June 25, 1996

Joe Smug, Chief Counsel
International Graft Corporation
666 Wabash
New York, New York

RE: IRS-Issued Notice of Levy John Workman "wages"
    ENCLOSURE: IRS/IRC public notice memorandum

Dear Mr. Ward:

     John Workman asked that I write to you concerning the notice
of levy  against  John's  wages  sent  by  the  Internal  Revenue
Service. They have evidently attempted to convince various people
at International  Graft Corporation  that the  instrument is  not
legitimate and  that they  don't have a legitimate federal income
tax obligation,  but this  is a  specialty  area  that  has  just
recently   been    unraveled   sufficiently   to   be   presented
comprehensively. Hopefully  you will  receive this  letter in the
spirit it  is sent  -- several  large corporations,  inclusive of
Amway, Boeing,  and others  are having  to come to terms with the
law as it is written rather than as it has been presumed over the
last fifty or sixty years.

     Enclosed you  will find  an IRS/IRC public notice memorandum
which  serves   as  a   thorough  indictment  against  IRS  while
simultaneously demonstrating  proper application of Subtitles A &
C of  the Internal  Revenue Code.  You might  be advised that the
memorandum is  publishing in  state legal publications across the
country --  Thayer County,  Nebraska beginning  June 12, Oklahoma
County, Oklahoma beginning June 20. and in Montana, presumably in
the county  where White Fish is located, beginning June 20. We've
had attorneys around the country going over the document, and the
only question  has pertained  to whether  or not United States v.
O'Dell still  applies  because  the  Internal  Revenue  Code  was
allegedly changed  since 1947, but have overcome the objection by
demonstrating that  it was  merely reorganized  in 1954, and that
the 1040 Form is still a voluntary filing instrument with limited

     The memorandum  faults IRS  and the Internal Revenue Code on
nine points which, with respect to the Workmans, are fatal. Fatal
meaning, IRS  doesn't have  a legal  leg to stand on. If you will
review Sections  3401 through  about 3405  of  Vol.  68A  of  the
Statutes at  Large, which  is the  true Internal  Revenue Code of
1954, you  will quickly unravel the "income tax" riddle -- it has
never applied to anyone other than officers, agents and employees
of the  United States. Then if you will read the five or so pages
in 26  CFR   601.401, you  will find  proper  application.  When
you're done  with those two reasonably brief selections, go to 26
CFR   31.0 -- application of the various Subtitle A & C taxes is
spelled  out   in  this  selection  which  has  no  corresponding
statutory provision.  These three  selections should bring you up
to speed with nominal effort.

     Where the  instant matter is concerned, look at the front of
the Notice  of Levy  instrument sent  to International Graft: The
first obvious  flaw is  the absence  of either  a court  order or
reference to a court order authorizing seizure, garnishment, etc.
While IRS  has run  the intimidation con game for years, the fact
is, the  Internal Revenue  Code preserves all existing rights and
remedies, "including  trial by jury," in the first sentence of 26
U.S.C.   7804(b). You  might consider  that the  Fifth Amendment
clearly stipulates  that no  person shall  be deprived  of  life,
liberty or  property without  due process of law. Unless or until
you either  have a  court order  issued by  a court  of competent
jurisdiction, or  have evidence  of a  court order, International
Graft Corporation  cannot under  any circumstance  withhold money
due the Workmans or anyone else.

     This is  a constitutionally-assured  right which  appears in
the Constitution  for  the  United  States  of  America,  in  the
Oklahoma  Constitution,   in  the   New  York  Constitution,  and
constitutions in the other states. And the Internal Revenue Code,
in the  first sentence  of   7804(b), clearly  preserves all due
process rights. It's a matter of fundamental law, and when you're
given notice,  you have  a due diligence requirement to learn and
comply with fundamental law.

     This is  of considerable  importance, as if you will consult
the 1966  report on  legislative intent, you will find that third
parties are  not exempted  from liability  where they erroneously
surrender "property",  including money,  to the  Internal Revenue
Service. Additionally, consult the Code of Federal Regulations at
27 CFR   70.163(c).  In relevant  part, this  subpart states  as

     Any person  who mistakenly  surrenders to  the United States
     property or  rights to property not properly subject to levy
     is not relieved from liability to a third party who owns the

     The statement  goes on  to specify that the proper owner may
seek administrative  relief under  26 U.S.C.   6343(b), or bring
suit against  the Government  under   7426, but  the point here,
which is  key to  ultimately ending IRS fraud, is that those with
fiduciary and trustee obligations to whomever has been victimized
may elect  to secure appropriate remedies, inclusive of civil and
criminal, against  those joined to IRS tyranny via accommodation.
I assure  you that  this  strategy  is  being  deployed.  As  the
Nuremberg trails  following World  War II  demonstrated,  tyranny
never  stands  on  one  leg.  Both  perpetrators  by  intent  and
perpetrators by  consent, whether  for personal  gain or  out  of
fear, must be held accountable.

