Tax Return History-Citizenship

How to file WITHOUT connecting oneself to STATUTORY "citizen" status:

Further Historical Research:

The history of tax returns and their relationship to citizenship is a fascinating one. Here is a chronological history.

The withholding was itself important for controlling inflation. See The True Nature of IRS Form 1040: It is a Loan to the Government.

Overview

Because the war effort resulted in increased production and employment, which caused a sudden large influx of money into circulation, the Federal Government and Federal Reserve System had to find a method of "mopping up excess purchasing power" thereby control inflation and obtain immediate funds for the Treasury. Several plans were put forth before the House ways and Means Committee and the Senate Committee on Finance to accomplish this purpose.

The following points were made by the Senators and those testifying before the committee:

I. The overall purpose was to obtain immediate money for the war effort to control inflation and to get the income tax on a current basis instead of being one year behind.

2. To accomplish this goal, it was recognized that a scheme was needed to reach the largest number of people.

3. That the scheme, regardless of whether it was a "coupon," "stamp" or "withholding of income tax at source," would constitute a "forced loan" [page 101] to the Federal Government and it would apply to taxpayers and nontaxpayers alike. [page 104].

4. Where an individual had money withheld and ultimately no tax liability, the individual would file an income tax return and that income tax return would constitute an automatic claim for refund [page 141].

5. The proposed plan was an emergency war time measure.

Below was the new measure in response to the above report:

IRC Section 31

(a) Wage withholding for income tax purposes

(1) In general
The amount withheld as tax under chapter 24 shall be allowed to the recipient of the income as a credit against the tax imposed by this subtitle.

(2) Year of credit
The amount so withheld during any calendar year shall be allowed as a credit for the taxable year beginning in such calendar year. If more than one taxable year begins in a calendar year, such amount shall be allowed as a credit for the last taxable year so beginning.

The above W-2 wage withholdings are a credit with no time limit against the tax liability for the SAME tax year. You cannot collect a refund for overpayment past three years from the due date of the return, however. But if no return has been filed, such credit remains available forever as a means of reducing the tax liability for that tax year.

The 3rd party reporting using the SSN was the black magic that would enable them to PRESUME a tax liability even if the taxpayer were to refuse to file a return; and THAT would permit them to KEEP most of the money collected under the withholding provisions. The LAYERS to this SCAM are what has made it so difficult to figure out. The SSN--the U.S. person presumption (Form #05.053) that creates, and just understanding what THAT means. People like Pete Hendrickson (Form #08.003) still refuse to recognize these quasi-CONTRACTUAL mechanisms. That presumption is documented in 26 C.F.R. 301.6109-1(g)(1)(i).

26 C.F.R. § 301.6109-1 - Identifying numbers.

(g) Special rules for taxpayer identifying numbers issued to foreign persons -

(1) General rule -

(i) Social security number. 

A social security number is generally identified in the records and database of the Internal Revenue Service as a number belonging to a [STATUTORY rather than CONSTITUTIONAL] U.S. citizen or resident alien individual.person may establish a different status for the number by providing proof of foreign status with the Internal Revenue Service under such procedures as the Internal Revenue Service shall prescribe, including the use of a form as the Internal Revenue Service may specify. Upon accepting an individual as a nonresident alien individual, the Internal Revenue Service will assign this status to the individual's social security number.

# Year Description
1 1864 Note the jurat on page 4 of the 1864 1040 form uses the phrase "subject to the Income Tax under the EXCISE laws of the United States"
2 1913

1913 form does not list any year, as this form was used for 1913-1915. Had Brushaber filed a return, this would have been the form he would have used. 1913 instructions:

1. This return shall be made by every citizen of the United States, whether residing at home or abroad, and by every person residing in the United States, though not a citizen thereof, having a net income of $3,000 or over for the taxable year, and also by every nonresident alien deriving income from property owned and business, trade, or profession carried on in the United States by him.

3 1916

Brushaber v. Union Pacific R.R., 240 U.S. 1 (1916) case was issued. Frank Brushaber was the litigant in this case who is referred to as a nonresident alien in Treasury Decision 2313, and subject to tax on his stock profits from a federally domestic stock corporation. The point being that 1040 was the only tax form for individuals back then, so they mentioned nonresident aliens in the instructions for 1913 and 1916, but suddenly removed all mention of nonresident aliens on the 1917-1919 forms.

Since Brushaber did not file a return, the decision is notable only because of T.D. 2313 that indicated this American litigant in the Brushaber case was a nonresident alien. It held that there was no Constitutional barrier to the taxation of Brushaber's stock profits. Union Pacific Railroad was a federal corporation at the time, so the income tax was a kickback from profits of a federal corporation franchise. This was consistent with the later holding of Bowers. v. Kerbaugh-Empire Col, 271 U.S. 170 (1928) ruling on the definition of "income", which was earnings in connection with federal corporations.

4 1916

The 1916 return instructions mention nonresident aliens. This form came out before the Brushaber opinion from SCOTUS was issued. T.D. 2313 was issued March 21, 1916---so this was most likely BEFORE the 1916 tax return would have been produced. Form 1916 instructions:

1. This return shall be made by every citizen of the United States, whether residing at home or abroad, and by every person residing in the United States, though not a citizen thereof, having a net income of $3,000 or over, including dividends, for the taxable year, although the tax has been paid at the source and the return shows no tax liability.

