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1The Federal Zone:
2Cracking the Code of Internal Revenue
3Eleventh Edition
4by
5Paul Andrew Mitchell, B.A., M.S.
6Counselor at Law, Federal Witness,
7and Private Attorney General
8Published by
9Supreme Law Publishers
10c/o Forwarding Agent
11501 W. Broadway, Suite A-332
12San Diego 92101
13CALIFORNIA, USA
14March 1, 2001 A.D.
15The Federal Zone:
16ii
17Disclaimer
18This book is designed to educate you about federal income tax law, the
19Treasury regulations which promulgate that law, and the various court
20decisions which have interpreted both. It is sold with the understanding
21that the Author and Publisher are not engaged in rendering legal services of
22any kind. The right to author and publish this book, no matter how often the
23statutes, regulations and case law are quoted, is explicitly guaranteed by
24the First Amendment to the Constitution for the United States of America, a
25written contract to which the federal government, the 50 States, and their
26respective agencies are all parties. Federal and State laws are changing
27constantly, and no single book can possibly address all legal situations in
28which you may find yourself, now or in the future.
29The Federal Zone:
30Cracking the Code of Internal Revenue
31Common Law Copyright
32March 1, 2001 A.D.
33Paul Andrew Mitchell, B.A., M.S.
34Counselor at Law, Federal Witness,
35and Private Attorney General
36The information contained in this book is lawfully protected from
37copyright violations and reproduction infringements of any kind. Violators
38are hereby warned that they can and will be prosecuted to the full extent of
39American law, at the sole discretion of the Author and Publisher. DO NOT
40COPY without prior written permission of the Publisher. The sole exception
41to this copyright limitation is the privilege, hereby granted by the Author,
42to incorporate brief quotations in critical articles and reviews, which
43articles and reviews may, of course, be published for profit or gain by their
44respective authors and publishers.
45Published by:
46Supreme Law Publishers
47c/o Forwarding Agent
48501 W. Broadway, Suite A-332
49San Diego 92101
50CALIFORNIA, USA
51WITH EXPLICIT RESERVATION OF ALL RIGHTS
52AND WITHOUT PREJUDICE TO ANY RIGHTS
53PER UNIFORM COMMERCIAL CODE
54ARTICLE 1, SECTION 207
55(UCCA 1207 in California)
56(See Appendix F, Paragraph 38, for details.)
57Preface
58iii
59Special Notice
60This book is protected by a Common Law Copyright under the name of the
61Author -- Paul Andrew Mitchell, B.A., M.S., Counselor at Law, Federal
62Witness, and Private Attorney General.
63One of the main purposes of this book is to explain how We, the
64American People, have been deliberately deceived by government officials who
65have systematically exploited this deception, to defraud us of our wealth and
66our freedom.
67If you make unauthorized copies of this book without paying
68the Author for those copies, you are obtaining unjust
69enrichment by doing so, and therefore you are no different
70from the government employees who are stealing from you.
71In other words, you are a criminal!
72Your continued financial support will be most appreciated and will be
73spent to cover the time and expenses of people in the Freedom Movement who
74are now dedicating precious time and energy to defend your rights and your
75freedoms. Please honor this work.
76To order additional copies, or to donate funds to cover unauthorized
77photocopies, please dispatch first class mail to:
78Supreme Law Publishers
79c/o Forwarding Agent
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81San Diego 92101
82CALIFORNIA, USA
83This United States Postal Service requires first class mail to bear postage
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85First Class Mail: $54.95 (includes shipping and handling
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88via express U.S. mail)
89We now accept only cash and blank postal money orders. A blank postal
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92do not invoice, ship COD, or accept credit cards. We reserve the right to
93endorse money orders "without prejudice UCC 1-207" and without granting
94jurisdiction (see Appendix F). If you are worried about lost mail, the USPS
95will insure your prepayment for a modest fee.
96Thank you very much for your interest and support.
97The Federal Zone:
98iv
99Publication History
100First Edition January 1992 hard-copy
101Second Edition July 4th 1992 hard-copy
102Third Edition January 1993 electronic
103Fourth Edition July 4th 1993 electronic
104Fifth Edition January 1994 hard-copy
105Sixth Edition destroyed by the "IRS"
106Seventh Edition January 1997 hard-copy
107Eighth Edition June 21, 1998 hard-copy
108(Author's 50th birthday)
109Ninth Edition March 1, 1999 hard-copy
110Tenth Edition September 1, 2000 hard-copy
111Eleventh Edition March 1, 2001 hard-copy
112An order form for this book is available from Internet URL:
113http://supremelaw.org/fedzone11/order.htm
114Please read all stated instructions before placing orders.
115We reserve the right to change prices and/or terms at any time, without
116advance notice of any kind.
117Preface
118v
119Notations
120The Supreme Court has officially defined the key term "United States"
121to have three separate and distinct meanings:
122(1) It may be the name of a sovereign occupying the position of other
123sovereigns in the family of nations.
124(2) It may designate the limited territory over which the sovereignty
125of the federal government extends.
126(3) It may be the collective name for the fifty States which are
127united by and under the U.S. Constitution.
128Understanding these several meanings is absolutely crucial to
129understanding the remainder of this book. Much confusion will result from
130failing to recognize (or decipher) the meaning that is used in any given
131context. In order to reinforce their importance, these three meanings will
132be identified by using the following convention whenever possible:
133(1) United States* or U.S.* (first meaning)
134The name of the sovereign Nation, occupying the position of other
135sovereigns in the family of nations.
136(2) United States** or U.S.** (second meaning)
137The federal government and the limited territory over which it
138exercises exclusive sovereign authority.
139(3) United States*** or U.S.*** (third meaning)
140The collective name for the States united by and under the
141Constitution for the United States of America.
142At the risk of being criticized for violating formal English style,
143quotations have also been modified with this notation. The risk of
144misunderstanding was judged to be far more serious, than any violations of
145conventional style. It is the Author's sincere intent that the addition of
146the asterisks will be obvious in all cases, even if the meaning of "United
147States" is not immediately obvious in any given case.
148Exceptions to this convention will be made for book titles, for United
149States Codes (abbreviated "USC" or "U.S.C."), for the United States (or
150"U.S.") Constitution, and for the United States (or "U.S.") Supreme Court
151(also abbreviated "S.Ct.")
152The Federal Zone:
153vi
154Other notations should be obvious from their context, but will be
155repeated here for extra clarity:
156IRS means Internal Revenue Service in the Department of the
157Treasury (not the U.S. Department of the Treasury)
158IR means Internal Revenue (e.g. IR Manual refers to the IRS
159Internal Revenue Manual)
160U.S. means United States decision when used to cite a ruling of
161the U.S. Supreme Court (e.g. 324 U.S. 652 refers to volume
162324, page 652, of U.S. Supreme Court decisions)
163USC means United States Code (e.g. 26 USC 7701(a) refers to
164Title 26 of the United States Codes, Section 7701(a)), and
165appears more often as "U.S.C."
166IRC means Internal Revenue Code (also known as Title 26 of the
167United States Code, but these are not one and the same)
168CFR means Code of Federal Regulations (e.g. 26 CFR 1.871-1 are
169the regulations for Section 871 of Title 26)
170T.D. means Treasury Decision, a written decision published in
171the Federal Register by the U.S. Department of the Treasury
172If a nation expects to be ignorant and free,
173in a state of civilization,
174it expects what never was
175and what never will be.
176Thomas Jefferson
177Help us to abolish the
178specter of modern slavery
179which now threatens to destroy
180the essential rights and freedoms
181which made this a great nation
182and the envy of others
183around the world.
184Help us to restore a government
185which has drifted so far off course
186it hardly resembles
187the constitutional republic
188it was designed to be.
189from Cover Page
190Notice to 50 Governors
191Account for Better Citizenship
192(see the Guarantee Clause for authority)
193Preface
194vii
195Dedications
196If Frank Brushaber was a nonresident alien
197with respect to the federal zone, then so am I,
198and so are millions of other Americans,
199who will know the truth if We teach them.
200Before the 14th amendment [sic] in 1868:
201... [F]or it is certain, that in the sense in which the word "Citizen" is
202used in the federal Constitution, "Citizen of each State," and "Citizen of
203the United States***," are convertible terms; they mean the same thing; for
204"the Citizens of each State are entitled to all Privileges and Immunities of
205Citizens in the several States," and "Citizens of the United States***" are,
206of course, Citizens of all the United States***.
207[44 Maine 518 (1859), Hathaway, J. dissenting]
208[italics in original, underlines & C's added]
209After the 14th amendment [sic] in 1868:
210It is quite clear, then, that there is a citizenship of the United States**
211and a citizenship of a State, which are distinct from each other and which
212depend upon different characteristics or circumstances in the individual.
213[Slaughter House Cases, 83 U.S. 36]
214[(1873) emphasis added]
215The first clause of the fourteenth amendment made negroes citizens of the
216United States**, and citizens of the State in which they reside, and thereby
217created two classes of citizens, one of the United States** and the other of
218the state.
219[Cory et al. v. Carter, 48 Ind. 327]
220[(1874) headnote 8, emphasis added]
221We have in our political system a Government of the United States** and a
222government of each of the several States. Each one of these governments is
223distinct from the others, and each has citizens of its own ....
224[U.S. v. Cruikshank, 92 U.S. 542]
225[(1875) emphasis added]
226One may be a citizen of a State and yet not a citizen of the United States.
227Thomasson v. State, 15 Ind. 449; Cory v. Carter, 48 Ind. 327 (17 Am. R.
228738); McCarthy v. Froelke, 63 Ind. 507; In Re Wehlitz, 16 Wis. 443.
229[McDonel v. State, 90 Ind. 320, 323]
230[(1883) underlines added]
231The Federal Zone:
232viii
233A person who is a citizen of the United States** is necessarily a citizen of
234the particular state in which he resides. But a person may be a citizen of a
235particular state and not a citizen of the United States**. To hold otherwise
236would be to deny to the state the highest exercise of its sovereignty, -- the
237right to declare who are its citizens.
238[State v. Fowler, 41 La. Ann. 380]
239[6 S. 602 (1889), emphasis added]
240The first clause of the fourteenth amendment of the federal Constitution made
241negroes citizens of the United States**, and citizens of the state in which
242they reside, and thereby created two classes of citizens, one of the United
243States** and the other of the state.
244[4 Dec. Dig. '06, p. 1197, sec. 11]
245["Citizens" (1906), emphasis added]
246There are, then, under our republican form of government, two classes of
247citizens, one of the United States** and one of the state. One class of
248citizenship may exist in a person, without the other, as in the case of a
249resident of the District of Columbia; but both classes usually exist in the
250same person.
251[Gardina v. Board of Registrars, 160 Ala. 155]
252[48 S. 788, 791 (1909), emphasis added]
253There is a distinction between citizenship of the United States** and
254citizenship of a particular state, and a person may be the former without
255being the latter.
256[Alla v. Kornfeld, 84 F.Supp. 823]
257[(1949) headnote 5, emphasis added]
258A person may be a citizen of the United States** and yet be not identified or
259identifiable as a citizen of any particular state.
260[Du Vernay v. Ledbetter]
261[61 So.2d 573, emphasis added]
262... citizens of the District of Columbia were not granted the privilege of
263litigating in the federal courts on the ground of diversity of citizenship.
264Possibly no better reason for this fact exists than such citizens were not
265thought of when the judiciary article [III] of the federal Constitution was
266drafted. ... citizens of the United States** ... were also not thought of;
267but in any event a citizen of the United States**, who is not a citizen of
268any state, is not within the language of the [federal] Constitution.
269[Pannill v. Roanoke, 252 F. 910, 914]
270[emphasis added]
271Preface
272ix
273Table of Contents
274Contents: Page
275Disclaimer ................................................... ii
276Special Notice .............................................. iii
277Notations ..................................................... v
278Dedications ................................................. vii
279Table of Contents (this page) ................................ ix
280Preface to the 8th Edition .................................. xii
281Introduction .......................................... intro - 1
282Chapter 1: The Brushaber Decision ........................ 1 - 1
283Chapter 2: Status and Jurisdiction ....................... 2 - 1
284Chapter 3: The Matrix .................................... 3 - 1
285Chapter 4: The Three United States ....................... 4 - 1
286Chapter 5: What State Are You In? ........................ 5 - 1
287Chapter 6: Empirical Results ............................. 6 - 1
288Chapter 7: Inside Sources ................................ 7 - 1
289Chapter 8: Is it Voluntary? .............................. 8 - 1
290Chapter 9: The Law of Presumption ........................ 9 - 1
291Chapter 10: The Fundamental Law .......................... 10 - 1
292Chapter 11: Sovereignty .................................. 11 - 1
293Chapter 12: Includes What? ............................... 12 - 1
294Chapter 13: Amendment 16 Post Mortem ..................... 13 - 1
295Chapter 14: Conclusions .................................. 14 - 1
296Appendices ..................................... (see next pages)
297The Federal Zone:
298x
299Table of Contents
300All appendices in the eleventh edition of The Federal Zone are
301available for free from the Supreme Law Library at Internet URL:
302http://supremelaw.org/fedzone10/index.htm
303Hypertext links and graphics will be added to these Internet documents,
304as soon as time and resources permit.