     To reinforce  the conclusion  that an "employee" is supposed
to secure  return of over-payment, illicit collection, etc., from
the "employer"  rather than  IRS, you might read 26 CFR  601.401
carefully. This  selection demonstrates  that IRS  is supposed to
deal exclusively  with the  employer, and  has nothing to do with
the employee,  even when  the employer  is an  agency  of  United
States Government.  This brief  four  or  five  pages  opens  the
cracker barrel  for good  -- if John seeks recourse, it should be
against the  "employer,"  which  would  be  International  Graft,
rather than IRS. We'll return to this matter momentarily.

     You will  also note  that "notice of levy" is defined by use
at 26  U.S.C.   6335(a). The  notice instrument  merely  conveys
information,  it  is  not  cause  for  action.  See  Black's  Law
Dictionary or  another law dictionary for the legal definition of
"notice". Notices of levy are to be left for whomever seizure has
been executed  against. In  other words, where the instant matter
is concerned, the notice should be sent to the Workmans after the
fact, and  if there was an actual seizure, IRS would have to take
possession of  money due the John via an actual levy supported by
a court  order. The  "notice of levy" sent to International Graft
has about the same merit as an obituary claiming the John is dead
when in reality he is alive and well. In other words, there is no
fact, legal or otherwise, to support the notice instrument.

     Consider application  of the  garnishment/levy process at 27
CFR  70.164(d):

     (d)  Person defined.  In addition to the definition given in
      70.11  of this  part, the  term "person,"  as used  in  26
     U.S.C.A. 6332(a)  and this  section, includes  an officer or
     employee of  a corporation  or a  member or  employee  of  a
     partnership, who  is under  a duty to surrender the property
     or rights to property or to discharge the obligation. In the
     case of  a levy  upon the  salary or  wages of  an  officer,
     employee, or  elected or  appointed official  of the  United
     States,  the   District  of   Columbia,  or  any  agency  or
     instrumentality of  either, the  term "person"  includes the
     officer or employee of the United States, of the District of
     Columbia, or  of such agency or instrumentality who is under
     a duty  to discharge  the obligation.  As to  the officer or
     employee who  is under  such duty,  see  70.161(a)(4)(i) of
     this part. (26 U.S.C. 6332)

     The key  to understanding  the  Internal  Revenue  Code  and
attending regulations  is largely in definitions -- words of art,
where commonly  understood words have specially assigned meaning.
Congress promulgated what is described as the "Dictionary Act" in
1871, and  Code law  has been  increasingly convoluted  since. Of
particular note, you might consult definitions at 27 CFR  250.11
where you  will find  that the  Secretary is the Secretary of the
Treasury of  Puerto Rico,  Revenue Agent  is any  duly authorized
Commonwealth Internal  Revenue Agent  of the  Department  of  the
Treasury  of  Puerto  Rico,  etc.  Here,  however,  we'll  simply
reproduce the definition of "person" reference above, being at 27
CFR  70.11:

     Person.    An  individual,  a  trust,  estate,  partnership,
     association or other unincorporated organization, fiduciary,
     company, or  corporation, or  the District  of  Columbia,  a
     State, or a political subdivision thereof (including a city,
     county, or other municipality).

     In my  memorandum, you  will find  that a  certain  Treasury
Order in  the 1970's  made a transfer of functions under Subtitle
F, which  includes  authority  for  administrative  and  judicial
collections, to  BATF. The  cites above from Title 27 of the Code
of Federal  Regulations are  in fact  under BATF  authority  even
though many  of the  regulations mention  IRS. These  regulations
obviously do  not have  general application to the several States
and the  population at  large, and  it will  be  found  that  the
corporations mentioned in the "person" definitions are either (1)
corporations, partnerships,  etc., subject  to  taxes  prescribed
under Subtitles  D & E, with application only in the geographical
United States,  or (2)  where Subtitles  A  &  C  are  concerned,
corporations and other such entities established and owned by the
United States,  exclusive of private enterprise even if organized
under laws  of the  United States.  This will  be  clearer  after
you've  read    3401-3405  of  Vol.  68A,  Statutes  at  Large.
Ironically, taxes  prescribed in  Subtitles A  & C are applicable
only to  government agencies  even in  the District  of Columbia,
Puerto Rico,  etc., where  those prescribed in Subtitles B, D & E
have general application in the geographical United States. Under
provisions of  26 U.S.C.   3402(p),  private corporations in the
District  of   Columbia,  etc.,   can  theoretically   elect   to
participate in  Subtitle C  programs (Social  Security,  railroad
retirement, etc.),  but the  authority does not reach the several
States and the population at large.

