CITES BY TOPIC:  liability

There's No Statute Making Anyone Liable to Pay IRS Subtitle A Income Taxes

PDF 26 U.S.C., Subtitle A:  All citations of the word "liable" or "liability"

Legal Obligation and Authority-Stanford Encyclopedia of Philosophy

Offer in Compromise (Doubt as to Liability), IRS Form 656-L

Doubt as to Liability Offers, Internal Revenue Manual Section 4.18.2

26 U.S.C. 1461. Liability for withheld tax

TITLE 26 > Subtitle A > CHAPTER 3 > 1461

1461. Definitions

Every person required to deduct and withhold any tax under this chapter is hereby made liable for such tax and is hereby indemnified against the claims and demands of any person for the amount of any payments made in accordance with the provisions of this chapter.

(Aug. 16, 1954, ch. 736, 68A Stat. 360; Pub. L. 89–809, title I, § 103(i), Nov. 13, 1966, 80 Stat. 1554.)

[26 U.S.C. §1461]

[EDITORIAL: This is the ONLY statute making ANYONE liable in the entire Internal Revenue Code Subtitle A]

Black's Law Dictionary, Sixth Edition, p. 914:

Liability.  The word is a broad legal term.  Mayfield v. First Nat. Bank of Chattanooga, Tenn., C.C.Tenn., 137 F.2d 1013, 1019.  It has been referred to as of the most comprehensive significance, including almost every character of hazard or responsibility, absolute, contingent, or likely.  It has been defined to mean:  all character of debts and obligations, Public Market Co. of Portland v. City of Portland, 171 Or. 522, 130 P.2d 624, 643, 646; amenability or responsibility, Eberhard v. Aetna Ins. Co., 134 Misc. 386, 235 N.Y.S. 445, 447; an obligation one is bound in law or justice to perform, State ex re. Diederichs v. Board of Trustees of Missoula County High School, 91 Mont. 300, 7 P.2d 543, 545; an obligation which may or may not ripen into a debt; any kind of debt or liability, either absolute or contingent, express or implied, Public Market Co. of Portland v. City of Portland, 171 Or. 522, 130 P.2d 624, 643, 646; condition of being actually or potentially subject to an obligation; condition of being responsible for a possible or actual loss, penalty, evil, expense, or burden; condition which creates a duty to perform an act immediately or in the future, Union Oil CO. of California v. Basalt Rock Co., 30 Cal.App.2d 317, 86 P.2d 139, 141; duty to pay money or perform some other service, Dehne v. Hillman Inv. Co., C.C.A.Pa., 110 F.2d 456, 458; duty whihc must at least eventually be performed, Vandergrift v. Riley, Cal.Supp., 16 P.2d 734, 736; estate tax, Lyeth v. Hoey, C.C.A.N.Y., 112 F.2d 4, 6; every kind of legal obligation, responsibility, or duty, Mayfield v. First Nat. Bank of Chattanooga, Tenn., C.C.A.Tenn., 137 F.2d 1013, 1019; fixed liability, Ivester v. STate ex rel. Gillum, 183 Okl 519, 83 P.2d 193, 196; legal responsibility, Clark v. Lowden, D.C.Minn., 43 F.Supp. 261, 263; penalty for failure to pay tax when due, State v. Fischl, 94 Mont. 92, 20 P.2d 1057, 1059; present, current, future, fixed or contingent debts, Erickson v. Grande Ronde Lumber Co., 162 Or. 556, 92 P.2d 170, 174; punishment, Holliman v. Cole, 168 Okl. 473, 34 P.2d 597, 599; responsibility for torts, Italiani v. Metro-Goldwyn-Mayer Corporation, 45 Cal.2d 464, 114 P.2d 370, 372; tax, Thompson v. Smith, 189 Okl. 217, 114 P.2d 922, 924; that which one is under obligation to pay, or for which one is liable, Reconstruction Finance Corporation v. Gossett, Tex., 111 S.W.2d 1066; the state of being bound or obliged in law or justice to do, pay, or make good something; the state of one who is bound in law and justice to do something which may be enforced by action, Fidelity Coal Co. v. Diamond, 310 Ill.APp. 387, 34 N.E.2d 123; Clark v. Lowden, D.C.Minn., 48 F.Supp. 261, 263; unliquidated claim.

All the claims against a corporation.  Liabilities include accounts and wages and salaries payable, dividends declared payable, accrued taxes payable, fixed or long-term liabilities such as mortgage bonds, debentures and bank loans.

See also Current liabilities; Derivative liability; Employer's liability acts; Enterprise liability; Legal liability; Liable; Limitation of liability acts; Malpractice; No fault; Parental liability; Personal liability; Product liability; Several liability; Strict liability; Vicarious liability.

Absolute liability.  See Strict liability.

Accrued liability.  Obligation which has been incurred but not yet paid; e.g. taxes, rent.

Children.  See Parental liability.

Contingent liability. A liability not yet fixed but dependent on events to occur in the future (e.g. a pending law suit).

Fixed liability. One fixed as to time, amount, etc.; e.g.  mortgage.

Joint and several liability.  Responsible together and individually.  The person who has been harmed can sue and recover from both wrongdoers or from either one of the wrongdoers (if he goes after both of them, he does not, however receive double compensation).  See also Joint and several liability; Joint tort-feasors.

Joint liability.  Liability for which more than one person is responsible.  See also Contribution; Joint liability; Joint tort-feasors.

Liability bond.  See Bond.

Primary liability.  A liability for which a person is directly responsible as contrasted with one which is contingent or secondary.

Secondary liability.  A liability in the nature of a contingent claim such as the liability of a guarantor as contrasted with that of a strict surety or comaker.  A guarantor's liability does not arise until the principal debtor has failed to pay the creditor.

