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This memorandum will be construed to comply with provisions necessary to establish presumed fact (Rule 301, Federal Rules of Civil Procedure, and attending State rules) should interested parties fail to rebut any given allegation or matter of law addressed herein. The position will be construed as adequate to meet requirements of judicial notice, thus preserving fundamental law. Matters addressed herein, if not rebutted, will be construed to have general application. A true and correct copy of this Public Notice is on file with and available for inspection at the newspaper responsible for publishing the instrument as legal notice. The memorandum addresses the character of the Internal Revenue Service and other agencies of the Department of the Treasury, and legal application of the Internal Revenue Code.
In 1953, the Internal Revenue Service was created by the stroke of
a pen when the Secretary of the Treasury changed the name of the
Bureau of Internal Revenue (T.O. No. 150-29, G.M. Humphrey, Secretary
of the Treasury, July 9, 1953). However, no congressional or
presidential authorization for making this change has been located,
so the source of authority had to originate elsewhere. Research to
which IRS officials have acquiesced suggests that the Secretary
exercised his authority as trustee of Puerto Rico Trust #62 (Internal
Revenue) (see 31
USC § 1321), and as will be demonstrated, the Secretary
does, in fact, operate as Secretary of the Treasury, Puerto Rico.
The solid link between the Internal Revenue Service and the
Department of the Treasury, Puerto Rico, was first published in the
September 1995 issue of Veritas Magazine, based on research by
William Cooper and Wayne Bentson, both of Arizona. In October, a
criminal complaint was filed in the office of W. A. Drew Edmondson,
attorney general for Oklahoma, against an Enid-based revenue officer,
and in the time since, IRS principals have failed to refute the
allegation that IRS is an agency of the Department of Treasury,
Puerto Rico. In November, criminal complaints were filed
simultaneously with the grand jury for the United States district
court for the District of Northern Oklahoma, Tulsa, and the office of
Attorney General Edmondson, and both the office of the United States
Attorney and IRS principals have yet to rebut the allegations in that
instance (UNITED STATES OF AMERICA vs. Kenney F. Moore, et al, 95
CR-129C).
By consulting the index for Chapter 3, Title 31 of the United
States Code, one finds that IRS and the Bureau of Alcohol, Tobacco
and Firearms are not listed as agencies of the United States
Department of the Treasury. The fact that Congress never created a
"Bureau of Internal Revenue" is confirmed by publication in the
Federal Register at 36 F.R. 849-890 [C.B. 1971 - 1,698], 36
F.R. 11946 [C.B. 1971 - 2,577], and 37 F.R. 489-490; and in
Internal Revenue Manual 1100 at 1111.2.
Implications are condemning both to IRS and third parties who
knowingly participate in IRS-initiated scams: No legitimate authority
resides in or emanates from an office which was not legitimately
created and/or ordained either by state or national constitutions or
by legislative enactment. See variously, United States v. Germane, 99
U.S. 508 (1879), Norton v. Shelby County, 118 U.S. 425, 441, 6 S.Ct.
1121 (1866), etc., dating to Pope v. Commissioner, 138 F.2d 1006,
1009 (6th Cir. 1943); where the state is concerned, the most recent
corresponding decision was State v. Pinckney, 276 N.W.2d 433, 436
(Iowa 1979).
Another direct evidence of the fraud is found at 27 CFR § 1,
which prescribes basic requirements for securing permits under the
Federal Alcohol Administration Act. The problem here is that Congress
promulgated the Act in 1935, and the same year, the United States
Supreme Court declared the Act unconstitutional. Administration of
the Act was subsequently moved offshore to Puerto Rico, along with
the Federal Alcohol Administration, and operation eventually merged
with the Bureau of Internal Revenue, Puerto Rico, which until 1938,
along with the Bureau of Internal Revenue, Philippines, created by
the Philippines provisional government via Philippines Trust #2
(internal revenue) (see 31
USC § 1321 for listing of Philippines Trust #2 (internal
revenue)), administered the China Trade Act (licensing & revenue
collection relating to opium, cocaine & citric wines). This line
will be resumed after examining additional evidences concerning IRS
and Commissioner of Internal Revenue authority.
Further verification that IRS does not have lawful authority in
the several States is found in the Parallel Table of Authorities and
Rules, beginning on page 751 of the 1995 Index volume to the Code of
Federal Regulations. It will be found that there are no regulations
supportive of 26 USC §§ 7621,
7801,
7802
& 7803
(these statute listings are absent from the table). In other
words, no regulations have been published in the Federal Register,
extending authority to the several States and the population at
large, (1) to establish revenue districts within the several States,
(2) extending authority of the Department of the Treasury [Puerto
Rico] to the several States, (3) giving authority to the
Commissioner of Internal Revenue and assistants within the several
States, or (4) extending authority of any other Department of
Treasury personnel to the several States.
Authority of the Internal Revenue Service, via the Commissioner of
Internal Revenue, is convoluted in regulations, but makes an amount
of sense by citing various regulations pertaining to the Service and
application of the Commissioner's authority. General procedural rules
at 26 CFR § 601.101(a) provide a beginning-point:
(a) General. The Internal Revenue Service is a bureau of
the Department of the Treasury under the immediate direction of the
Commissioner of Internal Revenue. The Commissioner has general
superintendence of the assessment and collection of all taxes imposed
by any law providing internal revenue. The Internal Revenue Service
is the agency by which these functions are performed...