     It is  also relevant  that "seizure"  is defined at 27 CFR 

     Seizure.   The act  of  taking  possession  of  property  to
     satisfy a tax liability or by virtue of an execution.

     Obviously, seizure  must either  be by  way of (1) voluntary
compliance, or  (2) by court order ("execution"). There is no way
to avoid  this conclusion  without pitching  the Constitution out
the  window.   International  Graft's  fiduciary  responsibility,
established   by   contract,   is   antecedent   to   voluntarily
surrendering money  due John.  International Graft principals may
voluntarily give  IRS the  farm, but if the crop belongs to John,
IRS must  secure a  court order  before International  Graft  may
voluntarily surrender that due to John.

     Let's return to the definition of "person." If you will read
 3401-3405  of Vol.  68A, Statutes  at  Large,  and  26  CFR  
601.401, as  I've suggested, this will make sense: Income, Social
Security, and  related taxes  in Subtitles  A & C of the Internal
Revenue  Code   are  mandatory  only  for  officers,  agents  and
employees of  the United States and political subdivisions of the
geographical United  States (D.C.,  Puerto Rico, etc.), exclusive
of the  several States  party to  the Constitution.  The  several
States and  the population at large are subject only to Congress'
Article I,  Sec. 8  delegated authority;  the geographical United
States is  subject to  Congress' absolute  Article IV legislative
authority. In  the several States, Congress may exercise only the
delegated, enumerated  powers; in the geographical United States,
Congress may  exercise any  power not  specifically prohibited by
the Constitution.  This duality,  occasionally referred to by the
United States  Supreme Court  as "Cooperative Federalism," is the
underlying fraud  behind the Internal Revenue Code -- governments
of the  several States,  with no  constitutional authority,  have
presumed to  be federal  States, and have generally engaged fraud
to dupe the American people. You will find that the Supreme Court
has tacitly  condemned the  complicity --  see New York v. United
States, et  al. (1992). The Tenth Amendment and the Separation of
Powers Doctrine  prohibit officers  of the  several  States  from
accommodating  federal  encroachment  without  first  securing  a
constitutional amendment.

     The Internal  Revenue Service  is the  Achilles Heel  of the
Cooperative Federalism  scam.  Nobody likes those folks, and once
the origins and nature of IRS are more commonly known, the jig is
up. Even  Joe Sixpack,  who occupies  himself with television and
his bass  boat, has  a patriotic  streak. When he learns that IRS
helped fund  the Kama  River tank  and military  truck factory in
Russia, that  his illicitly  collected tax  dollars  fund  United
Nations  brush   wars  around   the  world  via  the  Agency  for
International Development, et al.,  probably his  ears as well as
his neck  will turn  red, and even he will want an accounting. He
may demand heads.

     I don't  want to  construct a whole discourse on the subject
so will  move ahead:  If you  will examine  the "notice  of levy"
instrument, you will find in the first column under "kind of tax"
that Service  principals have  entered "1040". The 1040 is a type
of return  form, it  is not  a type of tax. Therefore, the notice
instrument forwarded  to International graft is fraud on its face
-- no taxing statute which stipulates the transaction, service or
object of  the tax  appears on  the form.  See the necessity of a
taxing statute  in United  States v. Community TV, Inc., 327 F.2d
797, at  page 800  (1964), and Hassett v. Welch, 303 U.S. 303, 58
S.Ct. 559, 82 L.Ed. 858.
     Next, you  will find that no IRS agent or officer has signed
the form under penalties of perjury:

     26 U.S.C.  6065

     Except as  otherwise provided  by the Secretary, any return,
     declaration, statement,  or other  document required  to  be
     made under  any provision  of the  internal revenue  laws or
     regulations shall  contain  or  be  verified  by  a  written
     declaration that it is made under the penalties of perjury.