[Black's Law Dictionary, Sixth Edition, p. 914:]

Black's Law Dictionary, Fourth Edition, pp. 1223-1226:

OBLIGATION. A generic word, derived from the Latin substantive "obligatio," having many, wide, and varied meanings, according to the context in which it is used. Enyeart v. City of Lincoln, 136 Neb. 146, 285 N.W. 314, 318. That which a person is bound to do or forbear; any duty imposed by law, promise, contract, relations of society, courtesy, kindness, etc. Goodwin v. Freadrich, 135 Neb. 203, 280 N.W. 917, 923. Duty. Rucks-Brandt Const. Co. v. Price, 165 Okl. 178, 23 P.2d 690. Duty imposed by law. Helvering v. British-American Tobacco Co., C.C.A., 69 F.2d 528,530. Law or duty binding parties to perform their agreement. An undertaking to perform. State v. Citrus County, 116 Fla. 676, 157 So. 4, 97 A.L.R. 431. That which constitutes a legal or moral duty and which renders a person liable to coercion and punishment for neglecting it; a word of broad meaning, and the particular meaning intended is to be gained by consideration of its context. An obligation or debt may exist by reason of a judgment as well as an express contract, in either case there being a legal duty on the part of the one bound to comply with the promise. Schwartz v. California Claim Service, 52 Cal.App.2d 47, 125 P.2d 883, 888. Liabilities created by contract or law, Rose v. W. B. Worthen Co., 186 Ark. 205, 53 S.W.2d 15, 16, 85 A.L.R. 212; or tort. Exchange Bank v. Ford, 3 P. 449, 451, 7 Colo. 314. As legal term word originally meant a sealed bond, but it now extends to any certain written promise to pay money or do a specific thing. Lee v. Kenan, C.C.A.Fla., 78 F.2d 425, 100 A.L.R. 869. A formal and binding agreement or acknowledgment of a liability to pay a certain sum or do a certain thing. United States v. One Zumstein Briefmarken Katalog 1938, D.C. Pa., 24 F.Supp. 516, 519.

The binding power of a vow, promise, oath, or contract. or of law, civil, political, or moral, independent of a promise; that which constitutes legal or moral duty, and whlch renders a person liable to coercion and punishment for neglecting lt. Webster.

A tie which binds us to pay or do something agreeably to the laws and customs of the country in which the obligation is made. Inst. 3, 14.

Obligatlon is (1) legal or moral duty, as opposed to physical compulslon: (2) a duty incumbent upon an individual, or a specific and limited number of individuals, as opposed to a duty imposed upon the Gorld at large; (3) the right to enforce such a duty. (jus in personam,) as opposed to such a right as that of property, (jus in rent,) which avalls against the world at large: (4) a bond contalning a penalty, with a condition annexed, for the payment of money, performance of covenants, or the llke. Mozley & Whitley.

"Obligation" la the correlative of "right." Taking the latter word in itd polltlc~ethical sense, as a power of free action lodged In a person, "obligation" 1s the corresponding duty, constraint, or binding force which should prevent all other persona from denying, abridging, or obstructing such right, or interfering with its exercise. And the same ie itd meaning as the correlative of a "jus in rent.'' Taking"right" aa meaning a "jw in personm," (a power. demand, claim, or privilege inherent In one person, and incident upon another,) the "obligation" is the coerclve force or control imposed upon the person of incidence by the moral law and the positive law, (or the moral law as recognized and sanctioned by the positive law,) constraining him to accede to the demand, render up the thing claimed, pay the money due, or otherwise perform what is expected of him with respect to the subject-matter of the right.

A penal bond or "writing obligatory." that is, a bond containing a penalty, with a condition annexed for the payment of money, performance of covenants, or the like, and which differs from a bill, the latter being generally without a penalty m condition, though it may be obligatory. Co.Litt. 172.

A deed whereby a man binds himself under a penalty to do a thlng. Com.Dig. Obligation (A): Taylor v. Glaser. 2 Serg. & R., Pa., 502; Denton v. Adams, 6 Vt. 40. The word has a very broad and comprehensive legal signiflcation and embraces all instruments of writing, however informal, whereby one party contracts with another for the payment of money or the delivery of specific articles. State v. Campbell, 103 N.C. 344, 9 S.E. 410; Morrison v. Lovejoy, 6 Mlnn. 353, Gil. 224; Slnton v. Carter Co., 23 F. 535.

In English expositions of the Roman law, and works upon general jurisprudence. "obligation" is used to translate the Latin "obligatio." In this sense its meaning is much wider than as a technical term of English law. See Obligatio.

Absolute obligation. One which gives no alternative to the obligor, but requires fulfillment according to the engagement.

Conjunctive or alternative obligation. The former is one in which the several objects in it are connected by a copulative, or in any other manner which shows that all of them are severally comprised in the contract. This contract creates as many different obligations as there are different objects; and the debtor, when he wishes to discharge himself, may force the creditor to receive them separately. But where the things which form the object of the contract are separated by a disjunctive, then the obligation is alternative, and the performance of either of such things will discharge the obligor. The choice of performing one of the obligations belongs to the obligor, unless it is expressly agreed that it shall belong to the creditor. Civ.Code La. art. 2068; Dougl. 14; 1 Ld. Rayrn. 279; Galloway v. Legan, 4 Mart. N. S. (La.) 167. A promise to deliver a certain thing or to pay a specified sum of money is an example of an alternative obligation. Civ.Code La. arts. 2063, 2066, 2067.

Contractual obligation. One which arises from a contract or agreement.