305These appendices are available in hard copy by special order only, in
306order to conserve paper and minimize shipping weights.
307Appendices: Page
308A Letter to John Knox and his Memorandum of Law ........ A - 1
309B Omnibus Acts ......................................... B - 1
310C Treasury Decision 2313 ............................... C - 1
311D Form 1040 for 1913 ................................... D - 1
312E Viacom Transcript .................................... E - 1
313F Affidavit of Rescission .............................. F - 1
314G Deceptive IRS Code Words ............................. G - 1
315H Analysis of U.S. v. Hicks ............................ H - 1
316I Notice to 50 Governors ............................... I - 1
317J Petitions to Congress ................................ J - 1
318K IRS Form 1040NR ...................................... K - 1
319L IRS Form W-8 ......................................... L - 1
320M List of Organizations ................................ M - 1
321N Bibliography ......................................... N - 1
322O Constructive Notice and Demand ....................... O - 1
323P Miscellaneous Letters ................................ P - 1
324[more ...]
325Preface
326xi
327Table of Contents
328Appendices: Page
329Q Apportionment Statute ................................ Q – 1
330R Affirmations: Within & Without ....................... R – 1
331S Affidavit of Foreign Status .......................... S – 1
332T Revocation of Birth Certificate ...................... T – 1
333U Revocation of Voter Registration ..................... U – 1
334V Affidavit of Applicable Law .......................... V - 1
335W Memos on Downes v. Bidwell ........................... W - 1
336X Certificate of Exemption from Withholding ............ X - 1
337Y Memoranda of Law by Richard McDonald ................. Y - 1
338Z Nature and Cause: Case Law .......................... Z - 1
339Many more documents are now available in the Supreme Law Library at
340Internet URL:
341http://supremelaw.org/library/index.htm
342An excellent point of entry for the new user is the Press Releases and
343the web pages linked to them. Begin at URL:
344http://supremelaw.org/press/rels/index.htm
345These documents are free to the entire nation, and to the whole world
346as well, using standard Internet computers.
347Your generous donations will help us to continue this vital work, to
348ensure that its many fruits will remain available to our youngest Citizens
349and to generations yet unborn.
350See the Supremacy Clause for the seminal authority.
351# # #
352The Federal Zone:
353xii
354Preface to the Eighth Edition
355The history of this book, since it was first published in the year
3561992, has been nothing if not tumultuous. With a limited private budget, and
357no help at all from any commercial publishing companies, the second edition
358of The Federal Zone was perfect-bound by an automated bindery and started
359shipping, most often in quantities of one or two, at a law conference in
360Sacramento, California, on the Fourth of July. The bright, professional
361cover, printed in two colors, was a welcome change from the amateur designs
362adopted by many other authors writing on similar subjects. Nobody else had
363thought to shrink-wrap their freshly bound books either.
364For the remainder of that year, this author spent every waking hour
365shipping books, sometimes by the case load, to customers in every State of
366the Union. What time remained was spent answering a mountain of
367correspondence, doing further research and bolstering the solid legal
368foundation already built for one specific purpose: to dismantle the IRS
369totally, once and for all. This is a worthy goal, for the entire nation.
370It was an exhilarating time, to be sure, and a mixed blessing when the
371initial run of 2,500 copies was quickly exhausted. The praise for its
372indisputable authority, consistent rigor, and almost stubborn fidelity to
373proven fact, was nearly unanimous.
374Although the revenue stream was substantial, the cumulative costs of
375continuing research, office overhead and living expenses made it impossible
376to pay the automated bindery for a second large print run, using the author's
377private funds. A plan was hatched to solicit investors who would pre-pay one
378thousand dollars each, in return for receiving one hundred bound copies
379"drop-shipped" directly from the bindery.
380This was a good deal, because each investor would pay a "wholesale"
381price of only ten dollars per book, compared to the "retail" price of forty
382dollars (fifty dollars for the first edition). Four investors had fronted
383one thousand each, and that sum of four thousand dollars was "safely"
384deposited in a trust account at Wells Fargo Bank, in San Rafael, California,
385when disaster struck.
386As it turned out, the Internal Revenue Service was watching, and they
387were hopping mad about the book. Nobody had ever pulled the rug out from
388under them quite like that, before then -- not in such a neat, professional
389package which was soon racing around the country and setting precedents in
390the history of American constitutional jurisprudence. So, like Nazis burning
391books in the town square at noon, the IRS cranked out a "Notice of Federal
392Tax Lien," strolled into Wells Fargo Bank, and strolled out with a cashier's
393check -- four thousand dollars worth, to be exact.
394All of this happened, of course, without any notice or hearing from
395anyone, and certainly without the court order which is an absolute
396prerequisite before a bank account can be levied. So, in many ways, the IRS
397had become much worse than Nazis.
398Preface
399xiii
400German Nazis at least provided their victims with ample notice of a
401pending book-burning, by inviting the town's people to witness cans of
402gasoline pouring over gutted library contents, piled high and deep in the
403local town square, as one lit match reduced their store of knowledge to
404ashes. In Amerika, the IRS steals the money being saved to print books, and
405nobody learns about it until the event is long past. At least, the Nazis
406were honest about it. Here, the books never even made it into print.
407California, 1993!
408The only real inventory, at that point, was the electronic fourth
409edition. A fateful decision was made to begin shipping "shareware" copies of
410the book on 3.5" floppy disks written by the author's personal computer -- an
411Intel 80386 CPU running DOS version 5 from Microsoft.
412By that time, a healthy market had developed in the computer industry,
413whereby independent programmers could distribute commercial software on the
414"honor" system. Computer programs would be copied or "shared" for free, and
415users would pay the original programmer a modest "shareware" fee if the
416software was found to be useful to them. This mode of distribution produced
417decent revenues for many independent programmers, because their users honored
418the rules, to everyone's advantage. The shareware fee for The Federal Zone
419was a mere $25.00.
420With high hopes that the freedom movement [sic] would play by the same
421rules, an electronic copy began to circulate around the country, with no way
422to track either copies or readers. Sadly, shareware revenues amounted to a
423miniscule pile of small change, forcing this author into a painful and
424protracted period of acute depression, both financial and emotional.
425This was an extremely bitter lesson about the real American mind set,
426at that point in recent history. Many potential readers had expressed what
427appeared to be genuine concerns about federal government attacks on the
428fundamental Rights of all Citizens.
429The U.S. Constitution is explicit about the importance of securing to
430authors the exclusive Right to their respective writings. And yet, the very
431same people who claimed to have such a deep and abiding commitment to
432defending, and promoting, such fundamental Rights, were often the first to
433steal The Federal Zone and to pass stolen copies to everyone who would
434listen.
435One copy was even modified, in blatant violation of stated copyright
436restrictions, and posted without this author's permission on the Internet,
437made vastly popular by the first commercial "browser" in Netscape's
438Navigator. That stolen copy remains today on the Internet file servers at
439America Online, Inc., whose corporate executives refuse to honor this
440author's copyrights either, even after receiving numerous written notices.
441The punishments, threats, retaliation, and reprisals did not stop
442there. Cars with tampered front brakes, physical assault, death threats,
443false arrest, false imprisonment, defamation and intentional starvation would
444follow.
445The Federal Zone:
446xiv
447The first of several court battles was not long in coming. The
448research which formed this book's solid foundation, had to happen initially
449during moonlight hours, while this author worked full-time doing systems
450development for a major investment bank in San Francisco. The pay was
451excellent, and there was no withholding, by choice. Remember, the courts had
452already ruled that compensation for services rendered was not "income", as
453that term is used in the Internal Revenue Code ("IRC"). At the end of 12
454months, a 6-figure salary was bound to attract IRS attention, even without
455the recent publication of the book.
456The IRS then issued an administrative summons, which this author
457promptly ignored. Waiting at the post office one day was an unmarked white
458car, and two IRS agents; one of them dropped an envelope at my feet, with a
459federal court order -- to show cause why I should not be compelled to obey
460their summons. This was a "civil" action, so I decided to remain civil too.
461In retrospect, I took this hearing far too seriously. With feedback
462from a small group of friends, I went to work perfecting a long pleading
463which explained in great, authoritative detail, why the United States
464District Court in San Francisco could not compel me to be a witness against
465myself.
466An unusually large set of documents was appended to the main pleading,
467including the printed second edition of The Federal Zone, and certified
468copies of all the correspondence which numerous government officials had
469dutifully ignored. This has become their custom in that zone, by the way.
470Their fraud is so enormous and far-reaching, they really do have no choice in
471the matter but to fall silent.
472These were petitions to government for redress of grievances, protected
473and guaranteed by the Petition Clause in the First Amendment, but that would
474not stop every single government employee from ignoring everything. This
475pleading is scheduled to be loaded, as soon as possible, into the Supreme Law
476Library on the Internet, time and money permitting. Read it! It is very
477good. See Internet URL http://supremelaw.org/cc/jetruman/oppososc.htm.
478The court hearing was before a tall federal judge, perched even higher
479on his custom mahogany bench, black mustache strangely similar to the
480infamous one right under the nose of one Adolf Hitler. A large bevy of highpaid
481attorneys, in expensive Italian 3-piece suits, was parked in the gallery
482-- shuffling papers and quiet whispers echoing from the high ceiling. When
483my turn came, I announced my appearance, and another little Nazi from DOJ's
484Tax Division made his.
485I began by explaining to the judge that I needed answers to certain
486specific questions, before I could proceed any further. This move caught the
487judge by surprise, who replied that he was not there to answer any of my
488questions. So, I continued by reading each and every question into the
489record, while the judge squirmed in his leather chair, nervously tugged at
490his mustache, and otherwise refused to answer any of my questions.
491The courtroom had become strangely quiet. I surmised that each and
492every high-paid attorney in that gallery was hearing all of this for the very
493first time, and they were astonished that anyone could, or would, talk to a
494Preface
495xv
496federal judge as I had just done. The legal merits went sailing overhead --
497everyone's!
498The court order to appear was dutifully signed by Adolf II, and I did
499show up, only to invoke the Fifth Amendment in response to every single
500question, without fail: "What is your name?" asked the Revenue Agent. "I
501decline to answer that question because I cannot be compelled to be a witness
502against myself." "Where's the money you made in 1990?" "I decline to answer
503that question, because I cannot be compelled to be a witness against myself."
504And so on. Blanket invocations of the Fifth don't work. Invoking the Fifth
505on each and every question does work.
506In retrospect, the most memorable incident at the IRS office that day
507was my demand to witness that Revenue Agent's photo identification. After
508much arguing, in an empty waiting room, Agent X appeared from behind the
509public counter and flashed a badge, at shoulder height, but from 20 feet
510away, where I could not decipher any of the important details.
511Years later, our impeccable research would prove that their badges tie
512them to an extortion racket and money laundry domiciled in Puerto Rico, and
513hiding behind defunct Prohibition laws. So much for their "Treasury
514Department" [sic]. The petroleum cartel had conspired to outlaw alcohol, to
515perfect their monopoly in automotive fuels, and it had to field a large
516federal police force which stayed when Prohibition was repealed.
517Expecting the worst, I girded myself for a contempt hearing which never
518happened. Months later, without any fanfare, Adolf the Second quietly
519dismissed the entire case -- no more hearings, no appeals, no nothing. He
520and I both knew well enough that I had successfully penetrated, and solved,
521their complex labyrinth. This was a victory, albeit a small one.
522A second hearing, to enforce a second summons, for records of pay
523during the second half of my tenure at the investment bank, was even more
524revealing. Again, a large coterie of Italian suits and expensive leather
525shoes was there to populate the gallery. A similar courtroom, with the
526requisite high ceiling, was scheduled.
527Only this time, a retired federal judge was appointed to handle an
528overflow of cases. Rather than to prepare an extensive set of pleadings and
529exhibits, I chose instead to do nothing whatsoever, except to appear as
530ordered. An aging Zionist occupied the bench, like the Gaza Strip, and the
531clerk called the case, "U.S.A. v. Mitchell, civil case number XYZ."
532Having no written pleadings whatsoever perturbed this judge, no end.