2. This return shall be made by every nonresident alien receiving any net income from sources in the United States. A nonresident alien individual may receive the benefit of the personal exemption only by filing or causing to be filed with the Collector of Internal Revenue a true and accurate return of his total income, received from all sources, corporate or otherwise, in the United States.

The 1916 Revenue Act is the first usage of the phrase "citizen or resident of the United States". Our guess is this was a panicked response to the Treasury Department's admission in TD 2313 (1916) that an American citizen was a nonresident alien (Brushaber) for income tax purposes. They must have known that using the term "citizen of the United States" in the Revenue Acts and on their forms could be deemed as a knowing act of fraud on their part. So they came up with "citizen or resident of the United States" and went to work DUPING Americans into declaring themselves to have that status—-this status came with a "reduced tax rate" only 4% on the first $4,000 of net income. Where the rate was normally 8%. Today, that status comes with a graduated tax rate and a standard deduction as well as the privilege of deducting certain personal expenses. and of course, tax credits in the form of stimulus payments. The timeline of events supports our theory: Treasury Decision 2313 was issued in March 2016, and referred to Frank Brushaber as a nonresident alien. The 1916 Revenue Act which first employed the phrase "citizen or resident of the United States" was passed into law by Congress on September 8, 1916.

5 1917

The 1917 return nonetheless shows clearly that, given another year to think about it, Treasury ADAPTED to the Brushaber opinion and T.D. 2313 and saw the need to OBSCURE the existence of the term "nonresident alien" from the public by removing any mention of nonresident alien on the 1040 form and instructions. 1917 form instructions: WHOOPS what happened to "nonresident aliens"?

1. Persons Required to Make a Return of Net Income.

Every citizen of the United States, whether residing at home or abroad, and every person residing in the United States, though not a citizen thereof, whose net income for the calendar year 1917 (see Item O, page 4) amounted to $1,000 if the individual is single or does not live with wife (or husband) or $2,000 if he is married and lives with wife (or husband), is required to make a return.

If the combined income of husband and wife, living together, and dependent children equaled or exceed $2,000, all such income must be reported, either on one return or on separate returns. Husband and wife should make separate returns if either is subject to surtax (see instruction 6).

Executors and administrators of the estates of deceased persons must make returns covering the part of the taxable year during which such persons were alive, and also returns for the estates during the period of settlement. If the income of a trust estate was distributed, the fiduciary should get a copy of Form 1041 and comply with the instructions thereon. If the income from a trust estate was not distributed, the fiduciary must make a return for the estate on this form.

Guardians must make returns for their wards. Duly authorized agents may make returns for persons who by reason of sickness or other disability or absence from the United States are unable to make their own returns

6 1918

In 1918, they no longer talk about who is required to file--it is just an unspecified "you". Of course by 1917, U.S. was involved in first World War.

1918 also does not mention nonresident aliens. As if trying to avoid the whole subject, they just use the vague "you" and "your" rather than use ANY terms to describe who is required to do what.

I. HOW TO DECIDE WHETHER TO MAKE A RETURN.

1. Calculate your net income by filling in page 2 of the work sheet according to page 2 of the instructions.
2. Add the net income of your wife (or .husband) and dependent minor children, if any, except as provided in paragraph 5.
3. The total family income, calculated in accordance with paragraphs 1 and 2, must be reported, either in your return or in a separate return by wife(or husband), if it equaled or exceeded—
(a) $2,000 if you were married and lived with your wife (or husband).
(b) $1,000 if you were not married or did not live with your wife (or husband).
4. In any case, you must make a return if your net income equalled or exceeded the amount of your personal exemption, not including any additional exemption allowed you as head of family or on account of dependents.
5. Income of a minor or incompetent, if derived from a separate estate under control of a guardian, trustee, or other fiduciary, must be reported by his guardian or other legal representative.
6. If your wife (or husband) had any separate income, she (or he) should make a separate return.

So you could definitely say they tried to obscure the existence of "nonresident alien" status from the American public after Brushaber and T.D. 2313

7 1919

1919 instructions Again, NO mention of nonresident aliens. This is the last year before they start asking on 1040 (from 1920 on) if the filer is a citizen or a resident of the United States.

GENERAL INSTRUCTIONS—INDIVIDUAL RETURN
I. PERSONS REQUIRED TO MAKE A RETURN OF INCOME.

1. Return of net income must be filed by every citizen of the United States whether residing at home or abroad, and every person residing in the United States, though not a citizen thereof, whose net income for the taxable year 1919 amount to—
(a) $1,000 if single or if married and not living with wife (or husband).
(b) $2,000 if married and living with wife (or husband).

2. Under any of these circumstances a return must be made even though the amount of net income is not sufficient to incur tax liability. Note especially credits for personal exemption and dependents under Instruction VI on this page.

3. If the combined income of husband, wife and dependent minor children equaled or exceeded $2,000, all such income must be reported either on a joint return or on separate returns of husband and wife. If single and the income, including that of dependent having a net income of $1,000 or $2,000, according to the marital status, must file a return, as such person is not considered a dependent.

4. In the case of husband and wife whose combined net income exceeds $5,000, separate returns must be made on Form 1040, showing the respective amounts of income.

5. Income of a minor or incompetent, if derived from a separate estate under control of a guardian, trustee or other fiduciary, must be reported by his guardian or other legal representative.

