claim concerned question
of tax liability). Accordingly, defendant's motion to dismiss is
hereby GRANTED, and the instant action is hereby DISMISSED.
[Rowen
v. U.S., 05-3766MMC. (N.D.Cal. 11/02/2005)]
3.
The revenue laws may not be cited or enforced against a person who is
not a “taxpayer”:
"The revenue laws are a code or system in
regulation of tax assessment and collection. They relate to
taxpayers, and not to nontaxpayers. The latter are without their
scope. No procedure is prescribed for nontaxpayers, and no
attempt is made to annul any of their rights and remedies in due
course of law. With them Congress does not assume to deal, and they
are neither of the subject nor of the object of the revenue laws..."
[Long v. Rasmussen, 281
F. 236 (1922)]
“Revenue Laws relate to taxpayers [officers,
employees, instrumentalities, and elected officials of the Federal
Government] and not to non-taxpayers [American Citizens/American
Nationals not subject to the exclusive jurisdiction of the Federal
Government and who did not volunteer to participate in the federal
“trade or business” franchise]. The latter are without their
scope. No procedures are prescribed for non-taxpayers and no
attempt is made to annul any of their Rights or Remedies in due
course of law. With them[non-taxpayers] Congress does not assume to
deal and they are neither of the subject nor of the object of
federal revenue laws.”
[Economy Plumbing & Heating v. U.S., 470
F2d. 585 (1972)]
"And by statutory definition, 'taxpayer'
includes any person, trust or estate subject to a tax imposed by the
revenue act. ...Since the statutory definition of 'taxpayer' is
exclusive, the federal courts do not have the power to create
nonstatutory taxpayers for the purpose of applying the provisions of
the Revenue Acts..."
[C.I.R. v. Trustees of L.
Inv. Ass'n, 100 F.2d 18 (1939)]
All of the above requirements have in common that
violating them would result in the equivalent of exercising eminent
domain over the private property of the private person without
their consent and without just compensation, which the U.S. Supreme
Court said violates the Fifth Amendment takings clause:
To lay, with one hand, the power of the
government on the property of the citizen, and with the other to
bestow it upon favored individuals to aid private enterprises and
build up private fortunes, is none the less a robbery because it is
done under the forms of law and is called taxation. This is not
legislation. It is a decree under legislative forms.
Nor is it taxation. ‘A tax,’ says
Webster’s Dictionary, ‘is a rate or sum of money assessed on the
person or property of a citizen by government for the use of the
nation or State.’ ‘Taxes are burdens or charges imposed by the
Legislature upon persons or property to raise money for public
purposes.’ Cooley, Const. Lim., 479.
Coulter, J., in Northern Liberties v. St.
John’s Church, 13 Pa. St., 104 says, very forcibly, ‘I think the
common mind has everywhere taken in the understanding that
taxes are a public imposition, levied by authority of the government
for the purposes of carrying on the government in all its machinery
and operations—that they are imposed for a public purpose.’
See, also Pray v. Northern Liberties, 31 Pa.St., 69; Matter of Mayor
of N.Y., 11 Johns., 77; Camden v. Allen, 2 Dutch., 398; Sharpless v.
Mayor, supra; Hanson v. Vernon, 27 Ia., 47; Whiting v. Fond du Lac,
supra.”
[Loan Association v.
Topeka, 20 Wall. 655 (1874)]
As a consequence of
the above considerations, any government officer or employee who does
any of the following is unlawfully converting private property to a
public use without the consent of the owner and without consideration:
1.
Assuming or “presuming” you are a “taxpayer” without producing evidence
that you consented to become one. In our system of jurisprudence, a
person must be presumed innocent until proven guilty with court
admissible evidence. Presumptions are NOT evidence. That means they
must be presumed to be a “nontaxpayer” until they are proven with
admissible evidence to be a “taxpayer”. See:
2.
Performing a tax assessment or re-assessment if you haven’t first
voluntarily assessed yourself by filing a tax return. See:
3.
Citing provisions of the franchise agreement against those who never
consented to participate. This is an abuse of law for political
purposes and an attempt to exploit the innocent and the ignorant. The
legislature cannot delegate authority to the Executive Branch to convert
innocent persons called “nontaxpayers” into franchisees called
“taxpayers” without producing evidence of consent to become “taxpayers”.
"In Calder v. Bull, which was here in 1798, Mr. Justice
Chase said, that there were acts which the Federal and State
legislatures could not do without exceeding their authority, and
among them he mentioned a law which punished a citizen for
an innocent act; a law that destroyed or impaired the lawful private
[labor] contracts [and labor compensation, e.g. earnings from
employment through compelled W-4 withholding] of citizens; a law
that made a man judge in his own case; and a law that took the
property from A [the worker]. and gave it to B [the government or
another citizen, such as through social welfare programs]. 'It is
against all reason and justice,' he added, 'for a people to intrust
a legislature with such powers, and therefore it cannot be presumed
that they have done it. They may command what is right and prohibit
what is wrong; but they cannot change innocence into guilt, or
punish innocence as a crime, or violate the right of an antecedent
lawful private [employment] contract [by compelling W-4 withholding,
for instance], or the right of private property. To maintain that a
Federal or State legislature possesses such powers [of THEFT!] if
they had not been expressly restrained, would, in my opinion, be a
political heresy altogether inadmissible in all free
republican governments.' 3 Dall. 388."
[Sinking
Fund Cases, 99 U.S. 700 (1878)]
4.
Relying on third party information returns that are unsigned as evidence
supporting the conclusion that you are a “taxpayer”. These forms
include IRS Forms W-2, 1042s, 1098, and 1099 and they are NOT signed
and are inadmissible as evidence under Federal Rule of Evidence 802
because not signed under penalty of perjury. Furthermore, the
submitters of these forms seldom have personal knowledge that you are in
fact and in deed engaged in a “trade or business” as required by 26
U.S.C. §6041(a). Most people don’t know, for instance, that a “trade or
business” includes ONLY “the functions of a public office”.
We’ll start off with a definition of “trade or
business":
26 U.S.C. §7701(a)(26)
"The term 'trade or business'
includes [is limited to] the performance of the functions of a
public office."
We know that the IRS likes to point to the word
“includes” in the above definition and state that it is an “expansive”
definition that does not exclude the common meaning of the term. We
must remember, however, that there is an important principle of
statutory construction which states that anything not mentioned in a
law, statute, code, or
regulation is “excluded by implication”, which means that all things not
connected to a “public office” are excluded from the definition of
“trade or business” by implication:
“Expressio unius est exclusio alterius.
A maxim of statutory interpretation meaning that
the expression of one thing is the exclusion
of another. Burgin v. Forbes, 293 Ky. 456, 169 S.W.2d
321, 325; Newblock v. Bowles, 170 Okl. 487, 40 P.2d 1097, 1100.
Mention of one thing implies exclusion of another.
When certain persons or things are specified
in a law, contract, or will, an intention to exclude all others from
its operation may be inferred. Under this maxim, if
statute specifies one exception to a general rule or assumes to
specify the effects of a certain provision, other exceptions or
effects are excluded.”
[Black’s Law Dictionary, Sixth Edition, p.
581]
Therefore, the definition of the term “trade or
business”, says what it means and means what it says.
The Supreme Court has said
many times that words used in a law or statute are to be given their
ordinary and plain meaning and are to be restricted to the clear
language found in the code itself. If you would like an
exhaustive analysis of the meaning of the word "includes"
within the Internal Revenue Code, please refer to our free pamphlet available on the
internet below:
Meaning of the words "includes" and "including"
http://famguardian.org/Subjects/Taxes/FalseRhetoric/Includess.pdf
The only time in the I.R.C. where the term “trade or business”
can mean anything other than what it is defined above to mean is in
places where there a regional definition that overrides
the general or default definition found in
26 U.S.C.
§7701(a)(26) above. Below is the only example of
that within the I.R.C., which is intended to be used only in the context of
“self employment”:
26 U.S.C.
§1402 Definitions
(c) Trade or business
The term ''trade or business'', when used with
reference to self-employment income or net earnings from
self-employment, shall have the same meaning as when used in section
162 (relating to trade or business expenses), except that such
term shall not include -
(1) the performance of the functions of a
public office, other than the functions of a public office of a
State or a political subdivision thereof with respect to fees
received in any period in which the functions are performed in a
position compensated solely on a fee basis and in which such
functions are not covered under an agreement entered into by such
State and the Commissioner of Social Security pursuant to section
218 of the Social Security Act;
(2) the performance of service by an individual
as an employee, other than -
(A) service described
in section 3121(b)(14)(B) performed by an individual who has
attained the age of 18,
(B) service described
in section 3121(b)(16),
(C) service described
in section 3121(b)(11), (12), or (15) performed in the United States
(as defined in section 3121(e)(2)) by a citizen of the United
States, except service which constitutes ''employment'' under
section 3121(y),
(D) service described
in paragraph (4) of this subsection,
(E) service performed
by an individual as an employee of a State or a political
subdivision thereof in a position compensated solely on a fee basis
with respect to fees received in any period in which such service is
not covered under an agreement entered into by such State and the
Commissioner of Social Security pursuant to section 218 of the
Social Security Act,
(F) service described
in section 3121(b) (20), and
(G) service described
in section 3121(b)(8)(B);
(3) the performance of service by an individual
as an employee or employee representative as defined in section
3231;
(4) the performance of service by a duly
ordained, commissioned, or licensed minister of a church in the
exercise of his ministry or by a member of a religious order in the
exercise of duties required by such order;
(5) the performance of service by an individual
in the exercise of his profession as a Christian Science
practitioner; or
(6) the performance of service by an individual
during the period for which an exemption under subsection (g) is
effective with respect to him. The provisions of paragraph (4) or
(5) shall not apply to service (other than service performed by a
member of a religious order who has taken a vow of poverty as a
member of such order) performed by an individual unless an exemption
under subsection (e) is effective with respect to him.
So we look up the definition in
26 U.S.C. §162 and
here is what it says:
TITLE 26
>
Subtitle A
>
CHAPTER 1
>
Subchapter B
Part VI-Itemized
deductions for Individuals and Corporations
Sec. 162. - Trade or business expenses
(a)
In
general
There shall be allowed as a deduction all the
ordinary and necessary expenses paid or incurred during the taxable
year in carrying on any trade or business, including –
(1) a
reasonable allowance for salaries or other compensation for
personal services actually rendered;
So in other words, in the context of self
employment ONLY, the term “trade or business” excludes public
offices in the District of Columbia and only includes those of
federal territories and possessions, which are called “States” within
the I.R.C. This is because the default definition in
26 U.S.C.
§7701(a)(26) includes ALL public offices everywhere within federal
jurisdiction, whereas those public offices in the District of Columbia
are specifically not mentioned by the above definition.
When the authors of the U.S.
Code in the Office of Law Revision Counsel of the House of
Representatives wants to confuse and mislead the American people, they
will write the code in such as way as to use a double-negative, whereby
they define what the new definition of “trade or business” excludes,
and then don’t include public offices in the District of Columbia but
include all other types of political offices under federal jurisdiction. Therefore, for self
employment context ONLY, “trade or business” has a different meaning
than the default definition in
26 U.S.C. §7701(a)(26) and has been
overridden to exclude public offices in the District of Columbia but
include all other types of public offices otherwise within federal
jurisdiction.
Another important
concept we need to be very aware of is that there are also synonyms for
"trade or business" used within the Internal Revenue Code.
The term "wages"
is synonymous with a "trade or
business". Below is the proof from 26 U.S.C.
§3401, where it says that earnings not in
the course of an employers "trade or business" are exempted from
"wages".
TITLE 26 >
Subtitle C >
CHAPTER 24 > § 3401
§ 3401. Definitions
(a)
Wages
For purposes of this chapter,
the term “wages” means all remuneration (other than fees paid to a
public official) for services performed by an employee for his
employer, including the cash value of all remuneration (including
benefits) paid in any medium other than cash;
except that such term shall not include remuneration paid—
[. . .]
(4) for
service not in the course of the employer’s trade or business
performed in any calendar quarter by an employee, unless the cash
remuneration paid for such service is $50 or more and such service
is performed by an individual who is regularly employed by such
employer to perform such service. For purposes of this paragraph, an
individual shall be deemed to be regularly employed by an employer
during a calendar quarter only if—
(A) on each of some 24 days
during such quarter such individual performs for such employer
for some portion of the day service not in the course of the
employer’s trade or business; or
(B) such individual was
regularly employed (as determined under subparagraph (A)) by
such employer in the performance of such service during the
preceding calendar quarter; or
(11) for
services not in the course of the employer’s trade or business,
to the extent paid in any medium other than cash; or
The above is also completely consistent
with the IRS form W-2 itself, which is an information return that 26
U.S.C. §6041 says may ONLY be filed
to document earnings in excess of $600 in the course of a "trade or
business".
TITLE 26 >
Subtitle F >
CHAPTER 61 >
Subchapter A >
PART III >
Subpart B > § 6041
§ 6041. Information at source
(a) Payments of
$600 or more
All
persons engaged in a trade or business and making payment in the
course of such trade or business to another person, of rent,
salaries, wages, premiums, annuities, compensations, remunerations,
emoluments, or other fixed or determinable gains, profits, and
income (other than payments to which section 6042 (a)(1), 6044
(a)(1), 6047 (e), 6049 (a), or 6050N (a) applies, and other than
payments with respect to which a statement is required under the
authority of section 6042 (a)(2), 6044 (a)(2), or 6045), of $600 or
more in any taxable year, or, in the case of such payments made by
the United States, the officers or employees of the United States
having information as to such payments and required to make returns
in regard thereto by the regulations hereinafter provided for,
shall render a true and accurate return to the Secretary, under
such regulations and in such form and manner and to such extent as
may be prescribed by the Secretary, setting forth the amount of such
gains, profits, and income, and the name and address of the
recipient of such payment.
So if you
aren't engaged in a "trade or business", then your private employer
cannot lawfully or truthfully report "wages" on an IRS form W-2 in
connection with you. If they do, they are in criminal violation of
26 U.S.C. §7207, which provides for a $10,000 fine and imprisonment
for up to one year for filing a false information return such as a W-2.
Those who
do not serve in a "public office" therefore can only earn "wages" if
they sign an agreement and stipulate to call their PRIVATE earnings
wages. In the absence of such an agreement, it is false and
fraudulent and a criminal offense to report any amount other than ZERO
on an IRS form W-2 in connection with a person who is not engaged in a
"trade or business". These conclusions are confirmed by 26 CFR
§31.3402(p)-1:
Title 26: Internal Revenue
PART 31—EMPLOYMENT TAXES AND COLLECTION OF INCOME TAX AT SOURCE
Subpart E—Collection of Income Tax at Source
Sec. 31.3402(p)-1 Voluntary
withholding agreements.
(a) In general.
An employee
and his employer may enter into an agreement under section 3402(b)
to provide for the withholding of income tax upon payments of
amounts described in paragraph (b)(1) of §31.3401(a)–3, made after
December 31, 1970. An agreement may be entered into under this
section only with respect to amounts which are includible in the
gross income of the employee under section 61, and must be
applicable to all such amounts paid by the employer to the employee.
The amount to be withheld pursuant to an agreement under section
3402(p) shall be determined under the rules contained in section
3402 and the regulations thereunder. See §31.3405(c)–1, Q&A–3
concerning agreements to have more than 20-percent Federal income
tax withheld from eligible rollover distributions within the meaning
of section 402.
(b) Form
and duration of agreement
(2) An
agreement under section 3402 (p) shall be effective for such period
as the employer and employee mutually agree upon. However,
either the employer or the employee may terminate the agreement
prior to the end of such period by furnishing a signed written
notice to the other. Unless the employer and employee agree
to an earlier termination date, the notice shall be effective with
respect to the first payment of an amount in respect of which the
agreement is in effect which is made on or after the first "status
determination date" (January 1, May 1, July 1, and October 1 of each
year) that occurs at least 30 days after the date on which the
notice is furnished. If the employee executes a new Form W-4, the
request upon which an agreement under section 3402 (p) is based
shall be attached to, and constitute a part of, such new Form W-4.
The above
is also reiterated again in the Treasury Regulations below:
26 CFR §31.3401(a)-3 Amounts deemed wages under voluntary
withholding agreements
(a) In general.
Notwithstanding the exceptions to the definition of wages specified
in section 3401(a) and the regulations thereunder, the term “wages”
includes the amounts described in paragraph (b)(1) of this section
with respect to which there is a voluntary withholding agreement in
effect under section 3402(p). References in this chapter to
the definition of wages contained in section 3401(a) shall be deemed
to refer also to this section (§31.3401(a)–3).
(b) Remuneration for services.
(1)
Except as provided in subparagraph (2) of this paragraph, the
amounts referred to in paragraph (a) of this section include any
remuneration for services performed by an employee for an employer
which, without regard to this section, does not constitute wages
under section 3401(a). For example, remuneration for
services performed by an agricultural worker or a domestic worker in
a private home (amounts which are specifically excluded from the
definition of wages by section 3401(a) (2) and (3), respectively)
are amounts with respect to which a voluntary withholding agreement
may be entered into under section 3402(p). See §§31.3401(c)–1 and
31.3401(d)–1 for the definitions of “employee” and “employer”.
If you do
not give your private employer a W-4 form or if it is signed under
duress and indicates so, it is a criminal offense to report anything
other than ZERO on any IRS form W-2 that is sent to the IRS.
Even if the IRS orders the private employer to withhold at single zero,
he can STILL only withhold on "wages", which are ZERO for a person who
never signed or submitted an IRS form W-4. 100% of ZERO is still
ZERO. Furthermore, nothing signed under any threat of duress, such as a threat to either
fire you or not hire you for refusing to sign and submit an IRS form W-4
can be described as an "agreement" pursuant to any of the above
regulations and
anyone who concludes otherwise is engaged in a criminal conspiracy
against your rights. This is ESPECIALLY true if they are acting
under the "color of law" as a voluntary officer of the government, such
as an "employer".
“An agreement [consent] obtained
by duress, coercion, or intimidation is invalid, since the party
coerced is not exercising his free will, and the test is not so much
the means by which the party is compelled to execute the agreement
as the state of mind induced.
Duress, like fraud, rarely becomes material, except where a contract
or conveyance has been made which the maker wishes to avoid. As a
general rule, duress renders the contract or conveyance voidable,
not void, at the option of the person coerced,
and it is susceptible of ratification. Like other voidable
contracts, it is valid until it is avoided by the person entitled to
avoid it.
However, duress in the form of physical compulsion, in which a party
is caused to appear to assent when he has no intention of doing so,
is generally deemed to render the resulting purported contract void.
”
[American Jurisprudence 2d, Duress, Section 21]
Brown v Pierce, 74 US 205, 7 Wall 205, 19 L Ed 134
Barnette v Wells Fargo Nevada Nat'l Bank, 270 US 438, 70 L Ed
669, 46 S Ct 326 (holding that acts induced by duress which operate
solely on the mind, and fall short of actual physical compulsion,
are not void at law, but are voidable only, at the election of him
whose acts were induced by it); Faske v Gershman, 30 Misc 2d 442,
215 NYS2d 144; Glenney v Crane (Tex Civ App Houston (1st Dist)) 352
SW2d 773, writ ref n r e (May 16, 1962); Carroll v Fetty, 121 W Va
215, 2 SE2d 521, cert den 308 US 571, 84 L Ed 479, 60 S Ct 85.
Faske v Gershman, 30 Misc 2d 442, 215 NYS2d 144; Heider v Unicume,
142 Or 416, 20 P2d 384; Glenney v Crane (Tex Civ App Houston (1st
Dist)) 352 SW2d 773, writ ref n r e (May 16, 1962)
Restatement 2d, Contracts § 174, stating that if conduct that
appears to be a manifestation of assent by a party who does not
intend to engage in that conduct is physically compelled by duress,
the conduct is not effective as a manifestation of assent.
Yet another confirmation of
the conclusions of this section is found in the Individual Master File
(IMF) that the IRS uses to maintain a record of your tax liability. The
amount of “taxable income” is called NOT "income", but "wages" at the
end of the report! Quite telling. See for yourself:
4.2 "personal services"
The term "personal services" in nearly all cases where it is
used in the code means "work performed by an individual in connection
with a trade or business". Here is an example:
26 CFR Sec. 1.469-9 Rules for certain rental real estate activities.
(b)(4)
PERSONAL SERVICES. Personal
services means any work performed by an individual in connection
with a
trade or business. However, personal services do not
include any work performed by an individual in the individual's capacity
as an investor as described in section 1.469-5T(f)(2)(ii).
The only place in the
code where "personal services" is mentioned outside the context of a
"trade or business" is the case where earnings from it are NOT taxable:
Therefore, whenever
you see the term "personal services", it means "work performed by an
individual in connection with a 'trade or business'" unless specifically
defined otherwise. This will become very important when we are
talking about earnings of "U.S. citizens" who are abroad.