The fact that there are no regulations extending Commissioner of
Internal Revenue, or Department of the Treasury authority to the
several States (26 USC § 7802(a)),
has greater clarity in the light of the general merging of functions
between IRS and other agencies presently attached to the Department
of the Treasury. The Commissioner is given responsibility for issuing
rules and regulations for the Code at 26
CFR § 301.7805-1, with approval of the Secretary, but there
are no cites of authority for this CFR subpart, whether Treasury
Order, publication in the Federal Register, or even statute cite. In
other words, there is no actual or effective delegation which vests
the Commissioner with significant independent authority which might
be conveyed to IRS, BATF, Customs or any other Department of the
Treasury agency with respect to powers extending to or affecting the
several States and the population at large.
The link between IRS and the Bureau of Alcohol, Tobacco and
Firearms is significant as the tie with the Bureau of Internal
Revenue, Department of the Treasury, Puerto Rico, is through this
door. Reorganization Plan No. 3 of 1940, Section 2, made the
following change:
§ 2. Federal Alcohol Administration
The Federal Alcohol Administration, the offices of the members
thereof, and the office of the Administrator are abolished, and their
function shall be administered under the direction and supervision of
the Secretary of the Treasury through the Bureau of Internal Revenue
in the Department of the Treasury.
Again, the Federal Alcohol Administration Act of 1935 was declared
unconstitutional in 1935, and the operation thereafter transferred
off shore to Puerto Rico. The name of the Bureau of Internal Revenue
was changed to the Internal Revenue Service in 1953 (cite above),
then the Bureau of Alcohol, Tobacco and Firearms, a division of the
Internal Revenue Service, was seemingly separated from IRS (T.O.
120-01, June 6, 1972). In relevant part, the order reads as
follows:
1. The purpose of this order is to transfer, as specified herein,
the functions, powers and duties of the Internal Revenue Service
arising under law relating to Alcohol, Tobacco, Firearms and
Explosives including the Alcohol, Tobacco, and Firearms division of
the Internal Revenue Service, to the Bureau of Alcohol, Tobacco and
Firearms herein after referred to as the Bureau which is hereby
established. The Bureau shall be headed by the Director of the
Alcohol, Tobacco and Firearms herein referred to as the
Director...
2. The Director shall perform the functions, exercise the powers
and carry out the duties of the Secretary and the administration and
the enforcement of the following provisions of law:
A. Chapters 51 and 52 and 53 of the Internal Revenue Code of 1954
and Section 7652 and 7653 of such code insofar as they relate to the
commodity subject to tax under such chapters.
B. Chapter 61 to 80 inclusive to the Internal Revenue Code of 1954
insofar as they relate to activities administered and enforced with
respect to chapters 51, 52, 53. (emphasis added)
Transfer of functions and duties of IRS to BATF relative to
Internal Revenue Code Subtitle F (chapters 61 to 80) is important
where the instant matter is concerned as the only regulations
published in the Federal Register applicable to the several States
are under 27 CFR, Part 70 and other parts of this title relating
exclusively to alcohol, tobacco and firearms matters. However, the
charade doesn't end there. In Reorganization Plan No. 1 of 1965
(5
USC
§ 903), the original Bureau of Customs, created by Act of
Congress in 1895, was abolished and merged under the Secretary of the
Treasury.
In a Treasury Order published in the Federal Register of December
15, 1976, the Secretary of the Treasury used something of a slight of
hand to confuse matters more by determining, "The term Director,
Alcohol, Tobacco, and Firearms has been replaced with the term
Internal Revenue Service."
Obviously, it is impossible to replace a person with a thing when
it comes to administrative responsibility. However, the order
demonstrates that IRS and BATF are one and the same, merely operating
with interchangeable hats. Therefore, definitions and designations
applicable to one are applicable to the other.
In definitions at 27
CFR § 250.11, the following provisions are found:
Revenue Agent. Any duly authorized Commonwealth Internal
Revenue Agent of the Department of the Treasury of Puerto Rico.
Secretary. The Secretary of the Treasury of Puerto
Rico.
Secretary or his delegate. The Secretary or any officer or
employee of the Department of the Treasury of Puerto Rico duly
authorized by the Secretary to perform the function mentioned or
described in this part.
In the absence of any other definition describing revenue officers
and agents, the Secretary, or the Department of the Treasury,
definitions above are uniformly applicable to all IRS and BATF
departments, functions and personnel. In fact, it will be found that
even petroleum tax prescribed in Subtitle D of the Internal Revenue
Code applies only to United States territorial jurisdiction exclusive
of the several States and to imported petroleum. BATF has authority
only with respect to firearms, munitions, etc., produced outside the
several States and the first sale of imports.
The two delegations of authority to the Commissioner of Internal Revenue thus far located tend to reinforce conclusions set out above. Treasury Department Order No. 150-42, dated July 27, 1956, appearing in at 21 Fed. Reg. 5852, specifies the following:
The Commissioner shall, to the extent of the authority vested in
him, provide for the administration of United States internal revenue
laws in the Panama Canal Zone, Puerto Rico and the Virgin
Islands.
On February 27, 1986 (51 Fed. Reg. 9571), Treasury Department
Order No. 150-01 specified the following:
The Commissioner shall, to the extent of authority otherwise
vested in him, provide for the administration of the United States
internal revenue laws in the U.S. Territories and insular possessions
and other authorized areas of the world.