Determinate or indeterminate obligation. A determinate obligation is one which has for its object a certain thing: as, an obligation to deliver a certain horse named Bucephalus, in which case
the obligation can be discharged only by delivering the identical horse. An indeterminate obligation is one where the obligor binds himself to deliver one of a certain species: as, to deliver a horse,
where the delivery of any horse will discharge the obligation.

Divisible or indivisible obligation. A divisible obligation is one which, being a unit, may nevertheless be lawfully divided, with or without the consent of the parties. An indivisible obligation is one which is not susceptible of division: as, for example,.if I promise to pay you one hundred dollars, you cannot assign one-half of this to another, so as to give him a right of action against me for his share.

Express or implied obligation. Express or conventional obligations are those by which the obligor binds himself in express terms to perform his obligation, while implied obligations are such as are raised by the implication or inference of the law from the nature of the transaction.

Failure to meet obligations. See Failure to Meet Obligations.

Joint or several obligation. A joint obligation is one by which two or more obligors bind themselves jointly for the performance of the obligation. France v. France, 94 Or. 414, 185 P. 1108.
A several obligation is one where the obligors promise, each for himself, to fulfill the engagement.

Moral obligation. A duty which is valid and binding in conscience and according to natural justice, but is not recognized by the law as adequate to set in motion the machinery of justice; that is, one which rests upon ethical considerations alone, and is not imposed or enforced by positive law. Taylor v. Hotchkiss, 81 App.Div. 470, 80 N. Y.S. 1042; Bailey v. Philadelphia, 167 Pa. 569, 31 A. 925, 46 Am.St.Rep. 691. A duty which would be enforceable by law, were it not for some positive rule, which, with a view to general benefit, exempts the party in that particular instance from legal liability. Backhaus v. Lee, 49 N.D. 821, 194 N.W. 887, 890; Longstreth v. City of Philadelphia, 245 Pa. 233, 91 A. 667.

Natural or civil obligation. A natural obligation is one which cannot be enforced by action, but which is binding on the party who makes it in conscience and according to natural justice; Blair v. Williams, 4 Litt., Ky., 41. As, for instance, when the action is barred by the act of limitation, a natural obligation still subsists, although the civil obligation is extinguished; Sturges v. Crowninshield, 4 Wheat. 197, 4 L.Ed. 529; Ogden v. Saunders, 12 Wheat. 318, 337, 6 L.Ed. 606. A civil obligation is a legal tie, which gives the party with whom it is contracted the right of enforcing its performance by law. Civ.Code La. art. 1757; Poth. Obl. 173, 191.

Obedientid obligation. One incumbent on parties in consequence of the situation or relationship in which they are placed. Ersk. Prin. 60.

Perfect or imperfect obligation. A perfect obligation is one recognized and sanctioned by positive law; one of which the fulfillment can be enforced by the aid of the law. Aycock v. Martin, 37 Ga. 124, 92 Am.Dec. 56. But if the duty created by the obligation operates only on the moral sense, without being enforced by any positive law, it is called an "imperfect obligation," and creates no right of action, nor has it any legal operation. The duty of exercising gratitude, charity, and the other merely moral duties are examples of this kind of obligation. Civ.Code La. art. 1757; Edwards v. Kearzey, 96 U.S. 600, 24 L.Ed. 793.

Personal or heritable obligation. An obligation is heritable when the heirs and assigns of one party may enforce the performance against the heirs of the other. Civ.Code La. art. 1997. It is personal when the obligor binds himself only, not his heirs or representatives. An obligation is strictly personal when none but the obligee can enforce the performance, or when it can be enforced only against the obligor. Civ.Code La. art. 1997. An obligation may be personal as to the obligee. and heritable as to the obligor, and it may inlike manner be heritable as to ihe obligee, and personal as to the obligor. Civ.Code La. art. 1998. For the term personal obligation, as used in a different sense, see the next paragraph.

Personal or real obligation. A personal obligation is one by which the obligor binds himself to perform an act, without directly binding his property for its performance. A real obligation is one by which real estate, and not the person, is liable to the obligee for the performance.

Thus, when an estate owes an easement, as a right of way, it is the thlng, and not the owner, who owes the easement. Another instance of a real obligation occurs when a person buys an estate which has been mortgaged, subject to the mortgage; he is not liable for the debt, though the estate Is. In these cases the owner has an interest only because he ir mized of the servient estate or the mortgaged premises, and he may discharge hlmself by abandoning or parting with the property. The obligation is both personal and real when the obligor has bound himself and pledged his estate for the fulfllment of the obligations. In the clvil law and in Louisiana, a real obligation is one which is attached to immovable property, and it passes with such property into whatever hands the property may come, without maklng the third possessor personally responslble. Civ.Code La art. 1997.

Primary obligation. An obligation which is the principal object of the contract. For example, the primary obligation of the seller is to deliver the thing sold, and to transfer the title to it. It is dlstlnguished from the accessory or secondary obligation to pay damages for not doing so.,, 1 Bouv.Inst. no. 702. The word "primary" and "direct, contrasted with "secondary," when spoken with reference to an obligatlon.
refer to the remedy provided by law for enforcing the obligation, rather than to the character and limits of the obllgation itself. Kllton v. Providence Tool Co., 27, R.I. 605, 48 A. 1039.

Primitive or secondary obligation. A primitive obligation, which in one sense may also be called a principal obligation, is one which is contracted with a design that it should itself be the first fulfilled. A secondary obligation is one which is contracted and is to be performed in case the primitive cannot be. For example, if one sells his house, he binds himself to give a title; but if he finds he cannot as when the title is in another, then his secondary obligation is to pay damages for nonperformance of the obligation.