4.3 "United States"
The term “United States” is
also a synonym for “trade or business” under the I.R.C. in most cases.
Under 26
U.S.C. §864(c)(3),
all earnings from within the "United States", which is defined as the
District of Columbia in
26 U.S.C.
§7701(a)(9) and (a)(10) is also treated as "effectively connected
with a trade or business".
TITLE 26 >
Subtitle A >
CHAPTER 1 >
Subchapter N >
PART I > § 864
§ 864. Definitions and special rules
(c)
Effectively connected income, etc.
(3) Other income from sources within
United States
All income, gain, or loss from sources within the United States
(other than income, gain, or loss to which paragraph (2) applies) shall
be treated as effectively connected with the conduct of a trade or
business within the United States.
Therefore, whenever you see the phrase
"sources within the
United States" associated with any earnings, then indirectly, it is
being associated with a "trade or business". This is the case for
26 U.S.C.
§871(a), which identifies income of nonresident aliens from within the District of
Columbia that is not connected to a "trade or business".
26 U.S.C. §864(c)(3)
says that this income is ALSO connected with a trade or business if it
was derived from sources within the District of Columbia.
26 U.S.C. §864(c)(2)
identifies all sources of income not associated with a "trade or
business" and they include ONLY:
-
26 U.S.C.
§871(a)(1): Income of nonresident aliens other than
capital gains derived from patents, copyrights, sale of original
issue discounts, gains described in
I.R.C. 631(b)
or (c), interest, dividends, rents, salaries, premiums, annuities
from sources within the District of Columbia.
-
26 U.S.C.
871(h): Earnings of nonresident aliens from portfolio debt
instruments
-
26 U.S.C.
§881(a): Earnings of foreign corporations from patents,
copyrights, gains, and interest not connected with a trade or
business.
26 U.S.C. §7701(a)(9) and (a)(10) defines
the "United States" in a "geographical sense" only as being the District
of Columbia.
TITLE 26
>
Subtitle F >
CHAPTER
79 > Sec. 7701. [Internal Revenue Code]
Sec. 7701.
- Definitions
(a)
When used in this title, where not otherwise
distinctly expressed or manifestly incompatible with the intent
thereof—
(9)
United States
The term
''United States'' when used in a geographical sense includes only
the
States and the District of Columbia.
(10)
State
The term
''State'' shall be construed to include the District of Columbia,
where such construction is necessary to carry out provisions of this
title.
However, I.R.C. Section 864 above does not
directly state or imply a "geographical sense", so it may have some
other undefined meaning. We allege that the ONLY way
that working for a living can be an excise taxable privilege or "trade
or business" is the where the Constitution itself, in Article 1, Section
8, Clause 17 requires all "public offices" ("trades or businesses"), to
be exercised, which is the District of Columbia:
United
States Constitution
Article
I: Legislative Department
Section
8: Powers of Congress
Clause
17: Seat of Government
Congress
shall have power * * * To exercise exclusive Legislation in all
Cases whatsoever, over such District (not exceeding ten Miles
square) as may, by Cession of particular States, and the Acceptance
of Congress, become the Seat of Government of the United States, and
to exercise like Authority over all Places purchased by the Consent
of the Legislature of the State in which the same shall be, for the
Erection of Forts, Magazines, Arsenals, dock–Yards, and other
needful Buildings.
Since accepting a public office in the
federal government is a voluntary act, then the tax is voluntary.
If you don't want to pay it, you don't accept or run for the office.
In furtherance of the above,
4 U.S.C. §72 requires all "public offices" that are the subject of
the tax upon a "trade or business" to be exercised ONLY in the
District of Columbia and NOT elsewhere, except as "expressly
provided by law":
TITLE 4 >
CHAPTER 3 > § 72
§ 72. Public offices; at seat of Government
All
offices attached to the seat of government shall be exercised in the
District of Columbia, and not elsewhere, except as otherwise
expressly provided by law.
Therefore,
all persons engaged in public offices MUST serve ONLY in the District of
Columbia and not elsewhere, and there is no enactment of Congress
authorizing them to serve in any state of the Union. Therefore,
the term "United States" as used throughout Subtitle A of the Internal
Revenue Code:
-
Does not
imply a "geographical sense", because that phrase is never used in
combination with the term "United States" anywhere we could find.
Instead, this definition is a red herring.
-
Does not
imply any state of the Union or any part of any state of the Union.
-
Implies the United
States government or “national government” in the District of
Columbia only and not the "federal government" of the states of the
Union. See Federalist Paper #39 for details.
-
Applies only to persons
domiciled on federal territory called the “United States” and
subject to the exclusive or general or plenary jurisdiction of
Congress.
26 U.S.C. §911(d)(3) requires that a person cannot have a “tax
home” unless their “abode”, meaning “domicile”, is within the
“United States”. The tax is applied against the “tax home” of
the “individual”, which individual is a “public officer” within the
United States government. States of the Union are not “territory”
as that word is correctly understood within American legal
jurisprudence.
Consequently,
"sources within the United States" really refers to payments to or from
the U.S. government, all of which are enumerated and described and
listed in
26 U.S.C. §871 in the context of
nonresident aliens. Subtitle A of the I.R.C. is therefore a
"kickback program" for federal instrumentalities,
domiciliaries, franchises, and
employees, and the "profit and loss" statement for these
instrumentalities is I.R.S. form 1040. The tax is on the "profit"
of these instrumentalities, which the I.R.S. calls "income". If
you never received a payment from the government or accepted a payment
on behalf of the government while acting in a representative capacity as
a "public officer", then we allege that you cannot be a "taxpayer" or
have a tax liability pursuant to Subtitle A of the I.R.C.
The
conclusions of this section are also consistent with
26 U.S.C. §7701(a)(39) and
26 U.S.C. §7408(d), which both effectively kidnap a “taxpayers”
identity and move it to the District of Columbia for the purposes of
Subtitle A of the I.R.C. The "citizen" and "resident" they are
talking about in these statutes are statutory and not constitutional
"citizens" and "residents" which rely on the statutory term "United
States", which means a person domiciled on federal territory and NOT
domiciled within any state of the Union. Why would they need such a provision
and why would they try to fool you into declaring yourself to be a "U.S.
citizen" using their deceptive forms if they
REALLY had jurisdiction within states of the Union? More about
this later.
Next, we must search
the code for the uses of the term “trade or business” to define how it
applies by using the context. Below is a summary of our findings:
1.
For “individuals”, who are
ALL "aliens" under the I.R.C., only income either "effectively connected with a
trade or business in the
United States" or originating from the
District of Columbia and earned by a nonresident alien under
26 U.S.C.
871(a) are considered "gross income" under I.R.C. Subtitle
A.
“U.S. citizens” can only earn "taxable income" when they are living abroad, in which case they
become “aliens” under the provisions of a treaty with a foreign
country. ONLY in that condition are they the proper subject of the
Internal Revenue Code AFTER volunteering to be "taxpayers":
NORMAL
TAXES AND SURTAXES
DETERMINATION OF TAX LIABILITY
Tax on Individuals
Sec. 1.1-1 Income tax on individuals.
(a)(2)(ii) For taxable years beginning after
December 31, 1970, the tax imposed by section 1(d) [married
individuals filing separately], as amended by
the Tax Reform Act of 1969, shall apply to the income effectively
connected with the conduct of a trade or business in the United
States by a married alien individual who is a nonresident of
the United States for all or part of the taxable year or by a
foreign estate or trust. For such years the tax imposed by
section 1(c) [unmarried individuals], as amended by such Act, shall apply to the income
effectively connected with the conduct of a trade or business in the
United States by an unmarried alien individual (other than a
surviving spouse) who is a nonresident of the United States for all
or part of the taxable year. See paragraph (b)(2) of section
1.871-8.”
[26 CFR § 1.1-1]
2.
Those who are “self employed” do not earn “gross income” unless
it is connected to a “trade or business”:
TITLE 26 >
Subtitle A >
CHAPTER 2 > §1402
§1402: Definitions
(a) Net earnings from self-employment
The term ''net earnings from self-employment''
means the gross income derived by an individual from any trade or
business carried on by such individual, less the deductions
allowed by this subtitle which are attributable to such trade or
business, plus his distributive share (whether or not distributed)
of income or loss described in section 702(a)(8) from any trade or
business carried on by a partnership of which he is a member; ….
3.
The only indirect excise taxable activity connected with a
biological person and which is subject to Subtitle A of the Internal
Revenue Code is identified in
26 CFR §1.861-8(f)(1)(iv) as “income
effectively connected with a trade or business” of a “nonresident
alien”. Therefore, the only earnings of a nonresident alien that can be
included in “gross income” are those “effectively connected with a trade
or business” (e.g. performance of a public office in the District
of Columbia):
Title 26:
Internal Revenue
PART 1—INCOME TAXES
Determination of Sources of Income
§1.861-8 Computation of taxable income from
sources within the United States and from other sources and
activities.
(f)
Miscellaneous matters.
(1) Operative sections.
The operative sections of the Code which require
the determination of taxable income of the taxpayer from specific
sources or activities and which give rise to statutory groupings to
which this section is applicable include the sections described
below.
(iv) Effectively connected taxable income.
Nonresident alien individuals and foreign
corporations engaged in trade or business within the United States,
under sections 871(b)(1) and 882(a)(1), on taxable income [federal
payments] which is effectively connected with the conduct of a trade
or business within the [federal] United States. Such taxable
income is determined in most instances by initially determining,
under section 864(c), the amount of gross income which is
effectively connected with the conduct of a trade or business within
the United States. Pursuant to sections 873 and 882(c), this section
is applicable for purposes of determining the deductions from such
gross income (other than the deduction for interest expense allowed
to foreign corporations (see section 1.882-5)) which are to be taken
into account in determining taxable income. See example (21) of
paragraph (g) of this section.
[SOURCE:
http://ecfr.gpoaccess.gov/cgi/t/text/text-idx?c=ecfr&sid=ffec583671411651209c041f59a8e75a&rgn=div8&view=text&node=26:9.0.1.1.1.0.4.74&idno=26]
4.
“U.S. Citizens” abroad whose earnings are subject to tax include only
those with income “effectively connected with a
trade or business”.
By “U.S. Citizen”, we mean those born in and
domiciled within the District
of Columbia or the territories of the
United States, as discussed in the
previous chapter starting in section 4.11:
TITLE 26 >
Subtitle A >
CHAPTER 1 >
Subchapter N >
PART III >
Subpart B > § 911
§ 911. Citizens or residents of the United States living abroad
(a) Exclusion from gross income
At the election of a qualified individual (made
separately with respect to paragraphs (1) and (2)), there shall be
excluded from the gross income of such individual, and exempt from
taxation under this subtitle, for any taxable year -
(1) the foreign earned income of
such individual, and
(2) the housing cost amount of
such individual. (d) Definitions and special rules
(b) Foreign earned income
(1) Definition
For purposes of this
section -
(A) In general
The term ''foreign
earned income'' with respect to any individual means the amount
received by such individual from sources within a foreign country or
countries which constitute earned income attributable to services
performed by such individual during the period described in
subparagraph (A) or
(B) of subsection
(d)(1), whichever is applicable. (B) Certain amounts not included in
foreign earned income
The foreign earned
income for an individual shall not include amounts -
(i) received as a
pension or annuity,
(ii) paid by the
United States or an agency thereof to an employee of the United
States or an agency thereof,
(iii) included in
gross income by reason of section 402(b) (relating to taxability of
beneficiary of nonexempt trust) or section 403(c) (relating to
taxability of beneficiary under a nonqualified annuity), or
(iv) received after
the close of the taxable year following the taxable year in which
the services to which the amounts are attributable are performed.
[. . .]
(d) Definitions and special rules
For purposes of this section -
[. . .]
(2) Earned income
(A) In general
The term ''earned income'' means wages,
salaries, or professional fees, and other amounts received as
compensation for personal services actually rendered, but does not
include that part of the compensation derived by the taxpayer for
personal services rendered by him to a corporation which represents
a distribution of earnings or profits rather than a reasonable
allowance as compensation for the personal services actually
rendered.
(B) Taxpayer engaged in trade or business
In the case of a taxpayer engaged in a
trade or business in which both personal services and
capital are material income-producing factors, under regulations
prescribed by the Secretary, a reasonable allowance as compensation
for the personal services rendered by the taxpayer, not in excess of
30 percent of his share of the net profits of such trade or
business, shall be considered as earned income.
The key "word of art"
above is the term "personal services" which 26 CFR §1.469-9 says
means "work performed by an individual in connection with a
trade or
business". Therefore, “U.S. citizens” abroad who are not involved
in a “trade or business” do not earn “taxable income” because they
are not engaged in an excise taxable activity. Notice also that
the term “abroad” is never defined anywhere in the Internal Revenue
Code AND that the 50 states of the Union are NOT “domestic” as
domestic is used in the Code. They instead are “foreign” for the
purposes of legislative jurisdiction, as we emphasize throughout
this chapter. Also notice that there is no mention anywhere within
the entire I.R.C. of the status of taxability of earnings of “U.S.
citizens” situated outside the District of Columbia (which is the
“United States” within the code) but NOT abroad. That is because
they ARE NOT subject to the Internal Revenue Code, and can’t even
volunteer to be subject to a prima facie statute that they are not
even within the territorial jurisdiction of.
5.
Earnings from labor rendered by a “nonresident alien”, even if within
the “United States” (federal zone), to a foreign corporation or foreign
partnership that is not involved in a “trade or business in the
United
States” (public office) is not includible as “gross income”. Ditto for
earnings from a “foreign country”, which includes states of the Union,
as we pointed out earlier in section 5.2.13.
Here is the proof:
TITLE 26 >
Subtitle A >
CHAPTER 1 >
Subchapter N >
PART I > §864
§864. Definitions and special rules
(b) Trade or business within the United States
For purposes of this part, part II, and chapter
3, the term “trade or business within the United States” includes
the performance of personal services within the United States at any
time within the taxable year, but does not include—
(1) Performance of personal services for
foreign employer
The performance of personal services—
(A) for a
nonresident alien individual, foreign partnership, or foreign
corporation, not engaged in trade or business within the United
States, or
(B) for an office or
place of business maintained in a foreign country or in a possession
of the United States by an individual who is a citizen or resident
of the United States or by a domestic partnership or a domestic
corporation,
6.
Whether a legal "person" is considered "resident" or "nonresident" has
nothing to do with where it was organized, incorporated or where it has
a physical residence. Instead, it is determined by whether the
organization is engaged in a "trade or business".
Therefore, if you aren't engaged in a "trade or business", even if you
are domiciled in the District of Columbia, then you are a "nonresident". Here is the proof:
26 CFR §301.7701-5
Domestic, foreign, resident, and nonresident persons.
A domestic corporation is one
organized or created in the United States, including only
the States (and during the periods when not States, the
Territories of Alaska and Hawaii), and the District of
Columbia, or under the law of the United States or of any
State or Territory. A foreign corporation is one which is
not domestic. A domestic corporation is a resident
corporation even though it does no business and owns no
property in the United States. A foreign corporation
engaged in trade or business within the United States is
referred to in the regulations in this chapter as a resident
foreign corporation, and a foreign corporation not engaged
in trade or business within the United States, as a
nonresident foreign corporation. A partnership
engaged in trade or business within the United States is
referred to in the regulations in this chapter as a resident
partnership, and a partnership not engaged in trade or
business within the United States, as a nonresident
partnership. Whether a
partnership is to be regarded as resident or nonresident is
not determined by the nationality or residence of its
members or by the place in which it was created or
organized.
[Amended by T.D. 8813, Federal Register: February 2, 1999
(Volume 64, Number 21), Page 4967-4975]
If you examine the
above list, there are only four statuses or conditions throughout the
I.R.C. that don’t specifically mention that they must be connected to a
“trade or business” in order to qualify as “gross income”, which are:
1.
“Married individuals” under
26 U.S.C. §1(a). Not mentioned in item 1 above.
2.
“Heads of household” under
26 U.S.C. §1(b). Not mentioned in item 1 above.
3.
Domestic International Sales Corporations (DISC) involved in foreign
commerce.
4.
Foreign Sales Corporations (FSC) involved in foreign commerce.
We know that the first two are ALSO involved in a “trade or business”
because in the only place they are mentioned in the I.R.C., which is
26 U.S.C. §1(a) and 1(b), a graduated rate of tax appears there.
There is no way to elect a flat 30% tax rate as a "Married individual"
or "Head of household" without declaring oneself as a “nonresident
alien” coming under the provisions of
26 U.S.C. §871(a) INSTEAD of these two provisions.
Furthermore, the requirement for "equal protection of the laws", found
in
Section 1 of the Fourteenth Amendment and in
42 U.S.C. 1981(a), mandates that "Heads of Household" and "Married
individuals" shall be subjected to the same burdens, taxes, and
penalties as "Married individuals filing separately" or "Unmarried
individuals" or they would be discriminated against. Therefore,
they too must be engaged in a "trade or business" in order to earn
"taxable income" as well. We also know that the graduated rate of tax
cannot be implemented in states of the Union, because they are not
"uniform", meaning that everyone doesn't pay the same percentage, as
required by the U.S. Constitution, Article 1, Section 8, Clause 1, which
says:
| U.S.
Constitution
Article 1, Section 8, Clause 3
The Congress shall have Power To lay and collect
Taxes, Duties, Imposts and Excises, to pay the Debts
and provide for the common Defence and general
Welfare of the United States; but all Duties,
Imposts and Excises shall be uniform [same
percentage] throughout the United States [and upon
all “persons”] |
|
The reason all excise taxes within states of the Union must be uniform
throughout the states and have the same percentage on all persons is
that if they weren't, then the federal government would be depriving
sovereign American Nationals in the states of "equal protection of the
laws". However, the Constitutional requirement for "equal
protection" does not apply within areas under exclusive federal
jurisdiction, such as the District of Columbia, under
Article 1, Section
8, Clause 17 of the Constitution, and under
Article 4, Section 3, Clause 2 of the Constitution.
There have been at least two state supreme Court rulings consistent with
this conclusion, which declared that graduated rate income taxes are
unconstitutional within states of the Union. See
Culliton v. Chase, 25 P.2d 81 (1933) and
Jensen v. Henneford, 53 P.2d 607 (1936).