533Taking cues from their phony summons, I launched into a direct attack on the
534meaning of "liability" and the utter absence of any liability statutes for
535taxes imposed by Subtitle A of the IRC. The judge was caught off guard, and
536evidently shocked. I pressed the point and reminded him that the DOJ crony
537(the same one as last time) had completely failed to produce any evidence
538whatsoever of any liability statutes. I moved the Court to order him, right
539then and there, to exhibit same.
540The Federal Zone:
541xvi
542Silence engulfed the cavernous courtroom. There were no shuffling
543papers and no whispers echoing from the packed gallery. I pressed the point
544again, a third time, and counted, on the small fingers of my out-stretched
545hand, how many times I had now demanded to see specific liability statutes,
546if any. The judge was now visibly shaking as he leaned forward in his big
547leather chair, the better to stare down at the podium where I stood tall and
548spoke with convictions, challenging his every word.
549"If you don't obey my order to attend that summons, I will send you to
550prison. Do you understand that?" shouted the judge. Oh, I wish I'd have
551known then what I know now (about threatening a federal witness). If one
552thought the courtroom was quiet before that remark, you could now hear a pin
553drop 40 feet away. I firmly stood my ground and answered by saying, "No. I
554do not understand how you can create a liability out of thin air,
555particularly when there appear to be no liability statutes anywhere in the
556IRC, and when the U.S. Attorney here can do nothing except to bite his lower
557lip, in total silence."
558I drove the point home, "Moreover, I have now asked you, four different
559times, for the statutes, if any, which create a liability for Subtitle A
560income taxes, and all I am getting is silence, from this court, and from Mr.
561U.S. Attorney over there. I notice that he is even now sitting down. Then,
562let the record show that there is no liability statute, and that your silence
563on this crucial point is a fraud upon me, and estoppel upon you." Whew!
564I wish there had been a truly spicy ending to this second summons
565enforcement. Unfortunately, the same nauseating routine repeated itself,
566once again. "What is your name?" they asked. Fifth Amendment reply again
567and again, every time. The aging federal judge pro tempore then did nothing;
568he didn't even dismiss the case.
569And this is the really amazing thing about this whole IRS mess. Here
570was a seasoned federal judge, with literally decades of experience under his
571belt, and he appeared sincerely stumped by my demand that his Court reveal
572the exact statutes which create a specific liability for taxes imposed by IRC
573Subtitle A. And, the terribly painful answer is that he could not do so,
574because there is none, and he was smart enough to realize the far-reaching
575implications of admitting same, in open court, with a licensed court reporter
576recording every word! Victory!!
577Now that a very bad pattern was beginning to evolve, the IRS Revenue
578Agent was really thirsting for blood. Having discovered my safe deposit box
579at Wells Fargo Bank in California, he went to a third federal judge and
580explained that these nasty "tax protesters" [sic] often hide their assets in
581safe deposit boxes. I normally correct these criminals whenever they
582designate me a "tax protester." I am not a tax protester; I am an "illegal
583tax protester," because the tax is illegal, not the protest, and certainly
584not the protesters! (DOJ always loses on this point.)
585The really ironic admission was the paragraph in his court petition
586which explained why it was that the IRS needed a court order, before raiding
587a bank safe deposit box. Yes! These were the very same authorities which
588require that IRS obtain a court order to levy a bank account. Remember the
589$4,000 that vanished from our trust account, set aside to re-print the book?
590Preface
591xvii
592Poof!
593Nevertheless, little did Mr. Revenue Agent know that I had never put
594anything into that safe deposit box. It was a nice gift from Wells Fargo
595Bank at a time when I had transferred some money from the Bank of America, as
596the B of A's financial ratings took a vertical nose dive; but, it had always
597been empty, zero, a small volume of stale air.
598So, it was with much glee, and no small degree of abandon, that I
599completely ignored this third court case. It had become a reliable source of
600great satisfaction to imagine that fateful moment, court order clutched in
601his left fist, right fist pounding on the bank's front door, when Mr. Revenue
602Agent arrived to bust my safe deposit box, and all of its valuable contents.
603Get this: the bank officer is ceremoniously summoned to escort this
604band of marauders to the waiting room, combination in hand. Mr. Revenue
605Agent is standing, in great anticipation, thinking that all of his expensive
606litigation is finally going to pay off -- or maybe break even. Ms. Bank
607Officer leans over to unlock the box. Mr. Revenue Agent leans over her
608shoulder. The door is finally opened and ... VOILA! It's empty!! Tears of
609laughter (mine).
610Maybe, some day in the next life, the Most High will allow me to replay
611the Wells Go Far videotape of that unique and unforgettable moment, as Mr.
612Revenue Agent storms out the front door, slams his car door shut, and then
613slams the accelerator to the floor, making straight his path to the nearest
614martini bar.
615There, he empties all available bottles of gin and vermouth, then runs
616over his daughter's tricycle, trying to find the garage door to his plush
617mansion in Mill Valley, California. I replay this fantasy in my mind with
618frequent intense fascination. That was the last I ever heard from Mr.
619Revenue Agent, in point of fact.
620The truth of these pyrrhic victories did not travel very far. It is
621amazing how empty federal courts do become, whenever IRS agents appear. Most
622people living in my neighboring communities were absolutely convinced I had
623gone totally wacky.
624It was true that I had abandoned a promising and lucrative career in
625the computer industry, I was now officially homeless, and my bouts with bona
626fide depression were not getting any better. At the lowest point, I was even
627washing dishes and renting a dilapidated trailer from a woman who later
628admitted to being a real witch. Yikes! The patience of friends I did have,
629was wearing very thin. The rumor mill was twisting truth beyond all
630recognition or repair. It was definitely time to move on.
631I made contact with a friend in Sacramento, and migrated to a project
632challenging the doctrine of judicial immunity on behalf of an activist who
633was being persecuted -- for handing out fully informed jury fliers on the
634steps of a county courthouse in California.
635The Federal Zone:
636xviii
637My computer skills were a bit threatening to the lead counsel; but we
638nevertheless reached the U.S. Supreme Court with an eloquent, if somewhat
639flawed call for full judicial review of the current trends which immunize
640federal judges from all accountability whatsoever. The high Court summarily
641denied the petition, and I decided to head for Kentucky, to start a new life.
642Those worthy briefs are now in the Supreme Law Library.
643It was during that period in Sacramento, when my friend handed me a
644copy of the high Court's decision in U.S. v. Lopez. In a concurring opinion,
645Justice Kennedy had utilized the term "federal zone" as a household word,
646entirely in the context of limiting federal jurisdiction under the Commerce
647Clause in the U.S. Constitution. In so doing, not only did Justice Kennedy
648give an impressive, if left-handed compliment to the book, which by then had
649reached the high Court's private library; more importantly, Justice
650Kennedy's use of that term, in a sweeping decision with far-reaching
651consequences, resulted in giving the term a permanent place in the history of
652American constitutional jurisprudence.
653This was really something to celebrate, and celebrate I did, but only
654in quiet moments that served to dissolve the depression and isolation, in
655small but sure steps, with no fanfare, no parties, and no limousines. My
656real Boss was beginning to take over, at last, for I had now become an agent
657of the Most High, on a mission to all of planet Earth, with special emphasis
658on the United States of America and the supreme Law of this Land.
659On the way to Kentucky, I was invited to attend a weekend conference on
660courts and common law in Albuquerque, New Mexico. A scheduled speaker could
661not show. So, on very short notice, I was recommended to the conference
662organizers as the best available pinch hitter. Without much time to prepare,
663I chose to address a relaxed audience early Sunday morning without using any
664notes. The impact on that audience was powerful.
665Two video cameras were there to record this author deliver a heartwarming
666story of judicial activism and amazing discovery. With confidence
667and precision, I recited certain key statutes from the IRC: "The provisions
668of subtitle F shall take effect on the day after the date of enactment of
669this title." There was instant applause when I reminded the audience that
670Title 26 of the United States Code had never been enacted into positive law!
671Three people were sufficiently impressed that morning to introduce
672themselves and invite me to Tucson, Arizona, to set up shop in an extra room
673in their company headquarters. One was the general manager of a health food
674chain, organized as a pure trust (with a rubber stamp for a Trustee). The
675other two were a married couple who had done the trust accounting for many
676years. The offer was just too good to refuse (and too good to be true).
677So, I turned my car around and headed back in the direction from whence
678I had come. I missed a junction in Las Cruces, and had to make a U-turn on a
679major boulevard, with an island dividing traffic and a 3-way light to control
680left turns. A homeless man was standing right there with a PLEASE HELP sign,
681so I reached into my pocket and came up with a $100 bill. As I handed it to
682him, my arrow turned green, so I drove on without making any eye contact with
683him. Was this man an angel in disguise?
684Preface
685xix
686Not long after that brief encounter, and back on the highway, headed
687west towards Tucson, I noticed the wheels of my car had begun to roll very
688smoothly, as if the highway had become a ribbon of fine glass. The sky was a
689patchwork of evenly shaped clouds, from horizon to horizon, equally spaced to
690permit the sunshine to stream through, in shafts of brilliant white light.
691The patchwork of clouds was iridescent with pastels from every spectrum of
692the visible rainbow.
693A profound joy overcame me, and the car felt as if it were no longer
694touching the pavement on I-10. I knew then that I was having a supernatural
695experience, and the message was clear: "You are now going in the right
696direction, and great discoveries are waiting at your next destination." That
697prophecy would soon come true. How true is simply hard to believe, even now.
698It wasn't long after setting up shop in Tucson, that the trust was
699served with a grand jury subpoena for copies of their books and records. I
700was rapidly promoted to Vice President for Legal Affairs, and the rest is now
701history, fully documented in the pleadings and related exhibits in the
702Supreme Law Library at Internet URL http://supremelaw.org/cc/nlhc/index.htm.
703Treat yourself to a careful study of the many documents which we
704generated in that case. The best place to begin is our letter to the Federal
705Bureau of Investigation, to support a complaint of judicial misconduct
706against the judge in that case.
707Suffice it to say that the judge was overwhelmed with convincing
708evidence, the IRS and DOJ attorneys went running for cover, and a proper
709criminal complaint was served upon a lot of government employees, for
710numerous federal offenses.
711We had finally busted the IRS, big time, and it has been all downhill
712for them, ever since then. Some who had followed this work, even now refer
713to that grand jury case as "legendary."
714We agree!
715Soon after arriving in Tucson, I was given a copy of a letter which
716Congresswoman Barbara Kennelly had written to one John Randall in San Diego,
717California. If ever there was any one, single document which proved that a
718major thesis of The Federal Zone is entirely correct, beyond all doubt, this
719letter was it. This one was good, and true.
720Many who do read Kennelly's letter are impressed by the fact that it
721was written on Congressional stationery, and mailed under their franking
722privileges. Government by appearances is a better term for this behavior.
723The real story is that Kennelly did not know the correct answer to
724Randall's question, so she went to the "experts" for advice, and merely
725relayed their answers back to Randall. Career specialists in federal law, in
726two different government offices -- the Legislative Counsel and the
727Congressional Research Service –- all agreed that the term "State" in the IRC
728includes only the named territories and possessions of the District of
729Columbia, Puerto Rico, the Virgin Islands, Guam, and American Samoa.
730The Federal Zone:
731xx
732When the dust had settled in the grand jury case, this author prepared
733a Press Release to publicize Kennelly's earth-shaking and revealing
734admission. That Press Release now follows, verbatim:
735FOR IMMEDIATE RELEASE August 28, 1996
736Congresswoman Suspected of Income Tax Evasion
737Payson, Arizona. Paul Mitchell, a Counselor at Law and Citizen of Arizona
738state, today challenged U.S. Representative Barbara Kennelly to stop evading
739the big question about federal income taxes: Does the term "State" at
740Internal Revenue Code 3121(e) include only the named federal territories and
741possessions of the District of Columbia, Puerto Rico, the Virgin Islands,
742Guam and American Samoa? Can this be income tax evasion? Read on.
743In a letter to Mr. John Randall of San Diego last January 24, Kennelly
744responded to a written request from Randall asking her if the word "State" in
74526 U.S. Code 3121(e) and in other pending legislation were the same. Rep.
746Kennelly, a Democrat from Connecticut, first checked with the Legislative
747Counsel and with the Congressional Research Service about the definition.
748"According to these legal experts," answered Kennelly, "the definitions are
749not the same. The term state in 26 U.S. Code 3121 (e) specifically includes
750only the named U.S. territories and possessions." Her letter to Randall, on
751official House of Representatives stationery, was dated January 24, 1996.