To date only three statutes in the Internal Revenue Code of 1986,
as currently amended, have been located that specifically reference
the several States, exclusive of the federal States (District of
Columbia, Puerto Rico, Guam, the Virgin Islands, etc.): 26 USC
§§ 5272(b),
5362(c)
& 7462.
The first two provide certain exemptions to bond and import tax
requirements relating to imported distilled spirits for governments
of the several States and their respective political subdivisions,
and the last provides that reports published by the United States Tax
Court will constitute evidence of the reports in courts of the United
States and the several States. None of the three statutes extend
assessment or collections authority for IRS or BATF within the
several States.
IRS is contracted to provide collection services for the Agency
for International Development, and case law demonstrates that the
true principals of interest are the International Monetary Fund and
the World Bank (Bank of the United States v. Planters Bank of
Georgia, 6 L.Ed (Wheat) 244; U.S. v. Burr, 309 U.S. 242; see 22 USCA
§ 286,
et seq.). In other words, IRS seemingly provides collection services
for undisclosed foreign principals rather than collecting internal
revenue for the benefit of constitutional United States government
operation. To date, IRS principals have failed to dispute the
published Cooper/Bentson allegation that the agency, via these
foreign principals, funded the enormous tank and military truck
factory on the Kama River, Russia.
The Internal Revenue Service, a foreign entity with respect to the several States, is not registered to do business in the several States.
The Internal Revenue Service has for years been protected by
statutory courts both of the United States and the several States,
with the latter operating in the framework of adopted uniform laws
which ascribe a federal character to the several States. Both operate
under the presumption of Congress' Article IV jurisdiction within the
geographical United States (the District of Columbia, Puerto Rico,
etc.), both accommodate private international law under exclusively
United States treaties on private international law, and both operate
in the framework of admiralty rules to impose Civil Law (see both
majority & dissenting opinions variously, Bennis v. Michigan,
U.S. Supreme Court No. 94-8729, March 4, 1996) , which is repugnant
to both state and national constitutions (see authority of Department
of Justice as representative of the "Central Authority" established
by U.S. treaties on private international law at 28
CFR
§ 0.49; also, "conflict of law" as a subcategory to
"statutes" in American Jurisprudence). However, this house of cards
will shortly fall as Cooperative Federalism, known as Corporatism
well into the 1930s, has been thoroughly documented and is rapidly
being exposed via state and United States appellate courts and in
public forum.
In reality, the Internal Revenue Code preserves due process
rights, but the statute has been dormant until recently:
(b) PRESERVATION OF EXISTING RIGHTS AND REMEDIES.
-- Nothing in Reorganization Plan Numbered 26 of 1950 or
Reorganization Plan Numbered 1 of 1952 shall be considered to impair
any right or remedy, including trial by jury, to recover any internal
revenue tax alleged to have been erroneously or illegally assessed or
collected, or any penalty claimed to have been collected without
authority, or any sum alleged to have been excessive or in any manner
wrongfully collected under the internal revenue laws. For the purpose
of any action to recover any such tax, penalty, or sum, all statutes,
rules, and regulations referring to the collector of internal
revenue, the principal officer for the internal revenue district, or
the Secretary, shall be deemed to refer to the officer whose act or
acts referred to in the preceding sentence gave rise to such action.
The venue of any such action shall be the same as under existing
law.
The reorganization plans of 1950 & 1952 were implemented via
the Internal Revenue Code of 1954, Volume 68A of the Statutes at
Large, and codified as title 26 of the United States Code. Savings
statutes have been in place since the beginning, but generally not
understood by the general population or the legal profession. The
statute set out above is easier to comprehend when references are
consolidated. Further, the dependent clause "including trial by jury"
relates to a constitutionally-assured right, not a remedy, so it
should be moved to the proper location in the sentence. Finally, the
matter of venue is important as "existing law" is constitutional and
common law indigenous to the several States. In the absence of
legitimate federal law which extends to the several States, those who
operate under color of law, engage in oppression, extortion, etc.,
are subject to the foundation law of the States. Venue is determined
by the law of legislative jurisdiction.
Citing "including trial by jury" preserves the full slate of due
process rights included in Fourth, Fifth, Sixth, Seventh and
Fourteenth Amendments to the Constitution for the united States of
America and corresponding provisions in constitutions of the several
States. The example represents the class.
Additionally, note that, (1) actions may issue against bogus
assessments as well as collections, and (2) § 7804(b),
unlike § 7433,
does not presume that the complaining party is a "taxpayer". Finally,
there is 26 CFR, Part 1 regulatory support for
§ 7804 where there are no regulations published in the
Federal Register in support of § 7433
(see Parallel Table of Authorities and Rules, beginning on page
751 of the Index volume to the Code of Federal Regulations).
Therefore, §
7804(b) preserves rights and determines the nature of civil
actions for remedies in the several States. When straightened out,
applicable portions of § 7804(b) read as follows:
Nothing in [the Internal Revenue Code] shall be
considered to impair any right, [including trial by jury], or
remedy, [***], to recover any internal revenue tax alleged to
have been erroneously or illegally assessed or collected ... The
venue of any such action shall be the same as under existing law.