You will also learn later in
this section that those who elect for a graduated rate of tax are
“effectively connected with a
trade or business in the
United States”
under
26 U.S.C. §871(b).
We’ll now provide a table summarizing our findings to show the excise
taxable for each type of entity to make the results of this survey of
the I.R.C. crystal clear. Note that all the taxable activities
must occur within exclusive federal jurisdiction under
Article 1,
Section 8, Clause 17 of the Constitution, or else they become “extortion
under the color of law”. The federal government cannot collect or
assess taxes in areas where it has no legislative jurisdiction:
Table 1: Taxable activity under I.R.C. by
type of entity
|
# |
Entitle name |
Entity type |
Citizenship status |
Excise taxable Activity |
I.R.C. Section |
Regulation |
Notes |
|
1 |
Married Individual |
Natural person |
“Resident alien” or “U.S.
citizen abroad” |
“trade or business” |
26 U.S.C. §1(a)
imposes the tax
26 U.S.C. §864(c )(3) says all
earnings from the District of Columbia are considered to be
from a “trade or business” |
26 CFR §1.861-8(f)(1)
lists all the taxable
activities, that are includible in “gross income” and the
only one connected with a natural person is a nonresident
alien engaged in a “trade or business” |
Must be engaged in a “trade or
business” to earn “taxable income” |
|
2 |
Head of Household |
Natural person |
“Resident alien” or “U.S.
citizen abroad” |
“trade or business” |
26 U.S.C. §1(b)
imposes the tax
26 U.S.C. §864(c )(3)
says all earnings from the
District of Columbia are considered to be from a “trade or
business” |
26 CFR §1.861-8(f)(1)
lists all the taxable
activities, that are includible in “gross income” and the
only one connected with a natural person is a nonresident
alien engaged in a “trade or business” |
Must be engaged in a “trade or
business” to earn “taxable income” |
|
3 |
Married Individual Filing
Separately |
Natural person |
“Resident alien” or “U.S.
citizen abroad” |
“trade or business” |
26 U.S.C. §1(c)
imposes the tax |
26 CFR §1.1-1(a)(2)(ii)
says must be engaged in
“trade or business” to earn “taxable income”
26 CFR §1.861-8(f)(1)
lists all the taxable
activities, that are includible in “gross income” and the
only one connected with a natural person is a nonresident
alien engaged in a “trade or business” |
Must be engaged in a “trade or
business” to earn “taxable income” |
|
4 |
Unmarried Individual |
Natural person |
“Resident alien” or “U.S.
citizen abroad” |
“trade or business” |
26 U.S.C. §1(d)
imposes the tax |
26 CFR §1.1-1(a)(2)(ii)
says must be engaged in
“trade or business” to earn “taxable income” |
Must be engaged in a “trade or
business” to earn “taxable income” |
|
5 |
Estate or trust |
Artificial entity |
“U.S. citizen” domiciled in
the District of Columbia |
Transfer of property |
I.R.C. Subtitle B
26 U.S.C. §2001 imposes tax
26 U.S.C. §2002 creates
liability |
|
Only applies to “U.S.
citizens” or “Resident aliens” domiciled in the federal zone
and NOT in a state of the Union. See Knowlton v. Moore,
178 U.S. 41 (1900) |
|
6 |
American national living in a
state of the Union |
Natural person |
“national but not citizen”
under
8 U.S.C. §1101(a)(21) and
8 U.S.C. §1452 |
None (nontaxpayer) |
26 U.S.C. §864(b)(1)(A) says
earnings not includible in “gross income” if paid to a
“nonresident alien”
26 U.S.C.
§861(a)(3)(C)(i) says earnings of a nonresident alien not
connected with a “trade or business” is not deemed income
from sources within the U.S. |
26 CFR §1.861-8(f)(1)
lists all the taxable activities, that are includible in
“gross income” and the only one connected with a natural
person is a nonresident alien engaged in a “trade or
business” |
Nontaxpayer not subject o the
Internal Revenue Code. |
|
7 |
Exempt Organization |
Artificial organization (DBA) |
“Resident alien” or “U.S.
citizen” |
“trade or business” |
26 U.S.C. §501 |
|
See IRS Publication 598 and
search for the phrase “trade or business” and you will be
surprised by what you find. That publication basically says
if the organization is engaged in a “trade or business” that
is not substantially related to its exempt purpose. |
|
8 |
Federal Corporation |
Corporation (DISC or FSC) |
“U.S. citizen” |
“trade or business” |
26 U.S.C. §11 imposes the tax. |
26 CFR §1.861-8(f)(1)
lists all the taxable
activities, that are includible in “gross income” and the
only one connected with a natural person is a nonresident
alien engaged in a “trade or business” |
|
|
9 |
Federal Corporation |
Corporation |
“U.S. citizen” |
“foreign commerce” |
26 U.S.C. §4081(a)
imposes tax on imported
petroleum |
|
Imposed under Subtitle D on
imported petroleum. This is a constitutional tax. |
|
10 |
State (not federally
registered) Corporation |
Corporation |
“state citizen” but not “U.S.
citizen” |
None. A “nontaxpayer” |
No federal legislative
jurisdiction inside states of the Union. |
|
Not subject to IRS
jurisdiction. |
It’s pretty obvious that your
public servants don’t want you to know about this “trade or business”
scam, because then the gravy train of plunder and their welfare check
would have to stop and they would have to get a REAL job.
What steps have they taken to obfuscate the truth about
this very important issue? Here is a brief summary of their
dishonest techniques:
1.
They made it “appear” in
26 U.S.C. §871(a) that income not connected with a “trade or
business” from within the “United States” was subject to mandatory 30%
tax. However:
1.1
26 CFR §1.871-7(d)(2)(ii)
says that the nonresident alien must be present in the United States for
183 days out of the year or more in order to be subject to the taxes on
sale or exchange of capital assets, in which case he isn't a nonresident
alien anymore by the "presence test". Quite a scam, huh?
1.2
26 CFR §1.871-7(b)(1)
says that the following types of income from within the District of
Columbia are taxable to "nonresident alien individuals" not engaged in a "trade or
business": "interest, dividends,
rents, salaries, wages, premiums, annuities, compensations,
remunerations, and emoluments, but other items of fixed or determinable
annual or periodical gains, profits, or income are also subject to the
tax, as, for instance, royalties, including royalties for the use of
patents, copyrights, secret processes and formulas, and other like
property". The
Classification Act of 1923, 42 Stat. 1988, then defines all these
types of income as being from the federal government only. See our
article on this fraud:
The Classification Act of 1923,
Great IRS
Hoax, section 6.5.16.
2.
They never explicitly state the simple truth anywhere in any IRS
publication that we could find that if you aren’t involved
in a “trade or business” within the “United States”
as a person who has a domicile there (such as a "U.S. citizen" or
"resident alien"), then you
don’t earn “gross income” and are a “nontaxpayer” not subject to
the I.R.C.
26 U.S.C. §7701(a)(31),
26 CFR 1.1-1(a)(2)(ii),
and
26 CFR 1.861-8(f)(1)(iv) are the only places that make this
fact very clear, but
it isn’t simply and explicitly explained anywhere else in the code or
regulations, and these sections are something that could easily be
overlooked by the average American.
3.
They did not directly state the excise taxable activities subject to tax
in a single, simple list anywhere within the Internal Revenue Code.
Instead, they left that statement to be made by the Secretary of the
Treasury, which he did in
26 CFR §1.861-8(f)(1) . This section of regulations is one that few
people read or refer to, and therefore they have kept the truth out of
plain view of most tax professionals.
4.
Those who have read and understand
26 CFR §1.861-8(f)(1) and who raise it in litigation have been
persecuted and slandered by the IRS and corrupted federal judges and
falsely called “frivolous” without justifying why it is frivolous.
However, they are the frivolous ones because no federal
judge that we know of has ever or would ever deal in their ruling
directly with the issue of the “excise taxable activities” identified in
26 CFR §1.861-8(f)(1) because they would have to admit that:
4.1.
Subtitle A of the Internal Revenue Code is an indirect excise tax.
4.2. People
and property within states of the Union are not the proper subject of
Subtitle A of the Internal Revenue Code.
4.3.
The only “taxable activities” under the I.R.C. are either public offices
in the United States government or “foreign commerce” of federally
registered corporations.
4.4.
Natural persons can only be involved in a “taxable activity” if they
hold a public office in the United States government or a federal
territory or possession, or are acting in the capacity as an officer of
a federally chartered corporation that is involved in foreign commerce
licensed under
26 U.S.C. §7001. Remember: The way an activity becomes excise
taxable is the issuance of a “license”. Requesting a “license”
or accepting a government "privilege" is the
essence of how a person volunteers to pay an excise tax.
Now,
let’s look at some of the devious ways that the IRS creates false
presumptions to deceive people living in the states of the Union into
admitting under penalty of perjury on the wrong tax return, the 1040,
that they are involved in a “trade or business” and that they are
subject to exclusive federal jurisdiction, even though we know that
neither is true. We refer you to IRS Publication 519, Year 2000
version, which says starting on p. 17:
The 30% Tax
Tax at a 30% (or lower treaty) rate applies to
certain items of income or gains from U.S. sources but
only if the items are not effectively connected with your U.S. trade
or business.
Fixed or Determinable Income
The 30% (or lower treaty) rate applies to the
gross amount of U.S. source fixed or determinable annual or periodic
gains, profits, or income
[. . .]
Social Security Benefits
A nonresident alien must include 85% of any U.S.
social security benefit (and the social security equivalent part of
a tier 1 railroad retirement benefit) in U.S. source fixed or
determinable annual or periodic income. This income is exempt under
some tax treaties. See Table 1 in Publication 901, U.S. Tax
Treaties, for a list of tax treaties that exempt U.S. social
security benefits from U.S. tax.
[IRS
Publication 519: U.S. Tax Guide for Aliens, Year 2000, p. 17]
Well, first of all, the above statement is
misleading, because they never defined the word “income” and the
Supreme Court said in Eisner v. Macomber that the Congress can’t define
it and that ONLY the Constitution can define it, so they can’t write
any law authorizing the IRS to define it either!
So what “income” are they talking about here? The only thing the
Supreme Court has ever defined “income” to mean was profit from a
corporation involved in foreign commerce, as we pointed out earlier in
section 5.6.5. Why didn’t they mention
this? Because they don’t want you to know!
Secondly, the only
thing that can be talking about is earnings not connected
with a “trade or business” described in 26 U.S.C. §871(a), which is the
only place the 30% tax rate appears. Those earnings can only relate to
payments originating from “sources within the United States” earned be
“nonresident alien individuals”, because that is what 26 U.S.C.
§871 says. What are the "items of income” that are subject to this 30%
tax? These “items of income” are listed in 26 U.S.C. §§862(a) and
863(a) TA \l "26 U.S.C. §§862(a) and 863(a)" \s "26 U.S.C. §§862(a) and
863(a)" \c 2 . Most of these “items of income” are then elsewhere
excluded, as we showed earlier in this section. We showed, for instance
that
1.
Those who are “nonresident aliens”
but not “nonresident alien individuals” are nowhere mentioned as having
any liability at all. This includes those domiciled in states of the
Union who are not “aliens” and therefore not “individuals”. The
liability to file a tax return described in 26 CFR §1.6012-1(b) only
applies to “nonresident alien individuals”, not “nonresident aliens” who
are NOT “individuals”. For further details, see the following:
2.
26 U.S.C. §7701(a)(31)(A) says that earnings not connected with
a “trade or business” and not originating from the “United States” are a
"foreign estate” not includible in “gross income”. 26 U.S.C.
§7701(a)(9) and (a)(10) defines this “United States” to mean the
District of Columbia or federal statutory "State" (4 U.S.C.
§110(d)) but not a state of the
Union. Such an estate, including the earnings of people who are part of
such an estate, would be “not subject” to the tax but at the same time
not “exempt”.
TITLE 26 >
Subtitle F >
CHAPTER 79 > § 7701
§ 7701. Definitions
(a) When used in this title, where not otherwise
distinctly expressed or manifestly incompatible with the intent
thereof—
(31) Foreign estate or trust
(A) Foreign estate
The term “foreign
estate” means an estate the income of which, from sources without
the United States which is not effectively connected with the
conduct of a
trade or business within the
United States, is not includible in gross income under
subtitle A.
3. 26 U.S.C. §864(b)(1)(A) excludes
earnings of nonresident aliens who are working for nonresident aliens,
even though
26 U.S.C. §862(a)(3) would appear to create the false
impression that such earnings are includible in “gross income”.
4. Self-employment income is not counted as “gross income” under
26 U.S.C. §1402 if it does not involve a “trade or
business”.
5.
Under
26 CFR §1.1-1(a)(2)(ii) and
26 CFR §1.861-8(f)(1)(iv), only income “effectively connected with a
trade or business” is includible in gross income for biological people.
So what
is left after one excludes the earnings indicated in the above
requirements because the “person” being taxed is a “national” and a
“nonresident alien” all of whose earnings are not “effectively connected
with a trade or business” and originate outside the District of Columbia? CORPORATE PROFIT OF A FEDERAL AND NOT STATE CORPORATION
INVOLVED IN FOREIGN COMMERCE! That’s what we already showed the Supreme
Court said constituted “income” within the meaning of the
Sixteenth
Amendment.
“Income
[corporate profit from foreign commerce, in the context of taxes
upon states of the Union] has been taken to mean the same thing as
used in the Corporation Excise Tax Act of 1909 (36 Stat. 112) in the
16th Amendment, and in the various revenue acts
subsequently passed.”
[Bowers v. Kerbaugh-Empire Co.,
271 U.S. 170, 174, (1926)]
________________________________________
"The grant of
the power to lay and collect taxes [on foreign commerce within the
states ONLY] is, like the power to regulate commerce, made in
general terms, and has never been understood to interfere with the
exercise of the same power by the State; and hence has been drawn an
argument which has been applied to the question under consideration.
But the two grants are not, it is conceived, similar in their terms
or their nature. Although many of the powers formerly
[22 U.S. 1, 199] exercised by the
States, are transferred to the government of the Union, yet the
State governments remain, and constitute a most important part of
our system. The power of taxation is indispensable to their
existence, and is a power which, in its own nature, is capable of
residing in, and being exercised by, different authorities at the
same time. We are accustomed to see it placed, for different
purposes, in different hands. Taxation is the simple operation of
taking small portions from a perpetually accumulating mass,
susceptible of almost infinite division; and a power in one to take
what is necessary for certain purposes, is not, in its nature,
incompatible with a power in another to take what is necessary for
other purposes. Congress is authorized to lay and collect
taxes [on foreign commerce ONLY within the states], and to pay the
debts, and provide for the common defence and general welfare of the
United States. This does not interfere with the power of the States
to tax [internally] for the support of their own governments; nor is
the exercise of that power by the States [to tax INTERNALLY], an
exercise of any portion of the power that is granted to the United
States [to tax EXTERNALLY]. In imposing taxes for State purposes,
they are not doing what Congress is empowered to do. Congress is not
empowered to tax for those purposes which are within the exclusive
province of the States. When, then,
each government exercises the power of taxation, neither is
exercising the power of the other. But, when a State
proceeds to regulate commerce with foreign nations, or among the
several States, it is exercising the very power that is granted to
Congress, [22 U.S. 1, 200] and is
doing the very thing which Congress is authorized to do. There is no
analogy, then, between the power of taxation and the power of
regulating commerce. “
[Gibbons v. Ogden,
22 U.S. 21 (1824)]
26 CFR §1.861-8(f)(1)
lists all these taxable activities, and they all come under treaties or
are connected with what is called a Domestic International Sales
Corporation (DISC) or a Foreign Sales Corporation (FSC). These weasels are slippery, aren’t they?
What they are trying
to do is make an exclusively municipal excise tax that only applies to the
District of Columbia “look” like it applies to everyone in the country
by encrypting and hiding the truth using “words
of art”. They contradict
themselves in their own publication, because elsewhere, they admit that
those who have income from outside the “United States” that is not
connected with “trade or business” don’t earn “gross income”:
Income Subject to Tax
Income from sources outside the United
States that is not effectively connected with a trade or business in
the United States is not taxable if you receive it while you are a
nonresident alien. The income is not taxable even if you
earned it while you were a resident alien or if you became a
resident alien or a U.S. citizen after receiving it and before the
end of the year.
[IRS Publication 519, Year 2000, p. 26]
The
above claim within Publication 519 originates from 26 U.S.C.
§7701(a)(31), which we cited at the beginning of this article. What
they are saying is that only earnings from within the District of
Columbia and which are not connected with a “trade or business” are
subject to the 30% tax rate, and that the income must be earned by
“nonresident alien individuals” whoa re aliens and not “nationals”,
because citizens can’t be taxed at home and aliens and nonresident
aliens are excluded. The only thing left is foreign “persons”, such as
foreign corporations. If they simply commute daily to work there, they
are "nonresident aliens" and therefore don't earn "gross income".
Anything not connected with a “trade or business” that is earned outside
of the District of Columbia is therefore not includible as “gross
income” at all. Anything earned inside the District of Columbia in
connection with a public office is includible in “gross income” at the
graduated, instead of 30% rate. Even then, one must consent voluntarily
to be a “taxpayer” because there is no statute making anyone liable in
either the D.C. Code or the I.R.C. That process is done by submitting a
form and assessing oneself with a liability even though there is none.
Once they “volunteer” by filling out and submitting the WRONG form, the
1040 form, and become “subject to” the I.R.C., they become virtual
inhabitants of the District of Columbia under the provisions of 26
U.S.C. §7701(a)(39) and 26 U.S.C. §7408(d):
TITLE 26 >
Subtitle F >
CHAPTER 79 > Sec. 7701.
Sec. 7701. – Definitions
(a)(39)
Persons
residing outside [the federal] United States
If any citizen or resident of the United
States does not reside in (and is not found in) any United
States judicial district, such citizen or resident shall be treated
as residing in the District of Columbia for purposes of any
provision of this title relating to -
(A) jurisdiction of courts,
or
(B) enforcement of summons.
____________________________________________________
TITLE 26 >
Subtitle F >
CHAPTER 76 >
Subchapter A > § 7408
§7408. Action to enjoin promoters of abusive tax shelters, etc.
(d) Citizens and residents outside the United
States If any citizen or resident of the United States does not
reside in, and does not have his principal place of business in, any
United States judicial district, such citizen or resident shall be
treated for purposes of this section as residing in the District of
Columbia.
If they REALLY had jurisdiction in a state of the
Union to tax, do you think they would need provisions like those above?
Note also that what “citizens and residents” have in common is a legal
“domicile” in the “United States” (District of Columbia)
pursuant to 26 U.S.C. §911(d)(3).
When a
person domciiled in a state of the Union who is rightfully a “nonresident
alien” NON-individual fills out and sends in a 1040 form, rather than the correct
1040NR form, they are assumed to be a “citizen or resident of the United
States” and an “individual”, meaning a “resident alien” pursuant
to 26 U.S.C. §7701(b)(1)(A). The “United States” in the context of
subtitle A of the I.R.C.
means the District of Columbia only. It is redefined in other
titles to include the 50 states, but in Subtitle A, it’s definition is
limited to that found in
26 U.S.C. §7701(a)(9) and (a)(10). Therefore, they are claiming that
they are domiciled in the District of Columbia. Did you know that by submitting an IRS form
1040, you were making an "voluntary election" to be treated as a
domiciliary of the District of Columbia? They didn't tell you
THAT in the IRS publications, now did they? Why not? Because
they want to manufacture your legal ignorance in the public schools and
then use their incomplete and deceptive publications to "harvest" the
fruits of your ignorance. A fool and his money are soon parted.
The public schools are the fool factory and the 1040 is the indenture
that makes you into their willing, voluntary indentured slave. Below
is what the IRS Published Products Catalog, year 2003 says about the
purpose of the form 1040:
1040A 11327A Each
U.S. Individual Income
Tax Return
Annual income tax return filed by citizens
and residents of the United States. There are separate
instructions available for this item. The catalog number for the
instructions is 12088U.
W:CAR:MP:FP:F:I Tax Form or Instructions
[2003
IRS Published Products Catalog, p. F-15;
SOURCE:
http://famguardian.org/TaxFreedom/Forms/IRS/IRSDoc7130.pdf]
Under
I.R.C. §7701(a)(39) above, they then become the equivalent of
“virtual inhabitants” of the District of Columbia. If we then look in
the District of Columbia Code, we find that there isn’t a liability
statute in that code either so the IRS still requires our consent to
call us a “taxpayer” no matter which way you look at it.
This is covered
in much more detail in the
Tax Fraud Prevention Manual ,
Chapter 3, section 3.5.3 if you want to investigate further. We also
know that kidnapping is highly illegal under
18 U.S.C. §1201, and that making us into a “virtual inhabitant” of
anything is the equivalent of kidnapping if done without our consent.
Therefore, indirectly we must conclude that anyone who does not inhabit
the District of Columbia must volunteer or consent to be a “taxpayer”
before their “res” or legal identity can be transported to the District
of Columbia. That process of volunteering is done using the IRS 1040
form and is done under the authority of
26 U.S.C. §6013(g) for those who file as “nonresident
aliens”.
It gets worse, folks. Let’s look at some of the
deceit in IRS Publication 519 that tries to convince people falsely that
they are involved in a “trade or business”, or tricks them into
admitting they are in the process of pursuing the “privilege” of having
additional deductions. Below is what they say about how you can
increase your deductions by claiming you are engaged in a “trade or
business”, from p. 23 of the Year 2000 edition of IRS Publication 519:
Itemized Deductions
Nonresident aliens can claim some of the same
itemized deductions that resident aliens can claim. However,
nonresident aliens can claim itemized deductions only if they have
income effectively connected with their U.S. trade or business.
Nonresident Aliens
You can deduct certain itemized deductions
if you receive income effectively connected with your U.S. trade or
business. These deductions include state and local income
taxes, charitable contributions to U.S. organizations, casualty and
theft losses, and miscellaneous deductions. Use Schedule A of Form
1040NR to claim itemized deductions.
If you are filing Form 1040NR–EZ, you can only
claim a deduction for state or local income taxes. If you are
claiming any other deduction, you must file Form 1040NR.
[IRS
Publication 519, Year 2000, p. 23]
Why do they do the above? Well, those who know
they have no effectively connected income and therefore have a zero tax
liability don’t need deductions because they don’t owe
anything! The only reason to pursue a deduction is because one has
“gross income”, and few Americans we have ever met living in the states
even have “gross income”.
Later on, in this same IRS Publication 519, we see
that the IRS tries to create a false “presumption” in their favor by
trying to convince people they are usually involved in a “trade or
business”. Notice that they never explicitly define what it means from
the I.R.C, which is defined in
26 U.S.C. §7701(a)(26) as “the functions of a
public office”. As a
matter of fact, if they DID explain this definition in their
publication, boy would they ever have a LOT of explaining to do on their
phone support line, so they conveniently leave it out. They don’t
mention its real definition because that would render everything listed
below as basically irrelevant and moot. The reader would simply throw
Pub 519 in the trash at that point and conclude he is a “nontaxpayer”,
so they instead tip toe around the definition and give examples
without relating them to the legal definition in the I.R.C.