Principal or accessory obligation. A principal obligation is one which arises from the principal object of the engagement of the contracting parties; while an accessory obligation depends upon or is collateral to the principal. See Poth. Obl. no. 182. For example, In the case of the sale of a house and lot of ground, the principal obligatlon on the part of the vendor is to make title for it; the accessory obllgation is to deliver all the title-papers which the vendor has relatlng to it, to take care of the estate until it is delivered, and the like. See, further, the title Accessory Obligation.

Pure obligation. One which is not suspended by any condition, whether it has been contracted without any condition, or, when thus contracted, the condition has been accomplished. Poth. Obl. no. 176. See simple obligation.

Simple or conditional obligation. Simple obligations are such as are not dependent for their execution on any event provided for by the parties, and which are not agreed to become void on the
happening of any such event. Conditional obligations are such as are made to depend on an uncertain event. If the obligation is not to take effect until the event happens, it is a suspensive condition; if the obligation takes effect immediately, but is liable to be defeated when the event happens, it is then a resolutory condition. Civ.Code La. arts. 2020, 2021; Moss v. Smoker, 2 La.Ann. 989. A simple obligation is also defined as one which is not suspended by any condition, either because it has been contracted without condition, or, having been contracted with one, the condition has been fulfilled; and a conditional obligation is also defined as one the execution of which is suspended by a condition which has not been accomplished, and subject to which it has been contracted.

Single or penal obligation. A penal obligation is one to which is attached a penal clause, which is to be enforced if the principal obligation be not performed. A single obligation is one without any penalty: as where one simply promises to pay another one hundred dollars. This is called a single bill, when it is under seal.

Solidary obligation. In the law of Louisiana, one which binds each of the obligors for the whole debt, as distinguished from a "joint" obligation, which binds the parties each for his separate praportion
of the debt. Groves v. Sentell, 14 S.Ct. 898, 153 U.S. 465, 38 L.Ed. 785. See Solidary.

[Black's Law Dictionary, Fourth Edition, pp. 1223-1226]

Merkel v. C.I.R, 192 F.3d. 844, 848 (9th Cir. 1999)

“Black's Law Dictionary defines "liability" as a "broad legal term . . . including almost every character of hazard or responsibility, absolute, contingent, or likely." Black's Law Dictionary 914 (6th ed. 1990). ”

[Merkel v. C.I.R, 192 F.3d. 844, 848 (9th Cir. 1999)]

Guardian T. & D. Co. v. Fisher, 200 U.S. 57, 26 S.Ct. 186 (1906)

"An individual may be 69*69 under no obligation to do a particular thing, and his failure to act creates no liability, but if he voluntarily attempts to act and do the particular thing he comes under an implied obligation in respect to the manner in which he does it. A surgeon, for instance, may be under no obligation, in the absence of contract, to assume the treatment of an injured person, but if he does undertake such treatment he assumes likewise the duty of reasonable care in such treatment. The owner of a lot is not bound to build a house or store thereon, but if he does so he comes under an implied obligation to use reasonable care in the work to prevent injury therefrom to others. Holmes on the Common Law, 278. Even if the water company was under no contract obligations to construct waterworks in the city or to supply the citizens with water, yet having undertaken to do so it comes under an implied obligation to use reasonable care, and if through its negligence injury results to an individual it becomes liable to him for the damages resulting therefrom, and the action to recover is for a tort and not for breach of contract."

[Guardian T. & D. Co. v. Fisher, 200 U.S. 57, 26 S.Ct. 186 (1906)]

26 U.S.C. 7601(a):

TITLE 26 > Subtitle F > CHAPTER 78 > Subchapter A > Sec. 7601.

Sec. 7601. - Canvass of districts for taxable persons and objects

(a) General rule

The Secretary shall, to the extent he deems it practicable, cause officers or employees of the Treasury Department to proceed, from time to time, through each internal revenue district and inquire after and concerning all persons therein who may be liable to pay any internal revenue tax, and all persons owning or having the care and management of any objects with respect to which any tax is imposed.

26 U.S.C. 6331(a):

TITLE 26 > Subtitle F > CHAPTER 64 > Subchapter D > PART II > Sec. 6331.

Sec. 6331. - Levy and distraint

(a) Authority of Secretary

If any person liable to pay any tax neglects or refuses to pay the same within 10 days after notice and demand, it shall be lawful for the Secretary to collect such tax (and such further sum as shall be sufficient to cover the expenses of the levy) by levy upon all property and rights to property (except such property as is exempt under section 6334) belonging to such person or on which there is a lien provided in this chapter for the payment of such tax. Levy may be made upon the accrued salary or wages of any officer, employee, or elected official, of the United States, the District of Columbia, or any agency or instrumentality of the United States or the District of Columbia, by serving a notice of levy on the employer (as defined in section 3401(d)) of such officer, employee, or elected official. If the Secretary makes a finding that the collection of such tax is in jeopardy, notice and demand for immediate payment of such tax may be made by the Secretary and, upon failure or refusal to pay such tax, collection thereof by levy shall be lawful without regard to the 10-day period provided in this section.

PDF United States v. Ward, 833 F.2d 1538 (11th Cir. 1988)

"The government is unable, therefore, to offer case authority for the universally accepted proposition that a citizen of the United States, working and residing in the United States, subject to federal law, earning wages, and responsible for filing an income tax return, is liable for taxation."

[United States v. Ward, 833 F.2d 1538 (11th Cir. 1988)]


"'Tax' is legal imposition, exclusively of statutory origin, and liability to taxation must be read in statute, or it does not exist." Bente v. Bugbee, 137 A. 552; 103 N.J. Law. 608 (1927)

"The taxpayer must be liable for the tax. Tax liability is a condition precedent to the demand. Merely demanding payment, even repeatedly, does not cause liability." Bothke v. Terry, 713 F.2d  1405, at 1414 (1983).