The necessity of due process is implicitly preserved by 28
USC § 2463, which stipulates that any seizure under United
States revenue laws will be deemed in the custody of the law and
subject solely to disposition of courts of the United States with
proper jurisdiction. In other words, even if IRS had legitimate
authority in the several States, the agency would of necessity have
to file a civil or criminal complaint prior to garnishment, seizure
or any other action adversely affecting the life, liberty or property
of any given person, whether a Fourteenth Amendment citizen-subject
of the United States or a Citizen principal of one of the several
States. Due process assurances in the Fifth and Fourteenth Amendments
do not equivocate -- administrative seizures without due process can
be equated only to tyranny and barbarian rule. Further, even
regulations governing IRS conduct acknowledge and therefore preserve
Fifth Amendment assurances at 26
CFR
§ 601.106(f)(1).
(1) Rule I. An exaction by the U.S. Government, which is not
based upon law, statutory or otherwise, is a taking of property
without due process of law, in violation of the Fifth Amendment to
the U.S. Constitution. Accordingly, an Appeals representative in his
or her conclusions of fact or application of the law, shall hew to
the law and the recognized standards of legal construction. It shall
be his or her duty to determine the correct amount of the tax, with
strict impartiality as between the taxpayer and the Government, and
without favoritism or discrimination as between taxpayers.
Even officers, agents and employees of United States agencies are
assured due process where garnishment is concerned (5
USC
§ 5520a), so the notion that IRS has authority to execute
garnishment and other seizures via the private sector without due
process is clearly absurd. In the English-American lineage, due
process has always been deemed to mean trial by jury under rules of
the common law indigenous to the several States; the de jure people
of America are not subject to admiralty or administrative
tribunals.
Where officers, agents and employees of the Internal Revenue
Service are concerned, there can be no plea of ignorance concerning
the necessity of due process as the Handbook for Revenue Agents, at
paragraph 332: (1), provides the following:
During the course of administratively collecting a tax, an
occasion may arise where service of a levy or a notice of levy is not
adequate to seize the property of a taxpayer. It cannot be emphasized
too strongly that constitutional guarantees and individual rights
must not be violated. Property should not be forcibly removed from
the person of the taxpayer. Such conduct may expose a revenue officer
to an action in trespass, assault and battery, conversion, etc.
The provision acknowledges the Supreme Court decision in Larson v.
Domestic and Foreign Commerce Corp. 337 U.S. 682 (1949).
In sum, the mandate for due process, meaning initiatives through judicial courts with proper jurisdiction, is clearly antecedent to imposition of administratively-issued liens, except where licensing agreements obligate assets, or seizures, whether by garnishment, attachment of bank accounts, administrative seizure and sale of real or private property, or any other initiative that compromises life, liberty or property.
Consult 26 USC §§ 7851
& 7852
to verify that the Internal Revenue Code of 1954, as amended in
1986 and since, simply reorganized the Internal Revenue Code of 1939.
Read § 7852(b)
& (c), then read the balance of §§ 7851
& 7852
for best comprehension.
The importance of making this connection rests on the fact that
the Internal Revenue Code of 1939 was merely codification of the
Public Salary Tax Act of 1939. There was no general income tax levied
against the population at large in 1939 or since. The Public Salary
Tax Act of 1939, which in the Internal Revenue Code of 1939
incorporated the Social Security tax activated after 1936, was
premised on the notion that working for federal government is a
privilege. Income and related taxes prescribed in Subtitles A & C
of the current Internal Revenue Code have never been mandatory for
anyone other than officers, agents and employees of the United
States, as identified at 26 USC § 3401(c),
and agencies of the United States, identified at § 3401(d),
particularized at 5 USC §§ 102 & 105.
The privilege tax is an excise rather than direct tax -- the
Sixteenth Amendment, fraudulently promulgated in 1913, did not alter
or repeal constitutional provisions which require all direct taxes to
be apportioned among the several States (Constitution, Article I
§§ 2.3 & 9.4). In Eisner v. Macomber, 252 U.S. 189
(1918), Coppage v. Kansas, 236 U.S. 1, and numerous decisions since,
the United States Supreme Court has repeatedly affirmed that for
purposes of income tax, wages and other returns from enterprise of
common right are property, not income. In fact, returns from
enterprise of common right are fundamental to all property, and the
sanctity is preserved as a fundamental common law principle dating to
signing of the Magna Charta in 1215.
The nature of Subtitles A & C taxes is revealed at 26
CFR
§ 31.3101-1: "The employee tax is measured by the amount of
wages received after 1954 with respect to employment after
1936..."
In other words, the wage is not the object, but merely the measure
of the tax. This verbiage constitutes so much legalese in an effort
to circumvent the duck test, but the fact that taxes collected by the
Internal Revenue Service fall into the excise category was confirmed
by the Comptroller General's report following the initial effort to
audit IRS (GAO/T-AIMD-93-3). It is further suggested at 26 CFR §
106.401(a)(2), where the regulation concedes that, "The descriptive
terms used in this section to designate the various classes of taxes
are intended only to indicate their general character..."
By referencing the Parallel Table of Authorities and Rules, cited
above, it is found that the definition of "gross income" is still
preserved in Section 22 of the Internal Revenue Code of 1939, thus
cementing the link between the Code of 1939 and Subtitles A & C
of the Code of 1954, as amended in 1986 and since. The Internal
Revenue Code of 1939 merely codified the Public Salary Tax Act of
1939. This link is further confirmed in Senate Committee On Finance
and House Committee On Ways and Means reports No. H.R. 8300 (1954,
Internal Revenue Code), in which § 22 of the Internal Revenue
Code of 1939 and § 61 of the Internal Revenue Code of 1954
(current code) were solidly linked. Both reports stipulate that the
current definition of "gross income" is intended to be
constitutional.