Below is the IRS Publication 519, Year 2000 definition of “trade or
business in the
United States” from pp. 15-16:
Trade or Business in the United States
Generally, you must be engaged in a trade or
business during the tax year to be able to treat income received in
that year as effectively connected with that trade or business.
Whether you are engaged in a trade or business in the United States
depends on the nature of your activities. The discussions that
follow will help you determine whether you are engaged in a trade or
business in the United States.
Personal Services
If you perform personal services in the United
States [District of Columbia] at any time during the tax year, you
usually are considered engaged in a trade or business
in the United States.
TIP: Certain compensation paid to a nonresident alien by a
foreign employer is not included in gross income. For more
information, see Services Performed for Foreign Employer in chapter
3.
Other Trade or Business Activities
Other examples of being engaged in a trade or
business in the United States follow.
Students and trainees.
You are considered
engaged in a trade or business in the United States if you are
temporarily present in the United States as a nonimmigrant under a
“F,” “J,” “M,” or “Q” visa. A nonresident alien temporarily present
in the United States under a “J” visa includes a nonresident alien
individual admitted to the United States as an exchange visitor
under the Mutual Educational and Cultural Exchange Act of 1961. The
taxable part of any scholarship or fellowship grant that is U.S.
source income is treated as effectively connected with a trade or
business in the United States.
Business operations.
If you own and
operate a business in the United States selling services, products,
or merchandise, you are, with certain exceptions [not
mentioned], engaged in a trade or business in the United
States.
Partnerships. If you are a member of a
partnership that at any time during the tax year is engaged in a
trade or business in the United States, you are considered to be
engaged in a trade or business in the United States.
Beneficiary of an estate or trust.
If you
are the beneficiary of an estate or trust that is engaged in a trade
or business in the United States, you are treated as being engaged
in the same trade or business.
Trading in stocks, securities, and
commodities.
If your only U.S. business activity is trading
in stocks, securities, or commodities (including hedging
transactions) through a U.S. resident [alien] broker or other agent,
you are not engaged in a trade or business in the United States.
For transactions in stocks or securities, this
applies to any nonresident alien, including a dealer or broker in
stocks and securities.
For transactions in commodities, this applies to
commodities that are usually traded on an organized commodity
exchange and to transactions that are usually carried out at such an
exchange.
U.S. office or other fixed place of business at
any time during the tax year through which, or by the direction of
which, you carry out your transactions in stocks, securities, or
commodities.
Trading for a nonresident alien's own account.
You are not engaged in a trade or business in the United States if
trading for your own account in stocks, securities, or commodities
is your only U.S. business activity.
This applies even if the trading takes place
while you are present in the United States or is done by your
employee or your broker or other agent.
This does not apply to trading for your own
account if you are a dealer in stocks, securities, or commodities.
This does not necessarily mean, however, that as a dealer you are
considered to be engaged in a trade or business in the United
States. Determine that based on the facts and circumstances in each
case or under the rules given above in Trading in stocks,
securities, and commodities.
Effectively Connected Income
If you are engaged in a U.S. trade or business,
all income, gain, or loss for the tax year that you get from sources
within the United States (other than certain investment income) is
treated as effectively connected income. This applies whether or
not there is any connection between the income and the trade or
business being carried on in the United States during the tax year.
Two tests, described under Investment Income ,
determine whether certain items of investment income (such as
interest, dividends, and royalties) are treated as effectively
connected with that business.
In limited circumstances, some kinds of foreign
source income may be treated as effectively connected with a trade
or business in the United States. For a discussion of these rules,
see Foreign Income, later.
[IRS
Publication 519, Year 2000, pp. 15-16]
The
first thing you notice is the statement: “Whether you are engaged in
a trade or business in the United States depends on the nature of your
activities”. That statement is a tacit admission that the income
tax is in fact an indirect excise tax on activities. They also said:
"If you perform personal services in the United
States [District of Columbia] at any time during the tax year, you
usually are considered engaged in a trade or business
in the United States."
Well,
let's look at the definition of "personal services" used above to see
what these weasels are up to:
26 CFR Sec. 1.469-9 Rules for certain rental real estate
activities.
(b)(4)
PERSONAL SERVICES.
Personal services means any work performed by an
individual in connection with a
trade or business. However, personal services do
not include any work performed by an individual in the
individual's capacity as an investor as described in section
1.469-5T(f)(2)(ii).
Notice
that they used the word "means" instead of "includes" in the above
definition and DID NOT confine the definition by stating "for the
purposes of this section" or "for the purposes of this chapter".
Instead, they provided an unambiguous universal definition of "personal
services" which applies throughout the ENTIRE
Internal Revenue Code and
they indicated effectively that you aren't performing "personal
services" UNLESS you are engaged in a "trade or business". So what
they are doing when they say "If you perform personal services in the
United
States [District of Columbia] at any time during the tax year, you
usually are considered engaged in a trade or business
in the United States." is effectively making a circular
statement that confirms itself. This is called a "tautology",
which is a word that is defined using itself. It's only purpose is
self-serving deception.
Can you see how insidious this deception and double-speak is? It's
all designed to take attention away from the nature of the taxed
activity so that people will think the tax is on the money instead of
the activity, isn’t it? If they admitted that the income tax was an
indirect excise tax on activities, they would dig a DEEP hole for
themselves that would start an avalanche of people leaving the tax
rolls. That is why they never come out and said EXACTLY what a “trade
or business” is or how their explanation relates to the definition of a
“trade or business” found in
26 U.S.C. §7701(a)(26), which describes it
as a "public office". Since when do people holding "public office" have
time to do any of the above things in addition to
fulfilling their office? Furthermore, under federal law, it is a
conflict of interest to maintain any private business activities outside
the workplace that might jeopardize one's objectivity. But then later
on p. 26 of the same publication, under “Dual Status Tax Year”, they
finally admit the truth:
Income Subject to Tax
Income from sources outside the United
States [District of Columbia] that is not effectively connected with a trade or business in
the United States is not taxable if you receive it while you are a
nonresident alien. The income is not taxable even if you
earned it while you were a resident alien or if you became a
resident alien or a U.S. citizen after receiving it and before the
end of the year.
[IRS
Publication 519, Year 2000, p. 26]
An excellent way to
confirm the conclusions of this section is to read the publications of
the Joint Committee on Taxation. We would like to quote from JCT
document 85-199 entitled “Explanation of Proposed Income Tax Treaty
Between The United States and the United Kingdom”. You can get this
publication at:
http://famguardian.org/PublishedAuthors/Govt/JointComteeOnTax/85199-US-GB-TreatyExplan.pdf
Now the excerpt, from
pp. 4-5 is VERY revealing. We boldface and underline the important portions
to bring attention to them.
We have also added bracketed material to amplify exactly what they mean
based on discussion earlier in this chapter and based on the definitions
of terms found in the Internal Revenue Code:
A. U.S. Tax Rules
The United States taxes
U.S. citizens
[people born in the District of Columbia and territories but
excluding those born in the states],
residents
[who are all "aliens"], and corporations
[registered ONLY in the District of Columbia and EXCLUDING
state-only corporations] on their worldwide income [connected with a
"trade or business"], whether derived in the United States
[the District of Columbia] or
abroad [outside the states of the Union]. The United States generally taxes nonresident alien
individuals and foreign corporations on all their income that is
effectively connected with the conduct of a trade or business in the
United States (sometimes referred to as ‘‘effectively connected
income’’). The United States also taxes nonresident alien
individuals and foreign corporations on certain U.S.-source income
that is not effectively connected with a U.S. trade or business.
Income of a
nonresident alien individual or foreign corporation that is
effectively connected with the conduct of a trade or business in
the United States generally is subject to U.S. tax in the same
manner and at the same rates as income of a
U.S. person.
Deductions are allowed to the extent that they are related to
effectively connected income. A foreign corporation also is
subject to a flat 30– percent branch profits tax on its ‘‘dividend
equivalent amount,’’ which is a measure of the effectively
connected earnings and profits of the corporation that are
removed in any year from the conduct of its U.S. trade or business.
In addition, a foreign corporation is subject to a flat 30–percent
branch-level excess interest tax on the excess of the amount of
interest that is deducted by the foreign corporation in computing
its effectively connected income over the amount of interest that is
paid by its U.S. trade or business. U.S.-source fixed or
determinable annual or periodical income of a nonresident alien
individual or foreign corporation (including, for example, interest,
dividends, rents, royalties, salaries, and annuities) that is not
effectively connected with the conduct of a U.S. trade or
business is subject to U.S. tax at a rate of 30 percent of
the gross amount paid. Certain insurance premiums earned by a
nonresident alien individual or foreign corporation are subject to
U.S. tax at a rate of 1 or 4 percent of the premiums. These taxes
generally are collected by means of withholding.
Specific statutory exemptions from the 30–percent withholding tax
are provided. For example, certain original issue discount and
certain interest on deposits with banks or savings institutions are
exempt from the 30–percent withholding tax. An exemption also is
provided for certain interest paid on portfolio debt obligations. In
addition, income of a foreign government or international
organization from investments in U.S. securities is exempt from U.S.
tax.
U.S.-source capital gains of a nonresident alien individual or a
foreign corporation that are not effectively connected with a
U.S. trade or business generally are exempt from U.S. tax, with
two exceptions: (1) gains realized by a nonresident alien individual
who is present in the United States [District of Columbia] for at
least 183 days during the taxable year, and (2) certain gains from
the disposition of interests in U.S. real property.
Rules are provided for the determination of the source of income.
For example, interest and dividends paid by a U.S. citizen or
resident or by a U.S. corporation generally are considered
U.S.-source income. Conversely, dividends and interest paid by a
foreign corporation generally are treated as foreign-source income.
Special rules apply to treat as foreign-source income (in whole or
in part) interest paid by certain U.S. corporations with foreign
businesses and to treat as U.S.-source income (in whole or in part)
dividends paid by certain foreign corporations with U.S. businesses.
Rents and royalties paid for the use of property in the United
States are considered U.S.-source income.
They basically admitted
everything we just got through saying throughout the preceding
discussion, folks! They are very cleverly hiding the taxable activity
by referring to it as a “trade or business”, which is a “word of art”,
and not defining which “U.S.” they are talking about or the fact that it
only includes the District of Columbia. They also admitted the
circumstances under which the 30% tax in
26 U.S.C. §871(a) applies.
Recall that this section identified a 30% tax on nonresident alien
income from sources inside the District of Columbia which is not
connected with a “trade or business”. Well, they just explained that
the tax is only paid by foreign corporations as an
indirect tax upon income derived from a “trade or business”. Therefore,
ALL income that is taxable under the I.R.C. Subtitle A derives
exclusively from a “trade or business” and a “public office” in one way
or another.
The first sentence of the
above also tries to deceive the reader by saying that "U.S. citizens",
"residents", and "corporations" are taxed on their "worldwide income"
WITHOUT mentioning the requirement for being engaged in a "trade or
business". We know based on our earlier analysis, however, that
under Subtitle A of the I.R.C., all natural persons who are "taxpayers"
under the code, whether whether married, unmarried, heads of Household,
etc. MUST be engaged in a "trade or business" in order to earn "taxable
income". The taxable activity for international corporations is
"foreign commerce" rather than the "trade or business" under other
subtitles of the code, and the above tries to lump all of them together
and thereby create an absolutely false presumption in the mind of the
reader. Therefore, such a claim can ONLY apply to artificial
entities engaged in foreign commerce under Subtitle D of the I.R.C.
The only thing we didn't cover earlier was the difference in treatment
between corporations and natural persons. In that scenario, under
I.R.C. Subtitle D, these corporations are taxed on their worldwide
income that derives from imports, which counts as "foreign commerce"
under the constitution. These conclusions are supported by the
Supreme Court, which said:
"The difficulties arising out of our dual form
of government and the opportunities for differing opinions
concerning the relative rights of state and national governments are
many; but for a very long time this court has steadfastly
adhered to the doctrine that the taxing power of Congress does not
extend to the states or their political subdivisions. The
same basic reasoning which leads to that conclusion, we think,
requires like limitation upon the power which springs from the
bankruptcy clause. United States v. Butler, supra."
[Ashton v.
Cameron County Water Improvement District No. 1,
298 U.S. 513; 56 S.Ct. 892 (1936)]
________________________________
“Thus, Congress having power to regulate
commerce with foreign nations, and among the several States, and
with the Indian tribes, may, without doubt, provide for granting
coasting licenses, licenses to pilots, licenses to trade with
the Indians, and any other licenses necessary or proper for
the exercise of that great and extensive power; and the same
observation is applicable to every other power of Congress, to the
exercise of which the granting of licenses may be incident. All such
licenses confer authority, and give rights to the licensee.
But very different considerations apply to the
internal commerce or domestic trade of the States.
Over this commerce and trade Congress has no power of regulation
nor any direct control. This power belongs exclusively
to the States. No interference by Congress with the business of
citizens transacted within a State is warranted by the Constitution,
except such as is strictly incidental to the exercise of powers
clearly granted to the legislature. The power to authorize a
business within a State is plainly repugnant to the exclusive power
of the State over the same subject. It is true that the power of
Congress to tax is a very extensive power. It is given in the
Constitution, with only one exception and only two qualifications.
Congress cannot tax exports, and it must impose direct taxes by the
rule of apportionment, and indirect taxes by the rule of uniformity.
Thus limited, and thus only, it reaches every subject, and may be
exercised at discretion. But, it reaches only existing subjects.
Congress cannot authorize a trade or business within a State in
order to tax it.”
[License Tax Cases,
72 U.S. 462, 18 L.Ed. 497, 5 Wall. 462, 2 A.F.T.R. 2224 (1866)]
Another way to confirm
the conclusions of this section is to look at older versions of the U.S.
Code and Statutes at Large that show the definition of "gross income". Politicians of
old were much more honest and direct than the weasels and thieves and
traitors we have in office today, so their laws told the truth plainly.
It wasn't until the socialists began to take over starting in 1913 and
peaking with Franklin Roosevelt in the 1930's that the I.R.C. really started to show
signs of willful deceit. Below are two very old definitions of
"gross income" that show the truth plainly to prove our point.
These versions did not use the "trade or business" trick so they had to
state the truth plainly:
You can also look at
our resource on “gross income”, which includes the above, at:
What about those who
are smart enough to avoid the “trade or business” scam by properly
declaring their status as:
-
“nonresident aliens”
-
No
income “effectively connected with a trade or business”
-
No
sources of income inside the “United States” (District
of Columbia)?
How does the IRS trap
them? The IRS tricks them into volunteering into their jurisdiction
using the IRS form W-4. The regulations say that those who submit an
IRS form W-4:
1.
MUST include all earnings listed on the W-2 as “gross income” on their
tax return under
26 CFR §31.3402(p)-1.
2.
Are consenting to be bound by a private legal “contract” between you and
the government under
26 CFR §31.3402(p)-1. It doesn’t say that on the
form, but the regulations tell the truth plainly. The form itself
simply identifies itself as an “Employee Withholding Allowance
Certificate” and nowhere uses the word “agreement” or “contract”. The
reason it doesn’t is because the government doesn’t want you to know
that you are signing a binding contract or that you have the choice NOT
to sign or consent to it. This is obviously entrapment and does not
constitute informed consent, but fraud.
Here is the regulation that proves this:
Title 26
CHAPTER I
SUBCHAPTER C
PART 31
Subpart E
Sec. 31.3402(p)-1 Voluntary withholding agreements.
(a) In
general.
An employee and his employer may enter into an agreement
under section 3402(b) to provide for the withholding of income tax
upon payments of amounts described in paragraph (b)(1) of Sec.
31.3401(a)-3, made after December 31, 1970. An agreement may
be entered into under this section only with respect to amounts
which are includible in the gross income of the employee under
section 61, and must be applicable to all such amounts paid by the
employer to the employee. The amount to be withheld pursuant
to an agreement under section 3402(p) shall be determined under the
rules contained in section 3402 and the regulations thereunder. (b)
Form and duration of agreement. (1)(i) Except as provided in
subdivision (ii) of this subparagraph, an employee who desires to
enter into an agreement under section 3402(p) shall furnish his
employer with Form W-4 (withholding exemption certificate) executed
in accordance with the provisions of section 3402(f) and the
regulations thereunder. The furnishing of such Form W-4 shall
constitute a request for withholding.
Remember, however, that no law or court or
government has the power to interfere with your right to contract. Here
is what the U.S. Supreme Court says on this subject:
"Independent of these views, there are
many considerations which lead to the conclusion that the power to
impair contracts [either
the Constitution or the
Holy Bible], by direct action to that end, does not exist
with the general [federal] government. In the first
place, one of the objects of the Constitution, expressed in its
preamble, was the establishment of
justice, and what that meant in its relations to contracts is not
left, as was justly said by the late Chief Justice, in Hepburn v.
Griswold, to inference or conjecture.
As he observes, at the time the
Constitution was undergoing discussion in the convention, the
Congress of the Confederation was engaged in framing the ordinance
for the government of the Northwestern Territory, in which certain
articles of compact were established between the people of the
original States and the people of the Territory, for the purpose, as
expressed in the instrument, of extending the fundamental principles
of civil and religious liberty, upon which the States, their laws
and constitutions, were erected. By that ordinance it was
declared, that, in the just preservation of rights and property, 'no
law ought ever to be made, or have force in the said Territory, that
shall, in any manner, interfere with or affect private contracts or
engagements bona fide and without fraud previously formed.'
The same provision, adds the Chief Justice, found more condensed
expression in the prohibition upon the States [in Article 1, Section
10 of the Constitution] against impairing the obligation of
contracts, which has ever been recognized as an efficient safeguard
against injustice; and though the prohibition is not applied in
terms to the government of the United States, he expressed the
opinion, speaking for himself and the majority of the court
at the time, that it was clear 'that those who framed and
those who adopted the Constitution intended that the spirit of this
prohibition should pervade the entire body of legislation, and that
the justice which the Constitution was ordained to establish was not
thought by them to be compatible with legislation [or judicial
precedent] of an opposite tendency.' 8 Wall. 623. [99 U.S.
700, 765] Similar views are found expressed in the opinions of
other judges of this court."
[Sinking
Fund Cases, 99 U.S. 700 (1878)]
________________________________________________________________________________
"A state can no more impair the obligation of
a contract by her organic law [constitution] than by legislative
enactment; for her constitution is a law within the meaning of
the contract clause of the national constitution. Railroad Co.
v. [115 U.S. 650, 673] McClure, 10 Wall. 511; Ohio Life Ins. & T.
Co. v. Debolt, 16 How. 429; Sedg. St. & Const. Law, 637 And the
obligation of her contracts is as fully protected by that instrument
against impairment by legislation as are contracts between
individuals exclusively. State v. Wilson, 7 Cranch, 164;
Providence Bank v. Billings, 4 Pet. 514; Green v. Biddle, 8 Wheat.
1; Woodruff v. Trapnall, 10 How. 190; Wolff v. New Orleans,
103 U.S. 358 ."
[New
Orleans Gas Company v. Louisiana Light Company, 115 U.S. 650 (1885)]
Neither states of the Union nor the federal
government can therefore use their jurisdiction to protect you if you
abuse your power to contract by signing a W-4 that gives away all your
rights or sovereignty. Under Article 4, Section 3, Clause 2 of the
Constitution, the federal government has jurisdiction over its own
employees and property wherever they may be found, including in places
where it otherwise has no legislative jurisdiction. Consequently, it
has exclusive jurisdiction over all those who sign a W-4 wherever they
may be found. The jurisdiction is “in rem” over all such “property”.
In law, all rights are property. Anything that
conveys rights is also property. Contracts convey rights and therefore
are property. All franchises are contracts and therefore also are
“property”. A “trade or business”/”public office” is a franchise and
therefore is also “property” within the meaning of Article 4, Section 3,
Clause 2 of the United States Constitution. These facts are the ONLY
reason why the United States District Courts, which were established
pursuant to Article 4, Section 3, Clause 2 of the United States
Constitution are even able to hear income tax cases: because they
relate to federal franchises.
Sneaky, huh? That is why we repeatedly say DO NOT file form W-4’s to
stop withholding with your private employer. Use ONLY the modified form
W-8BEN, or you are asking for BIG trouble and walking right into their
trap, folks! Below is a link that will show you how to fill out
the W-8BEN properly, if you choose to use it.
Additional information
beyond that above about how to handle tax withholding paperwork is also
available in the following free book:
A person domiciled in a state of the Union who has
identified him or herself properly with their private employer as a
"nonresident alien" (NRA) by filing the amended W-8BEN as we suggest,
and who has had his earnings involuntarily withheld by his private
employer is put into the unfortunate position of having to file a return
to get the wrongfully withheld earnings back. Usually, they will
incorrectly file the wrong form, the 1040, instead of the proper form
1040NR, and thereby make themselves effectively into a "resident
alien". This gives the IRS jurisdiction over them because they are then
treated as maintaining a domicile in the District of Columbia. The IRS
will then drag their feet refunding the wrongfully withhold earnings,
forcing the NRA to take deductions and apply a graduated rate to reduce
the withholding, which effectively forces them into perjuring themselves
on a tax form just to get back the earnings that always were theirs to
begin with.