8 1920

First time they ask on the return if the filer is citizen, if not a resident. Also, nonresident aliens are not mentioned on the 1920 form. They are not mentioned in the 1040 instructions again until 1938. So that is over 20 years where they tried to flush the idea of "nonresident aliens" down the memory hole. By the time it is mentioned again, the public is conditioned to think of themselves in international terms as "citizens of the United States". NOBODY called themselves that in Brushaber's day. He petitioned the Supreme Court as a Citizen of the State of New York.

Again, the term "nonresident alien" was no longer mentioned in the 1040 instructions, so most Americans would be unaware that this term even EXISTED. Thus, they would believe the only possible choices are "citizen" or "resident", assuming this to mean "American" or "non-American who lives in America". So after a few years of that, it probably starts to seem strange that the 1040 asks Americans every year to say whether they are Americans or non-Americans. This should not be necessary---it is only necessary because the filer is being DUPED into a contract each tax year by answering that question (REGARDLESS OF HOW HE ANSWERS IT!). How many people would know they could just IGNORE the question?

They had let the cat out of the bag in Treasury Decision 2313 after the Brushaber case (that Americans are nonresident aliens) and so in 1916 Revenue Act they introduced a new phrase: "citizen or resident of the United States" for duping American citizens into believing the tax applied to all of them. By 1920 they no longer had the "Great War" propaganda to rely on to get the masses to willingly pay income tax. So they resorted to constructive fraud---offer a "lower" tax rate for "citizens or residents of the United States" on the first $4,000 of net income. People fell for it, obviously, never realizing that they did not NEED the lower tax rate in the first place if they did not have federally-sourced income.

9 1924

Landmark Cook v. Tait ruling issued by United States Supreme Court. It made the income tax INTERNATIONAL in scope. All STATUTORY "U.S. citizens" abroad held to owe income tax. BEING a STATUTORY "U.S. citizen", however, was held NOT to be related to EITHER nationality OR domiciled. Hence it was a franchise office you had to volunteer for. Read Federal Jurisdiction, Form #05.018, Section 4.4 for complete discussion of Cook v. Tait, 265 U.S. 47 (1924). Former President Taft was the chief justice at the time, who was also the guy that got the 14th Amendment fraudulently ratified by Philander Knox. See Great IRS Hoax, section 6.7.1 for details on this SCAM.

6 years after Brushaber, George Cook in Cook v Tait called himself a "citizen of the United States" in his petition but probably because he had been living in Mexico for 30 years and wanted to make it clear he was not a MEXICAN citizen. And of course Cook was DUPED into calling himself a "citizen" on the 1921 1040.

He created an obligation for himsel by filing the WRONG tax form, the 1040, and then argued that he should not have to pay. No one can assess himself with a tax on a return and then make any argument whatsoever that will absolve him of the obligation to pay that tax. He literally declared himself a "citizen" and this alone deprived him of the right to exclude any income from "gross income". He did not even attempt to exclude any income from his gross income. He reported all of it, as the law required him to do as a "citizen", and then he tried to argue his way out of the obligation. He literally consented to have the Collector assess that amount of tax, notwithstanding his "protest" that accompanied his return.

Government brief in the Cook v Tait case: they slyly say that "the plaintiff is a citizen although not a resident". Note they do NOT refer to him as a "citizen of the United States". The tax is on "citizens" and NOT "citizens of the United States", so that it wouldn't be confused with a Constitutional citizen. They also argue: "the statute clearly shows the intention of Congress that, except as otherwise indicated, every individual to whom the taxing power of the United States EXTENDS shall be taxed; that certain provisions apply to every citizen or resident of the United States, while other provisions apply to those who are neither citizens or residents of this country." Note how CAREFULLY they AVOID ever using the term "citizen of the United States". "every individual to whom the taxing power of the United States EXTENDS" pretty well sums it up.

The solicitor general brilliantly throws the term "citizen" around when discussing the intent of Congress in addressing the proper statutory construction for the 1921 Revenue Act. SCOTUS must have thought it was WAY too risky to address this in their opinion. The government brief concludes: "The statute, therefore, applies to the incomes of nonresident citizens even though those incomes are derived from sources outside of the United States." That is the key right there: the use of the word "citizen" standing alone---without the "of the United States" part. Of course citizen = subject so just substitute the word "subject" when you see "citizen" used by itself and the SCAM is revealed.

The 1920 1040 return asks the filer "Are you a citizen of the United States?" and "If not, are you a resident of the United States?" The 1040 George Cook (of Cook v Tait) filed in 1921 is different! It asks the filer "Are you a citizen or resident of the United States?" Note that one is NOT asked on the form in 1921 if one is a "citizen of the United States". Only a "citizen or resident of the United States". So we can see an advance in the deception between 1920 and 1921. Cook answered "yes" on the 1921 return to the question of whether he was a "citizen or resident of the United States", thus putting himself under the obligations applicable to that status. It would be interesting to see what Cook did on his 1920 return, if he filed one (I believe the case file indicated that he had filed a 1920 return, during which he was living in Mexico and presumably collected rents for Mexican real estate he owned, just as in 1921.) But on the 1920 return Cook would have stated he was a citizen of the United States not a "citizen or resident of the United States". Did he pay tax for 1920 and just not complain about it?

The lower court in the Cook v Tait case refers to Article 3 of Regulation 02, promulgated by the Commissioner of Internal Revenue and approved by the Secretary of Treasury under the Revenue Act of 1921 which provides: "Citizens of the United States, except those entitled to the benefits of Section 202...wherever resident, are LIABLE TO the tax." That "LIABLE TO" language goes back to at least 1921!!