752This admission is earth-shaking, according to Paul Mitchell, who has
753conducted an in-depth investigation of federal laws and the U.S. Constitution
754for seven years now. If the Internal Revenue Code was deliberately written
755to confuse the American people into believing that "State" means "Arizona" or
756"California," when it does not, then the Congress has a lot of explaining to
757do. Mitchell has since challenged Kennelly to produce copies of the
758correspondence she received from the Legislative Counsel and Congressional
759Research Service, but she has now fallen silent and refuses to answer any
760follow-up letters. Congress, incidentally, exempted themselves from the
761disclosure requirements of the Freedom of Information Act.
762Writing under several pen names, Paul Mitchell's work has reached all
763the way into the U.S. Supreme Court, which adopted "the federal zone" as a
764household word in their sweeping 1995 decision in U.S. v. Lopez. His book
765entitled The Federal Zone: Cracking the Code of Internal Revenue, was first
766published in 1992, and became an instant underground success for its lucid
767language and indisputable legal authority. The book was originally written
768in electronic form, which made it easy to disseminate through the Internet.
769The fourth edition can be viewed with the Alta Vista search engine, developed
770by Digital Equipment Corporation. The Internet version does not preserve any
771bold, underline, or italics, however. Mitchell has used special character
772formats to highlight important words and phrases in federal statutes and case
773laws, easing the reader's burden of deciphering an otherwise unintelligible
774code.
775Preface
776xxi
777It is clear, there is a huge difference between the area covered by the
778federal zone, and the area covered by the 50 States. "Money is a powerful
779motivation for all of us," writes Mitchell in a chapter from the book.
780"Congress had literally trillions of dollars to gain by convincing most
781Americans they were inside its revenue base when, in fact, most Americans
782were outside its revenue base, and remain outside even today. This is
783deception on a grand scale, and the proof of this deception is found in the
784statute itself." Indeed, the proof is now leaking out on official
785Congressional stationery.
786Mitchell goes on to argue, it is no wonder why public relations
787"officials" of the IRS cringe in fear when dedicated Patriots admit, out loud
788and in person, that they have read the law. It is quite stunning how the
789carefully crafted definitions of "United States" do appear to unlock a
790statute that is horribly complex and deliberately so. As fate would have it,
791these carefully crafted definitions also expose perhaps the greatest fiscal
792fraud that has ever been perpetrated upon any people at any time in the
793history of the world. It is now time for a shift in the wind. That shift is
794being driven by a growing understanding of personal status and its relation
795to government territorial jurisdiction.
796The vivid pattern that has now painfully emerged is that "citizens of
797the United States", as defined in federal tax law, are the intended victims
798of a modern statutory slavery that was predicted by the infamous Hazard
799Circular soon after the Civil War began. This circular admitted that chattel
800slavery was doomed, so the bankers needed to invent a new kind of slaves.
801These "statutory" slaves are now burdened with a bogus federal debt which is
802spiralling out of control. The White House budget office recently invented a
803new kind of "generational accounting" so as to project a tax load of seventyone
804percent on future generations of these "citizens of the United States".
805The final version of that report upped the projection to eighty percent. "It
806is our duty to ensure that this statutory slavery is soon gone with the wind,
807just like its grisly and ill-fated predecessor," concludes Paul Mitchell.
808# # #
809What follows here is the exact text of Kennelly's letter. Pay
810particular attention to the precise language found in the second paragraph:
811The term state in 26 U.S. Code 3121(e) specifically includes only the
812named U.S. territories and possessions of the District of Columbia,
813Puerto Rico, the Virgin Islands, Guam and American Samoa.
814[bold emphasis added]
815This level of language precision is quite rare, coming as it did from a
816lawmaker currently seated in the U.S. House of Representatives, in
817Washington, D.C. More importantly, Kennelly is telling us that experts in
818the offices of the Congressional Research Service, and the Legislative
819Counsel, agree completely with the main, and highly controversial thesis of
820this book:
821The Federal Zone:
822xxii
823Congress of the United States
824House of Representatives
825Washington, D.C. 20515
826January 24, 1996
827Mr. John Randall
8283808 Rosecrans Street
829Apartment #233
830San Diego, California 92110
831Dear Mr. Randall:
832Thank you for writing with your question about Section 3(a)
833of H.R. 97, legislation I introduced this Congress. Please
834excuse the delay in my response.
835In your letter you asked if Section 3(a) of H.R. 97 defining
836the word state, and 26 U.S. Code 3121 (e) are the same. I have
837checked with Legislative Counsel and the Congressional Research
838Service about the definition. According to these legal experts
839the definitions are not the same. The term state in 26 U.S. Code
8403121 (e) specifically includes only the named U.S. territories
841and possessions of the District of Columbia, Puerto Rico, the
842Virgin Islands, Guam and American Samoa. In addition, this
843section of the U.S. Code unlike H.R. 97 also states,
844"An individual who is a citizen of the Commonwealth of Puerto Rico (but
845not otherwise a citizen of the United States) shall be considered, for the
846purposes of this section, as a citizen of the United States."
847H.R. 97, section 3(a) does not specifically define the U.S.
848territories and possessions that would be eligible under this
849legislation, and therefore is somewhat more expansive. Again,
850thank you for writing on this issue.
851Sincerely,
852/s/ Barbara
853BARBARA B. KENNELLY
854Member of Congress
855BBK:ajr
856[bold emphasis added]
857Finally, it was no surprise when Rep. Kennelly refused to answer my
858polite request for copies of any written communications which she had
859received from those two offices. Remember, silence had become their custom
860in that zone. Their fraud is so enormous and far-reaching, they really do
861have no choice in the matter, but to fall totally and completely silent.
862Here's that letter:
863Preface
864xxiii
865MEMO
866TO: Rep. Barbara B. Kennelly
867Member of Congress
868FROM: Paul Andrew, Mitchell, B.A., M.S.
869Counselor at Law
870DATE: June 28, 1996
871SUBJECT: Definition of "State" in IRC 3121(e)
872I am a part-time student of comparative economic history, and your
873letter to Mr. John Randall of San Diego, dated January 24, 1996, just
874happened across my desk recently (see attached).
875I would be very interested to obtain copies of any written
876communications you received from the Legislative Counsel and the
877Congressional Research Service concerning the definition of the term "State"
878as found in 26 U.S. Code, Section 3121(e).
879Would it be possible for you to send me copies of their written
880communications to you, if any?
881These communications would be very helpful to certain aspects of my
882current research endeavors, in particular, the fallout from a set of U.S.
883Supreme Court decisions known as The Insular Cases (circa 1900).
884Rep. Kennelly, thank you very much for your consideration.
885Sincerely yours,
886/s/ Paul Andrew Mitchell
887Paul Andrew Mitchell, B.A., M.S.
888Counselor at Law, Federal Witness,
889and Private Attorney General
890email: supremelawfirm@yahoo.com
891attachment: letter to John Randall,
892January 24, 1996
893copies: Legislative Counsel
894Congressional Research Service
895The Federal Zone:
896xxiv
897Reader's Notes:
898
899[This page left intentionally blank.]
900intro 1 of 6
901Introduction
902In the late Spring of the year 1990, our small beach town in Northern
903California was visited by a minor political controversy. A local writer for
904the weekly newspaper, a man named Kirby Ferris, had a number of neighbors
905buzzing about his recent sequence of articles challenging the 16th Amendment,
906the so-called "income tax" amendment in the U.S. Constitution. It seems that
907Kirby had come across some huge collection of documents which allegedly
908proved that the 16th Amendment was never ratified. Instead of obtaining the
909required approval of 36 State legislatures, the proposed amendment was simply
910"declared" ratified on February 25, 1913, by Philander C. Knox, a man who
911purported to be Secretary of State. Kirby Ferris had, evidently, visited one
912of the men responsible for assembling this collection of 17,000 Statecertified
913documents and returned entirely convinced that the so-called 16th
914Amendment was a complete and total fraud. The man he visited was Martin J.
915"Red" Beckman, a Montana rancher whose name now appears as co-author with
916Bill Benson on the cover of The Law That Never Was, a book that has already
917become a classic in American historical literature.
918Up to that point in time, I had not been much of a Ferris fan. Too
919often for me, his style bordered on being too inflammatory and lacking
920necessary details. After all, Kirby had spent his youth surfing waves,
921drinking beer, and chasing bikinis. When this little controversy erupted, I
922made no secret of my bachelor's degree in Political Science from UCLA, and my
923master's degree from the University of California at Irvine in Public
924Administration. Trotting out these credentials, of course, was invariably my
925preface to answering the several questions which friends and neighbors put to
926me about Kirby's allegations, as if to underscore my obvious qualifications
927to repudiate Kirby's claims. "If there's a problem, Congress will just fix
928it," I must have said more times than I care to admit.
929One day at breakfast in the Parkside Cafe, a favorite hang-out for all
930the "locals", the same conversation began again, this time with a Vietnam War
931veteran by the name of Mike Taylor. Mike is an intense man, with fierce
932convictions, a booming voice, a few lingering effects of combat shell shock
933(bad hearing), and a habit of getting right to the point. "What do you think
934of Kirby's columns on income tax?" he queried. Again, as if to practice a
935polished art, I repeated the same old answer one more time, "Congress will
936just fix it, if there really is a problem with the 16th Amendment." The
937answer had worked in the past; there was no reason why it wouldn't work on
938Mike too. Wrong! Mike shot right back, "OK. You're so smart. How is
939Congress going to fix it?" he retorted. "They'll pass a law. How else do
940you think they would fix it?" I answered, somewhat surprised from pride to be
941challenged so directly. And then Mike lowered the boom, "Are you telling me
942that Congress can amend the Constitution by passing a law? Is that what
943you're telling me?"
944My jaw fell, as if to begin my next sentence, but no words came out of
945my mouth. I knew that he had me. Congress cannot amend the Constitution.
946Of course, Mike was right. In a feeble attempt to recover, I retreated by
947admitting that two-thirds of the States were required to amend the
948Constitution, and that Congress alone did not have the power to do so. Then
949Mike delivered the knockout punch, "It takes three-fourths of the States to
950The Federal Zone:
951intro 2 of 6
952amend the Constitution, Paul, not two-thirds." I was had. All those years
953in school, all those high school civics classes, all those papers on
954political theory, and all those months of management science had left me
955woefully unprepared to spar with Mike when it came to the supreme Law of our
956Land. The lesson was a good one, one that I will never forget for the rest
957of my days. This book is my repentance, and redemption.
958My embarrassed defeat was a terrific motivation. I went to work
959ordering books and reading everything I could get my hands on. A purchase
960order flew up to Red Beckman in Billings, Montana. Within a week I was
961devouring my own copy of The Law That Never Was. I had to repent for my
962errors, or so my religious training had led me to believe. The book was a
963turning point, in more ways than one. I knew enough about the rules of
964evidence to question every page. "How could this problem have gone
965undetected for such a very long time?" I asked myself. Here were allegations
966which appeared to undermine a major source of revenue for the entire federal
967government of the United States. I needed more proof.
968I wrote to Kirby and explained my situation. It had been many years
969since my college political activism. I was now a senior systems consultant
970for a major investment bank in San Francisco, with almost 20 years of
971computer experience under my belt. I was often seen blending in among the
972"grey men" of the financial district, not too far from a regional Federal
973Reserve Bank. If I was going to take this problem very seriously and, in
974particular, if I was ever going to do anything about the 16th Amendment
975fraud, then I was going to need something more than a printed book from some
976Montana rancher I had never met. After all, with enough money, anybody can
977put ink to paper and put almost anything into circulation these days. I
978needed something more; I needed material evidence, as they call it in court
979rooms and in law schools -- material evidence, not hearsay, and certainly
980not unsubstantiated allegations that a massive fiscal fraud had been
981perpetrated on the American people for more than two generations.
982Kirby rose to the occasion. "Tell me what you need," he said. I
983thought about it and invited him to come over for coffee. If there really
984were 17,000 documents, all officially certified by the Secretaries of State
985in the Capitol buildings of 48 of the United States***, there was no point in
986plowing through such a huge mound of paperwork. Paperwork was something
987which I put somewhere below a necessary evil. We put our heads together and
988came up with a plan. The feds have admitted in writing that 6 States did not
989ratify the 16th Amendment. Since three-fourths of the States were required
990to ratify it, the amendment could have passed with at most 12 States opposing
991it. If we could find only 7 additional States which obviously failed to
992ratify the amendment, that would make a total of 13 NAY's, and we would have
993defeated the "income tax". What a tantalizing thought! Before the night was
994over, we had our list of "The Dirty Seven", as Kirby liked to call them.
995Kirby Ferris went home to call Red Beckman. Two days later, Kirby left
996a short note on my front door: Red Beckman had agreed to photocopy all the
997relevant documents for The Dirty Seven States, and would ship them to us as
998soon as the copying was done. Within a week, two large cardboard boxes were
999sitting on my front porch when I returned home from work. There it was, the
1000evidence I needed. It was incontrovertible: the 16th Amendment was never
1001ratified. The act of declaring it ratified was an act of outright fraud by
1002Introduction
1003intro 3 of 6
1004Secretary of State Philander C. Knox, a man who was sworn to obey the
1005Constitution. This was an awesome discovery.