This intent is articulated at 26
CFR
§ 1.61-1(a): "Gross income means all income from whatever
source derived, unless excluded by law."
An "Act of Congress" is policy, not law, and per definition
located in Rule 54, Federal Rules of Criminal Procedure, has only
local application in the District of Columbia and other United States
territories and insular possessions unless general application is
manifestly expressed: Rule 54(c) -- "'Act of congress' includes any
act of Congress locally applicable to and in force in the District of
Columbia, in Puerto Rico, in a territory or in an insular
possession."
Where the Internal Revenue Code of 1954 is concerned (Vol. 68A,
Statutes at Large, p. 3), the legislation is in fact styled, "An Act"
"To revise the internal revenue laws of the United States."
As demonstrated above, wages and other returns from enterprise of
common right are exempt from direct tax by fundamental law, and the
regulation for the current Internal Revenue Code definition for
"gross income" clearly articulates the fundamental law exemption.
The exemption as it pertains to the several States is demonstrated
by referencing the Parallel Table of Authorities and Rules (Index
volume to the CFR, p. 751 of the 1995 edition): There are 26 CFR,
Part 1 regulations listed for 26 USC §§ 61 & 62, the
latter being the definition for adjusted gross income, but there is
no 26 CFR, Part 1 or 31 regulation for 26 USC § 63, the
definition for taxable income.
While definitions for gross and adjusted gross income are clearly
antecedent to the definition of taxable income, they have no legal
effect if there is no taxing authority -- adjusted gross income which
is not taxable within the several States is of no consequence where
the federal tax system is concerned.
Further, on examination of 26
CFR
§ 1.62-1, pertaining to "adjusted gross income", it is found
that subsections (a) & (b) are reserved so the published
regulation is incomplete, with "temporary" regulation §
1.62-1T
serving as the current authority defining "adjusted gross
income." Temporary regulations have no legal effect.
Definitions at § 3401, Vol. 68A of the Statutes at Large (the Internal Revenue Code of 1954), make it clear that, (§ 3401(a)(A)), "a resident of a contiguous country who enters and leaves the United States at frequent intervals..," is a nonresident alien of the United States (citizens and residents of the several States included), and the exclusion from "wages" extends even to citizens of the United States who provide services for employers "other than the United States or an agency thereof"(§3401(a)(8)(A)).
Volume 68A of the Statutes at Large, the Internal Revenue Code of
1954, makes it perfectly clear who is "liable" for payment of
Subtitles A & C taxes:
SEC. 3504. ACTS TO BE PERFORMED BY AGENTS.
In case a fiduciary, agent, or other person has the control,
receipt, custody, or disposal of, or pays the wages of an employee or
group of employees, employed by one or more employers, the Secretary
of his delegate, under regulations prescribed by him, is authorized
to designate such fiduciary, agent, or other person to perform such
acts as are required by employers under this subtitle and as the
Secretary or his delegate may specify. Except as may be otherwise
prescribed by the Secretary or his delegate, all provisions of law
(including penalties) applicable in respect to an employer shall be
applicable to a fiduciary, agent, or other person so designated, but,
except as so provided, the employer for whom such fiduciary, agent,
or other person acts shall remain subject to the provisions of law
(including penalties) applicable in respect to employers.
The liability is further clarified at Vol. 68A, Sec. 3402(d):
(d) TAX PAID BY RECIPIENT. -- If the employer, in violation of
the provisions of this chapter, fails to deduct and withhold the tax
under this chapter, and thereafter the tax against which such tax may
be credited is paid, the tax so required to be deducted and withheld
shall not be collected from the employer; but this subsection shall
in no case relieve the employer from liability for any penalties or
additions to the tax otherwise applicable in respect to such failure
to deduct and withhold.
These provisions from Vol. 68A of the Statutes at Large comply
with and verify liability set out at 26 CFR, Part 601, Subpart D in
general. Further, territorial limits of application are made clear by
the absence of regulations supporting 26 USC §§ 7621,
7802,
etc., which are the statutes authorizing establishment of internal
revenue districts and delegations of authority to the Commissioner of
Internal Revenue and assistants. The fact that the liability falls to
the "employer" (26 USC § 3401(d))
and/or his agent, with no compensation for serving as "tax
collector," narrows the field to federal government entities as
"employers" if for no other reason than the population at large is
not subject to the edict of government officials. As a matter of
course, government cannot compel performance where the general
population is concerned. The subject class that has "liability" for
Subtitles A & C taxes is the "employer" or his agent, fiduciary,
etc., as specified above.
The matter is further clarified in Sections 3403 & 3404 of
Vol. 68A, Statutes at Large:
SEC. 3403. LIABILITY FOR TAX.
The employer shall be liable for the payment of the tax required
to be deducted and withheld under this chapter, and shall not be
liable to any person for the amount of any such payment.
SEC. 3404. RETURN AND PAYMENT BY GOVERNMENTAL EMPLOYER.
If the employer is the United States, or a State, Territory, or
political subdivision thereof, or the District of Columbia, or any
agency or instrumentality of any one or more of the foregoing, the
return of the amount deducted and withheld upon any wages may be made
by any officer or employee of the United States, or of such State,
Territory, or political subdivision, or of the District of Columbia,
or of such agency or instrumentality, as the case may be, having
control of the payment of such wages, or appropriately designated for
that purpose.