"Liability for taxation must clearly appear from statute imposing tax."  Higley v. Commissioner of Internal Revenue, 69 F.2d 160 (1934)

26 C.F.R. §301.7122-1

26 C.F.R. §301.7122-1 - Compromises.

(b) Grounds for compromise—

(1) Doubt as to liability. Doubt as to liability exists where there is a genuine dispute as to the existence or amount of the correct tax liability under the law. Doubt as to liability does not exist where the liability has been established by a final court decision or judgment concerning the existence or amount of the liability. See paragraph (f)(4) of this section for special rules applicable to rejection of offers in cases where the Internal Revenue Service (IRS) is unable to locate the taxpayer's return or return information to verify the liability.

(2) Doubt as to collectibility. Doubt as to collectibility exists in any case where the taxpayer's assets and income are less than the full amount of the liability.

[26 C.F.R. §301.7122-1(b)

EDITORIAL: The REAL reason courts have so often rejected as "frivolous" a taxpayer's argument that "wages are not income" is the LACK of a genuine dispute as to the existence of a tax liability in cases where that argument has been made.]


Congress does not hesitate to use the words "liable" and "liability" when writing tax laws exercising its constitutional taxing authority.

Approximately 55 different types of constitutional, lawful and mandatory varieties of tax statutes can be found within the Internal Revenue Code.  Here are but a few examples:

3403 states that employers shall be liable for payment of tax withheld from employee wages
4374 places tax liability on foreign insurance policies;
4401 establishes tax liability on wagering;
5005 lays a tax liability for distilled spirits, wines and beer on  distillers or importers;
5043 establishes wine tax liability on wine cellar proprietors or importers;
5703 places cigar and cigarette tax liability on manufacturers or importers.

Dozens of other "revenue taxable activities" which the Constitution authorizes Congress to tax uniformly throughout the United States are clearly enumerated within the IRC and are lawfully taxable.

Scrutiny of Exhibit 13 displaying the Internal Revenue Index to Code  entries for "Liability for tax" reveals that a Code section establishing "liability for income tax" does not exist.  Congress is not authorized to make any taxpayer within the 50 states liable and has not done so.

Question 1:  Can a federal regulation create a specific liability, when no specific liability is created by the corresponding statute?

Answer 1:  No.  The U.S. Constitution vests all legislative power in the Congress of the United States.  See Article I, Section 1.  The Executive Branch of the federal government has no legislative power whatsoever.  This means that agencies of the Executive Branch, and also the federal Courts in the Judicial Branch, are prohibited from making law.

If an Act of Congress fails to create a specific liability for any tax imposed by that Act, then there is no liability for that tax. Executive agencies have no authority to cure any such omission by using regulations to create a liability.  "[A]n administrative agency may not create a criminal offense or any liability not sanctioned by the lawmaking authority, especially a liability for a tax or inspection fee."  See 2 Am Jur 2d, page 129 [emphasis added].

Question 2. The federal regulations create an income tax liability for what specific classes of people?

Answer 2:  The regulations at 26 CFR 1.1-1 attempt to create a specific liability for all "citizens of the United States" and all "residents of the United States".  However, this regulation corresponds to IRC section 1, which does not create a specific liability for taxes imposed by subtitle A.  Therefore, this regulation is an overly broad extension of the underlying statutory authority;  as such, it is unconstitutional, null and void ab initio (from the beginning, in Latin).

Admit that the United States Supreme Court has held in C.I.R. v. Acker, 361 U.S. 87, 89 (1959), and in U.S. v. Calamaro, 354 U.S. 351, 358-359 (1957), that a regulation that purports to create a legal requirement not imposed by Congress in the underlying statute is invalid.


General demands for filing tax returns, production of records, examination of books, imposition and payment of tax, etc., are of no consequence to the point a taxing statute (1) defines what tax is being imposed, and (2) the basis of liability. In other words, even if the Internal Revenue Service was a legitimate agency of the United States Department of the Treasury and had authority in the several States, the Service would have to be specific with respect to what tax was at issue and would have to demonstrate the tax by citing a taxing statute with the necessary elements to establish that any given person was obligated to pay any given tax.

This mandate has been clarified by the courts numerous times, with the matter definitely stated by the Tenth Circuit Court of Appeals in United States v. Community TV, Inc. 327 F.2d 797, at p. 800 (1964):

Without question, a taxing statute must describe with some certainty the transaction, service, or object to be taxed, and in the typical situation it is construed against the Government, Hassett v. Welch, 303 U.S. 303, 58 S. Ct. 559, 82 L.Ed. 858

In other words, to the point Service personnel produce the statute which mandates a certain tax and which specifies, "… the transaction, service, or object to be taxed..," the burden of proof lies with the Government, with the consequence being that no obligation or civil or criminal liability can ensue to the point a taxing statute that meets the above requirements is in evidence.

This conclusion is supported by the statute which provides the underlying requirements for keeping records, making statements, etc., located at 26 USC 6001: Every person liable for any tax imposed by this title, or for the collection thereof, shall keep such records, render such statements, make such returns, and comply with such rules and regulations as the Secretary may from time to time prescribe. Whenever in the judgement of the Secretary it is necessary, he may require any person, by notice served upon such person, or by regulations, to make such returns, render such statements, or keep such records, as the Secretary deems sufficient to show whether or not such person is liable for tax under this title. The only records which an employee shall be required to keep under this section in connection with charged tips shall be charge receipts, records necessary to comply with section 6053 (C), and copies of statements furnished by employees under section 6053 (a).