How can we know if the
IRS thinks we are involved in a “trade or business”? Here is how,
within the context of Subtitle A of the I.R.C.:
1. Only people who are engaged in a “trade or business” are subject to the
graduated rate of tax.
See
26 U.S.C. §871(b)
2. All income from within the District of Columbia, which is the “United
States” under the I.R.C. section
7701(a)(9) and (a)(10), must be treated as “effectively connected
with a trade or business in the
United States”, according to
26 U.S.C. §864(c )(3). That’s right: it is a “privilege” under
26 U.S.C. §864(c)(3) to simply “live” and earn “income” in the District
of Columbia. Here is what it says:
TITLE 26 >
Subtitle A >
CHAPTER 1 >
Subchapter N >
PART I > § 864
§864. Definitions and special rules
(c)
Effectively connected income, etc.
(3) Other income from sources within United
States
All income, gain, or loss from sources
within the United States (other than income, gain, or loss to
which paragraph (2) applies) shall be treated as effectively
connected with the conduct of a trade or business within the
United States.
3. Only people who are engaged in a “trade or business” can claim
deductions on their “return”. Otherwise, they can't.
See
26 U.S.C. §162
for proof.
4.
Only people who are engaged
in a “trade or business” can owe a tax and therefore be the target of a
Substitute For Return (SFR), which is an assessment that in most cases
is illegally executed by the IRS.
5.
Only "Citizens" or "residents" who file a 1040 and put a nonzero amount for income can be
connected to a "trade
or business within the
United States" .
6.
Only "Nonresident aliens" who file a 1040NR form and put a nonzero amount for “trade
or business” income can be connected to a "trade
or business within the
United States".
7. Only people who complete, voluntarily sign, and submit a W-4 and thereby
identify themselves as federal "employees"
can be connected to a "trade
or business". 26 CFR 31.3401(c )-1 identifies all
federal "employees"
as "public
officers". All "public officers" are by definition engaged in
a "trade or business".
8. Those
who receive Social Security Benefits.
26 U.S.C. §861(a)(8) says that
Social Security benefits received must be included in “gross income”
from “sources within the
United States”. Indirectly, they also must be
saying that such earnings are to be treated as “effectively connected
with a trade or business”, because
26 U.S.C. §7701(a)(31) says that if
these earnings were not connected with a trade or business, then they
cannot be reported as "gross income" and are part of a “foreign estate”
not subject to the code.
26 U.S.C. §871(a)(3), on the other hand, associates Social Security
benefits received by "nonresident aliens" with OTHER than a "trade or
business" and also makes them reportable and taxable as "gross income".
Those who avail
themselves of any of the above government “privileges” are
presumed to be
“taxpayers” as far as the IRS is concerned. It’s a “privilege” to have
deductions and pay a usually lower graduated rate of tax on earnings
that are otherwise “taxable”.
This doesn’t mean they are
“taxpayers” for ALL their earnings, but only for those in which the above
activities are undertaken. It's a privilege to
receive federal Socialist Security, Medicare, and FICA benefits, and
only those who consent to be treated as federal "employees" can receive
them. In effect, the government is exploiting
people's ignorance and greed in the pursuit of exemptions or tax
reductions or benefits they don’t need in order to transform "nontaxpayers" into
"taxpayers". Here is how one Congressman described this kind of very
devious exploitation:
“Objections to its [the income tax] renewal are
long, loud, and general throughout the country. Those who pay are
the exception, those who do not pay are millions; the whole moral
force of the law is a dead letter. The honest man makes a true
return; the dishonest hides and covers all he can to avoid this
obnoxious tax. It has no moral force. This tax is unequal,
perjury-provoking and crime encouraging, because it is a war with
the right of a person to keep private and regulate his business
affairs and financial matters. Deception, fraud, and falsehood mark
its progress everywhere in the process of collection. It creates
curiosity, jealousy, and prejudice among the people. It makes the
tax-gatherer a spy…The people demand that it shall not be renewed,
but left to die a natural death and pass away into the future as
pass away all the evils growing out of the Civil War.”
[Congressional Globe, 41st Congress, 2d Session, 3993
(1870)]
Those “taxpayers” in
receipt of taxable privileges or “nontaxpayers” who are too stupid to
know that they don’t need to become a “taxpayer” in order to receive a
“privilege” they don’t need should definitely pay for the
“privilege” they are taking advantage of. Therefore, if you are a
nonresident alien not engaged in a “trade or business” and
any one of the above conditions applies to you, then the IRS is
ASSUMING, usually wrongfully, that you are engaged in a “trade or
business” or have income under
26 U.S.C. §871(a) originating from the District of Columbia that is
not connected with a “trade or business”. The great irony of this whole
fraudulent federal “scheme” is that those who were otherwise
“nontaxpayers” and never had any “gross income” to begin with, in effect
were fooled by deceptive IRS publications and phone advice into:
1.
Falsely believing that their income was “taxable” and that they were
“taxpayers”.
2.
Falsely believing that because they were “taxpayers” with “taxable
income”, then they needed deductions to reduce their liability.
3.
Volunteering to make themselves into “taxpayers” to procure federal
“privileges” called “deductions” that they never needed to begin with,
but which the IRS was too dishonest to remind them that they didn’t
need. Once they took these deductions, they became “taxpayers” even if
they weren’t before.
The Bible describes
this GREAT deception and fraud as follows:
For thus
says the LORD:
"You have sold yourselves for nothing,
And you shall be redeemed without money."
[Isaiah
52:3, Bible, NKJV]
We call the above “government
instituted slavery using privileges” or simply “privilege-induced
slavery” earlier in section 4.3.12. Those with liberal arts degrees in
business from prestigious but amoral or immoral universities might
euphemistically refer to this devious brand of exploitation simply as
“clever marketing”, but in the end, it amounts to deceit in commerce,
which the Bible says is the gravest of sins which God hates most of all
sins:
"As religion towards God is a branch of
universal righteousness (he is not an honest man that is not
devout), so righteousness towards men is a branch of true
religion, for he is not a godly man that is not honest, nor
can he expect that his devotion should be accepted; for,
1. Nothing is more offensive to God than
deceit in commerce. A false balance is here put for all manner of
unjust and fraudulent practices [of our public dis-servants] in
dealing with any person [within the public], which are all an
abomination to the Lord, and render those abominable [hated] to him
that allow themselves in the use of such accursed arts of thriving.
It is an affront to justice, which God is the patron of, as well as
a wrong to our neighbour, whom God is the protector of.
Men [in the IRS and the Congress] make light of such frauds, and
think there is no sin in that which there is money to be got by,
and, while it passes undiscovered, they cannot blame themselves for
it; a blot is no blot till it is hit, Hos. 12:7, 8. But they are not
the less an abomination to God, who will be the avenger of those
that are defrauded by their brethren.
2. Nothing is more pleasing to God than
fair and honest dealing, nor more necessary to make us and our
devotions acceptable to him: A just weight is his delight.
He himself goes by a just weight, and holds the scale of judgment
with an even hand, and therefore is pleased with those that are
herein followers of him.
A [false] balance, [whether
it be in the federal courtroom or
at the IRS
or
in the
marketplace,] cheats, under pretence of doing
right most exactly, and therefore is the greater abomination to
God."
[Matthew Henry’s Commentary on the Whole Bible;
Henry, M., 1996, c1991, under Prov. 11:1]
Of I.R.C. Subtitle A income
taxes, the U.S. Supreme Court has said:
"...the requirement to pay [excise] taxes involves the exercise
of privilege."
[Flint vs. Stone Tracy Co.,
220 U.S. 107 (1911)]
_________________________________________
“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 by generalizing the many contentions advanced in
argument to support it...”
“[Taxation of "income" is] in its nature an excise entitled to be
enforced as such unless and until it was concluded that to enforce
it would amount to accomplishing the result which the requirement as
to apportionment of direct taxation was adopted to prevent, in which
case the duty would arise to disregard form and consider substance
alone, and hence subject the tax to the regulation as to
apportionment which otherwise as an excise would not apply to it”
(That is, if the "income" tax ever comes to be administered as
something other than an excise, or on something unsuited to an
excise, the rule of apportionment must be applied.)
[Brushaber v. Union Pacific R. Co.,
240 U.S. 1 (1916)]
_________________________________________
"The provisions of the Sixteenth Amendment conferred no new power
of taxation . . ."
[Stanton v. Baltic Mining Co.,
240 U.S. 103 (1916)]
_________________________________________
“The Sixteenth Amendment, although referred to in argument, has
no real bearing and may be put out of view. As pointed out in recent
decisions, it does not extend the taxing power to new or excepted
subjects...”
[Peck v. Lowe,
247 U.S. 165 (1918)]
_________________________________________
"We must reject… …the broad contention submitted in behalf of the
government that all receipts-- everything that comes in-- are
income…”
[So. Pacific v. Lowe,
247 U.S. 330 (1918)]
Therefore,
Subtitle A of the I.R.C. describes an
indirect excise tax upon “privileges”. If it ain’t a privilege, then
they can’t tax it. Neither can the government lawfully tax the exercise
of a right, such as the right to work and support yourself, unless that
right is exercised coincident with a “privilege” of federal employment,
agency, or benefits.
"PRIVILEGE: A
particular benefit or advantage enjoyed by a person, company, or
class beyond the common advantages of others citizens. An
exceptional or extraordinary power of exemption. A particular right,
advantage, exemption, power, franchise, or immunity held by a person
or class, not generally possessed by others."
[Black's Law Dictionary,
6th Ed., p. 1197]
“It has been well said
that 'the property which every man has in his own labor, as it is
the original foundation of all other property, so it is the most
sacred and inviolable. The patrimony of the poor man lies in the
strength and dexterity of his own hands, and to hinder his employing
this strength and dexterity in what manner he thinks proper, without
injury to his neighbor, is a plain violation of this most sacred
property’.”
[Butcher Union Co. v.
Crescent City Co.,
111 U.S. 746 (1883)]
”Included in the right
of personal liberty and the right of private property- partaking of
the nature of each- is the right to make contracts for the
acquisition of property. Chief among such contracts is that of
personal employment, by which labor and other services are exchanged
for money or other forms of property”
[Coppage v. Kansas,
236 U.S. 1 (1915)]
“Every man has a natural
right to the fruits of his own labor, is generally admitted; and
no other person can rightfully deprive him of those fruits, and
appropriate them against his will…”
[The Antelope,
23 U.S. 66; 10 Wheat 66; 6 L.Ed. 268 (1825)]
Now that we have thoroughly
analyzed why Subtitle A of the Internal Revenue Code describes an
“excise” tax on a taxable activity called a “trade or business” and why
it is NOT a “direct” tax within the meaning of the Constitution, we are
now ready to deal with one last important issue that generates a lot of
questions in people’s minds. Recall from discussion earlier in section
5.1.5
and following that we said that Subtitle A is not only an “excise tax”
but that it is “indirect”. An “indirect” excise tax falls
on artificial entities and not directly upon natural
persons. Most people have a hard time viewing IRC Subtitle A donations
as being “indirect” because we pay them personally to the I.R.S. rather
than as an agent of a separate artificial entity or business. So how
then is
I.R.C. Subtitle A in truth and in fact “indirect”? We have
prepared a table to clarify all the reasons why
Subtitle A of the
Internal Revenue Code meets all the criteria for being an “indirect
excise” as we have said previously:
Table 5-41: What makes
IRC Subtitle A an
Indirect
Excise Tax
|
# |
Characteristics of indirect
excise taxes |
Description |
|
1 |
Taxable privilege |
Exercising a “public office”, which is called a
“trade or business” in
26 U.S.C. §7701(a)(26). |
|
2 |
“License” that identifies us as engaging in the
privilege |
1.
Filing a W-4
with your private employer. When you file a W-4, you signed an
“agreement”/contract (see
26 CFR §31.3401(a)-3 ). This
agreement made you into a recipient, “transferee”, and
“fiduciary” over payments to the federal government under
26
U.S.C. §6901 . It also constituted an
agreement under
26 CFR §31.3402(p)-1 to include all of your
earnings from the employer receiving the W-4 on a tax “return”
as “gross income”. Your private employer is no longer paying
you directly and you effectively become a “subcontractor” to the
U.S. government, who is your intermediary and real “employer”.
Instead, your private employer is paying a “strawman” or
artificial entity called a federal “employee” acting on behalf
of the government as a “transferee” and “fiduciary”. The all
caps name on the W-4 and the SSN associated with the all caps
name is the “res” or artificial entity that describes the
federal subcontractor that you are representing. The SSN or TIN
and the all caps “strawman” name on the pay stub that your
private employer gives you is evidence that the payment is a
payment to the federal government which is federal property
because this number can only used for keeping track of federal
payments and “receipts”. The money your private employer pays
you are “earnings” of a U.S. government subcontractor. Recall
that “income”, within the meaning of the Constitution is
“corporate profit”. The U.S. government is described as a
“federal corporation” in
28 U.S.C. §3002(15)(A). The “profit”
of this federal corporation is the “tax” deducted from the
payment and “returned” to the corporation using a tax “return”.
The SSN is a vehicle the government uses to keep track of
federal payments and federal subcontractors called “employees”
who are managing these payments and returning “taxes”, which are
“corporate profit” payments, to their rightful owner.
2.
Filing a form 1040 rather than
the correct 1040NR. The IRS Published
Products catalog says this form can only be filed by “citizens
or residents of the United States”, all of whom are living ONLY
in the District of Columbia (see
26 U.S.C. §7701(a)(38)). Under
26 U.S.C. §864(c )(3), all earnings within the District of
Columbia are “effectively connected with a trade or business”,
so you must be engaged in a “trade or business”
whether you realize it or not if you file form 1040 instead of
the proper form 1040NR. |
|
3 |
License number |
Taxpayer Identification Number (TIN) or Social
Security Number (SSN) |
|
4 |
How privilege is exercised |
1.
Receiving payments destined for the federal government from
private parties, like employers and financial institutions.
These payments are public property that can only be handled by
“public officers”.
2.
Ability to claim deductions on tax return.
3.
Ability to apply graduated rate rather than fixed rate.
4.
Ability to claim exemptions and earned income credit on a tax
return.
5.
Living in the District of Columbia |
|
5 |
Affect of accepting privilege |
1.
Acting as a “transferee”, “fiduciary”, and “trustee” over
payments made to the federal government.
2.
Lose
control over earnings. They don’t become yours until the
federal overpayment is returned in the form of a
“tax”/”kickback”.
3.
Subject to federal jurisdiction because in custody of federal
overpayment. Jurisdiction is “in rem” under Article 4, Section
3. Clause 2 of the Constitution.
4.
IRS
can enforce I.R.C. without implementing regulations. See
44
U.S.C. §1501(a)(1),
5 USC §552(a)(1),
5 USC §553(a)(2). |
|
6 |
Why tax is an excise tax |
The tax is on an activity that can be avoided and
therefore is not direct. If you don’t want to pay the tax, then
don’t exercise any of the “privileges” associated with a “trade
or business” listed in item 2 above. |
|
7 |
Why tax is “indirect” |
Because the “tax” is treated as a kickback of a
federal overpayment. Between the time the overpayment is
received and the time it is “returned” as a “tax” to the U.S.
government, the recipient is a “transferee” and a “trustee” and
a “fiduciary” over federal funds and is not acting
on his own behalf. |
|
8 |
Tax measured by |
Taxable income, which is “gross income” minus
deductions and exemptions. |
A picture is worth a
thousand words. Below is a diagram showing the condition of those who
are employed by private employers and who have consented to participate
in the federal tax system by completing a W-4. This diagram shows
graphically the relationships described in the table above.
Figure 5-2: Employment arrangement of those
involved in a "trade or business"
 NOTES ON ABOVE
DIAGRAM:
1.
The “tax” is not paid by you, but by your “strawman”, who is a federal
“public officer” engaged in a “trade or business” as defined in
26
U.S.C. §7701(a)(26). That “public officer” you
volunteered to represent is working as a federal
“employee” who is part of the United States government, which is defined
as a federal corporation in
28 U.S.C. §3002(15)(A). In that sense, the
“tax” is indirect, because you don’t pay it, but your strawman, who is a
“public officer”, pays it to your “employer”, the federal government,
which is a federal corporation.
2.
Because you are presumed by the IRS to be a federal “employee” and you work for an
unspecified and unidentified federal
corporation, then you are acting as an “officer or employee of a federal
corporation” and you:
2.1.
Are the proper subject of the penalty statutes, as defined under
26
U.S.C. §6671(b).
2.2.
May have the code enforced against you without implementing regulations
as required by 44 U.S.C. §1505(a)(1) and
5 U.S.C. §553(a)(2)
3.
The “activity” of performing a “trade or business” is only “taxable”
when executed in the District of Columbia, which is what the “United
States” is defined as in
26 U.S.C. §7701(a)(9) and (a)(10). See
26
U.S.C. §864 and this section for evidence.
4.
Those who file form 1040 instead of the proper form 1040NR provide
evidence under penalty of perjury that they live in the District of
Columbia. The IRS Published Products catalog says the form can only be
used for “citizens or residents” of the “United States”, which is
defined as the “District of Columbia” in the code.
The subject of exactly what constitutes a “public
office” within the meaning described in
26 U.S.C. §7701(a)(26) is not
defined in any IRS publication we could find. The reason is quite
clear: the “trade or business” scam is the Achilles heal of the IRS
fraud and both the IRS and the Courts are loath to even talk about it
because there is nothing they can defend themselves with other than
unsubstantiated presumption created by the abuse of the word “includes”
and certain key “words of art”. Therefore, those who want to know how
they could lawfully be classified as a “public office” will have to answer
that question completely on their own, which is what we will attempt to
do in this section.
We begin our search with a definition of “public
office” from Black’s Dictionary:
Public office. The right, authority, and duty
created and conferred by law, by which for a given period, either
fixed by law or enduring at the pleasure of the creating power, an
individual is invested with some portion of the sovereign functions
of government for the benefit of the public. Walker v. Rich, 79
Cal.App. 139, 249 P. 56, 58. An agency for the state, the duties of
which involve in their performance the exercise of some portion of
the sovereign power, either great or small. Yaselli v. Goff, C.C.A.,
12 F.2d 396, 403, 56 A.L.R. 1239; Lacey v. State, 13 Ala.App. 212,
68 So. 706, 710; Curtin v. State, 61 Cal.App. 377, 214 P. 1030,
1035; Shelmadine v. City of Elkhart, 75 1nd.App. 493, 129 N.E. 878.
State ex rel. Colorado River Commission v. Frohmiller, 46 Ariz. 413,
52 P.2d 483, 486. Where, by virtue of law, a person Is clothed, not
as an incidental or transient authority, but for such time as de-
notes duration and continuance, with Independent power to control
the property of the public, or with public functions to be exercised
in the supposed interest of the people, the service to be
compensated by a stated yearly salary, and the occupant having a
designation or title, the position so created is a public office.
State v. Brennan, 49 Ohio St. 33. 29 N.E. 593.
[Black’s Law Dictionary,
Fourth Edition, p. 1235]
Black’s Law Dictionary Sixth Edition further
clarifies the meaning of a “public office” below:
“Essential characteristics of a ‘public office’ are:
(1)
Authority conferred by law,
(2)
Fixed tenure of office, and
(3)
Power to exercise some of the sovereign functions of government.
Key
element of such test is that “officer is carrying out a sovereign
function. Spring v. Constantino, 168 Conn. 563, 362 A.2d 871, 875.
Essential elements to establish public position as ‘public office’
are:
Position must be created by Constitution, legislature, or through
authority conferred by legislature.
Portion of sovereign power of government must be delegated to
position,
Duties
and powers must be defined, directly or implied, by legislature or
through legislative authority.
Duties
must be performed independently without control of superior power
other than law, and
Position must have some permanency.”
[Black’s
Law Dictionary, Sixth Edition, p. 1230]
American Jurisprudence Legal Encyclopedia further
clarifies what a “public office” is as follows:
“As expressed otherwise, the powers delegated to
a public officer are held in trust for the people and are to be
exercised in behalf of the government or of all citizens who may
need the intervention of the officer.
Furthermore, the view has been expressed that all public
officers, within whatever branch and whatever level of government,
and whatever be their private vocations, are trustees of the people,
and accordingly labor under every disability and prohibition imposed
by law upon trustees relative to the making of personal financial
gain from a discharge of their trusts.
That is, a public officer occupies a fiduciary relationship to
the political entity on whose behalf he or she serves.
and owes a fiduciary duty to the public.