The territorial application, and limitation, is made clear by
definitions in Title 26 of the Code of Federal Regulations, as
follows:
§ 31.3121(3)-1 State, United States, and citizen.
(a) When used in the regulations in this subpart, the term "State"
includes the District of Columbia, the Commonwealth of Puerto Rico,
the Virgin Islands, the Territories of Alaska and Hawaii before their
admission as States, and (when used with respect to services
performed after 1960) Guam and American Samoa.
(b) When used in the regulations in this subpart, the term "United
States", when used in a geographical sense, means the several states
(including the Territories of Alaska and Hawaii before their
admission as States), the District of Columbia, the Commonwealth of
Puerto Rico, and the Virgin Islands. When used in the regulations in
this subpart with respect to services performed after 1960, the term
"United States" also includes Guam and American Samoa when the term
is used in a geographical sense. The term "citizen of the United
States" includes a citizen of the Commonwealth of Puerto Rico or the
Virgin Islands, and, effective January 1, 1961, a citizen of Guam or
American Samoa.
Definition of the terms "includes" and "including" located at 26
USC § 7701(c) provides the limiting authority which the above
definitions, beyond constructive application, are subject to:
(c) INCLUDES AND INCLUDING. -- The terms "includes" and
"including" when used in a definition contained in this title shall
not be deemed to exclude other things otherwise within the meaning of
the term defined.
Two principles of law clarify definition intent: (1) The example represents the class, and (2) that which is not named is intended to be omitted. In the definition of "United States" and "State" set out above, all examples are of federal States, and are exclusive of the several States, with the transition of Alaska and Hawaii from the included to the excluded class proving the point. This conclusion is reinforced by the absence of regulations which extend authority to establish revenue districts in the several States (26 USC § 7621), authority for the Department of the Treasury [Puerto Rico] in the several States (26 USC § 7801), and no grant of delegated authority for the Commissioner of Internal Revenue, assistant commissioners, or other Department of the Treasury personnel (26 USC § 7802 & 7803).
Here again, the Parallel Table of Authorities and Rules is useful
as it demonstrates that Subtitles A & C taxes do not have general
application within the several States and to the population at large.
The regulation for 26 USC § 1 refers to 26 CFR § 301, but
that amounts to a dead end -- there is no regulation under 26 CFR,
Part 1 or 31 which would apply to the several States and the
population at large. Further, there are no supportive regulations at
all for 26 USC §§ 2 & 3, and of considerable
significance, no regulations supporting corporate income tax, 26 USC
§ 11, as applicable to the several States.
Where the instant matter is concerned, regulations
supporting
26
USC § 6321, liens for taxes, and § 6331, levy and
distraint, are under 27 CFR, Part 70. The importance here is that
Title 27 of the Code of Federal Regulations is exclusively under
Bureau of Alcohol, Tobacco and Firearms administration for Subtitle E
and related taxes. There are no corresponding regulations for the
Internal Revenue Service, in 26 CFR, Part 1 or 31, which extend
comparable authority to the several States and the population at
large.
The necessity of regulations being published in the Federal
Register is variously prescribed in the Administrative Procedures
Act, at 5 USC § 552
et seq., and the Federal Register Act, at 44 USC § 1501
et seq. Of particular note, it is specifically set out at
44
USC § 1505(a), that when regulations are not published in
the Federal Register, application of any given statute is exclusively
to agencies of the United States and officers, agents and employees
of the United States, thus once again confirming application of
Subtitles A & C tax demonstrated above. Further, the need for
regulations is detailed in 1 CFR, Chapter 1, and where the Internal
Revenue Service is concerned, 26 CFR § 601.702.
The need for regulations has repeatedly been affirmed by the
Supreme Court of the United States, as stated in California Bankers
Ass'n. v. Schultz, 416 U.S. 21, 26, 94 S.Ct. 1494, 1500, 39 L.Ed.2d
812 (1974):
Because it has a bearing on our treatment of some of the issues
raised by the parties, we think it important to note that the Act's
civil and criminal penalties attach only upon violation of
regulations promulgated by the Secretary; if the Secretary were to do
nothing, the Act itself would impose no penalties on anyone ... The
government argues that since only those who violate regulations may
incur civil and criminal penalties it is the regulations issued by
the Secretary of the Treasury and not the broad, authorizing language
of the statute, which is to be tested against the standards of the
4th Amendment...
Because there is a citation supporting these statutes applicable under Title 27 of the Code of Federal Regulations, it is important to point out that, "Each agency shall publish its own regulations in full text," (1 CFR § 21.21(c)), with further verification that one agency cannot use regulations promulgated by another at 1 CFR § 21.40. To date, no corresponding regulation has been found for 26 CFR, Part 1 or 31, so until proven otherwise, IRS does not have authority to perfect liens or prosecute seizures in the several States as pertaining to the population at large.
Regulations pertaining to seized property are found at 26
CFR § 601.326:
Part 72 of Title 27 CFR contains the regulations relative to
the personal property seized by officers of the Internal Revenue
Service or the Bureau of Alcohol, Tobacco and Firearms as subject to
forfeiture as being used, or intended to be used, to violate certain
Federal Laws; the remission or mitigation of such forfeiture; and the
administrative sale or other disposition, pursuant to forfeiture, of
such seized property other than firearms seized under the National
Firearms Act and firearms and ammunition seized under title 1 of the
Gun Control Act of 1968. For disposal of firearms and ammunition
under Title 1 of the Gun Control Act of 1968, see 18
U.S.C. 924(d). For disposal of explosives under Title XI
of Organized Crime Control Act of 1970, see 18
U.S.C. 844(c).