Worth noting that TWO questions were put before the SCOTUS in the writ of error for Cook v. Tait:

1. The first was "Has the Congress of the United States the POWER to levy, assess and collect income tax received by a native citizen of the United States who was during many years before the time when the income was received and continuously thereafter resident and domiciled in Mexico....

2. The second question was "Does the 1921 Revenue Act authorize such tax?"

So the first question was "can Congress do that?" and the second was "did Congress do that in this 1921 act?" SCOTUS answered ONLY THE FIRST QUESTION. Check out the SCOTUS opinion in Cook v Tait: at paragraph 5:

The question in the case, and which was presented by the demurrer to the declaration is, as expressed by plaintiff, whether Congress has power to impose a tax upon income received by a native citizen of the United States who, at the time the income was received, was permanently resident and domiciled in the city of Mexico, the income being from real and personal property located in Mexico.

SCOTUS did not address whether the 1921 act authorized income tax on the income of a native Citizen of the United States from real property in Mexico!!!! You know why? Because they did not want to reveal the CONTRACT!! It was easy enough for SCOTUS to justify why Congress had the POWER to impose such an income tax---since in this case the taxpayer had DECLARED himself a subject of the sovereign power on his return!!

But SCOTUS stopped short of saying that the 1921 revenue act imposed such a tax on EVERY Citizen of the United States (so situated as Cook). But they wanted everyone to BELIEVE that is how they had ruled. The truth is that Congress DOES have the POWER to impose a tax on the foreign income of ANYONE who CONSENTS to have that income taxed---which is exactly what Cook did when he filed a 1040, declared himself a citizen or resident of the United States and declared his Mexican real estate income as gross income on that return!!

Again, what they DO NOT SAY is often more powerful than what they do say, though it is harder to notice what they do NOT say. We will need to look back at old 1040 returns, but we note that by 1936 the 1040 asks the filer if he or she is a) a citizen of the United States or b) a resident alien. 1921 is the first use of the phrase "citizen or resident of the United States" on the 1040 form. Perhaps the Revenue Act of 1921 is the first time that phrase is used.

Back when this case was heard, there was not 1040NR form, so he filed the only form he could file, which is with the 1040. Since then, the 1040NR has been introduced and section 871 now allows only U.S. Source income to be taxed instead of foreign earned income for nonresident aliens. Back then, to get out of tax, all he had to do was answer "NO" to the question of whether he was a "citizen or resident of the United States", and he could have got all his money back. But he didn't do that and thereby committed perjury on the form by misrepresenting his status. Thus, he the shaft unfairly when he filed his action as a refund suit. He could have just ignored the IRS collector and not filed anything. He was in Mexico, what were they going to do?

The 1040 form asked "are you a citizen or resident of the United States?" from 1921 through 1933. That is the form Cook filled out. From 1934 to 1936, they altered it to ask "Are you a) a citizen of the United States or b) a resident alien?" From 1937 on, the use of 1040 form itself indicated "citizen or resident of the United States" status, as a separate form was introduced in 1937 for nonresident aliens.

The legal problem they might have had would be if a taxpayer marked that he was a "citizen of the United States" (which does not preclude nonresident alien status) on one of those returns and then proceeded to exclude income not federally-connected. They would have had to allow that, or be prepared for a battle over the issue of whether the applicable Revenue Act actually imposed tax on citizens of the United States, a question which SCOTUS had totally DODGED in the Cook v. Tait case.

Cook argued in his brief that the tax assessed against him "is not within the Statute; for the Statute does not contain express declaration of authority to impose the tax and will be strictly construed in favor of the taxpayer (citing numerous cases) and because it must be construed as including only property and persons within the constitutional power of Congress to reach so as to keep the Statute in harmony with the Constitution."

The Constitution did not apply to Cook for income tax purposes because not only was he abroad, where it didn't apply, but he also CONSENTED to an implied contract by requesting a "benefit". SCOTUS KNEW the tax assessed against him WAS within the 1921 Statute, as such tax was imposed on the net income of every individual, with a LOWER RATE (of which Cook took advantage of) of 4 % on the first $4,000 in the case of a "citizen or resident of the United States". This would be the ostensible purpose of asking on the form if you are a citizen or resident of the United States"!

Cook made really great arguments against presuming an intent in the Revenue Act to tax all American citizens abroad for their income from foreign sources. And he was RIGHT! That is why SCOTUS dodged the question--because if they HAD addressed that argument, they would have to admit that all Americans WERE NOT being made subject to tax in the Revenue Act, only the ones who CONSENTED by calling themselves citizens or residents of the United States (and/or accepting the lower 4% tax rate on the first $4,000 of their net income).

Last line of the Cook v Tait opinion: The consequence of the relations is that the native citizen who is taxed may have domicile, and the property from which his income is derived may have situs, in a foreign country and the tax be legal—the government having power to impose the tax. The native "citizen" WHO IS TAXED (i.e. one who has become subject to a tax as in Cook who CONSENTED to be taxed) may be taxed even though his domicile is in a foreign country, and even though the situs of the property from which income is derived so long as the government has power to impose the tax. All they really said is that his arguments re his foreign domicile and foreign situs of the property were of no avail to the tax he had become subject to---which he had CONSENTED to make himself subject to. A STATUTORY citizen or resident of the United States has no access to these arguments to avoid taxation of income, per the 16th Amendment and the 1921 Revenue Act.