It has been said that the fiduciary responsibilities of a public
officer cannot be less than those of a private individual.
Furthermore, it has been stated that any enterprise undertaken by
the public official which tends to weaken public confidence and
undermine the sense of security for individual rights is against
public policy.”
[63C Am.Jur.2d, Public
Officers and Employees, §247]
State ex rel. Nagle v Sullivan, 98
Mont 425, 40 P2d 995, 99 ALR 321; Jersey City v Hague, 18
NJ 584, 115 A2d 8.
Georgia Dep't of Human Resources v
Sistrunk, 249 Ga 543, 291 SE2d 524. A public official is
held in public trust. Madlener v Finley (1st Dist) 161 Ill
App 3d 796, 113 Ill Dec 712, 515 NE2d 697, app gr 117 Ill
Dec 226, 520 NE2d 387 and revd on other grounds 128 Ill 2d
147, 131 Ill Dec 145, 538 NE2d 520.
Chicago Park Dist. v Kenroy, Inc., 78
Ill 2d 555, 37 Ill Dec 291, 402 NE2d 181, appeal after
remand (1st Dist) 107 Ill App 3d 222, 63 Ill Dec 134, 437
NE2d 783.
United States v Holzer (CA7 Ill) 816
F2d 304 and vacated, remanded on other grounds 484 US
807, 98 L Ed 2d 18, 108 S Ct 53, on remand (CA7 Ill) 840
F2d 1343, cert den 486 US 1035, 100 L Ed 2d 608, 108 S Ct
2022 and (criticized on other grounds by United States v
Osser (CA3 Pa) 864 F2d 1056) and (superseded by statute on
other grounds as stated in United States v Little (CA5 Miss)
889 F2d 1367) and (among conflicting authorities on other
grounds noted in United States v Boylan (CA1 Mass) 898 F2d
230, 29 Fed Rules Evid Serv 1223).
Chicago ex rel. Cohen v Keane, 64 Ill
2d 559, 2 Ill Dec 285, 357 NE2d 452, later proceeding (1st
Dist) 105 Ill App 3d 298, 61 Ill Dec 172, 434 NE2d 325.
Indiana State Ethics Comm'n v Nelson
(Ind App) 656 NE2d 1172, reh gr (Ind App) 659 NE2d 260, reh
den (Jan 24, 1996) and transfer den (May 28, 1996).
Ordinary or common-law employees of the government
also do not qualify as “public officers”:
Treatise on the Law
of Public Offices and Officers
Book 1: Of the Office and the Officer: How Officer Chosen and
Qualified
Chapter I: Definitions and Divisions
§2 How Office Differs from Employment.-A
public office differs in material particulars from a public
employment, for, as was said by Chief Justice MARSHALL,
"although an office is an employment, it does not follow that
every employment is an office. A man may certainly be employed
under a contract, express or implied, to perform a service
without becoming an officer."
"We apprehend that the term 'office,'" said
the judges of the supreme court of Maine, "implies a delegation
of a portion of the sovereign power to, and the possession of it
by, the person filling the office; and the exercise of such
power within legal limits constitutes the correct discharge of
the duties of such office. The power thus delegated and
possessed may be a portion belonging sometimes to one of the
three great departments and sometimes to another; still it is a
legal power which may be rightfully exercised, and in its
effects it will bind the rights of others and be subject to
revision and correction only according to the standing laws of
the state. An employment merely has none of these distinguishing
features. A public agent acts only on behalf of his principal,
the public, whoso sanction is generally considered as necessary
to give the acts performed the authority and power of a public
act or law. And if the act be such as not to require
subsequent sanction, still it is only a species of service
performed under the public authority and for the public good,
but not in the exercise of any standing laws which are
considered as roles of action and guardians of rights."
"The officer is distinguished from the
employee," says Judge COOLEY, "in the greater importance,
dignity and independence of his position; in being required to
take an official oath, and perhaps to give an official bond; in
the liability to be called to account as a public offender for
misfeasance or non-feasance in office, and usually, though not
necessarily, in the tenure of his position. In particular cases,
other distinctions will appear which are not general."
[A Treatise on the Law of Public Offices and Officers, Floyd
Russell Mechem, 1890, pp. 3-4, §2;
SOURCE:
http://books.google.com/books?id=g-I9AAAAIAAJ&printsec=titlepage]
United States v. Maurice, 2 Brock. (U.S.C.C.) 96.
Opinion of Judges, 8 Greenl. (Me.) 481.
Throop v. Langdon, 40 Mich. 678, 682; “An office is a public
position created by the constitution or law, continuing during
the pleasure of the appointing power or for a fixed term with a
successor elected or appointed. An employment is an agency for
a temporary purpose which ceases when that purpose is
accomplished. “ Cons. Ill., 1870, Art. 5, §24.
Based on the
foregoing, one cannot be a “public officer” if:
1.
There is not a statute or constitutional
authority that specifically creates the office. All “public offices”
can only be created through legislative authority.
2.
Their duties are not specifically and exactly
enumerated in some Act of Congress.
3.
They have a boss or immediate supervisor. All
duties must be performed INDEPENDENTLY.
4.
They have anyone but the law and the courts to
immediately supervise their activities.
5.
They are serving as a “public officer” in a
location NOT specifically authorized by the law. The law must create
the office and specify exactly where it is to be exercised.
4 U.S.C.
§72 says ALL public offices of the federal and national
government MUST be exercised ONLY in the District of Columbia and not
elsewhere, except as expressly provided by law.
6.
Their position does not carry with it some kind
of fiduciary duty to the “public” which in turn is documented in and
enforced by enacted law itself.
7.
The beneficiary of their fiduciary duty is other
than the “public”. Public service is a public trust, and the
beneficiary of the trust is the public at large and not any one specific
individual or group of individuals. See
5 CFR
§2635.101(b) and
Executive Order 12731.
All public officers must take an oath. The oath,
in fact, is what creates the fiduciary duty that attaches to the
office. This is confirmed by the definition of "public official"
in Black's Law Dictionary:
"Public
Official. A person who,
upon being issued a commission, taking required oath,
enters upon, for a fixed tenure, a position called an office where
he or she exercises in his or her own right some of the attributes
of sovereign he or she serves for benefit of public. Macy v.
Heverin, 44 Md.App. 358, 408 A.2d 1067, 1069. The holder of a
public office though not all persons in public employment are public
officials, because public official's position requires the exercise
of some portion of the sovereign power, whether great or small.
Town of Arlington v. Bds. of Conciliation and Arbitration, Mass.,
352 N.E.2d 914."
[Black's Law
Dictionary, Sixth Edition, p. 1230]
The oath
for United States federal and state officials was prescribed in the very
first enactment of Congress on March 4, 1789 as follows:
Statutes at Large,
March 4, 1789
1 Stat. 23-24
SEC. 1. Be it enacted by the Senate and [Home
of] Representatives of the United States of America in Congress
assembled, That the oath or affirmation required by the sixth
article of the Constitution of the United States, shall be
administered in the form following, to wit : '' I, A, B. do solemnly
swear or affirm (as the case may be) that I will support the
Constitution of the United States." The said oath or affirmation
shall be administered within three days after the passing of this
act, by any one member of the Senate, to the President of the
Senate, and by him to all the members and to the secretary; and by
the Speaker of the House of Representatives, to all the members who
have not taken a similar oath, by virtue of a particular resolution
of the said House, and to the clerk: and in case of the absence of
any member from the service of either House, at the time prescribed
for taking the said oath or affirmation, the same shall be
administered to such member, when he shall appear to take his seat.
SEC. 2. And he it further enacted, That at the
first session of Congress after every general election of
Representatives, the oath or affirmation aforesaid, shall be
administered by any one member of the House of Representatives to
the Speaker; and by him to all the members present,
and to the clerk, previous to entering on any other
business; and to the members who shall afterwards appear, previous
to taking their seats. The President of the Senate for the time
being, shall also administer the said oath or affirmation to
each Senator who shall hereafter be elected,
previous to his taking his seat: and in any future case of a
President of the Senate. who shall not have taken the said
oath or affirmation, the same shall be administered to him by any
one of the members of the Senate.
SEC. 3. And be it further enacted. That
the members of the several State legislatures, at the next
sessions of the said legislatures, respectively, and all
executive and judicial officers of the several States, who have been
heretofore chosen or appointed, or who shall be chosen or
appointed before the first day of August next, and who shall then be
in office, shall, within one month thereafter, take the same oath or
affirmation, except where they shall have taken it before; which may
be administered by any person authorized by the law of the State, in
which such office shall be holden, to administer oaths. And
the members of the several State legislatures, and all executive and
judicial officers of the several States, who shall be chosen
or appointed after the said first day of August, shall, before they
proceed to execute the duties of their respective offices, take the
foregoing oath or affirmation, which shall be administered by the
person or persons, who by the law of the State shall be authorized
to administer the oath of office; and the person or persons so
administering the oath hereby required to be taken, shall cause a
re- cord or certificate thereof to be made, in the same manner, as,
by the law of the State, he or they shall be directed to record or
certify the oath of office.
SEC. 4. And he it further enacted, That all
officers appointed, or hereafter to be appointed under the authority
of the United States, shall, before they act in their respective
offices, take the same oath or affirmation, which shall be
administered by the person or persons who shall be authorized by law
to administer to such officers their respective oaths of office; and
such officers shall incur the same penalties in case of failure, as
shall be imposed by law in case of failure in taking their
respective oaths of office.
SEC. 5. And be it further enacted, That the
secretary of the Senate, and the clerk of the House
of Representatives for the time being, shall, at the time of
taking the oath or affirmation aforesaid, each take an oath or
affirmation in the words following, to wit : “1, A. B. secretary of
the Senate, or clerk of the House of Representatives (as the case
may be) of the United States of America, do solemnly swear or
affirm, that I will truly and faithfully discharge the duties of my
said office, to the best of my knowledge and abilities."
Based on the above,
the following persons within the government are “public officers”:
1.
Federal Officers:
1.1.
The President of the United States.
1.2.
Members of the House of Representatives.
1.3.
Members of the Senate.
1.4.
All appointed by the President of the United States.
1.5.
The secretary of the Senate.
1.6.
The clerk of the House of Representatives.
1.7.
All district, circuit, and supreme court justices.
2.
State Officers:
2.1.
The governor of the state.
2.2.
Members of the House of Representatives.
2.3.
Members of the Senate.
2.4.
All district, circuit, and supreme court justices of the
state.
At the federal level, all those engaged in the
above “public offices” are statutorily identified in
26 U.S.C. §2105.
Consistent with this section, what most people would regard as ordinary
common law employees are not included in the definition. Note the
phrase “an officer AND an individual”:
TITLE 5 >
PART III >
Subpart A >
CHAPTER 21 > § 2105
§ 2105. Employee
(a) For the
purpose of this title, “employee”, except as otherwise provided by
this section or when specifically modified, means an officer
and an individual who is—
(1)
appointed in the civil service by one of the following acting in an
official capacity—
(A) the
President;
(B) a Member or Members of Congress, or the Congress;
(C) a member of a uniformed service;
(D) an individual who is an employee under this section;
(E) the head of a Government controlled corporation; or
(F) an adjutant general designated by the Secretary concerned
under section 709 (c) of title 32;
(2) engaged
in the performance of a Federal function under authority of law or
an Executive act; and
(3) subject to the supervision of an individual named by paragraph
(1) of this subsection while engaged in the performance of the
duties of his position.
The “public offices” described in
26 U.S.C.
§7701(a)(26) within the definition of “trade or business” are ONLY
public offices located in the District of Columbia and not elsewhere.
To wit:
TITLE 4 >
CHAPTER 3 > § 72
§ 72. Public offices; at seat of Government
All offices attached to the seat of government
shall be exercised in the District of Columbia, and not elsewhere,
except as otherwise expressly provided by law.
[SOURCE:
http://www4.law.cornell.edu/uscode/html/uscode04/usc_sec_04_00000072----000-.html]
The only provision of any act of Congress that we
have been able to find which authorizes “public offices” outside the
District of Columbia as expressly required by law above, is
48 U.S.C.
§1612, which authorizes enforcement of the Internal Revenue Code within
the U.S. Virgin Islands. To wit:
TITLE 48 >
CHAPTER 12 >
SUBCHAPTER V > § 1612
§ 1612. Jurisdiction of District Court
(a) Jurisdiction
The District Court of the Virgin Islands shall
have the jurisdiction of a District Court of the United States,
including, but not limited to, the diversity jurisdiction provided
for in section
1332 of title
28 and that of a bankruptcy court of the United States.
The District Court of the Virgin Islands shall have exclusive
jurisdiction over all criminal and civil proceedings in the Virgin
Islands with respect to the income tax laws applicable to the Virgin
Islands, regardless of the degree of the offense or of the amount
involved, except the ancillary laws relating to the income tax
enacted by the legislature of the Virgin Islands. Any act or
failure to act with respect to the income tax laws applicable to the
Virgin Islands which would constitute a criminal offense described
in chapter
75 of subtitle
F of title
26 shall constitute an offense against the government of the
Virgin Islands and may be prosecuted in the name of the government
of the Virgin Islands by the appropriate officers thereof in the
District Court of the Virgin Islands without the request or the
consent of the United States attorney for the Virgin Islands,
notwithstanding the provisions of section
1617 of this title.
There is NO PROVISION OF LAW which would similarly
extend public offices or jurisdiction to enforce any provision of the
Internal Revenue Code to any place within the exclusive jurisdiction of
any state of the Union, because Congress enjoys NO LEGISLATIVE
JURISDICTION THERE.
“It is no longer open
to question that the general government, unlike the states,
Hammer v. Dagenhart,
247 U.S. 251, 275 , 38 S.Ct. 529, 3 A.L.R. 649, Ann.Cas.1918E
724, possesses no inherent power in respect of the internal
affairs of the states; and emphatically not with regard to
legislation.“
[Carter v. Carter Coal
Co.,
298 U.S. 238, 56 S.Ct. 855 (1936)]
"The difficulties
arising out of our dual form of government and the opportunities for
differing opinions concerning the relative rights of state and
national governments are many; but for a very long time this
court has steadfastly adhered to the doctrine that the taxing power
of Congress does not extend to the states or their political
subdivisions. The same basic reasoning which leads to that
conclusion, we think, requires like limitation upon the power which
springs from the bankruptcy clause. United States v. Butler, supra."
[Ashton
v. Cameron County Water Improvement District No. 1,
298 U.S. 513; 56
S.Ct. 892 (1936)]
By law then, no “public office” may therefore be
exercised OUTSIDE the District of Columbia except as “expressly provided
by law”, including privileged or licensed activities such as a “trade or
business”. This was also confirmed by the U.S. Supreme Court in the
License Tax Cases, when they said:
“Thus, Congress having power to regulate
commerce with foreign nations, and among the several States, and
with the Indian tribes, may, without doubt, provide for granting
coasting licenses, licenses to pilots, licenses to trade with
the Indians, and any other licenses necessary or proper for
the exercise of that great and extensive power; and the same
observation is applicable to every other power of Congress, to the
exercise of which the granting of licenses may be incident. All such
licenses confer authority, and give rights to the licensee.
But very different
considerations apply to the internal commerce or domestic
trade of the States. Over this commerce and trade
Congress has no power of regulation nor any direct control.
This power belongs exclusively to the States. No
interference by Congress with the business of citizens transacted
within a State is warranted by the Constitution, except such as is
strictly incidental to the exercise of powers clearly granted to the
legislature. The power to authorize a business within a State is
plainly repugnant to the exclusive power of the State over the same
subject. It is true that the power of Congress to tax is a very
extensive power. It is given in the Constitution, with only one
exception and only two qualifications. Congress cannot tax exports,
and it must impose direct taxes by the rule of apportionment, and
indirect taxes by the rule of uniformity. Thus limited, and thus
only, it reaches every subject, and may be exercised at discretion.
But, it reaches only existing subjects.
Congress cannot authorize a trade or
business within a State in order to tax it.”
[License Tax Cases,
72
U.S. 462, 18 L.Ed. 497, 5 Wall. 462, 2 A.F.T.R. 2224 (1866)]
Since
I.R.C. Subtitle A is a tax on “public
offices”, which is called a “trade or business”, then the tax can only
apply to those domiciled within the District of Columbia, wherever
they are physically located to include states of the Union, but
only if they are serving under oath in their official capacity as
“public officers”.
"Thus, the Court has frequently held that
domicile or residence, more substantial than mere presence in
transit or sojourn, is an adequate basis for taxation, including
income, property, and death taxes. Since the Fourteenth
Amendment makes one a citizen of the state wherein he resides,
the fact of residence creates universally reciprocal duties of
protection by the state and of allegiance and support by the
citizen. The latter obviously includes a duty to pay taxes, and
their nature and measure is largely a political matter. Of
course, the situs of property may tax it regardless of the
citizenship, domicile, or residence of the owner, the most obvious
illustration being a tax on realty laid by the state in which the
realty is located."
[Miller Brothers Co. v.
Maryland,
347 U.S. 340 (1954)]
Another important point needs to be emphasized,
which is that those working for the federal government, while on
official duty, are representing a federal corporation called the “United
States”, which is domiciled in the District of Columbia.
TITLE 28
>
PART VI >
CHAPTER 176 >
SUBCHAPTER A > Sec. 3002.
TITLE 28 -
JUDICIARY AND JUDICIAL PROCEDURE
PART VI -
PARTICULAR PROCEEDINGS
CHAPTER 176
- FEDERAL DEBT COLLECTION PROCEDURE
SUBCHAPTER
A - DEFINITIONS AND GENERAL PROVISIONS
Sec. 3002. Definitions
(15)
''United States'' means -
(A) a
Federal corporation;
(B) an
agency, department, commission, board, or other entity of the United
States; or
(C) an
instrumentality of the United States.
Federal
Rule of Civil Procedure 17(b) says that the capacity to sue and be
sued civilly is based on one’s domicile:
IV. PARTIES > Rule 17.
Rule 17. Parties Plaintiff and Defendant; Capacity
(b)
Capacity to Sue or be Sued.
Capacity to sue
or be sued is determined as follows:
(1)
for an individual who is not acting in a representative capacity, by
the law of the individual's domicile;
(2)
for a corporation [the “United States”, in this
case, or its officers on official duty representing the corporation],
by the law under which it was organized [laws of
the District of Columbia]; and
(3) for all
other parties, by the law of the state where the court is located,
except that:
(A) a partnership or other unincorporated association with no
such capacity under that state's law may sue or be sued in its
common name to enforce a substantive right existing under the
United States Constitution or laws; and
(B)
28 U.S.C. §§ 754 and
959(a) govern the capacity of a receiver appointed by a
United States court to sue or be sued in a United States court.
[SOURCE:
http://www.law.cornell.edu/rules/frcp/Rule17.htm]
Government employees, including “public officers”,
while on official duty representing the federal corporation called the
“United States”, maintain the character of the entity they represent and
therefore have a legal domicile of the District of Columbia within the
context of their official duties. The Internal Revenue Code also
reflects this fact in
26 U.S.C. §7701(a)(39) and
26 U.S.C. §7408(d):
TITLE 26 >
Subtitle F >
CHAPTER 79 > § 7701
§ 7701. Definitions
(a)
When used in this title, where not
otherwise distinctly expressed or manifestly incompatible with the
intent thereof—
(39) Persons residing outside United States
If any citizen or resident of the United States
does not reside in (and is not found in) any United States judicial
district, such citizen or resident shall be treated as
residing in the District of Columbia for purposes of any provision
of this title relating to—
(A) jurisdiction of courts, or
(B) enforcement of summons
_________________________________________________________________________________
TITLE 26 >
Subtitle F >
CHAPTER 76 >
Subchapter A > § 7408
§ 7408. Actions to enjoin specified conduct related to tax shelters
and reportable transactions
(d) Citizens and residents outside the United
States
If any citizen or resident of the United States
does not reside in, and does not have his principal place of
business in, any United States judicial district, such citizen or
resident shall be treated for purposes of this section as
residing in the District of Columbia.
Kidnapping and transporting the legal identity of a
person domiciled outside the District of Columbia in a foreign state,
which includes states of the Union, is illegal pursuant to
18 U.S.C. §1201. Therefore, the only people who can be legally and
involuntarily “kidnapped” by the courts based on the above two
provisions of statutory law are those who individually consent through
private contract to act as “public officials” in the execution of their
official duties. The fiduciary duty of these “public officials” is
further defined in the I.R.C. as follows, and it is only
by an oath of “public office” that this fiduciary duty can lawfully be
created:
TITLE 26 >
Subtitle F >
CHAPTER 68 >
Subchapter B >
PART I > § 6671
§ 6671. Rules for application of assessable penalties
(b) Person defined
The term “person”, as used in this subchapter,
includes an officer or employee of a corporation, or a member or
employee of a partnership, who as such officer, employee, or
member is under a duty to perform the act in respect of which the
violation occurs.