The control statute for Subtitle F, Chapter 61, Subchapter A, Part I, concerning records, statements, and special returns, clearly returns the matter to the "employee" defined at Sec. 3401 (C), and the "employer" defined at Sec 3401(d). In general, however, (1) the Secretary must provide direct notice to whomever is required to keep books, records, etc., as being the "person liable," or (2) specify the person liable by regulation. In the absence of notice by the Secretary, based on a taxing statute which makes such a person liable according to provisions stipulated in Unite States v. Community TV, Inc., Hassett v. Welch, and other such cases, or regulations which specifically set establish general liability, there is no liability.

Sec. 6001 also exempts "employees" from keeping records except where tips and the like are concerned. This is consistent with constructive demonstration that "employers" rather than "employees" are required to file returns, as opposed to paying deducted amounts as income tax returns, constructively demonstrated in a previous section of this memorandum and specifically articulated in 26 CFR sec 601.104.

Clarification via 26 USC sec 6053(a) is as follows: (a) REPORTS BY EMPLOYEES. – Every employee who, in the course of his employment by an employer, receives in any calendar month tips which are wages (as defined in section 3121(a) or section 3401(a)) or which are compensation (as defined in section 3231(e)) shall report all such tips in one or more written statements furnished to his employer on or before the 10th day following such month. Such statements shall be furnished by the employee under such regulations, at such other times before such 10th day, an in such form and manner, as may be prescribed by the Secretary.

Unraveling Sec. 6001 straightens out the meaning of Sec. 6011, which requires filing returns, statements, etc., by the person made liable (Sec. 3401(d)), as distinguished from the person required to make returns (payments) at Sec. 6012 (sec. 3401(c)). Even though a person might be a citizen or resident of the United States employed by an agency of the United States, and thereby be required to return a prescribed amount of United States – source income, he is not the person liable under Sec. 6011 and attending regulations.

The "method of assessment" prescribed at 26 USC Sec. 6303 is therefore dependent on the taxing statute and must rest on authority specifically conveyed by a taxing statute which prescribes liability where the Secretary (1) has provided specific notice, including the statute and type of tax being imposed, or (2) supports assessment by regulatory application. In the absence of one or the other, an assessment by the Secretary is of no consequence as it is not legally obligating.

The requirement for the Secretary to provide notice to whomever is responsible for collecting tax, keeping records, etc., is clarified at 26 CFR Sec. 301.7512-1, particularly (a)(1)(i), relating to "employee tax imposed by section 3101 of chapter 21 (Federal Insurance Contributions Act)," and (a)(1)(iii), relating to "income tax required to be withheld on wages by section 3402 of chapter 24 (Collection of Income Tax at Source on Wages)… " The person liable is the employer or the employer’s agent, and of particular significance, it is this "person" who is subject to civil and particularly criminal penalties (26 CFR sec 301.7513-1(f); 26 CFR Secs. 301.7207-1 & 301.7214-1, etc.). Officers and employees of the United States are specifically identified as being liable at 26 CFR Sec. 301.7214-1.

The matter of who is required to register, apply for licenses, or otherwise collect and/or pay taxes imposed by the Internal Revenue Code is ultimately and finally put to rest under "Licensing and Registration", 26 CFR Secs. 301.7001-1, et seq. Each of the categories so addressed has liability based on some particular taxing statute that creates liability.


Enclosed in this correspondence you will find copies of IRS Notices that threaten to assess frivolous-filing penalties against me for the year 2000.  I am hard pressed to understand the nature of your communication, as I have cooperated in good faith with the IRS to the very best of my knowledge, information, and belief.  I have sought to comply with the rules and regulations of the Secretary and have submitted all forms known by me to be pertinent in this process.

I have prepared and provided the lawful forms regarding my returns for the above year. The 8275 Forms allowed me to explain my contentions of factual nature on the returns, and the 8275 Forms demonstrate how this position concurs with that of the Secretary of the Treasury.  Both the  8275 Forms were created and promulgated for these specific purposes by the Secretary.

I must point out that the IRS does not have statutory authority to penalize me civilly or create criminal charges against me for the returns that I have submitted. The following points clearly express the supporting elements of this claim:

1)      the 1st Amendment says that I have the right to redress a grievance to my government;

2)      the case of United States v. Sullivan 274 U.S. 259 (1927) states that I can, by law, raise objections and controversies on a return.

 It was my right, as set forth by the U.S. Supreme Court and the administrative process, to make my contentions of factual nature on my return.  The requirements of the Internal Revenue Manual clearly provide that the IRS must comply with those determinations of the U.S. Supreme Court regarding my rights:

[4.2]  (05-14-1999)
Importance of Court Decisions

  1. Decisions made at various levels of the court system are considered to be interpretations of tax laws and may be used by either examiners or taxpayers to support a position.

  2. Certain court cases lend more weight to a position than others. A case decided by the U.S. Supreme Court becomes the law of the land and takes precedence over decisions of lower courts. The Internal Revenue Service must follow Supreme Court decisions. For examiners, Supreme Court decisions have the same weight as the Code.

  3. Decisions made by lower courts, such as Tax Court, District Courts, or Claims Court, are binding on the Service only for the particular taxpayer and the years litigated. Adverse decisions of lower courts do not require the Service to alter its position for other taxpayers.