1006The events which have transpired since that moment have literally
1007changed my life. I have filed formal petitions with two Representatives in
1008the Congress of the United States. A detailed notice of fraud and deception
1009has been served on all the governors of the 50 States. I have requested a
1010Grand Jury investigation into the fraud committed by Secretary of State
1011Philander C. Knox. I have studied and debated and learned everything I could
1012about the laws and regulations which bear on this question. It has been an
1013exhilarating and challenging experience. Almost all of the opposition has
1014come from government personnel, mostly officials of the Internal Revenue
1015Service. That opposition has been most instructive.
1016For those of you who may not know exactly how and where the U.S.
1017Constitution is relevant to this subject matter, the text of the failed 16th
1018Amendment follows:
1019The Congress shall have power to lay and collect taxes on incomes, from
1020whatever source derived, without apportionment among the several
1021States, and without regard to any census or enumeration.
1022[Constitution for the United States of America]
1023[text of so-called 16th Amendment]
1024[emphasis added]
1025From the beginning, the U.S. Constitution has empowered Congress to levy two
1026different kinds of taxes: direct and indirect. These are powers which
1027Congress has always had, with or without the so-called 16th Amendment. The
1028power to levy indirect taxes is authorized by Article 1, Section 8, Clause 1,
1029as follows:
1030The Congress shall have Power To Lay and collect Taxes, Duties, Imposts
1031and Excises, to pay the Debts and provide for the common Defense and
1032general Welfare of the United States; but all Duties, Imposts and
1033Excises shall be uniform throughout the United States; ....
1034[Constitution for the United States of America]
1035[Article 1, Section 8, Clause 1]
1036[emphasis added]
1037Federal excise taxes on the sale of gasoline and tires are examples of
1038indirect taxes. The requirement that indirect taxes be uniform throughout
1039the several States is known as the "uniformity rule". The power to levy
1040direct taxes is authorized by two separate clauses of the Constitution, as
1041follows:
1042Representatives and Direct Taxes shall be apportioned among the several
1043States which may be included within this Union, according to their
1044respective Numbers ....
1045[Constitution for the United States of America]
1046[Article 1, Section 2, Clause 3]
1047[emphasis added]
1048The Federal Zone:
1049intro 4 of 6
1050No Capitation, or other direct, Tax shall be laid, unless in Proportion
1051to the Census or Enumeration hereinbefore directed to be taken.
1052[Constitution for the United States of America]
1053[Article 1, Section 9, Clause 4]
1054[emphasis added]
1055Thus, the requirement that direct taxes be apportioned was considered
1056by the Framers to be so important, it is mentioned twice in the U.S.
1057Constitution. This requirement is known as the "apportionment rule", and its
1058application is easy to understand. If California has 10 percent of the
1059nation's population, then California's "portion" would be 10 percent of any
1060direct tax imposed by Congress. A "capitation" is another word for a direct
1061tax imposed on each "head" or person (caput is Latin for "head"). Federal
1062taxes on personal property, or on the income of personal property, are
1063examples of direct taxes. Appendix Q shows the State portions of a lawful
1064direct tax that was levied by Congress in the year 1798.
1065# # #
1066Introduction
1067intro 5 of 6
1068Reader’s Notes:
1069The Federal Zone:
1070intro 6 of 6
1071Reader’s Notes:
1072Page 1 - 1 of 6
1073Chapter 1:
1074The Brushaber Decision
1075Historically, defensive federal officials have argued that the 16th
1076Amendment is constitutional because the Supreme Court of the United States
1077has said so. In the year 1916, the high court issued a pivotal decision
1078which is identified in the case law as Brushaber v. Union Pacific Railroad
1079Company, 240 U.S. 1. It is important to realize that the evidence impugning
1080the ratification of the 16th Amendment was not published until the year 1985.
1081This evidence was simply not available to plaintiff Frank R. Brushaber when
1082he filed his first complaint on March 13, 1914, in the District Court of the
1083United States ("DCUS") for the Southern District of New York. His complaint
1084challenged the constitutionality of the income tax statute which Congress had
1085passed immediately after the 16th Amendment was declared ratified.
1086Specifically, he challenged the constitutionality of the income tax as it
1087applied to a corporation of which he was a shareholder, i.e., the Union
1088Pacific Railroad Company. His challenge went all the way to the Supreme
1089Court, and he lost.
1090Ever since then, attorneys, judges and other officials of the federal
1091government have been quick to cite the Brushaber case, and others which
1092followed, as undeniable proof that the 16th Amendment is constitutional.
1093With its constitutionality seemingly settled by the Brushaber ruling, former
1094Commissioner of Internal Revenue Donald C. Alexander felt free, almost 60
1095years later, to cite the 16th Amendment as the constitutional authority for
1096the government to tax the income of individuals and corporations. Consider
1097the following statement of his which was published in the official Federal
1098Register of March 29, 1974, in the section entitled "Department of the
1099Treasury, Internal Revenue Service, Organization and Functions". His
1100statement reads in part:
1101(2) Since 1862, the Internal Revenue Service has undergone a period of
1102steady growth as the means for financing Government operations shifted
1103from the levying of import duties to internal taxation. Its expansion
1104received considerable impetus in 1913 with the ratification of the
1105Sixteenth Amendment to the Constitution under which Congress received
1106constitutional authority to levy taxes on the income of individuals and
1107corporations.
1108[Vol. 39, No. 62, page 11572]
1109[emphasis added]
1110What is not widely known about the Brushaber decision is the essence of
1111the ruling. Contrary to widespread legal opinion which has persisted even
1112until now, the Supreme Court ruled that taxation on income is an indirect
1113tax, not a direct tax. The Supreme Court also ruled that the 16th Amendment
1114did not change or repeal any part of the Constitution, nor did it authorize
1115any direct tax without apportionment. To illustrate the persistence of wrong
1116opinions, on a recent vacation to Montana, I had occasion to visit the
1117federal building in the city of Missoula. On the wall outside the Federal
1118District Court, Room 263, a printed copy of the U.S. Constitution is
1119displayed in text which annotates the 16th Amendment with the following
1120statement:
1121The Federal Zone:
1122Page 1 - 2 of 6
1123This amendment modifies Paragraph 3, Section 2, of Article I and
1124Paragraph 4, Section 9, of Article I.
1125In light of the Brushaber decision, this statement is plainly wrong and
1126totally misleading. The text of the 16th Amendment contains absolutely no
1127references to other sections of the U.S. Constitution (unlike the repeal of
1128Prohibition). In his excellent book entitled The Best Kept Secret, author
1129Otto Skinner reviews a number of common misunderstandings like this about the
113016th Amendment, and provides ample support in subsequent case law for the
1131clarifications he provides. Interested readers are encouraged to order Otto
1132Skinner's work by referring to the Bibliography (Appendix N).
1133The U.S. Constitution still requires that federal direct taxes must be
1134apportioned among the 50 States of the Union. Thus, if California has 10
1135percent of the nation's population, then California's "portion" would be 10
1136percent of any direct federal tax. In the Brushaber decision, the Supreme
1137Court concluded that income taxes are excises which fall into the category of
1138indirect taxes, not direct taxes. From the beginning, the U.S. Constitution
1139has made an explicit distinction between the two types of taxation authorized
1140to the Congress, with separate limitations for each type: indirect taxes
1141must be uniform across the States; direct taxes must be apportioned.
1142Writing for the majority in one of his clearer passages, Chief Justice Edward
1143Douglass White explained it this way:
1144[T]he conclusion reached in the Pollock Case did not in any degree
1145involve holding that income taxes generically and necessarily came
1146within the class of direct taxes on property, but on the contrary
1147recognized the fact that taxation on income was in its nature an excise
1148entitled to be enforced as such ....
1149[Brushaber v. Union Pacific Railroad Co.]
1150[240 U.S. 1 (1916), emphasis added]
1151Unfortunately for Justice White, most of the language he chose to write
1152the majority's opinion, and the resulting logic contained therein, are
1153tortuously convoluted and almost totally unintelligible, even to collegeeducated
1154English majors. In his wonderful tour de force entitled Tax Scam,
1155author Alan Stang quips that Justice White:
1156... turned himself into a pretzel trying to justify the new tax without
1157totally junking the Constitution.
1158[page 45]
1159Stang's book is a must, if only because his extraordinary wit is
1160totally rare among the tax books listed in the Bibliography (Appendix N).
1161Other legal scholars and experienced constitutional lawyers have published
1162books which take serious aim at one or more elements of White's ruling.
1163Jeffrey Dickstein's Judicial Tyranny and Your Income Tax and Vern Holland's
1164The Law That Always Was are two excellent works of this kind. Both authors
1165focus on the constitutional distinctions between direct and indirect taxes,
1166and between the apportionment and uniformity rules, respectively.
1167The Brushaber Decision
1168Page 1 - 3 of 6
1169Dickstein does a masterful job of tracing a century of federal court
1170decisions, with an emphasis on the bias and conflict among federal court
1171definitions of the key word "income". He exercises rigorous logic to
1172demonstrate how the Brushaber ruling stands in stark contrast to the
1173important Supreme Court precedents that came before and after it in time.
1174For example, after a meticulous comparison of Pollock with Brushaber,
1175Dickstein is forced to conclude that:
1176Justice White's indirect attempt to overturn Pollock is wholly
1177unpersuasive; he clearly failed to state a historical, factual or
1178legal basis for his conclusion that a tax on income is an indirect,
1179excise tax. It is clear that Mr. Brushaber and his attorneys correctly
1180stated the proposition to the Supreme Court that the Sixteenth
1181Amendment relieved the income tax, which was a direct tax, from the
1182requirement of apportionment, and that the Brushaber Court failed
1183miserably in attempting to refute Mr. Brushaber's legal position.
1184[Judicial Tyranny and Your Income Tax, page 60]
1185[emphasis added]
1186Dickstein also proves that an irreconcilable conflict exists between the
1187Brushaber decision and a subsequent key decision of the Supreme Court, Eisner
1188v. Macomber, 252 U.S. 189:
1189There is an irreconcilable conflict between the Brushaber case, which
1190holds the income tax is an indirect tax not requiring apportionment,
1191and the Eisner case, which holds the income tax is a direct tax
1192relieved from apportionment.
1193[Judicial Tyranny and Your Income Tax]
1194[footnote on page 141]
1195Going back even further in American history, Holland argues persuasively that
1196"income" taxes have always been direct taxes which must be apportioned even
1197today, Brushaber notwithstanding:
1198It results, therefore: ...
11994. That the Sixteenth Amendment did not amend the Constitution. The
1200United States Supreme Court by unanimous decisions determined
1201that the amendment did not grant any new powers of taxation;
1202that a direct tax cannot be relieved from the constitutional
1203mandate of apportionment; and the only effect of the amendment
1204was to overturn the theory advanced in the Pollock case which
1205held that a tax on income, was in legal effect, a tax on the
1206sources of the income. ...
12076. [T]hat a General Tax on Income levied upon one of the Citizens of
1208the several States, has always been a direct tax and must be
1209apportioned.
1210[The Law That Always Was, page 220]
1211[emphasis in original]
1212The Federal Zone:
1213Page 1 - 4 of 6
1214There are, however, two additional lessons from the Brushaber decision
1215which have been entirely lost on most, if not all of the authors who have
1216published any analysis of this important ruling. These are the dual issues
1217of status and jurisdiction, issues which it is my intention to elevate to the
1218level of importance which they have always deserved. An understanding of
1219status and jurisdiction places the Brushaber ruling in a new and different
1220light, and solves a number of persistent mysteries and misunderstandings
1221which have grown up around an income tax law which now includes some 2,000
1222pages of statutes and 10,000 pages of regulations. More precisely, the
1223published rules of statutory construction require us to say that the income
1224tax law now includes only 2,000 pages of statutes and 10,000 pages of
1225regulations.
1226Obviously, without a comprehensive paradigm with which to navigate such
1227a vast quantity of legalese, particularly when this legalese is only slightly
1228more intelligible than White's verbal pretzels, it is easy to understand why
1229professors, lawyers, CPA's, judges, prosecutors, defendants and juries
1230consistently fail to fathom its meaning. In the Republic envisioned by the
1231Framers of the Constitution, a sophisticated paradigm should not be necessary
1232for the ordinary layman to understand any law. In and of itself, the need
1233for a sophisticated paradigm is a sufficient ground to nullify the law for
1234being vague and too difficult to understand in the first place.