The only other comparable authority thus far found pertains to
windfall profits tax on petroleum (26
CFR § 601.405), but once again, application is not supported
by regulations applicable to the several States and the population at
large.
Where the provision for filing 1040 returns is concerned, the key
regulatory reference is at 26
CFR § 601.401(d)(4), and this application appears related to
"employees" who work for two or more "employers", receiving
foreign-earned income effectively connected to the United States. The
option of filing a 1040 return for refund is mentioned in
instructions applicable to United States citizens and residents of
the Virgin Islands, but to date has not been located elsewhere.
Reference OMB numbers for § 601.401,
listed on page 170, 26 CFR, Part 600-End, cross referenced to
Department of Treasury OMB numbers published in the Federal Register,
November 1995, for foreign application.
The fact that 1040 tax return forms are optional and voluntary,
with special application, is further reinforced by Delegation Order
182 (reference 26 CFR §§ 301.6020-
1(b) & 301.7701). The Secretary or his delegate is authorized
to file a Substitute for Return for the following: Form 941
(Employer's Quarterly Federal Tax Return); Form 720 (Quarterly
Federal Excise Tax Return); Form 2290 (Federal Use Tax Return on
Highway Motor Vehicles); Form CT-1 (Employer's Annual Railroad
Retirement Tax Return); Form 1065 (U.S. Partnership Return of
Income); Form 11-B (Special Tax Return - Gaming Services); Form 942
(Employer's Quarterly Federal Tax Return for Household Employees);
and Form 943 (Employer's Annual Tax Return for Agricultural
Employees).
The "notice of levy" instrument forwarded to various third parties
is not a "levy" which warrants surrender of property. The Internal
Revenue Code, at § 6335(a), defines the "notice" instrument by
use -- notice is to be served to whomever seizure has been executed
against after the seizure is effected. In short, the notice merely
conveys information, it is not cause for action. The term "notice" is
clarified by definition in Black's Law Dictionary, 6th Edition, and
other law dictionaries. Use of the "notice of levy" instrument to
effect seizure is fraud by design.
Proper use of the "notice" process, administrative garnishment, et
al, is specifically set out in 5 USC § 5514, as being applicable
exclusively to officers, agents and employees of agencies of the
United States (26 USC § 3401(c)). Even then, however, the
process must comply with provisions of 31 USC § 3530(d), and
standards set forth in §§ 3711 & 3716-17. In accordance
with provisions of 26 CFR, Part 601, Subpart D, the employer, meaning
the United States agency the employee is employed by, is responsible
for promulgating regulations and carrying out garnishment.
Even if IRS was the agency responsible for collecting from an "employee," due process would be required, as noted above, so authority to collect would ensue only after securing a court order from a court of competent jurisdiction, which in the several States would mean a judicial court of the State. In law, however, there is no authority for securing or issuing a Notice of Distraint premised on non-filing, bogus filing, or any other act relating to the 1040 return. See United States v. O'Dell, Case No. 10188, Sixth Circuit Court of Appeals, March 10, 1947. In G.M. Leasing Corp. v. United States, 429 U.S. 338 (1977), the United States Supreme Court held that a judicial warrant for tax levies is necessary to protect against unjustified intrusions into privacy. The Court further held that forcible entry by IRS officials onto private premises without prior judicial authorization was also an invasion of privacy.
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 definitively 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 judgment 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 § 3401(c), and
the "employer" defined at § 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 United 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
§ 601.104. Clarification via 26 USC § 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, and in such form and
manner, as may be prescribed by the Secretary.
Unraveling § 6001 straightens out the meaning of § 6011,
which requires filing returns, statements, etc., by the person made
liable (§ 3401(d)), as distinguished from the person required to
make returns (payments) at § 6012 (§ 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 § 6011 and attending regulations.
The "method of assessment" prescribed at 26 USC § 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 § 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 § 301.7513-1(f); 26 CFR
§§ 301.7207-1 & 301.7214-1, etc.). Officers and
employees of the United States are specifically identified as being
liable at 26 USC § 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 USC §§ 301.7001-1, et seq. Each of the categories so addressed has liability based on some particular taxing statute which creates liability.
The requirement for a specific taxing statute, with 26 USC §
6001 clearly providing the first leg in necessary administrative
procedure to determine liability, was addressed at length in
Rodriguez v. United States, 629 F. Supp. 333 (N.D. Ill. 1986).
Presuming (1) the Secretary has provided the necessary notice, or
(2) a regulation prescribes general application which makes any given
person liable for a tax and requires tax return statements to be
filed, each step in administrative process prescribed by 26 USC
§§ 6201, 6212, 6213, 6303 and 6331 must be in place for
seizure or any other encumbrance to be legal.