 As you should be well aware, the courts have also held that you must comply with your own Regulations;

"Purpose of rules that federal agencies are required to abide by their own regulations even where such regulations are more generous than required by law is to prevent unjust discrimination and denial of adequate notice of procedures by the agency in violation of due process."
United States v. Newell
, 578 F.2d 827, 828 (9th Cir.) (1978)

In support of my submission of the 1040 Forms with Form  8275, the actions of the IRS to-date have indicated to me that I must now specifically inform the Examination Division of the following U.S. Supreme Court decision supporting my right and duty to make my contentions of factual nature upon the face of those forms:

 “If the form or return provided called for answers that the defendant was privileged from making he could have raised the objection in the return, but could not on that account refuse to make a return at all.” United States v. Sullivan 274 U.S. 259 at 262

Also, in my effort to understand the IRS’ determination and threat to penalize me I have discovered the following statement from the IRS’ own Internal Revenue Manual at [120.1] 10.9  (08-12-1998):

The intent of the law [6702] is to stop the flow of returns, amended returns, or documents which purport to be returns, that contain altered line items or claim clearly unallowable deductions or credits based on a frivolous position. 

It is unreasonable to believe that my submission of duly promulgated tax forms in the proper and specific manner for which they were created qualifies as a frivolous action.       Therefore, to attempt to press this matter from your position will place the IRS in direct conflict with the Court, as well as its own governing Manual provisions.  As a result, it appears to have entrapped me with civil penalties despite the fact that the IRS itself has promulgated the Forms by which I can make contentions of factual nature.

Furthermore, the IRS Penalty Handbook [120.1] 1.2.1 [08-20-1998] details 10 points explaining how penalties are to encourage ‘Voluntary Compliance’.

 I have taken note of them and provide the following contentions regarding your Office’s apparent violations of these provisions of the IRM.  From what I can see, I have been compliant with the process for 1997 through 1999 but am being threatened with penalties nonetheless:

#1  “Voluntary compliance exists when taxpayers conform to the law without compulsion or threat.”  This is exactly why I filed returns for 2000, but the problem in this case has arisen due to the IRS refusing to review and acknowledge the forms that I submitted (i.e. Form 8275).  These forms were submitted in order to make complete and acceptable contentions of factual nature to prove that I had “0” gross income as defined by law.

#2  “The Service is responsible for providing information to taxpayers, which includes:

Written materials that clearly explain the rules.

Forms that permit the self-computation of tax liability.”

This statement by the Commissioner in the IRM proves my assertion that the IRS has acted in bad faith by initially failing to inform me of the proper forms and documents to make my contentions of factual nature, and then is apparently choosing to ignore my submissions when I have provided the forms as the procedure allows. I actually have concluded that I should be filing a 2555 form so I am asking if that will solve this problem.

The BIG problem is that I have never met an IRS employee that had even a remote clue concerning the Code and some did not even know what a regulation was nor had ever read the regulations. How can such a person who is ignorant of the law make any adverse determinations against any Citizen? I think it is the principal of “we have always done it that way, or we were only following orders”. I think I will summons you to any examination proceedings concerning this penalty and see just how much you really know about tax law, and the basis upon which you found the citations of law I included on my 8275 form are frivolous. I will also ask you what regulations I should have followed in order to properly file the 1040 form. I am willing to bet you do not have a clue.

“In the present context these principles require…timely and adequate notice detailing reasons…, by presenting arguments and evidence FCC v. WJR, 337 U.S. 265, 275-277 (1949)”

This court has been zealous to protect these rights from erosion. It has spoken out…in all types of cases where administrative...actions were under scrutiny.”
Greene v. McElroy, 360 U.S. 474. 496-497 (1959)


pursuant to the standards of due process of law as held by the U.S. Supreme Court, and the burden of proof being upon the Secretary pursuant to 26 USC 6703(a),

I want to remind you of the Statues and Regulations I am relying upon for the determination if I am liable for any tax or subject to any internal revenue tax as found in the definition of Taxpayer as in code sect 7701 (a)(14).  I first am relying upon the privacy act statement in the 1040 instruction book where the Secretary of the Treasury  cites code sects. 6001, 6011. and 6012. They clearly say I have to pay taxes I am liable for according to regulations , that is not statutes but REGULATIONS and that I have to have Gross Income according to Regulations. I have relied upon the following REGULATIONS and their Statutes:  All are found in 26 CFR and now I will list them,  1.1-1b,  1.61-1,  1.16-2, 1.861-1,  1.861-8, 1.863-1c, 1.861-2, 1.861-3,  1.861-4. I cannot find any provisions of these Regulations that describe my situation in any of the examples of taxable situations or sources of income found in these Regulations.  I was unable to also find any other REGULATIONS describing the earned income of a U.S. Citizen who lives and works within the U.S.  I want to also remind you that the Regulations are the official interpretations of the Secretary of the Treasury of the provisions and scope of the Statutes. These Regulations are binding upon the IRS.

 I will not tolerate arbitrary determinations concerning taxable income (code sect. 63) that are not based upon Regulations because this will be a violation of  the law, the 1040 instructions, failure to follow the instructions if the Secretary as found in REGULATIONS, and constitute denial of Due Process.

The Court ruled that the meaning of income is a profit proceeding from capital as found in the Corporation Excise Tax Act of 1909. These cases have been cited in the last several years and have never been overturned. The Eisner v. Macomber case being the most prominent case defining income. Remember that in U.S. v. Ballard the court said income is not defined in the Code and Eisner ruled that congress is not free to define income because the word is in the Constitution so the Court defined it to mean a profit. According to the U.S. Government manual the IRS relies upon the 16th Amendment for income taxing power. The supreme Court defined income to be a profit from capital and  none of the money I received was a profit.

PDF Jibilian v. United States, Federal Court of Claims, Case No. 04-1663T (2005)

Tony Jibilian, Plaintiff v. The United States, Defendant.

U.S. Court of Federal Claims; 04-1663T, June 6, 2005.