1235Nevertheless, the remainder of this book will show that status and
1236jurisdiction together provide a comprehensive paradigm with sufficient
1237explanatory power not only to solve the persistent mysteries, but also to
1238provide vast numbers of Americans with the tax relief they so desperately
1239need and deserve.
1240# # #
1241The Brushaber Decision
1242Page 1 - 5 of 6
1243Reader’s Notes:
1244The Federal Zone:
1245Page 1 - 6 of 6
1246Reader’s Notes:
1247Page 2 - 1 of 8
1248Chapter 2:
1249Status and Jurisdiction
1250Understanding the status of the parties to the Brushaber case is
1251essential to understanding both the outcome, and the Treasury Decision which
1252followed soon after the U.S. Supreme Court's landmark ruling in the case.
1253Frank R. Brushaber filed his original Bill of Complaint on March 13, 1914,
1254within a year after Philander C. Knox declared the 16th Amendment to be the
1255supreme Law of the Land. Addressing the judges of the District Court of the
1256United States ("DCUS") for the Southern District of New York, Brushaber began
1257his complaint as follows:
1258Frank R. Brushaber, a citizen of the State of New York and a resident
1259of the Borough of Brooklyn, in the City of New York, brings this his
1260bill against Union Pacific Railroad Company, a corporation and citizen
1261of the State of Utah, having its executive office and a place of
1262business in the Borough of Manhattan, in the City of New York, and the
1263Southern District of New York, in his own behalf and on behalf of any
1264and all of the stockholders of the defendant Union Pacific Railroad
1265Company who may join in the prosecution and contribute to the expenses
1266of this suit.
1267[emphasis added]
1268Right from the beginning, Frank Brushaber made an important statement
1269of fact which remained unchallenged at every level in the federal courts. He
1270identified himself as a citizen of the State of New York and a resident of
1271the Borough of Brooklyn, in the City of New York. He did not identify
1272himself as a "citizen of the United States**", as a "United States** citizen"
1273or as a "resident of the United States**". He indicated that he lived and
1274worked in New York State, outside the District of Columbia and outside any
1275territory, possession or enclave governed by the Congress of the United
1276States**. "Enclaves" are areas within the 50 States which are "ceded" to
1277Congress by the acts of State Legislatures (e.g. military bases).
1278The federal government concluded that Brushaber, under the law, was a
1279"nonresident alien". He was "nonresident" because he lived and worked
1280outside the areas of land over which the Congress has exclusive jurisdiction.
1281The authority to have exclusive jurisdiction over this land was granted to
1282Congress by the authorities at Article 1, Section 8, Clause 17 ("1:8:17"),
1283and Article 4, Section 3, Clause 2 ("4:3:2"), in the U.S. Constitution. In
1284this book, we will often refer to these areas of land as "the federal zone".
1285Brushaber was an "alien" because his statement of citizenship was taken
1286as proof that he was not a citizen of the federal zone. He was not a
1287"citizen of the United States**" nor a "United States** citizen", either
1288through birth or naturalization, because the term "United States**" in this
1289context means only the federal zone. Therefore, he was alien with respect to
1290the District of Columbia and the federal enclaves, territories and
1291possessions over which the Congress has exclusive legislative jurisdiction.
1292This may sound strange to the casual reader, but the Code is not referring to
1293creatures from outer space. The Code is referring to the creation of well
1294paid lawyers.
1295The Federal Zone:
1296Page 2 - 2 of 8
1297Right from the beginning, Frank Brushaber also made an important error
1298which contributed to his ultimate downfall in the case. He identified his
1299opposition as a corporation chartered by the State of Utah:
1300Your orator further shows that the defendant Union Pacific Railroad
1301Company is, and at all the times hereinafter mentioned was, a
1302corporation duly organized and existing under and by virtue of the laws
1303of the State of Utah, and a citizen of the State of Utah ....
1304[from original Bill of Complaint, filed March 13, 1914]
1305This was incorrect. The Union Pacific Railroad Company was originally
1306created in the year 1862 by an Act of Congress. The stated purpose of the
1307corporation was to aid in the construction of a railroad and telegraph line
1308from the Missouri River to the Pacific Ocean (from the "Union" to the
1309"Pacific"). This Act was passed on July 1, 1862, by the Thirty-Seventh
1310Congress, Second Session, as recorded in the Statutes at Large, (December 5,
13111859, to March 3, 1863, at Chapter CXX, page 489). At that time, Utah had
1312not yet been admitted as a State of the Union. It was still a territory,
1313i.e., a "federal state", over which the Congress had exclusive legislative
1314jurisdiction.
1315Being a creation of Congress, the Union Pacific Railroad Company was
1316found to be a "domestic" corporation under the law. This is another term
1317which is very confusing to the casual reader. In common, everyday language,
1318the term "domestic" is often used to mean "inside the country". For example,
1319airports are divided into different areas for domestic and foreign flights,
1320in order to allow Customs agents to inspect the baggage and passports of
1321passengers arriving on flights from foreign countries. However, under
1322federal tax law, the term "domestic" does not mean "inside the country"; it
1323means "inside the federal zone" which is an area that is much smaller than
1324the whole country. Accordingly, a "foreign" corporation is a corporation
1325chartered by a government that is "outside the federal zone".
1326The federal zone consists of the enclaves, territories and possessions
1327over which the Congress of the United States** has exclusive legislative
1328jurisdiction. California is outside of the federal zone, for example, and
1329corporations which are chartered in the State of California are foreign
1330corporations with respect to the federal zone. Similarly, corporations
1331chartered in France are likewise foreign corporations with respect to the
1332federal zone. It is simple, once you understand the proper legal definitions
1333of the terms "foreign" and "domestic" in the federal tax Code.
1334The status of the two parties in the Brushaber case can, therefore, be
1335summarized as follows:
13361. State Citizen Frank R. Brushaber was identified by evidence in
1337his court documents as a nonresident alien, as that term is now
1338defined in the Internal Revenue Code.
13392. The Union Pacific Railroad Company was identified by court
1340documents as a domestic corporation, as that term is now defined
1341in the Internal Revenue Code.
1342Status and Jurisdiction
1343Page 2 - 3 of 8
1344Government Propaganda
1345The federal government has tried to confuse the implications of Frank
1346Brushaber's status by asserting that he was a French immigrant. This is
1347government propaganda, pure and simple. This propaganda is designed to make
1348us believe that Brushaber was found to be an alien because he was born in
1349France, not because he declared himself to be a "citizen of the State of New
1350York". Accordingly, the federal officials responsible for this propaganda
1351are trying in vain to convince everyone that the 50 States are inside the
1352federal zone, because they want us to conclude that Frank Brushaber would
1353have been a "U.S.** resident" if he resided in New York, or a "U.S.**
1354citizen" if he had been born in New York. It is fairly easy (and fun) to
1355defeat this propaganda, because it is only make believe.
1356First of all, Frank Brushaber declared himself to be a "resident of the
1357Borough of Brooklyn, in the City of New York". If New York State were inside
1358the federal zone, and if Frank Brushaber had been born in France, he most
1359certainly would have been an "alien", but a "resident" alien according to the
1360government's own immigration rules. After the U.S. Supreme Court's decision,
1361the Treasury Department published a crucial Treasury Decision (T.D. 2313)
1362which clearly identified Frank Brushaber as a nonresident alien (see page 2-4
1363below, and also Appendix C).
1364Secondly, regardless of whether federal officials place New York State
1365inside or outside the federal zone, their French immigrant theory would place
1366Frank Brushaber in the category of an alien who was lawfully admitted for
1367permanent "residence". Congress does have legislative jurisdiction over
1368immigration and naturalization. Being lawfully admitted for permanent
1369residence is also called the "green card test" (see next chapter). Again,
1370the government's own rules and regulations would have designated Frank
1371Brushaber as a "resident" alien. As we know, the Treasury Department
1372identified him as a nonresident alien. A native of France would be a
1373nonresident alien if he resided in France; he would be a resident alien if
1374he lawfully immigrated to America under rules established by Congress. But,
1375no "green card" was in evidence to prove that Brushaber was an immigrant, and
1376current "green cards" exhibit the words RESIDENT ALIEN in bold letters.
1377Thirdly, if Frank Brushaber had been a French immigrant who applied
1378for, and was granted U.S.** citizenship, quite obviously he would have become
1379a naturalized U.S.** citizen, no longer an alien. Again, Congress does have
1380jurisdiction over immigration and naturalization. The government's own rules
1381and regulations would have designated Frank Brushaber as a U.S.** citizen.
1382Finally, Frank Brushaber identified himself as a "citizen of the State
1383of New York". Although a native of France would also be an "alien" with
1384respect to the federal zone, this is not how Frank Brushaber identified
1385himself to the federal courts. He identified himself as a "citizen of the
1386State of New York". On the basis of this status as presented to the federal
1387courts, the U.S. Treasury Department thereafter concluded that he was a
1388nonresident alien, not a U.S.** citizen and not a U.S.** resident. To argue
1389that he was a French immigrant is to assume facts that were not in evidence.
1390The government arrived at their conclusion on the basis of facts that were in
1391evidence. Author and scholar Lori Jacques addresses the French immigrant
1392theory as follows:
1393The Federal Zone:
1394Page 2 - 4 of 8
1395... [I]t appears that a state citizen was identified as a nonresident
1396alien and taxed upon his unearned income deriving from a domestic
1397corporation. This conclusion is possible because there would be no
1398question that a person who, for example, was born and domiciled in
1399France and who owned shares in Union Pacific Railway [sic] Co. would be
1400taxed as a nonresident alien. Only Mr. Brushaber, citizen of New York
1401State and stockholder, was considered in the case decided by the
1402Supreme Court, thus there was no basis for the Secretary extending the
1403decision to those not parties to the action.
1404[A Ticket to Liberty, November 1990 edition, page 40]
1405[emphasis added]
1406In the final analysis, it doesn't really matter whether Frank Brushaber
1407was a French immigrant or not. The U.S. Treasury Department agreed that any
1408person claiming to be citizen and resident of New York was a nonresident
1409alien with respect to the federal zone. This is all we need to know about
1410the plaintiff's status. It is essential to understand that it was federal
1411government officials who determined Frank Brushaber was a nonresident alien
1412for purposes of imposing a federal tax on his dividends. Brushaber did not
1413come into federal court claiming that he was a nonresident alien; he did
1414come into court claiming that he was a New York State Citizen and a resident
1415of Brooklyn. Now you see why the French immigrant theory is really just
1416propaganda. Treasury Decision 2313 is the proof. In later chapters, the
1417motive for this propaganda will become crystal clear.
1418Treasury Decision 2313
1419Soon after the Brushaber decision, and as a direct result of that
1420decision, the Office of the Commissioner of Internal Revenue published
1421Treasury Decision ("T.D.") 2313 to clarify the meaning and consequences of
1422the Supreme Court's ruling. Volume 18 of the Treasury Decisions was
1423published for the period of January to December of 1916 by Secretary of the
1424Treasury W. G. McAdoo. Treasury Decision 2313 was written to clarify the
1425"... taxability of interest from bonds and dividends on stock of domestic
1426corporations owned by nonresident aliens, and the liabilities of nonresident
1427aliens under section 2 of the act of October 3, 1913."
1428Frank Brushaber had purchased stock in the Union Pacific Railroad
1429Company. He was then paid a dividend on this stock. The Union Pacific
1430Railroad Company acted as a "withholding agent" and withheld a portion of his
1431dividend to pay the federal income tax that was owed on that dividend. The
1432term "withholding agent" still has the same meaning in the current Internal
1433Revenue Code. Although he was legally a nonresident alien, Frank Brushaber
1434received income from a source that was inside, or "within" the federal zone.
1435The "source" of his income was a "domestic" corporation, because that
1436corporation had been chartered by Congress and not by the State of Utah.
1437The net result of his defeat in the Supreme Court was to render as
1438taxable the income from bond interest and stock dividends issued by domestic
1439corporations to nonresident aliens like Frank Brushaber. A key paragraph
1440from Treasury Decision 2313 is the following:
1441Status and Jurisdiction
1442Page 2 - 5 of 8
1443Under the decision of the Supreme Court of the United States in the
1444case of Brushaber v. Union Pacific Railway Co. [sic], decided January
144524, 1916, it is hereby held that income accruing to nonresident aliens
1446in the form of interest from the bonds and dividends on the stock of
1447domestic corporations is subject to the income tax imposed by the act
1448of October 3, 1913.
1449[emphasis added]
1450Because Brushaber's income originated from a source "inside" or
1451"within" the United States**, where "United States**" means the federal zone,
1452the income was taxable. The "source" was the Union Pacific Railroad Company,
1453the issuer of the stock and the payor of dividends. (The T.D. failed to
1454spell the corporation's name correctly.) The federal tax law then, as now,
1455designates such a dividend payor as the "withholding agent":
1456The normal tax shall be withheld at the source from income accrued to
1457nonresident aliens from corporate obligations and shall be returned and
1458paid to the Government by debtor corporations and withholding agents as
1459in the case of citizens and resident aliens ....