________________________________________________________________________________
TITLE 26 >
Subtitle F >
CHAPTER 75 >
Subchapter D > § 7343
§ 7343. Definition of term “person”
The term “person” as used in this chapter
includes an officer or employee of a corporation, or a member or
employee of a partnership, who as such officer, employee, or member
is under a duty to perform the act in respect of which the violation
occurs.
We remind our readers
that there is no liability statute within Subtitle A of the I.R.C.
that would create the duty documented above, and therefore the ONLY way
it can be created is by the oath of office of the “public officers” who
are the subject of the tax in question. This was thoroughly described
in the following article:
The existence of fiduciary duty of “public
officers” is therefore the ONLY lawful method by which anyone can be
prosecuted for an “omission”, which is a thing they didn’t do that the
law required them to do. It is otherwise illegal and unlawful to
prosecute anyone under either common law or statutory law for a FAILURE
to do something, such as a FAILURE TO FILE a tax return pursuant to
26 U.S.C. §7203. Below is an example of where the government
gets its authority to prosecute "taxpayers" for failure to file a tax
return, in fact:
“I: DUTY TO ACCOUNT FOR PUBLIC FUNDS
§ 909. In general.-It is the duty of the
public officer, like any other agent or trustee, although not
declared by express statute, to faithfully account for and pay over
to the proper authorities all moneys which may come into his hands
upon the public account, and the performance of this duty may be
enforced by proper actions against the officer himself, or against
those who have become sureties for the faithful discharge of his
duties.”
[A Treatise on the Law of Public Offices and officers, p. 609,
§909; Floyd Mechem, 1890;
SOURCE:
http://books.google.com/books?id=g-I9AAAAIAAJ&printsec=titlepage]
In addition to the above, every attorney admitted
to practice law in any state or federal court is described as an
“officer of the court”, and therefore ALSO is a “public officer”:
Attorney at law. An advocate,
counsel, or official agent employed in preparing, managing, and
trying cases in the courts. An officer in a court of justice, who is
employed by a party in a cause to manage it for him. In re Bergeron,
220 Mass. 472, 107 N.E. 1007, 1008, Ann.Cas.l917A, 549.
In English law. A public officer belonging to
the superior courts of common law at Westminster. who conducted
legal proceedings on behalf of others. called his clients, by whom
he was retained; he answered to the solicitor in the courts of
chancery, and the proctor of the admiralty, ecclesiastical, probate,
and divorce courts. An attorney was almost invariably also a
solicitor. It is now provided by the judicature act. 1873, 8 87.
that solicitors. Attorneys, or proctors of, or by law empowered to
practice in, any court the jurisdiction of which is by that act
transferred to the high court of justice or the court of appeal,
shall be called "solicitors of the supreme court." Wharton.
[Black’s Law Dictionary,
Fourth Edition, p. 164]
__________________________________________________________________________________
ATTORNEY AND CLIENT,
Corpus Juris Secundum Legal Encyclopedia Volume 7, Section 4
His
[the attorney’s] first duty is to the courts and the public, not to
the client, and wherever the duties to his client conflict with
those he owes as an officer of the court in the administration of
justice, the former must yield to the latter.
[7 C.J.S. Attorney and
Client, §4]
Executive Order 12731 and 5 CFR §2635.101(a)
furthermore both indicate that “public service is a public trust”:
Executive Order 12731
"Part 1 -- PRINCIPLES OF
ETHICAL CONDUCT
"Section 101. Principles of Ethical Conduct.
To ensure that every citizen can have complete confidence in the
integrity of the Federal Government, each Federal employee shall
respect and adhere to the fundamental principles of ethical service
as implemented in regulations promulgated under sections 201 and 301
of this order:
"(a) Public service is a public trust,
requiring employees to place loyalty to the Constitution, the laws,
and ethical principles above private gain.
___________________________________________________________________________________
TITLE 5--ADMINISTRATIVE PERSONNEL
CHAPTER XVI--OFFICE OF GOVERNMENT ETHICS
PART
2635--STANDARDS OF ETHICAL CONDUCT FOR EMPLOYEES OF THE EXECUTIVE
BRANCH--Table of Contents
Subpart A--General Provisions
Sec.
2635.101 Basic obligation of public service.
(a) Public service is a public trust.
Each
employee has a responsibility to the United States Government and
its citizens to place loyalty to the Constitution, laws and ethical
principles above private gain. To ensure that every citizen can
have complete confidence in the integrity of the Federal Government,
each employee shall respect and adhere to the principles of ethical
conduct set forth in this section, as well as the implementing
standards contained in this part and in supplemental agency
regulations.
The above provisions of law imply that everyone who
works for the government is a “trustee” of “We the People”, who are the
sovereigns they serve in the public. In law, EVERY “trustee” is a
“fiduciary” of the Beneficiary of the trust within which he serves:
“TRUSTEE.
The person appointed, or required by law, to execute a trust; one in
whom an estate, interest, or power is vested, under an express
or implied agreement [e.g. PRIVATE LAW or CONTRACT] to administer or
exercise it for the benefit or to the use of another called the
cestui que trust. Pioneer Mining Co. v. Ty berg,
C.C.A.Alaska, 215 F. 501, 506, L.R.A.l915B, 442; Kaehn v. St. Paul
Co-op. Ass'n, 156 Minn. 113, 194 N.W. 112; Catlett v. Hawthorne, 157
Va. 372, 161 S.E. 47, 48. Person who holds title to res and
administers it for others' benefit. Reinecke v. Smith, Ill., 53
S.Ct. 570, 289 US. 172, 77 L.Ed. 1109. In a strict sense, a
"trustee" is one' who holds the legal title to property for the
benefit of another, while, in a broad sense, the term is sometimes
applied to anyone standing in a fiduciary or confidential relation
to another. such as agent, attorney, bailee, etc. State ex rel. Lee
v. Sartorius, 344 Mo. 912, 130 S.W.2d 547, 549, 550.
"Trustee" is also used In a wide and perhaps inaccurate sense, to
denote that a person has the duty of carrying out a transaction, in
which he and another person are interested, in such manner as will
be most for the benefit of the latter, and not in such a way that he
himself might be tempted, for the sake of his personal advantage, to
neglect the interests of the other. In this sense, directors of
companies are said to be "trustees for the shareholders." Sweet.
[Black’s Law Dictionary,
Fourth Edition, p. 1684]
The fact that public service is a “public trust”
was also confirmed by the U.S. Supreme Court, when it said:
"... The
governments are but trustees acting under derived authority and have
no power to delegate what is not delegated to them. But the
people, as the original fountain might take away what they have
delegated and intrust to whom they please. ...The sovereignty in
every state resides in the people of the state and they may alter
and change their form of government at their own pleasure."
[Luther v. Borden,
48 US 1, 12 LEd 581 (1849)]
An example of someone
who is NOT a “public officer” is a federal “employee” on duty and who is
not required to take an oath. Almost invariably, such “employees” have
some kind of immediate supervisor who manages and oversees and evaluates
his activities pursuant to the position description drafted for the
position he fills. He may be a “trustee” and he may have a “fiduciary
duty” to the public as a “public servant”, but he isn’t an “officer” or
“public officer” unless and until he takes an oath of office prescribed
by law. A federal “employee”, however, can become a “public office” by
virtue of any one or more of the following purposes that we are aware of
so far:
1.
Be elected to political office.
2.
Being appointed to political office by the President or
the governor of a state of the Union.
3.
Voluntarily engaging in a privileged, excise taxable
activity called a “trade or business”, which effectively is an extension
of the federal government and is defined as a “public office” in
26
U.S.C. §7701(a)(26) . A “trade or business” is a federal
business franchise and partnership, in which you become a trustee and
public official of the United States who has donated his private
property temporarily to a “public use” for the purpose of procuring
“privileged compensation” of a public office in the form of tax
deductions under
26 U.S.C. §162, Earning income credits under
26 U.S.C.
§32, and a graduated REDUCED rate of tax under
26 U.S.C. §1. Only those engaged
in a “public office”/”trade or business” can avail themselves of any of
these pecuniary government financial incentives.
4.
Engaging in a privileged activity regulated by the
federal government, such as:
4.1.
Pursuing a license to practice law. All attorneys are
officers of the court, and all courts are part of the government and
therefore “public” entities.
4.2.
Applying for and accepting FDIC insurance as an officer
of a bank. See 31 CFR §202.2, which makes those accepting FDIC
federal insurance into agents of the federal government.
4.3.
Becoming an officer of a corporation, and only within
the context of the jurisdiction the corporation is registered in. The
officers of a state-only registered corporation would be “public
officers” only within the context of the specific state they registered
in. They would have to make application for recognition as a federal
corporation to also be “public officers” in the context of federal law.
A “public office” is not limited to a natural
person. It can also extend to an entire entity such as a corporation.
An example of an entity that is a “public office” in its entirety is a
federally chartered bank, such as the original Bank of the United States
described in Osborn v. United States, in which the U.S.
Supreme Court identified the original and first Bank of the United
States, a federally chartered bank corporation created by Congress, as a
“public office”:
All the powers of the government must be
carried into operation by individual agency, either through the
medium of public officers, or contracts made with individuals.
Can any public office be created, or does one exist, the
performance of which may, with propriety, be assigned to this
association [or trust], when incorporated? If such office exist, or
can be created, then the company may be incorporated, that they may
be appointed to execute such office. Is there any portion of the
public business performed by individuals upon contracts, that this
association could be employed to perform, with greater advantage and
more safety to the public, than an individual contractor? If there
be an employment of this nature, then may this company be
incorporated to undertake it.
There is an employment of this nature.
Nothing can be more essential to the fiscal concerns of the nation,
than an agent of undoubted integrity and established credit, with
whom the public moneys can, at all times, be safely deposited.
Nothing can be of more importance to a government, than that there
should be some capitalist in the country, who possesses the means of
making advances of money to the government upon any exigency, and
who is under a legal obligation to make such advances. For these
purposes the association would be an agent peculiarly suitable and
appropriate. [. . .]
The mere creation of a corporation, does not
confer political power or political character. So this Court decided
in Dartmouth College v. Woodward, already referred to. If I may be
allowed to paraphrase the language of the Chief Justice, I would
say, a bank incorporated, is no more a State instrument, than a
natural person performing the same business would be. If, then, a
natural person, engaged in the trade of banking, should contract
with the government to receive the public money upon deposit, to
transmit it from place to place, without charging for commission or
difference of exchange, and to perform, when called upon, the duties
of commissioner of loans, would not thereby become a public officer,
how is it that this artificial being, created by law for the purpose
of being employed by the government for the same purposes, should
become a part of the civil government of the country? Is it because
its existence, its capacities, its powers, are given by law? because
the government has given it power to take and hold property in a
particular form, and to employ that property for particular
purposes, and in the disposition of it to use a particular name?
because the government has sold it a privilege
[22
U.S. 738, 774] for a large sum
of money, and has bargained with it to do certain things; is it,
therefore, a part of the very government with which the contract is
made?
If the Bank be constituted a public
office, by the connexion between it and the government, it cannot be
the mere legal franchise in which the office is vested; the
individual stockholders must be the officers. Their
character is not merged in the charter. This is the strong point of
the Mayor and Commonalty v. Wood, upon which this Court ground their
decision in the Bank v. Deveaux, and from which they say, that cause
could not be distinguished. Thus, aliens may become public officers,
and public duties are confided to those who owe no allegiance to the
government, and who are even beyond its territorial limits.
With the privileges and perquisites of
office, all individuals holding offices, ought to be subject to the
disabilities of office. But if the Bank be a public office, and the
individual stockholders public officers, this principle does not
have a fair and just operation. The disabilities of office
do not attach to the stockholders; for we find them every where
holding public offices, even in the national Legislature, from
which, if they be public officers, they are excluded by the
constitution in express terms.
If the Bank be a public institution of such
character as to be justly assimilated to the mint and the post
office, then its charter may be amended, altered, or even abolished,
at the discretion of the National Legislature. All public offices
are created
[22
U.S. 738, 775]
purely for public purposes, and may, at any time, be modified in
such manner as the public interest may require. Public corporations
partake of the same character. So it is distinctly adjudged in
Dartmouth College v. Woodward. In this point, each Judge who
delivered an opinion concurred. By one of the Judges it is said,
that 'public corporations are generally esteemed such as
exist for public political purposes only, such as towns, cities,
parishes and counties; and in many respects they are so, although
they involve some private interests; but, strictly speaking, public
corporations are such only as are founded by the government for
public purposes, where the whole interest belongs also to the
government. If, therefore, the foundation be private, though
under the charter of the government, the corporation is private,
however extensive the uses may be to which it is devoted, either by
the bounty of the founder, or the nature and objects of the
institution. For instance, a bank, created by the government for its
own uses, whose stock is exclusively owned by the government, is, in
the strictest sense, a public corporation. So, a hospital created
and endowed by the government for general charity. But a bank, whose
stock is owned by private persons, is a private corporation,
although it is erected by the government, and its objects and
operations partake of a public nature. The same doctrine may be
affirmed of insurance, canal, bridge, and turnpike companies. In all
these cases, the uses may, in a certain sense, be called public,
but the corporations are private; as much [22 U.S.
738, 776] so, indeed, as if the franchises were vested in a
single person.[. . .]
In what sense is it an instrument of the
government? and in what character is it employed as such? Do the
government employ the faculty, the legal franchise, or do they
employ the individuals upon whom it is conferred? and what is the
nature of that employment? does it resemble the post office, or the
mint, or the custom house, or the process of the federal Courts?
The post office is established by the general
government. It is a public institution. The persons who perform its
duties are public officers. No individual has, or can acquire, any
property in it. For all the services performed, a compensation is
paid out of the national treasury; and all the money received upon
account of its operations, is public property. Surely there is no
similitude between this institution, and an association who trade
upon their own capital, for their own profit, and who have paid the
government a million and a half of dollars for a legal character and
name, in which to conduct their trade.
Again: the business conducted through the agency
of the post office, is not in its nature a private business. It is
of a public character, and the
[22
U.S. 738, 786] charge of it is
expressly conferred upon Congress by the constitution. The business
is created by law, and is annihilated when the law is repealed. But
the trade of banking is strictly a private concern. It exists and
can be carried on without the aid of the national Legislature. Nay,
it is only under very special circumstances, that the national
Legislature can so far interfere with it, as to facilitate its
operations.
The post office
executes the various duties assigned to it, by means of subordinate
agents. The mails are opened and closed by persons invested with the
character of public officers. But they are transported by
individuals employed for that purpose, in their individual
character, which employment is created by and founded in contract.
To such contractors no official character is attached. These
contractors supply horses, carriages, and whatever else is necessary
for the transportation of the mails, upon their own account. The
whole is engaged in the public service. The contractor, his horses,
his carriage, his driver, are all in public employ. But this does
not change their character. All that was private property before the
contract was made, and before they were engaged in public employ,
remain private property still. The horses and the carriages are
liable to be taxed as other property, for every purpose for which
property of the same character is taxed in the place where they are
employed. The reason is plain: the contractor is employing his own
means to promote his own private profit, and the tax collected is
from the individual, though assessed upon the
[22
U.S. 738, 787] means he uses to
perform the public service. To tax the transportation of the mails,
as such, would be taxing the operations of the government, which
could not be allowed. But to tax the means by which this
transportation is effected, so far as those means are private
property, is allowable; because it abstracts nothing from the
government; and because, the fact that an individual employs his
private means in the service of the government, attaches to them no
immunity whatever.”
[Osborn v. Bank of U.S.,
22 U.S. 738 (1824)]
The record of the
House of Representatives after the enactment of the first income tax
during the Civil War in 1862, confirmed that the income tax was upon a
“public office” and that even IRS agents, who are not “public officers”
and who are not required to take an oath, are therefore exempt from the
requirements of the revenue acts in place at the time. Read the amazing
truth for yourself:
Below is
an excerpt from that report proving our point. The Secretary of the
Treasury at the time is comparing the federal tax liabilities of postal
clerks to those of internal revenue clerks. At that time, the IRS was
called the Bureau of Internal Revenue. The office of Commissioner of
Internal Revenue was established in 1862 as an emergency measure to fund
the Civil War, which ended shortly thereafter, but the illegal
enforcement of the revenue laws continued and expanded into the states
over succeeding years:
House of Representatives, Ex. Doc. 99, 1867, pp. 1-2
39th
Congress, 2d Session
Salary Tax Upon Clerks to Postmasters
Letter form the Secretary of the Treasury
in answer to A resolution of the House of the 12th of
February, relative to salary tax upon clerks to postmasters, with
the regulations of the department
Postmasters' clerks are appointed by
postmasters, and take the oaths of office prescribed in the
2d section of the act of July 2, 1862, and in the 2d section of the
act of March 3, 1863.
Their salaries are not fixed in amount bylaw,
but from time to time the Post master General fixes the amount',
allotted to each postmaster for clerk hire, under the authority
conferred upon him by tile ninth section of the act of June 5, 1836,
and then the postmaster, as an agent for and in behalf of the United
States, determines the salary to be paid to each of his clerks.
These salaries are paid by the postmasters, acting as disbursing
agents, .from United States moneys advanced to them for this
purpose, either directly from the Post Office Department in
pursuance of appropriations made by law, or from the accruing
revenues of their offices, under the instructions of the Postmaster
General. The receipt of such clerks constitute vouchers in the
accounts of the postmasters acting as disbursing agents in the
settlements made with them by the Sixth Auditor. In the foregoing
transactions the postmaster acts not as a principal, but as an agent
of the United States, and the clerks are not in his private
employment, but in the public employment of the United States. Such
being the facts, these clerks are subjected to and required to
account for and pay the salary tax, imposed by the one
hundred and twenty-third section of the internal revenue act of June
30, 1864, as amended by the ninth section of the internal revenue
act of July 13, 1866, upon payments for services to persons in the
civil employment or service of the United States.
Copies of the regulations under which such
salary taxes are withheld and paid into the treasury to the credit
of internal revenue collection account are herewith transmitted,
marked A, b, and C. Clerks to assessors of internal revenue
[IRS agents] are appointed by the assessors. Neither law nor
regulations require them to take an oath of office, because, as the
law at present stands, they are not in the public service of the
United States, through the agency of the assessor, but are
in the private service of the assessor, as a principal, who employs
them.
The salaries of such clerks are neither fixed in
amount by law, nor are they regulated by any officer of the Treasury
Department over the clerk hire of assessors is to prescribe a
necessary and reasonable amount which shall not be exceeded in
reimbursing the assessors for this item of their expenses.
No money is advanced by the United States for
the payment of such salaries, nor do the assessors perform the
duties of disbursing agents of the United States in paying their
clerks. The entire amount allowed is paid directly to the assessor,
and he is not accountable to the United States for its payment to
his clerks, for the reason that he has paid them in advance, out of
his own funds, and this is a reimbursement to him of such amount as
the department decides to be reasonable. No salary tax is
therefore collected, or required by the Treasury Department to be
accounted for, or paid, on account of payments to the assessors’
clerks, as the United States pays no such clerks nor has them in its
employ or service, and they do not come within the provisions of
existing laws imposing such a tax.
Perhaps no better illustration of the difference
between the status of postmasters’ clerks and that of assessors’
clerks can be given than the following: A postmaster became a
defaulter, without paying his clerks,; his successor received from
the Postmaster General a new remittance for paying them; and if at
any time, the clerks in a post office do not receive their salaries,
by reason of the death, resignation or removal of a postmaster, the
new appointee is authorized by the regulations of the Post Office
Department to pay them out of the proceeds of the office; and should
there be no funds in his hands belonging to the department, a draft
is issued to place money in his hands for that purpose.
If an assessor had not paid his clerks, they
would have no legal claim upon the treasury for their salaries. A
discrimination is made between postmasters’ clerks and assessor’s
clerks to the extent and for the reasons hereinbefore set forth.
I have the honor to be, very respectfully, your
obedient servant.
H. McCulloch, Secretary of the Treasury
[House of
Representatives, Ex. Doc. 99, 1867, pp. 1-2]
Notice based on the
above that revenue officers don’t take an oath, so they don’t have to
pay the tax, while postal clerks take an oath, so they do. Therefore,
the oath that creates the “public office” is the method by which the
government manufactures “public officers”, “taxpayers”, and “sponsors”
for its wasteful use or abuse of public monies. If you would like a
whole BOOK full of reasons why the only "taxpayers"
under the
I.R.C. Subtitle A are "public
officials", please see the following exhaustive analysis:
12
How do ordinary government workers not holding “public
office” become “taxpayers”?
A question we are asked frequently is whether
ordinary government workers not otherwise engaged in a “public office”
are “taxpayers” and how they become “taxpayers”. The answer is they
aren’t unless they sign a contract to become a “public officer” called
IRS Form W-4. The remainder of this section will explain why this
is.