Or to put the contention another way, to the existence of the power and its exercise, the person receiving the income and the property from which he receives it must both be within the territorial limits of the United States to be within the taxing power of the United States. The contention is not justified, and that it is not justified is the necessary deduction of recent cases.

All they did was shoot down Cook's arguments that Congress does not have the power to tax HIS income from outside the U.S. when he is outside of the U.S. This is no obstacle to the power of taxing his income that Cook GAVE Congress when he filed his 1040 and declared himself a citizen

10 1938

First return called a "UNITED STATES individual income tax return". Before that, it was just "Individual Income Tax Return". From 1938 1040 instructions

B. WHO MUST USE FORM 1040.—Form 1040 must be used by all individuals (except nonresident aliens), who are required to make returns and (1) whose net income is more than $5,000, or (2) whose income, regardless of amount, includes any item other than salaries or other compensation received from others for personal services, dividends, interest, and taxable income from annuities, or (3) whose return is made on an accrual basis, or (4) whose return is made for a fiscal year. All other individuals, except nonresident aliens, required to make returns shall use Form 1040A. Nonresident aliens are required to use Form 1040B or Form 1040NB

To their credit, they DO mention there is a different form for nonresident aliens, which is more than they do NOW in the 1040 instructions

We think they decided they needed something not so "on the nose" as this question (to say whether they are Americans or non-Americans) they had been putting on the 1040 since 1920. So they decided to roll out a separate return form for "nonresident aliens" in 1938, and since Americans were already used to the 1040 Individual forms--they would not notice too much if it was suddenly called a "U.S. Individual" return.

They created that status of "U.S. Individual" FIRST in 1938 then made everybody start using SSN on such return by 1945 in order to create a reasonable basis for "generally identifying" an SSN in IRS records as "belonging to a citizen of the United States". See 26 C.F.R. §301.6109-1(g)(1)(i). They need this in order to be able to do default assessments based on information returns like W-2 once some of the sheep woke up and realized that duping American into filing a 1040 is a SCAM designed as a workaround of Constitutional restrictions using "implied contract". Naturally anyone waking up to this would begin by refusing to file a return. It is the simplest first step for not going along with the scam.

11 1940

Check out the 1940 "income and DEFENSE tax" return. They were ramping up to get U.S into WWII and in 1940 they did not yet have the wage withholding program that would help alleviate inflation during the massive borrowing that would be required

So 1940 return seems like an attempt to get patriotic Americans to file to pay for "defense" from the Japs who were possibly plotting to invade California etc. Or attack U.S. positions in the South Pacific.

1940 instructions make no mention of income that is "wholly exempt from tax"---but from 1941-1945 they DO, just so you can't say they didn't TELL you about it

12 1942

First year they ask for a SSN on the return

13 1943

Last "United States Individual" return

14 1944

1944 1040 is the first time we see the form called a "U.S. Individual Income Tax Return" rather than a "United States Individual Income Tax Return"

The 1944 1040 form instructions say you can exclude items that are "wholly exempt from tax" and refers the reader to the provision of the Code that mentions income excluded by statute or fundamental law. Below is a snapshot of the instructions for this form:

 

15 1945

These instructions say you can exclude items that are "wholly exempt from tax" and refers the reader to the provision of the Code that mentions income excluded by statute or fundamental law.

Click here for the 1945 instructions.
16 1967

1967 is the first 1040NR form---it asks for SSN "if any". This is the same year that American Samoa became a self governing unincorporated territory of the United States. Do you think there is any coincidence there?

17 1972

By 1972, 1040NR requires an "identifying number". The 1040-NR was modified to add various "filing / tax statuses". 1972 was the same year that Congress amended I.R.C. 873(b)(3). Yet the IRS did not update the 1040-NR form to reflect a replacement of "resident of American Samoa" to "national of the U.S." until 1980... and in 1983 changed from "national of the U.S." to "U. S. national" (note the space between U. and S.) at the end of the status sentence.

18 1980

First use of "national of the U.S." on the 1040NR return. As late as 1979, they do not have U.S. national on the 1040NR but refer to "resident of American Samoa". Why change that, if a U.S. national means ONLY an American Samoan? Why would an American Samoan have the right to avoid personal jurisdiction by claiming nonresident alien status, but no other American would have that right? Brushaber was NOT an American Samoan, yet Treasury decision 2313 referred to him as a nonresident alien!

Obviously he had American nationality. This makes him a "U.S. national"--which is the term THEY chose to use on their 1040NR form to describe an American who does not choose the "citizen" (American electing to be treated as a resident alien for tax purposes) implied contract. "Nonresident alien individual" is thus a CONTRACT term, especially for American nationals--since it is entirely their choice whether or not to enter into this "citizen" contract each tax year. For a foreign national, there may be other factors such as substantial presence test that would qualify such person as a resident alien, so they cannot lawfully choose nonresident alien status if they were present 183 days or more in the U.S. for example. But the substantial presence test is IRRELEVANT to an American national, as his presence in U.S. is by RIGHT and is never a federal privilege as it is with a foreign national.

19 1984-2017 "U.S. national" replaces "national of the U.S." on the 1040NR return
20 1987

In 1987 they close the "space gap" between the U. and the S. In 1993 they modified the verbiage to specifically state whether the "a ___ U.S. national" was single or married instead of letting people assume a distributive application from "single resident of Canada or Mexico" to apply to the U.S. national on the same check box level. Weird.