1460[emphasis added]
1461This "withholding agent" must withhold a certain amount from the
1462dividend, to cover the federal tax liability of the recipient. The amount
1463withheld is paid to the federal government. T.D. 2313 then went on to
1464explain the use of Form 1040 in this situation:
1465The liability, under the provisions of the law, to render personal
1466returns ... of annual net income accrued to them from sources within
1467the United States** during the preceding calendar year, attaches to
1468nonresident aliens as in the case of returns required from citizens and
1469resident aliens. Therefore, a return on Form 1040, revised, is
1470required except in cases where the total tax liability has been or is
1471to be satisfied at the source by withholding or has been or is to be
1472satisfied by personal return on Form 1040, revised, rendered in their
1473behalf.
1474[emphasis added]
1475For those of you who are interested, the complete text of Treasury
1476Decision 2313 can be found in Appendix C of this book.
1477Summary
1478The dual issues of status and jurisdiction are closely intertwined.
1479The federal government has a limited area over which it exercises exclusive
1480legislative jurisdiction, an area we have called "the federal zone".
1481Congress is not limited by the constitutional restrictions on direct and
1482indirect taxation within the federal zone. The birth and residency status of
1483natural persons situate them either inside or outside that jurisdiction.
1484Citizens who were naturalized by federal courts are situated inside that
1485jurisdiction, regardless of where they reside. Both citizens and residents
1486of the federal zone are liable for federal taxes on their worldwide income,
1487no matter where the source of that income.
1488The Federal Zone:
1489Page 2 - 6 of 8
1490If you are not a citizen, then you are an alien. If you are not a
1491resident, then you are a nonresident. Nonresident aliens pay taxes only on
1492income which is derived from sources that are inside the federal zone. If
1493you work for the federal government, your pay comes from a source that is
1494inside the federal zone.
1495Likewise, artificial "persons" like corporations are either foreign or
1496domestic. (It may appear strange at first, but a corporation is also a
1497"person" as that term is defined in the Internal Revenue Code.) A
1498corporation that is chartered by Congress is domestic with respect to the
1499federal zone. A corporation that is chartered by one of the 50 States of the
1500Union is foreign with respect to the federal zone. A corporation that is
1501chartered by a foreign country like France is likewise foreign with respect
1502to the federal zone.
1503Imagine what a difference it would make if all individuals and
1504corporations knew and asserted their correct status with respect to the
1505exclusive legislative jurisdiction of the federal zone!
1506# # #
1507Status and Jurisdiction
1508Page 2 - 7 of 8
1509Reader’s Notes:
1510The Federal Zone:
1511Page 2 - 8 of 8
1512Reader’s Notes:
1513Page 3 - 1 of 12
1514Chapter 3:
1515"The Matrix"
1516This chapter contains an essential key with the potential to set you
1517free. One of the biggest obstacles to understanding federal tax law is that
1518it never uses diagrams or pictures. If a picture is worth a thousand words,
1519then the Internal Revenue Code ("IRC") would certainly lose a lot of weight
1520if it were reduced to pictures; but there would still be a lot of pictures!
1521A careful examination of certain key terms like "resident" and "citizen"
1522reveals a certain two-dimensional quality to the statutory relationship among
1523these terms. Specifically, you are an alien if you are not a citizen, and
1524you are a nonresident if you are not a resident. This careful examination
1525led to the following diagram, which we like to call "The Matrix". The Matrix
1526is the key that unlocks the whole puzzle of federal income taxation. When
1527you understand The Matrix, you will know exactly where you stand with respect
1528to the federal zone:
1529column 1: column 2:
1530┌─────────────────┬─────────────────┐
1531│ citizen of the │ │
1532│ United States** │ alien │
1533├─────────────────┼─────────────────┤
1534│ │ │
1535│ │ │
1536resident │ X │ X │ row 1
1537│ │ │
1538├─────────────────┼─────────────────┤
1539│ │ │
1540│ │ │
1541nonresident │ X │ │ row 2
1542│ │ │
1543└─────────────────┴─────────────────┘
1544The validity of The Matrix is supported by a large body of evidence,
1545only a small part of which can be covered effectively in a single book. The
1546IRC is not a good place to begin, because Chapter 1 of that Code imposes a
1547tax on the taxable income of "individuals", a term which the Code simply does
1548not define. The definitions that do exist are found in Chapter 79, and in
1549other places which are spread around the Code like leaves blowing in the
1550wind.
1551The Code of Federal Regulations ("CFR") is a much better place to begin
1552a review of the evidence. The regulations in the CFR are considered to be
1553official publications of the federal government because they are "judicially
1554noticed" (courts must defer to them) and because they are considered by law
1555to be official supplements to the Federal Register. According to the federal
1556regulations which promulgate the Internal Revenue Code, the liability for
1557federal income tax is imposed on all citizens of the United States** and on
1558all residents of the United States**, as follows:
1559The Federal Zone:
1560Page 3 - 2 of 12
1561In general, all citizens of the United States**, wherever resident, and
1562all resident alien individuals are liable to the income taxes imposed
1563by the Code whether the income is received from sources within or
1564without the United States**. ... As to tax on nonresident alien
1565individuals, see sections 871 and 877.
1566[26 CFR 1.1-1(b)]
1567Thus, the regulations impose an income tax on all citizens, whether
1568they are resident or nonresident (column 1 in The Matrix), and on all
1569residents, whether they are citizens or aliens (row 1 in The Matrix). These
1570same regulations define a United States** citizen as someone who is either
1571born or naturalized in the United States** and who is subject to the
1572jurisdiction of the United States**, as follows:
1573Every person born or naturalized in the United States** and subject to
1574its jurisdiction is a citizen.
1575[26 CFR 1.1-1(c)]
1576[emphasis added]
1577The official IRS "Publications" are another excellent source of
1578evidence which supports the validity of The Matrix. These publications can
1579be obtained by ordering them directly from the Internal Revenue Service. For
1580example, Publication number 519, U.S. Tax Guide for Aliens, begins with the
1581following statements:
1582Introduction
1583For tax purposes, an alien is an individual who is not a U.S.**
1584citizen. Aliens are classified as nonresident aliens and resident
1585aliens. ....
1586[emphasis in original]
1587Clearly, an alien is an individual who is not a U.S.** citizen. Aliens
1588are individuals who were born outside of the federal zone, and who never
1589elected to become U.S.** citizens via naturalization. Publication 519 then
1590explains the difference between a resident alien and a nonresident alien, as
1591follows:
1592Resident or nonresident?
1593Resident aliens generally are taxed on their worldwide income, the same
1594as U.S.** citizens. Nonresident aliens generally are taxed only on
1595their income from sources within the United States**. ...
1596Nonresident aliens are taxed on their U.S.** source income (and on
1597certain foreign source income that is effectively connected with a
1598trade or business in the United States**).
1599[emphasis in original]
1600The Matrix
1601Page 3 - 3 of 12
1602How does one become a "resident" of the United States**? Remember, as
1603used in the Internal Revenue Code and its regulations, the term "United
1604States**" means the area over which Congress exercises exclusive legislative
1605jurisdiction, i.e. the federal zone. The IRC contains a relatively clear
1606definition of the terms "resident alien" and "nonresident alien", as follows:
1607Definition of Resident Alien and Nonresident Alien. --
1608(1) In General. -- For purposes of this title (other than subtitle B)
1609--
1610(A) Resident Alien. -- An alien individual shall be treated
1611as a resident of the United States** with respect to any
1612calendar year if (and only if) such individual meets the
1613requirements of clause (i), (ii), or (iii):
1614(i) Lawfully Admitted for Permanent Residence. -- Such
1615individual is a lawful permanent resident of the
1616United States** at any time during such calendar
1617year.
1618(ii) Substantial Presence Test. -- Such individual makes
1619the election provided in paragraph (3).
1620(iii) First Year Election. -- Such individual makes the
1621election provided in paragraph (4).
1622(B) Nonresident Alien. -- An individual is a nonresident alien
1623if such individual is neither a citizen of the United
1624States** nor a resident of the United States** (within the
1625meaning of subparagraph (A)).
1626[IRC 7701(b), emphasis added]
1627Being lawfully admitted for permanent residence is also called "the
1628green card test". IRS Publication 519 explains the green card test as
1629follows:
1630You are a resident for tax purposes if you are a lawful permanent
1631resident of the United States** at any time during the calendar year.
1632... This is known as the "green card" test. You are a lawful
1633permanent resident of the United States** at any time if you have been
1634given the privilege, according to the immigration laws, of residing
1635permanently in the United States** as an immigrant, and this status has
1636not been taken away and has not been administratively or judicially
1637determined to have been abandoned. You have this status if you have
1638been issued an alien registration card, also known as a "green card,"
1639by the Immigration and Naturalization Service.
1640[emphasis in original]
1641American Citizens who were born free in one of the 50 States of the
1642Union are not required to obtain an alien registration card, because their
1643presence in one of the 50 States is not a privilege; on the contrary, it is
1644an unalienable Right which is guaranteed to them by the United States
1645The Federal Zone:
1646Page 3 - 4 of 12
1647Constitution because they were born free and Sovereign. The Constitution
1648refers to these people as "natural born Citizens" (2:1:5), "free Persons"
1649(1:2:3) and "Citizens of a State" (3:2:1 and 4:2:1). On the basis of this
1650criterion alone, the natural born State Citizen enjoys a significant Right
1651which is not enjoyed by a person who must apply for residence as a privilege
1652granted by government.
1653(Throughout this book, the terms "native American Citizen", "nativeborn
1654American Citizen" and "American Citizen" will be synonymous with
1655"natural born Citizens" as in 2:1:5 of the Constitution, and with "State
1656Citizens" as in 3:2:1 and 4:2:1 of the Constitution, to avoid problems that
1657do arise solely from terminology. See also 1:2:2 and 1:3:3.)
1658Publication 519 explains the "substantial presence test" using rules
1659which closely parallel those which are actually found in the Internal Revenue
1660Code:
1661You will be considered a U.S.** resident for tax purposes if you meet
1662the substantial presence test for the calendar year. To meet this
1663test, you must be physically present in the United States** on at
1664least:
1665(1) 31 days during the current year, and
1666(2) 183 days during the 3-year period that includes the current year
1667and the 2 years immediately before, counting:
1668- all the days you were present in the current year ... , and
1669- 1/3 of the days you were present in the first year before
1670the current year ... , and
1671- 1/6 of the days you were present in the second year before
1672the current year ...
1673Example. You were physically present in the United States** on 120
1674days in each of the years 1988, 1989, and 1990. To determine if you
1675meet the substantial presence test for 1990, count the full 120 days of
1676presence in 1990, 40 days in 1989 (1/3 of 120), and 20 days in 1988
1677(1/6 of 120). Since the total for the 3-year period is 180 days, you
1678are not considered a resident under the substantial presence test for
16791990.
1680[emphasis in original]
1681An individual may elect to be treated as a resident of the United
1682States**. The rules for making this election are found in the Code (IRC
1683Section 7701(b)(4)) and in the regulations which promulgate this Code (26 CFR
16841.871 et seq.). Why anyone would want to do this, without actually residing
1685in the United States**, remains a mystery to us. Many Americans have been
1686duped into believing that electing to be treated as a resident is a
1687"beneficial" thing to do. Subsequent chapters will discuss the so-called
1688"benefits" of U.S.** residence and U.S.** citizenship by contrasting
1689revocable privileges and unalienable rights.
1690The Matrix
1691Page 3 - 5 of 12
1692At last, we arrive at the definition of "nonresident alien". We have
1693taken the long way around the mountain, but it is the only way around the
1694mountain (as it turns out) because Chapter 1 of the Internal Revenue Code
1695imposes the tax on undefined "individuals". It is in Chapter 79, near the
1696end of the Code, where it states that an individual is a nonresident alien if
1697such individual is neither a citizen of the United States** nor a resident of
1698the United States**.
1699If you were born outside the federal zone, either as a Sovereign
1700Citizen natural born free in one of the 50 States of the Union, or as a
1701native citizen of a foreign country like France, then you are not
1702automatically a "citizen of the United States**". You may, of course, obtain
1703"U.S.** citizenship" by applying for this "privilege" with the Immigration
1704and Naturalization Service, even if you are a Sovereign State Citizen. You
1705may also relinquish U.S.** citizenship at will, through a process known as
1706"expatriation". If you were born inside the federal zone, then you are
1707automatically a "citizen of the United States**". The rules for residency
1708have already been reviewed above.