The previous section discussed the differences
between a “public office” and “public employment” and clearly proved
that they are NOT equivalent. Consequently, ordinary government workers
or civil service employees are NOT “public officers” nor are they
therefore engaged in the “trade or business” franchise and contract by
default.
Earnings not connected
to the “trade or business” and public office franchise are described in
26 U.S.C. §871(a) in the case of “nonresident
aliens”. The following article proves that nonresident aliens not
engaged in the “trade or business” franchise cannot earn “wages” unless
they consent to do so by signing a contract called IRS Form W-4:
I.R.C. Subtitle A is a franchise
tax on public offices, which the I.R.C. calls a “trade or business”.
“Public office” and “public employment” are NOT equivalent in law.
Even for government workers, they don't earn “wages” as legally defined
in
26 U.S.C. §3401 unless they are ALREADY public officers in the
government BEFORE they sign the W-4. This is because:
1.
If a government worker not engaged in a public office refuses to sign
the W-4 and is not otherwise engaged in a “public office”, then they
can’t lawfully become the subject of W-2 information returns and if they
are filed with nonzero “wages”, they are FALSE in violation of 26
U.S.C. §7207 and 26 U.S.C. §7434.
2. It
is “wages” which appear on IRS Form W-2 in block
1. This form connects the term “wages” to the “trade or business”
franchise pursuant to
26 U.S.C. §6041(a).
3.
26
U.S.C. §871(a)(1) mentions “wages” as
being taxable when not connected to the “trade or business” franchise
and one can only earn “wages” if they consent under the W-4
contract/agreement.
TITLE 26--INTERNAL REVENUE
CHAPTER I--INTERNAL REVENUE SERVICE, DEPARTMENT OF THE TREASURY
PART 31_EMPLOYMENT TAXES AND COLLECTION OF INCOME TAX AT
SOURCE--Table of Contents
Subpart E_Collection of Income Tax at Source
26 CFR §31.3401(a)-3 Amounts deemed wages under voluntary
withholding agreements
(a) In general.
Notwithstanding the exceptions to the
definition of wages specified in section 3401(a) and the regulations
thereunder, the term “wages” includes the amounts described in
paragraph (b)(1) of this section with respect to which there is a
voluntary withholding agreement in effect under section 3402(p).
References in this chapter to the definition of wages contained in
section 3401(a) shall be deemed to refer also to this section
(§31.3401(a)–3).
(b) Remuneration for services.
(1) Except as
provided in subparagraph (2) of this paragraph, the amounts
referred to in paragraph (a) of this section include any
remuneration for services performed by an employee for an employer
which, without regard to this section, does not constitute wages
under section 3401(a). For example, remuneration for
services performed by an agricultural worker or a domestic worker in
a private home (amounts which are specifically excluded from the
definition of wages by section 3401(a) (2) and (3), respectively)
are amounts with respect to which a voluntary withholding agreement
may be entered into under section 3402(p). See §§31.3401(c)–1 and
31.3401(d)–1 for the definitions of “employee” and “employer”.
4. It
is “wages” and NOT “all earnings”, “income”, or even “gross income” that
appear in the IRS Individual Master File (IMF) as being
taxable.
5.
The income tax is upon “wages” but not even “public officers” earn
“wages”.
TITLE 26 >
Subtitle C >
CHAPTER 24 > § 3401
§ 3401. Definitions
(a) Wages
For purposes
of this chapter, the term “wages” means all remuneration (other than
fees paid to a public official) for services performed by an
employee for his employer, including the cash value of all
remuneration (including benefits) paid in any medium other than
cash; except that such term shall not include remuneration paid—
6. It
is “wages” which are the subject of I.R.C. Subtitle C withholding and
constitute I.R.C. Subtitle A “gross income” because “wages” is the code
word for earnings of those who elect to become “public officers” and
thereby donate their private property earnings to a “public office”, a
“public use”, and a “public purpose” and thereby subject them to
taxation by signing the federal W-4 “public officer” job application
and contract.
7. It
is “wages” that 26 CFR §31.3401(p)-1 says become “gross income” and
therefore “trade or business” income ONLY AFTER one signs the W-4.
TITLE 26--INTERNAL REVENUE
CHAPTER I--INTERNAL REVENUE SERVICE, DEPARTMENT OF THE TREASURY
PART 31_EMPLOYMENT TAXES AND COLLECTION OF INCOME TAX AT
SOURCE--Table of Contents
Subpart E_Collection of Income Tax at Source
§31.3402(p)-1 Voluntary withholding agreements.
(a) In general.
An employee and his employer may enter into an
agreement under section 3402(b) to provide for the withholding of
income tax upon payments of amounts described in paragraph (b)(1) of
§31.3401(a)–3, made after December 31, 1970. An agreement may
be entered into under this section only with respect to amounts
which are includible in the gross income of the employee under
section 61, and must be applicable to all such amounts paid by the
employer to the employee. The amount to be withheld pursuant
to an agreement under section 3402(p) shall be determined under the
rules contained in section 3402 and the regulations thereunder. See
§31.3405(c)–1, Q&A–3 concerning agreements to have more than
20-percent Federal income tax withheld from eligible rollover
distributions within the meaning of section 402.
8. It
is for claiming that “wages” are not taxable that many tax
protesters are properly sanctioned. See:
The W-4 form is being used to
connect private earnings to “wages” as legally defined and the “trade or
business”/”public office” franchise by all of the following mechanisms:
1. As
a federal “election” form where you can elect yourself into public
office within the government. You are the only voter in this “election”.
Now do you know why the IRS calls it an “election” whenever you consent
to something in the I.R.C. They aren't lying!
2. As
a permission form authorizing the filing of information returns
connecting otherwise private persons to a public office and a “trade or
business” pursuant to
26 U.S.C. §6041(a).
If the W-2 is filed against a person who did NOT make such an election,
then election fraud is occurring and the employer is committing the
crime of impersonating a public officer in violation of
18 U.S.C. §912 .
Any withholdings against a person who did not submit the W-4 is a bribe
to procure a public office in criminal violation of
18 U.S.C. §211.
http://www.law.cornell.edu/uscode/html/usc...11----000-.html
3. To
CREATE public offices in the U.S. government unlawfully rather than tax
those already in existence.
4. As
a way to create a franchise that turns private labor into public
property by donating it to a public use and a public office.
“Men are
endowed by their Creator with certain unalienable rights,-'life,
liberty, and the pursuit of happiness;' and to 'secure,' not grant
or create, these rights, governments are instituted. That
property [or income] which a man has honestly acquired he retains
full control of, subject to these limitations: First, that he shall
not use it to his neighbor's injury, and that does not mean that he
must use it for his neighbor's benefit; second, that if he devotes
it to a public use, he gives to the public a right to control that
use; and third, that whenever the public needs require, the public
may take it upon payment of due compensation.”
[Budd v. People of State of New York, 143 U.S. 517 (1892)]
5. As
a way to make private workers into a Kelly Girls and contractors for the
government engaged in a “public office”.
6. As
a way to make you party to the franchise agreement codified in I.R.C.
Subtitles A and C.
7.
The SSN or TIN on the W-4 form is being used as a de facto “license” to
act as a “public officer” in the U.S. government called a “taxpayer”.
The IRS Form 1042-s Instructions say the SSN is only required for
those engaged in a “trade or business”, which means a public office. The
tax is on the office, not on the private person. The office is the “res”
that is the subject of the tax and the use of the number is prima facie
evidence of the existence of the “res”. All tax proceedings are “in rem”
against the office, which is the only real “citizen”, “resident”, and
“taxpayer”. The human being filling the office is not the “taxpayer”,
but he is surety for the “taxpayer”. They don't call the SSN or TIN a
“license number” even though it is for all intents and purposes, because
they don't want to admit that they have no authority to license ANYTHING
within a state of the Union:
“But very different considerations apply to the
internal commerce or domestic trade of the States. Over this
commerce and trade Congress has no power of regulation nor any
direct control. This power belongs exclusively to the States. No
interference by Congress with the business of citizens transacted
within a State is warranted by the Constitution, except such as is
strictly incidental to the exercise of powers clearly granted to the
legislature. The power to authorize a business within a State is
plainly repugnant to the exclusive power of the State over the same
subject. It is true that the power of Congress to tax is a very
extensive power. It is given in the Constitution, with only one
exception and only two qualifications. Congress cannot tax exports,
and it must impose direct taxes by the rule of apportionment, and
indirect taxes by the rule of uniformity. Thus limited, and thus
only, it reaches every subject, and may be exercised at discretion.
But, it reaches only existing subjects. Congress cannot
authorize [e.g. LICENSE] a trade or business within a State in order
to tax it.”
[License Tax Cases, 72 U.S. 462, 18 L.Ed. 497, 5 Wall. 462, 2
A.F.T.R. 2224 (1866)]
Please show us a case where the License Tax cases
was overruled? It's still in force. The feds can't license ANYTHING
within a state, including “public offices” and the “trade or business”
franchise that is being ILLEGALLY enforced within states of the Union at
this time. To admit otherwise is to sanction a destruction of the
separation of powers between the states and the federal government.
There is NO PLACE within the I.R.C. that authorizes the CREATION of
public offices using any tax form, and yet that is what the IRS is
unlawfully using W-2, W-4, and 1040 forms for.
4 U.S.C. §72 says there
MUST be a statute that authorizes the creation and exercise of such
offices within a state in order for such public offices to be valid.
Essentially what is happening is that the forms constitute an election
to make you into a “resident agent” for an office that exists in the
District of Columbia.
The existence of
26 U.S.C. §871(a) is a deception,
because
26 U.S.C. §7701(a)(31) says the property of those not engaged
in the “trade or business' franchise is a foreign estate not subject to
the I.R.C. One's earnings are part of that “foreign estate”.
26 U.S.C. §3401(a)(6)
excludes earnings of “nonresident aliens” from “wages”, if regulations
exist. Government workers who aren't public officers therefore have the
same protections as ordinary private industry workers who are
nonresident aliens not engaged in the “trade or business” franchise.
The only way a nonresident alien not otherwise engaged in the “trade or
business” franchise can become subject is to sign the W-4 contract to:
1.
Become engaged in the franchise and be eligible for “benefits” under the
franchise agreement.
2.
Waive sovereign immunity pursuant to
28 U.S.C. §1605.
3.
Make an election to become a “resident alien”.
Where within
26 U.S.C. §3401 is the term “wages”
treated any differently for government workers who AREN'T “public
officers”? It AIN'T, friend.
Remember: Information returns are the only
way the IRS could find out about the earnings of a government employee,
and these returns can ONLY be filed against those engaged in the “trade
or business” franchise or who elect to be using the W-4
agreement/contract. 26 CFR §31.3401(a)-3(a), 26 CFR §31.3402(p)-1. How
would the IRS find out about 871(a) income that is NOT connected with
the “trade or business”? There is no information return that is NOT
connected to a “trade or business” and it is a CRIME for a person not
ALREADY engaged in a public office in the government BEFORE they signed
the W-4 to impersonate a public officer or engage in the activities of a
public office.
18 U.S.C. §912.
The income tax is upon
the COINCIDENCE of DOMICILE within the jurisdiction AND being engaged in
the “trade or business” franchise. The VOLUNTARY use of an identifying
number connects you to BOTH of these prerequisites:
1.
SSNs and TINs can only be issued to “U.S. persons”.
26 U.S.C. §6109(g) ,
26 CFR §301.6109-1(g), and 20 CFR §422.103(d).
2.
The number is only MANDATORY for persons engaged in franchises. See IRS
form 1042-s instructions AND section 10 of the following:
You can STILL be a government worker as a
nonresident alien not engaged in a “trade or business”, not have a
domicile on federal territory, and therefore STILL be a “foreign person”
who is free and sovereign. The domicile and the
protection it pays for is where the government's authority comes from to
collect the tax in the first place. It is a CIVIL liability and you
aren't subject to their CIVIL law without a domicile on federal
territory, unless you contract with them to procure an identity or
“res”, and thereby become a “res-ident”. When you contract with them,
you create a “public office” in the government and become surety for the
office you created using your signature. F.R.Civ.P. 17(b),
26 U.S.C.
§7408(d), and
26 U.S.C. §7701(a)(39) then changes the choice of law to
the District of Columbia for all functions of the “public office”
because now you are acting in a representative capacity on behalf of the
federal corporation as such public officer.
On the subject of contracting with the government,
the Bible forbids Christians from nominating a King or Protector above
them, or from contracting with the pagan government:
“Do not walk in the [civil] statutes of your
fathers [the heathens, by selecting a domicile or “residence” in
their jurisdiction], nor observe their judgments, nor defile
yourselves with their idols. I am the LORD your God: Walk in My
statutes, keep My judgments, and do them; hallow My Sabbaths, and
they will be a sign between Me and you, that you may know that I am
the LORD your God.”
[Ezekial 20:10-20, Bible, NKJV]
“You shall make no covenant [contract or
franchise] with them [foreigners, pagans], nor with their [pagan
government] gods [laws or judges]. They shall not dwell in your land
[and you shall not dwell in theirs by becoming a “resident” in the
process of contracting with them], lest they make you sin against Me
[God]. For if you serve their gods [under contract or agreement or
franchise], it will surely be a snare to you.”
[Exodus 23:32-33, Bible, NKJV]
“Therefore, my brethren, you also have become
dead to the law [man's law] through the body of Christ [by shifting
your legal domicile to the God's Kingdom], that you may be married
to another—to Him who was raised from the dead, that we should bear
fruit [as agents, fiduciaries, and trustees] to God. For when we
were in the flesh, the sinful passions which were aroused by the law
were at work in our members to bear fruit to death. But now we have
been delivered from the law, having died to what we were held by, so
that we should serve in the newness of the Spirit [and newness of
the law, God’s law] and not in the oldness of the letter.”
[Rom. 7:4-6, Bible, NKJV]
“The
wicked shall be turned into hell, And all the nations [and
peoples] that forget [or disobey] God [or His commandments].”
[Psalms 9:17, Bible, NKJV]
“Do you not
know that friendship with the world is enmity with God? Whoever
therefore wants to be a friend [“citizen”, “resident”, “taxpayer”,
“inhabitant”, or “subject” under a king or political ruler] of the
world [or any man-made kingdom other than God's Kingdom] makes
himself an enemy of God. “
[James 4:4, Bible, NKJV]
“Above all, you must live as citizens of heaven
[INSTEAD of citizens of earth. You can only be a citizen of ONE
place at a time because you can only have a domicile in one place at
a time], conducting yourselves in a manner worthy of the Good News
about Christ. Then, whether I come and see you again or only hear
about you, I will know that you are standing together with one
spirit and one purpose, fighting together for the faith, which is
the Good News.”
[Philippians 1:27, Bible, NLT]
The government can’t
lawfully force you to choose a domicile in their jurisdiction or to
nominate a protector or become a “resident” if you are a “national” who
was born in this country. They can force an alien born in another
country to become a privileged “resident”, but the can't force a
“national” who is born here to become a “resident”, because they can't
lawfully compel a “citizen” under the constitution to suffer any of the
disabilities of alienage without engaging in involuntary servitude and
violation of constitutional rights. This is also confirmed by the
definition of “residence” at 26 CFR §1.871-2, which only includes aliens
and not “nonresident aliens”. If they did force you to choose a domicile
or residence and thereby become a “taxpayer”, it would be a violation of
the First Amendment prohibition against compelled association and the
Thirteenth Amendment prohibition against involuntary servitude. It has
always been lawful to refuse protection and refuse to be a domiciliary
called a statutory “U.S. citizen”, “U.S. person”, or statutory “U.S.
resident”, and to refuse to contract with them or accept any “benefits”
that might give rise to a “quasi-contractual” obligation to pay for
“social insurance”. See:
1.
Why Domicile and Becoming a “Taxpayer” Require Your Consent,
Form #05.002
http://sedm.org/Forms/FormIndex.htm
2.
The Government “Benefits” Scam, Form #05.040
http://sedm.org/Forms/FormIndex.htm
As Frank Kowalik points out in his wonderful book,
IRS Humbug , the income tax is a public officer kickback
program disguised to “look” like a legitimate income tax. It's smoke and
mirrors. To make it look like an income tax, they had to throw the
“domicile” stuff into it, but the public officer status is still the
foundation. That is why
26 U.S.C. §7701(a)(31) says everything in the
code is “foreign” that is not connected to the public office (“trade or
business”) franchise. To be “foreign” means it is outside the
jurisdiction of the franchise agreement because not consensually
connected to it.
13.
Methods of Connecting You to the Franchise
13.1
Reductions in Liability: Graduated Rate of Tax, Deductions,
and Earned Income Credits
All attempts to reduce
one’s assumed tax liability require the person filing the tax return to
be engaged in the “trade or business” excise taxable franchise. This
includes:
1.
Applying the graduated rate of tax found in 26 U.S.C. §1. Without the
graduated rate of tax, the flat 30% tax applies to “nonresident alien
individuals” found in 26 U.S.C. §871(a). The Section 1 rate usually
starts lower than 30%.
2.
Applying for earned income credits in 26 U.S.C. §32.
3.
Taking “trade or business” deductions found in 26 U.S.C. §162:
TITLE 26 >
Subtitle A >
CHAPTER 1 >
Subchapter B
Part VI-Itemized
deductions for Individuals and Corporations
Sec. 162. - Trade or business expenses
(a) In general
There shall be allowed as a deduction all the
ordinary and necessary expenses paid or incurred during the taxable
year in carrying on any trade or business, including –
(1) a reasonable allowance for salaries
or other compensation for
personal services actually rendered;
Why must you be engaged in a “trade or business” in
order to reduce your liability as a “taxpayer”? Because this is a
commercial “benefit” and only those who work for the government can
receive any commercial benefit from the government. Otherwise, the
government is abusing its taxing power to transfer wealth among private
individuals:
To lay, with one hand, the power of the
government on the property of the citizen, and with the other to
bestow it upon favored individuals to aid private enterprises and
build up private fortunes, is none the less a robbery because it is
done under the forms of law and is called taxation. This is not
legislation. It is a decree under legislative forms.
Nor is it taxation. ‘A tax,’ says
Webster’s Dictionary, ‘is a rate or sum of money assessed on the
person or property of a citizen by government for the use of the
nation or State.’ ‘Taxes are burdens or charges imposed by the
Legislature upon persons or property to raise money for public
purposes.’ Cooley, Const. Lim., 479.
Coulter, J., in Northern Liberties v. St.
John’s Church, 13 Pa. St., 104 says, very forcibly, ‘I think the
common mind has everywhere taken in the understanding that
taxes are a public imposition, levied by authority of the government
for the purposes of carrying on the government in all its machinery
and operations—that they are imposed for a public purpose.’
See, also Pray v. Northern Liberties, 31 Pa.St., 69; Matter of Mayor
of N.Y., 11 Johns., 77; Camden v. Allen, 2 Dutch., 398; Sharpless v.
Mayor, supra; Hanson v. Vernon, 27 Ia., 47; Whiting v. Fond du Lac,
supra.”
[Loan Association v. Topeka, 20 Wall. 655 (1874)]
IRS Publication 519 confirms the above by saying
the following:
Nonresident Aliens
You can claim deductions to figure your
effectively connected taxable income. You generally cannot claim
deductions related to income that is not connected with your U.S.
business activities. Except for personal exemptions, and certain
itemized deductions, discussed later, you can claim deductions only
to the extent they are connected with your effectively connected
income.
[IRS Publication 519, Year 2005, p. 24]
13.2 Information Returns
Information returns include
but are not limited to IRS Forms W-2, 1042-S, 1098, 1099, and 8300.
Receipt of “trade or business” earnings is the basis for nearly all
Information Returns processed by the IRS, which are reports documenting
financial payments made to government entities or officers. The
requirement to file these reports is found at 26 U.S.C. §6041. The
“person” they are referring to in the article is none other than a
“public officer” in the government:
TITLE 26 >
Subtitle F >
CHAPTER 61 >
Subchapter A >
PART III >
Subpart B > § 6041
§ 6041. Information at source
(a) Payments of
$600 or more
All
persons engaged in a trade or business and making payment in the
course of such trade or business to another person, of rent,
salaries, wages, premiums, annuities, compensations, remunerations,
emoluments, or other fixed or determinable gains, profits, and
income (other than payments to which section 6042 (a)(1), 6044
(a)(1), 6047 (e), 6049 (a), or 6050N (a) applies, and other than
payments with respect to which a statement is required under the
authority of section 6042 (a)(2), 6044 (a)(2), or 6045), of $600 or
more in any taxable year, or, in the case of such payments made by
the United States, the officers or employees of the United States
having information as to such payments and required to make returns
in regard thereto by the reg | 