The also use the indefinite article "a" in conjunction with U.S. national which we find interesting.

They demarcate the "U.S. national" from "resident of Mexico or Canada" with a comma, (Single resident of Canada or Mexico, or a single U.S. national) instead of just running it on like so..."Single resident of Canada or Mexico or a single U.S. national"

21 2010 In 2010 the IRS changed the 1040NR again, and removed the comma separating "Single resident of Canada or Mexico" with "a single U.S. national" and also removed the indefinite article "a".
22 2018 "U.S. national" removed from 1040NR return. The one that was removed in 2018 and onward (U.S. national or resident of canada/mexico) and which was added in 1972 was "resident of American Samoa, Mexico, Canada".
23 2020 In 2020 they removed the filing status section altogether of the comingled tax status and filing status, and only included filing status. This continues to the present time.
24 Current

As of 2020 tax season, they are STILL using the phrase "citizen or resident of the United States" in their publications: From Publication 17:

Do I Have To File a Return?

You must file a federal income tax return if you are a citizen or resident of the United States or a resident of Puerto Rico and you meet the filing requirements for any of the following categories that apply to you.

On the next page they switch to the undefined term "U.S. citizen" and obviously hope you will equate this with the "citizen" referred to in the phrase "citizen or resident of the United States":

Individuals—In General

If you are a U.S. citizen or resident, whether you must file a return depends on three factors.

1. Your gross income. 2. Your filing status. 3. Your age.

To find out whether you must file, see Table 1-1, Table 1-2, and Table 1-3. Even if no table shows that you must file, you may need to file to get money back. See Who Should File, later.

Gross income. This includes all income you receive in the form of money, goods, property, and services that isn't exempt from tax. It also includes income from sources outside the United States or from the sale of your main home (even if you can exclude all or part of it).

Note also that they qualify the statement about "gross income" including all income you receive with THIS: "that isn't exempt from tax". The EXEMPTION is, in fact THE CONSTITUTION, which they currently refuse to recognize in all but the most hidden regulations, as we point out earlier.

They do a similar "switcheroo" at 26 C.F.R. §1.1-1. 26 C.F.R. §1.1-1 (a) says the tax is imposed by Section 1 of the Code on the income of every individual who is "citizen or resident of the United States" is used to define "United States person" at 7701 then at (b) it says "In general, all citizens of the United States, wherever resident, and all resident alien individuals are liable to the income taxes imposed by the Code whether the income is received from sources within or without the United States."

They get away with saying "all citizens of the United States" because they QUALIFY that at the beginning of the sentence with the phrase "In general..."

Why don't they explain what the exceptions are for this general rule right here? How am I supposed to know if the general rule applies to me (as a citizen of the United States) or not? Here is the reason. It is a maxim of law that:

"Dolosus versatur generalibus. A deceiver deals in generals. 2 Co. 34."

"Fraus latet in generalibus. Fraud lies hid in general expressions."

Generale nihil certum implicat. A general expression implies nothing certain. 2 Co. 34.

Ubi quid generaliter conceditur, in est haec exceptio, si non aliquid sit contra jus fasque. Where a thing is concealed generally, this exception arises, that there shall be nothing contrary to law and right. 10 Co. 78.
[Bouvier's Maxims of Law, 1856]

Here is what they should say if they want full disclosure:

"In general, we at the Treasury Department assume that most citizens of the United States will be duped into filing a 1040 and declaring themselves 'citizens or residents of the United States', but it is possible some citizens of the United States will not fall for this SCAM and will file as a nonresident alien using 1040NR, as is their right."

This FRAUD has persisted since 1916, when they first added "citizen or resident of the United States" to the income tax act.

So they did not actually claim that an UNDEFINED "U.S. citizen" (if we take that to mean "American citizen") must report all income as "gross income". Although they are not responsible for what they put in their publications, they nevertheless seem to be carefully avoiding making any statements that are blatantly false---they use these qualifiers to give themselves plausible deniability. They DO actually make presumptuous statements in their publications by calling the reader YOU, instead of merely "those subject" who BECOME subject by either being a privileged "resident ALIEN" or an American dumb enough to call themselves a fictional volunteer called a "citizen" in 26 C.F.R. §1.1-1(c).

They always put these two things together (citizen) and (resident of the United States) so that they can stick that "of the United States" on the end of the phrase "citizen or resident of the United States" and trick you into believing they said "citizen of the United States". But they do NOT ever actually say citizen of the United States unless they use a qualifier such as in 26 C.F.R. §1.1-1(b) "in general". It is "citizen" all by itself then "resident of the United States". These are equivalent for tax purposes, but that does NOT mean that "citizen" refers to any "citizen of the United States." The "citizen" of 26 C.F.R. §1.1-1(a) is a SUBSET of the group "citizens of the United States", as explained at 26 C.F.R. §1.1-1(c)---where the additional condition of being SUBJECT TO ITS (United States corporation) JURISDICTION is added to that explanation of "who is a citizen. "

HOWEVER, when Congress wants to be especially clear to distinguish a "citizen of the United States" from a mere "citizen", they know how to be. Here is an example:

26 U.S. Code § 7701 - Definitions

(b)Definition of resident alien and nonresident alien

(1) In general

For purposes of this title (other than subtitle B)—

(A) Resident alienAn alien individual shall be treated as a resident of the United States with respect to any calendar year if (and only if) such individual meets the requirements of clause (i), (ii), or (iii):

(i) Lawfully admitted for permanent residence

Such individual is a lawful permanent resident of the United States at any time during such calendar year.