Subsequent Developments: 2006-1 ustc ¶50,256, (CA-FC) aff'd FedCl in an unpublished opinion.
Plaintiff also appears to argue that there is no law that makes him liable for income tax. However, I.R.C. §1(a) imposes an income tax upon the income of United States citizens and resident aliens. “Gross income” is defined in I.R.C. §61 as “all income from whatever source derived,” and “taxable income” is defined in I.R.C. §63 as being “gross income minus” allowable deductions. Pursuant to §1(a), Treas. Reg. §1.1-1(b) states that “all citizens of the United States … are liable to the income taxes imposed by the Code whether the income is received from sources within or without the United States.” Finally, the Code requires that taxes shown to be due on the return be paid with the filing of the return. I.R.C. §6151(a). In United States v. Drefke, the court, while discussing §6151, stated that “when a tax return is required to be filed, the person so required shall pay such taxes to the internal revenue officer with whom the return is filed at the fixed time and place. The sections of the Internal Revenue Code imposed a duty on [the taxpayer] to file tax returns and pay the … tax.” [ 83-1 ustc ¶9354], 707 F.2d 978, 981 (8th Cir. 1983) (emphasis in original).

Congress has expressed its intent that plaintiff be liable for income tax by asserting that “[u]nder the Federal individual income tax system, an individual who is a citizen or a resident of the United States generally is subject to tax on worldwide taxable income.” H.Conf. Rep. No. 108-126, at 26 (2003), reprinted in 2003 U.S.C.C.A.N., 108th Cong., 1st Sess., Vol. 2, at 736. The courts are also in agreement that “all individuals, natural or unnatural, must pay federal income tax ….” Lovel v. United States [ 85-1 ustc ¶9208], 755 F.2d 517, 519 (7th Cir. 1984). Plaintiff, as a citizen of the United States, is subject to tax upon his worldwide income, and has therefore failed to state a claim on the theory that no law makes him liable for income tax.

The Court strains to interpret an argument apparently asserted by plaintiff that because there is no regulation requiring the use of the Form 1040 for filing an income tax return, plaintiff cannot be liable for income tax. Plaintiff's argument is without merit. It is the tax code, not the regulations that imposes a duty upon persons such as plaintiff to file tax returns. United States v. Hicks [ 91-2 ustc ¶50,549], 947 F.2d 1356, 1360 (9th Cir. 1991) (citing United States v. Bowers [ 90-2 ustc ¶50,588], 920 F.2d 220, 222 (4th Cir. 1990)). Plaintiff has therefore failed to state a claim based on his Form 1040 argument.

Pursuant to §1(a), Treas. Reg. §1.1-1(b) states that “all citizens of the United States … are liable to the income taxes imposed by the Code whether the income is received from sources within or without the United States.”

[Jibilian v. United States, Federal Court of Claims, Case No. 04-1663T (2005)]

26 U.S.C. §26. - Limitation based on tax liability; definition of tax liability

TITLE 26 > Subtitle A > CHAPTER 1 > Subchapter A > PART IV > Subpart A > Sec. 26.

Sec. 26. - Limitation based on tax liability; definition of tax liability

(a) Limitation based on amount of tax

(1) In general

The aggregate amount of credits allowed by this subpart (other than sections 23, 24, and 25B) for the taxable year shall not exceed the excess (if any) of -

(A) the taxpayer's regular tax liability for the taxable year, over

(B) the tentative minimum tax for the taxable year (determined without regard to the alternative minimum tax foreign tax credit).

For purposes of subparagraph (B), the taxpayer's tentative minimum tax for any taxable year beginning during 1999 shall be treated as being zero.

(2) Special rule for 2000 and 2001

For purposes of any taxable year beginning during 2000 or 2001, the aggregate amount of credits allowed by this subpart for the taxable year shall not exceed the sum of -


the taxpayer's regular tax liability for the taxable year reduced by the foreign tax credit allowable under section 27(a), and


the tax imposed by section 55(a) for the taxable year.

(b) Regular tax liability

For purposes of this part -

(1) In general

The term ''regular tax liability'' means the tax imposed by this chapter for the taxable year.

(2) Exception for certain taxes

For purposes of paragraph (1), any tax imposed by any of the following provisions shall not be treated as tax imposed by this chapter:

(A) section 55 (relating to minimum tax),

(B) section 59A (relating to environmental tax),

(C) subsection (m)(5)(B), (q), (t), or (v) of section 72 (relating to additional taxes on certain distributions),

(D) section 143(m) (relating to recapture of proration of Federal subsidy from use of mortgage bonds and mortgage credit certificates),

(E) section 530(d)(3) (relating to additional tax on certain distributions from Coverdell education savings accounts),

(F) section 531 (relating to accumulated earnings tax),

(G) section 541 (relating to personal holding company tax),

(H) section 1351(d)(1) (relating to recoveries of foreign expropriation losses),

(I) section 1374 (relating to tax on certain built-in gains of S corporations),

(J) section 1375 (relating to tax imposed when passive investment income of corporation having subchapter C earnings and profits exceeds 25 percent of gross receipts),

(K) subparagraph (A) of section 7518(g)(6) (relating to nonqualified withdrawals from capital construction funds taxed at highest marginal rate),

(L) sections 871(a) and 881 (relating to certain income of nonresident aliens and foreign corporations),

(M) section 860E(e) (relating to taxes with respect to certain residual interests),

(N) section 884 (relating to branch profits tax),

(O) sections 453(l)(3) and 453A(c) (relating to interest on certain deferred tax liabilities),

(P) section 860K (relating to treatment of transfers of high-yield interests to disqualified holders), and

(Q) section 220(f)(4) (relating to additional tax on Archer MSA distributions not used for qualified medical expenses).

(c) Tentative minimum tax

For purposes of this part, the term ''tentative minimum tax'' means the amount determined under section 55(b)(1)