     This applies  as much to IRS principals as to people subject
to revenue  laws of the United States. It's one of those, "What's
sauce for the goose is sauce for the gander" things.

     In this  same framework, it will please you to know that the
International Graft  paymaster  was  required  to  "certify"  the
notice of  levy. In  other words,  IRS dupes  you into  doing the
dirty work. Again, if you will consult 26 CFR  601.401, you will
find that  the "employer,"  being an agency of the United States,
is supposed  to draft regulations for the garnishment process. So
while IRS  people are  operating under  color of  law,  they  are
technically roping private business owners and corporate officers
into effecting  garnishment  in  a  manner  which  more  or  less
complies with  regulatory provisions.  The problem, of course, is
that International Graft hasn't "promulgated" regulations, and if
you will  consult Title  5 of  the  United  States  Code  on  the
subject, even  the "employer" is required to secure a court order
prior to garnishing wages.

     Another problem  ... you  will note  that the  various cites
I've related  where the  Code of Federal Regulations is concerned
for the  most part  come from 26 CFR, Part 301 & 601, and 27 CFR,
Part 70.  In fact,  if you  will dig  out the  Parallel Table  of
Authorities and  Rules, beginning  on page  751 of the 1995 Index
volume to the Code of Federal Regulations, you will find that the
only  regulatory  authority  for  26  U.S.C.    6331  (levy  and
distraint) is  under 27  CFR, Part  70. Title  27 of  the  United
States Code  and  the  Code  of  Federal  Regulations  are  under
exclusive  administration   of  BATF,   not  IRS.  There  are  no
corresponding regulations  published in  the Federal Register for
26 CFR, Part 1 or 31, the two CFR parts relating to Subtitles A &
C of  the Internal  Revenue Code.  The need for regulations to be
published in  the Federal  Register is  clearly set  out  in  the
Administrative Procedures  Act (5  U.S.C.   552  et  seq.),  the
Federal Register  Act (44  U.S.C.  1501 et seq.), and in Title 1
of the Code of Federal Regulations, Chapter 1. If regulations are
not published  in the  Federal Register, application of any given
statute is  exclusive  to  agencies  of  the  United  States  and
officers, agents  and employees  of the  United States  -- see 44
U.S.C.   1505(a) for  effect and  review particulars  of 1  CFR,
Chapter 1.

     If you  will review the back of the "notice of levy" sent to
International Graft, you will find that 26 U.S.C.  6331(a) isn't
reproduced in the statute authorities. This is another element of
document fraud  as   6331(a) is  the general authority paragraph
for levy  and distraint.  If you  will consider  6331(a) in your
copy of Title 26, you will see that the second sentence specifies
officers, agents  and employees  of the  United States  as  being
subject to  levy and  distraint. The first sentence is applicable
under Subtitles  D &  E of  the Internal  Revenue Code  -- excise
taxes on certain privileged activity and production.

     Normally when  I assist people with matters relating to IRS,
I try to avoid undue peril by asking Service principals to comply
with certain provisions of law, or at least to produce authority,
etc. In  this same  spirit, I  might suggest that you incorporate
particulars set  out in  this letter,  and inquire concerning IRS
authority, the  legitimacy of  the tax, particularly with respect
to the  existence or  non-existence  of  a  taxing  statute,  and
specifically request  a letter of immunity which assures that IRS
principals responsible for issuing the "notice of levy" will bear
full legal  liability should  the seizure  prove to be illegal or

     If you  will make this effort on behalf of John, I think you
will posture  International Graft  to check  out of  the  Federal
Income Tax  business. If  you will  consult the Parallel Table of
Authorities and  Rules, beginning on page 751 of the Index volume
to the  Code of Federal Regulations, you will find that there are
no implementing  regulations which extend corporate income tax to
the several  States and the population at large (26 U.S.C.  11).
Again,  consult  44  U.S.C.    1505(a)  for  effect  --  without
implementing regulations, any given statute is applicable only to
agencies of  the United  States, as  defined at 5 U.S.C.  102 &
105, and  officers, agents  and employees  of the  United States.
Review the necessity for delegations of authority and regulations
published in the Federal Register in 1 CFR, Chapter I.

     If I can be of further assistance, feel free to contact me.

     John articulates  that he  appreciates the  factory position
with International Graft so he doesn't want to get crosswise, but
you understand  his position  with respect to securing rights and
protection  of  the  law.  Please  consider  this  letter  notice
adequate to  require due  diligence on your part to determine and
comply with the law.


/s/ Dan Meador

Dan Meador

copy:  John Workman

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