(ii) Substantial presence test

Such individual meets the substantial presence test of paragraph (3).

(iii) First year election

Such individual makes the election provided in paragraph (4).

(B) Nonresident alien

An individual is a nonresident alien if such individual is neither a citizen of the United States nor a resident of the United States (within the meaning of subparagraph (A)).

Maybe a clearer way to think of this is to define the term "nonresident alien" as ANY person that is not a "United States person". Again, there are only two choices: United States person or, if one is not that, one is a nonresident alien. Congress does not DEFINE the term "nonresident alien" at 26 U.S.C. §7701(b)(1)(b)--they only state a RULE/EXPLANATION that an individual who is not a citizen of the United States and is also not a resident alien is a nonresident alien (i.e. NOT a United States person). But there is a DISCREPANCY in that 26 U.S.C. §7701(b) references citizens of the United States, while "United States person" definition in 26 U.S.C. §7701(a)(39) uses only the term "citizen" NOT "citizen of the United States." So this creates a gray area---where a person who is a "citizen of the United States" but is NOT a "citizen" can be a nonresident alien.

An X is a Y if such X is neither a W nor a Z. That is not the same thing as "an x is a y ONLY if such x is neither a w nor a z.". Few also will be able to appreciate this beyond us and our readers, but note they do NOT use the word "means" or "includes" or "is limited to" in that "definition" of nonresident alien. All they say is that an individual who is neither a citizen of the United States or a resident alien of the United States is a nonresident alien individual. Which is true! But this does not in any way LIMIT other individuals from being nonresident alien individuals. Namely, an individual who is a citizen of the United States and who does not elect to file as a "citizen" or "resident [alien] of the United States".

An X who is a W could also be a Y. An X who is not a Z could also NOT be a Y, if he is a W. OK that's confusing me, lol. An individual who is not a resident alien could also NOT be a nonresident alien, if such individual is a citizen of the United States AND such individual chooses NOT to file as a nonresident alien.

Per the regulations, the 1040NR is the form for nonresident aliens, and 1040 is for everyone else. They do not actually say in the regulations that 1040 is for "citizens or residents of the United States", but that is all that is left once you eliminate the choice of nonresident alien.

26 C.F.R. §1.6012-1

(a) Individual citizen or resident -

(6) Form of return.

Form 1040 is prescribed for general use in making the return required under this paragraph. Form 1040A is an optional short form which, in accordance with paragraph (a)(7) of this section, may be used by certain taxpayers. A taxpayer otherwise entitled to use Form 1040A as his return for any taxable year may not make his return on such form if he elects not to take the standard deduction provided in section 141, and in such case he must make his return on Form 1040. For taxable years beginning before January 1, 1970, a taxpayer entitled under section 6014 and § 1.6014-1 to elect not to show his tax on his return must, if he desires to exercise such election, make his return on Form 1040A. Form 1040W is an optional short form which, in accordance with paragraph (a)(8) of this section, may be used only with respect to taxable years beginning after December 31, 1958, and ending before December 31, 1961.

"for general use". Generalities again! Then they describe variations such as 1040A and 1040W (1958-1961 only) before getting to the 1040NR.

26 C.F.R. §1.6012-1

(b) Return of nonresident alien individual -

(1) Requirement of return -

(i) In general.

Except as otherwise provided in subparagraph (2) of this paragraph, every nonresident alien individual (other than one treated as a resident under section 6013 (g) or (h)) who is engaged in trade or business in the United States at any time during the taxable year or who has income which is subject to taxation under subtitle A of the Code shall make a return on Form 1040NR. For this purpose it is immaterial that the gross income for the taxable year is less than the minimum amount specified in section 6012(a) for making a return. Thus, a nonresident alien individual who is engaged in a trade or business in the United States at any time during the taxable year is required to file a return on Form 1040 NR even though (a) he has no income which is effectively connected with the conduct of a trade or business in the United States, (b) he has no income from sources within the United States, or (c) his income is exempt from income tax by reason of an income tax convention or any section of the Code. However, if the nonresident alien individual has no gross income for the taxable year, he is not required to complete the return schedules but must attach a statement to the return indicating the nature of any exclusions claimed and the amount of such exclusions to the extent such amounts are readily determinable.

Note this regarding a NRA with zero gross income:

However, if the nonresident alien individual has no gross income for the taxable year, he is not required to complete the return schedules but must attach a statement to the return indicating the nature of any exclusions claimed and the amount of such exclusions to the extent such amounts are readily determinable.

"must attach a statement" This is not mandatory, as "must" means "may". But if you are going to say you had $0 gross income, I would definitely consider explaining any items you excluded. This would go a long way toward mitigating risk of being accused of "fraud" or "evasion" due to "failing" to report certain items. If they determine your exclusion is not permitted by law, at least they cannot say you failed to disclose the income.

The 1040NR instructions even describe what is called a "protective return" where one can claim "trade or business" expenses against no "trade or business" income, in the event that an item or items that YOU determined is/are NOT trade or business income is/are later determined by the IRS to be "trade or business income".