Here again, regulations published in the Federal Register are
significant, with provisions of 5 USC § 552 et seq., 44 USC
§ 1501 et seq., 1 CFR, Chapter I, and 26 CFR, Part 601 all
supporting the mandate for regulations to be published in the Federal
Register before they have general application. It will be noted by
referencing the Parallel Table of Authorities and Rules, beginning on
page 751 of the 1995 Index volume to the Code of Federal Regulations,
that application by regulation to the several States is only under
Title 27 of the Code of Federal Regulations, or that there are no
regulations published in the Federal Register. The following entries,
or non-entries, are found:
26 USC § 6201 Assessment authority 27 CFR, Part 70
26 USC § 6212 Notice of deficiency No Regulation
26 USC § 6213 Restrictions applicable to deficiencies;
petition to Tax Court
No Regulation
26 USC § 6303 Notice and Demand for Tax 27 CFR, Part 53,
70
26 USC § 6331 Levy and distraint 27 CFR, Part 70
The assessment authority under 26 USC § 6201, in relevant
part as applicable to Subtitles A & C taxes, are as follows:
(a) AUTHORITY OF SECRETARY. -- The Secretary is authorized and
required to make the inquires, determination, and assessments of all
taxes (including interest, additional amounts, additions to the tax,
and assessable penalties) imposed by this title, or accruing under
any former internal revenue law, which have been duly paid by stamp
at the time and in the manner provided by law. Such authority shall
extend to and include the following:
(1) TAXES SHOWN ON RETURN. -- The secretary shall assess all taxes
determined by the taxpayer or by the Secretary as to which returns or
lists are made under this title.
(3) ERRONEOUS INCOME TAX PREPAYMENT CREDITS. -- If on any return
or claim for refund of income taxes under subtitle A there is an
overstatement of the credit for income tax withheld at the source, or
of the amount paid as estimated income tax, the amount so overstated
which is allowed against the tax shown on the return or which is
allowed as a credit or refund may be assessed by the Secretary in the
same manner as in the case of a mathematical or clerical error
appearing upon the return, except that the provisions of section
6213(b)(2) (relating to abatement of mathematical or clerical error
assessments) shall not apply with regard to any assessment under this
paragraph.
(b) AMOUNT NOT TO BE ASSESSED. --
(1) ESTIMATED INCOME TAX. -- No unpaid amount of estimated income
tax required to be paid under section 6654 or 6655 shall be
assessed.
(2) FEDERAL EMPLOYMENT TAX. -- No unpaid amount of Federal
unemployment tax for any calendar quarter or other period of a
calendar year, computed as provided in section 6157, shall be
assessed.
(d) DEFICIENCY PROCEEDINGS. --
For special rules applicable to deficiencies of income, estate,
gift, and certain excise taxes, see subchapter B. [emphasis
added]
The grant of assessment authority with respect to taxes prescribed in Subtitles A & C is limited to provisions set out above even where the Service might have authority relating to those made liable for the tax, meaning the "employer" specified at 26 USC § 3401(d). Clearly, returns made either by the agent of the United States agency required to file a return, or the Secretary, are to be evaluated mathematically, and errors are to be treated as clerical errors, nothing more. The Secretary has no authority to assess estimated income tax (individual estimated income tax at § 6554; corporation estimated income tax at § 6655), or unemployment tax ( § 6157). For all practical purposes, the trail effectively ends here.
In order for there to be an opportunity for a nonresident alien of
the United States (a Citizen of one of the several States) to elect
to be taxed or treated as a citizen or resident of the United States,
one or the other of a married couple, or the single "individual"
making the election, must be a citizen or resident of the United
States (26 USC § 6013(g)(3)). Some party must in some way be
connected with a "United States trade or business" (performance of
the functions of a public office (26 USC § 7701(a)(26)). A
nonresident alien never has self-employment income (26 CFR §
1.1402(b)-1(d)). In the event that a nonresident alien is an
"employee" (26 USC § 3401(c)), the "employer" (26 USC §
3401(d)) is liable for collection and payment of income tax (26 CFR
§ 1.1441-1). And in order for real property to be treated as
effectively connected with a United States trade or business by way
of election, it must be located within the geographical United States
(26 USC § 871(d)).
Provisions cited above preclude any and all legal authority for Citizens of the several States, or privately owned enterprise located in the several States, to participate in federal tax and benefits programs prescribed in Subtitles A & C of the Internal Revenue Code and companion legislation such as the Social Security Act which provide benefits from the United States Government, which is a foreign corporation to the several States.
This memorandum is not intended to be exhaustive, but merely sufficient to support causes set out separately. The most conspicuous conclusions of law are that Congress never created a Bureau of Internal Revenue, the predecessor of the Internal Revenue Service; Subtitles A & C of the Internal Revenue Code prescribe excise taxes, mandatory only for employees of United States Government agencies; the Internal Revenue Service, within the geographical United States where the Service appears to have colorable authority, is required to use judicial process prior to seizing or encumbering assets; and the law demonstrates that people of the several States, defined as nonresident aliens of the self-interested United States in the Internal Revenue Code, cannot legitimately elect to be taxed or treated as citizens or residents of the United States. If a Citizen of one of the several States works for an agency of the United States or receives income from a United States "trade or business" or otherwise effectively connected with the United States, the employer or other third party responsible for payment is made liable for withholding taxes at the rate of 30% or 14%, depending on classification, and is thus "the person liable" and may be subject to Internal Revenue Service initiatives, with administrative initiatives, where seizure and/or encumbrance actions are concerned, subject to judicial determinations by courts of competent jurisdiction.
Under penalties of perjury, per 28 USC § 1746(1), I attest that
to the best of my knowledge and understanding, all matters of law and
fact presented herein are accurate and true.
__________________________________ ___________________________
Dan Meador Date
*****
Memorandums by Dan Meador and other researchers can be downloaded from Internet on the Law Research & Registry web site: www.LawResearch-Registry.org
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