Protective Returns

Foreign corporations who are uncertain as to whether they are required to file a U.S. tax return, or uncertain as to whether their income is effectively connected to a U.S. trade or business, may file a protective Form 1120-F by checking the “Protective Return” box on Form 1120-F and providing the information as required in the instructions (Protective Return). Filing a Protective Return operates to preserve the right to claim deductions and credits should the IRS later assert that the foreign corporation does have a U.S. filing requirement, after the 18-month window has passed.

A Protective Return is also recommended for foreign corporations that determine they do not have a U.S. permanent establishment (a taxable presence) in the U.S. under an applicable U.S. tax treaty. In this case, such foreign corporations are generally required to file a Treaty Based Return Position (Form 8833) with Form 1120-F to assert the treaty claim. Timely filing a Protective Return preserves the foreign corporation’s right to offset income with allowable deductions should the IRS subsequently assert the company does have a taxable U.S. permanent establishment.

Swallows Case

A case which highlights the importance of timely filing Form 1120-F in a manner prescribed by regulations is Swallows Holding, Ltd. V. Commissioner, 101 AFTR 2d 2008-876. Swallows was a Barbados company that owned real estate in the U.S. Swallows filed a timely Form 1120-F for their first year and reported no activity, however, future year Forms 1120-F were not timely filed. The taxpayer subsequently filed the delinquent Forms 1120-F, reporting gross rents, the usual real estate deductions, including real estate taxes, and state franchise taxes. Upon audit, the IRS disallowed the deductions since the returns were filed more than 18 months after the original due date. The Swallows case eventually reached the 3rd Circuit, which determined that the IRS correctly disallowed the deductions. The result was that the Barbados company paid U.S. tax on gross income rather than on income after the deductions—a disastrous scenario.

[IRS May Disallow Deductions and Credits on Delinquent Forms 1120-F, EideBailey; https://www.eidebailly.com/insights/articles/irs-may-disallow-deductions-and-credits-on-delinquent-forms-1120-f]

The Swallows case was VERY specific to regulations establishing an 18 month deadline for a foreign corporation rather than a human being. We are not aware of any general 18 month deadline to claim trade or business deductions for a human being. Excerpt from that case:

The dispute in this case arises from the filing deadlines set forth in Treas. Reg. 1.882-4(a)(3)(i), 2 which the Secretary of the Treasury promulgated to supplement section 882(c)(2). The regulation requires that a foreign corporation file a return within eighteen months of the filing deadline set in section 6072 in order to claim the real property activity tax deductions. Here, Taxpayer filed the tax returns in question well after the expiration of the eighteen-month filing period. The Commissioner assessed tax deficiencies accordingly.

Treas. Reg. 1.882-4(a)(3)(i) provides:

If a return was filed for that immediately preceding taxable year, or if the current taxable year is the first taxable year of the foreign corporation for which a return is required to be filed, the required return for the current taxable year must be filed within 18 months of the due date as set forth in section 6072 and the regulations under that section….

More information on "protective return" from IRS Publication 519:

Protective return.

If your activities in the United States were limited and you do not believe that you had any gross income effectively connected with a U.S. trade or business during the year, you can file a protective return (Form 1040NR) by the deadline explained above. By filing a protective return, you protect your right to receive the benefit of deductions and credits in the event it is later determined that some or all of your income is effectively connected. You are not required to report any effectively connected income or any deductions on the protective return, but you must give the reason the return is being filed.

If you believe some of your activities resulted in effectively connected income, file your return reporting that income and related deductions by the regular due date. To protect your right to claim deductions or credits resulting from other actiities, attach a statement to that return explaining that you wish to protect your right to claim deductions and credits if it is later determined that the other activities produced effectively connected income.

You can follow the same procedure if you believe you have no U.S. tax liability because of a U.S. tax treaty. Be sure to also complete item
L on page 5 of Form 1040NR.

Waiver of filing deadline.

The IRS may waive the filing deadline if you establish that, based on the facts and circumstances, you acted reasonably and in good faith in failing to file a U.S. income tax return (including a protective return) and you cooperate with the IRS in determining your U.S. income tax liability for the tax year for which you did not file a return.

To protect your right to claim deductions or credits resulting from other activities, attach a statement to that return explaining that you wish to protect your right to claim deductions and credits if it is later determined that the other activities produced effectively connected income.

The IRS may waive the filing deadline if you establish that, based on the facts and circumstances, you acted reasonably and in good faith in failing to file a U.S. income tax return (including a protective return) and you cooperate with the IRS in determining your U.S. income tax liability for the tax year for which you did not file a return.

[IRS Publication 519; 2021]

By the way, look at this from Publication 519:

Amended Returns and Claims for Refund

If you find changes in your income, deductions, or credits after you mail your return, file Form 1040X, Amended U.S. Individual Income Tax
Return. Also use Form 1040X if you should have filed Form 1040, 1040A, or 1040EZ instead of Form 1040NR or 1040NR-EZ, or vice versa. If you amend Form 1040NR or Form 1040NR-EZ or file the correct return, attach the corrected return (Form 1040, Form 1040NR, etc.) to Form 1040X. Print “Amended” across the top. Ordinarily, an amended return claiming a refund must be filed within 3 years from the date your return was filed or within 2 years from the time the tax was paid, whichever is later. A return filed before the final due date is considered to have been filed on the due date.

Also use Form 1040X if you should have filed Form 1040, 1040A, or 1040EZ instead of Form 1040NR or 1040NR-EZ, or vice versa.

They use "or vice versa". In other words a 1040 filer can amend to a 1040NR in theory.