1709The validity of The Matrix is also reinforced clearly by a man named
1710Roger Foster who, in the year 1915, wrote a forgotten treatise on the Act of
17111913, the year the so-called 16th Amendment was declared ratified. Some
1712people argue that these older materials are not relevant because they do not
1713take into account all the changes that have occurred in the Code and its
1714regulations. Although changes have indeed occurred, the relevance of these
1715materials lies in their proximity in time to the origins of income taxation
1716in America, and to the intent of the original statutes. It is a principle of
1717law that the intent of a statute is always decisive. The following excerpt
1718is taken from A Treatise on the Federal Income Tax under the Act of 1913, 2nd
1719edition, by Roger Foster of the New York Bar, published by The Lawyers
1720Co-operative Publishing Company, Rochester, New York, in 1915:
1721Section 35: Incidence of the tax with respect to persons.
1722Under [the statute] four possible cases arise. Two are of
1723citizens, with reference to their residence or nonresidence, and two
1724are of aliens, with reference likewise to their residence or
1725nonresidence. There is no question as to the first two, that the whole
1726income of every citizen whether residing at home or abroad is taxed;
1727it is so specifically provided in the act. Similarly, it is expressly
1728provided in the act that every person residing in the United States**
1729shall pay a tax upon all his income, from whatever source derived,
1730which without question includes all resident aliens. Whatever,
1731therefore, the power of Congress may be, its intent is clear, that in
1732case of non-resident aliens the only measure of the tax is income
1733derived within the United States**.
1734With reference to aliens, therefore, it must be determined
1735whether they are resident in which case they must pay the tax on their
1736whole income; or if not resident whether they own property or carry on
1737a business, trade or profession in the United States**.
1738The Federal Zone:
1739Page 3 - 6 of 12
1740In the latter case, they are taxable only with reference to
1741income earned or paid in this country. If they are non-resident and do
1742not derive an income from any source within our territory of course
1743they are not taxable at all.
1744[pages 153 to 155, emphasis added]
1745Note, in particular, that Foster makes reference to "income earned or
1746paid in this country". You might be sorely tempted to conclude, therefore,
1747that he meant to define the "United States" to mean the several States of the
1748Union (then 48), in addition to the federal zone. He did not. This question
1749is squarely settled in another section of his treatise, in which he considers
1750the incidence of the tax with respect to territory:
1751Section 34: Incidence of the tax with respect to territory and places
1752exempted from the same.
1753The tax ... is levied in Alaska, the District of Columbia, Porto
1754Rico [sic] and the Philippine Islands. ... The Act expressly directs:
1755"That the word 'State' or 'United States**' when used in this
1756section shall be construed to include any Territory, Alaska, the
1757District of Columbia, Porto Rico, and the Philippine Islands,
1758when such construction is necessary to carry out its provisions."
1759Although there might be ground for argument that the phrase "any
1760Territory" applies to the Hawaiian Islands, it was the evident
1761intention of Congress that the residents of Hawaii, at least when not
1762citizens of the United States**, are exempt from the tax, for the
1763reason that the Legislature of Hawaii has imposed an Income Tax upon
1764all residents of that territory.
1765[pages 152 to 153, emphasis added]
1766It is important to appreciate that Roger Foster was considered by many
1767to be a recognized authority on federal law. In addition to his treatise on
1768the Federal Income Tax Act of 1913, he wrote numerous other treatises and
1769articles, including (but not limited to) "Commentaries on the Constitution of
1770the United States", "Federal Judiciary Acts", and "The Federal Income Tax of
17711894". In the published opinion of author John L. Sasscer, Sr., any doubts
1772about Foster's intentions are completely dissolved by his choice of words for
1773the heading to Section 34: incidence of the tax with respect to territory
1774and places exempted from the same:
1775If the income tax were levied within the states of the union there is
1776no doubt that he would have so stated. The absence of any mention of
1777the states of the union as being "territory" where the tax is imposed,
1778shows that Mr. Foster recognized the income tax was imposed in those
1779mentioned areas only, all of which were federal territories in 1913.
1780["Deciphering the Internal Revenue Code: The Keys Revealed"]
1781[by John L. Sasscer, Sr., in Economic Survival, page 27]
1782[emphasis in original]
1783The Matrix
1784Page 3 - 7 of 12
1785In subsequent chapters, a principle of statutory construction is
1786applied to the IRC to show that the inclusion of one thing is equivalent to
1787the exclusion of all other things not explicitly mentioned. This principle
1788also applies to persons and to places. Laws are constructed in strict
1789obedience to the rules of formal English; one of these rules is that a
1790"noun" is either a person, a place, or a thing. Both Sasscer and Foster
1791evidence their keen awareness of these rules. Notice how Foster mentions the
1792incidence of the tax with respect to persons and to places. The States of
1793the Union are not mentioned anywhere among the places where the tax is
1794imposed. In and of itself, this documentary evidence from Foster's second
1795edition is stunning proof of the territorial extent of the 1913 federal
1796income tax.
1797What is even more stunning is the comparable section from the first
1798edition of Foster's treatise. In this section, he rambles on about the lack
1799of any court precedents authorizing Congress to tax bond interest that is
1800payable to nonresident aliens by domestic corporations. Because he makes
1801repeated use of the term "United States", a term which we now know to have
1802multiple different meanings in law, this section is almost always vague about
1803the exact territorial extent of the 1913 Act. There is, however, one place
1804where he tips his hand by utilizing the term "Union" in a territorial sense.
1805In other words, the first edition of Foster's treatise considers the "Union
1806of several States" to be the territorial reach of the 1913 Act, but in his
1807second edition this whole section is replaced with a much smaller section
1808which limits that reach to Alaska, the District of Columbia, Puerto Rico and
1809the Philippine Islands. Therefore, Foster has as much admitted, in writing,
1810that his first edition was in error about the territorial extent of the 1913
1811federal income tax.
1812There you have it! Four possible cases arise for natural born persons
1813like you and me. Go back to The Matrix and the original cover of this book.
1814Focus carefully on the lonely cell found at row 2, column 2. You are a
1815nonresident alien if you are not a citizen of the United States** and you are
1816not a resident of the United States**:
1817The term "nonresident alien individual" means an individual whose
1818residence is not within the United States**, and who is not a citizen
1819of the United States**.
1820[26 CFR 1.871-2]
1821At this point, you may still be wondering if it is indeed correct to
1822use the term "nonresident alien" to describe Sovereign State Citizens who
1823were born free in one of the 50 States of the Union, and who also live and
1824work in one of the 50 States of the Union. All that remains to prove it
1825correct is to verify the correct legal meaning of the term "United States**"
1826in the IRC. This proof requires an overview of the several meanings of the
1827terms "United States" and "State" as they are defined in the Code itself, in
1828the case law, and elsewhere.
1829An exhaustive proof is not necessary here because other capable authors
1830have already completed a massive amount of work on this subject. Interested
1831readers are encouraged to review the Bibliography, found in Appendix N, and
1832to obtain copies of the key publications entitled Good-Bye April 15th! by
1833Boston T. Party, Which One Are You? by The Informer, United States Citizen
1834The Federal Zone:
1835Page 3 - 8 of 12
1836versus National of the United States and A Ticket to Liberty both by Lori
1837Jacques, The Omnibus by Ralph F. Whittington, and Free At Last -- From the
1838IRS by N. A. "Doc" Scott. Taken as a group, these authors have published a
1839wealth of irrefutable documentation which proves, beyond any doubt, the true
1840meaning of "nonresident alien" in the federal income tax statutes. Author
1841Ralph Whittington's book is particularly valuable because its appendices
1842contain true and correct copies of key documents like Roger Foster's treatise
1843and selected Acts of Congress.
1844The following anecdote summarizes nicely many of the key points which
1845we have covered thus far:
1846Several years ago in a coffee shop while talking with a friend
1847about "tax matters," a man in the adjacent booth overheard our
1848conversation and asked to join us. The conversation continued, and
1849centered mainly on IRS abuses.
1850This gentleman seemed particularly knowledgeable about the
1851subject and we asked him what he did for a living. He told us his name
1852and that he was an attorney with the Tax Division of the Department of
1853Justice in Washington. Naturally, this put us on guard, but he quickly
1854put us at ease by agreeing in large part with the conclusion we had
1855drawn.
1856Reluctantly, I asked him this question, "Why are defendants in
1857federal district court always asked if they are 'citizens of the United
1858States'?" He replied without hesitation, "So we can determine
1859jurisdiction. In many cases the federal court does not have
1860jurisdiction over a citizen unless they testify they are a citizen of
1861the United States -- meaning a federal citizen under the 14th
1862Amendment."
1863My friend innocently asked, "What's a federal citizen?" The
1864attorney replied, "That's a person who receives benefits or privileges
1865or is an alien that has been admitted [naturalized] as a citizen of the
1866United States."
1867I quickly interjected, "What if the individual denied being a
1868citizen of the United States and claimed to be a sovereign citizen of
1869Oklahoma?" The attorney bowled me over with, "We don't get
1870jurisdiction."
1871He had to catch a plane.
1872[Freeman Letter, March 1989, page 6, emphasis added]
1873[as quoted in "Brief of Law for Zip Code Implications"]
1874[by Walter C. Updegrave, revised March 28, 1992]
1875The implications of the 14th Amendment are considered in some detail in
1876Chapter 11 and in Appendix Y. For now, it is best to remember that we have
1877in America a government of the United States** and a government of each of
1878the several States; moreover, each of these governments is distinct from the
1879others, and each has citizens of its own. In parallel with the federal and
1880State governments, there are federal citizens and there are State Citizens.
1881The Matrix
1882Page 3 - 9 of 12
1883Federal citizens are the same as "U.S.** citizens" and "citizens of the
1884United States**". If you are not a federal citizen, then you are an "alien"
1885with respect to the federal government. If you get confused, just recall the
1886familiar distinction between State and federal governments, and then remember
1887that each has citizens of its own. For consistency throughout this book,
1888federal citizens will be spelled with a lower-case "c" and State Citizens
1889will be spelled with an UPPER-CASE "C". Happily for us, this convention is
1890strictly obeyed throughout the Internal Revenue Code ("IRC") and throughout
1891the Code of Federal Regulations ("CFR") which promulgates the IRC.
1892Summary
1893The citizen/alien distinction explains the two columns of The Matrix.
1894By definition, you are an alien with respect to the United States** if you
1895are not a citizen of the United States**. The happy result of The Matrix is
1896the legal and logical equation which exists between most State Citizens and
1897nonresident aliens. A citizen of the United States** is the same thing as a
1898federal citizen. Anyone who is not a federal citizen is an "alien" with
1899respect to the United States**. Therefore, as long as a State Citizen is not
1900also a federal citizen, then such a State Citizen is an "alien" as that term
1901is defined in the IRC. State Citizens are free to reside wherever they
1902choose, because their right to travel is an unalienable right. However, the
1903term "resident" has a very specific meaning in the IRC, whether it is used as
1904an adjective or as a noun.
1905The resident/nonresident distinction explains the two rows of The
1906Matrix. An alien can be either a resident alien, or a nonresident alien.
1907There are three and only three criteria to distinguish resident aliens from
1908nonresident aliens: (1) lawful admission for permanent residence, (2)
1909substantial presence test, and (3) election to be treated as a resident. All
1910three of these criteria depend for their legal meaning upon the statutory
1911definition of "United States".
1912Therefore, if State Citizens are "residents" of the United States**
1913according to these criteria, then they are resident aliens, by definition.
1914If State Citizens are not "residents" of the United States** according to
1915these legal criteria, then they are nonresident aliens, by definition. A
1916deliberately confusing Code is clarified considerably by understanding the
1917legal and logical equation which exists between State Citizens and
1918nonresident aliens (like Frank R. Brushaber). They are one and the same
1919thing, to the extent that State Citizens do not reside in the United States**
1920and to the extent that they are not also federal citizens.
1921The issue of citizenship in America has been complicated a great deal
1922because the federal government recognizes the legal possibility that one can
1923be a federal citizen and a State citizen at the same time. This possibility
1924exists primarily because of Section 1 of the so-called 14th amendment. This
1925amendment was carefully worded to recognize a dual citizenship, federal and
1926State, but the State citizenship which it recognized was still a second class
1927of citizenship. That is the reason why the term "citizens" in the 14th
1928amendment is spelled with a small "c". It is a municipal franchise.
1929The Federal Zone:
1930Page 3 - 10 of 12
1931The mountain of litigation that resulted from this amendment is proof
1932that the issue of citizenship has become unnecessarily complicated in
1933America. There is a logical path through this complexity, however, and a
1934subsequent chapter will delineate this path as clearly and as simply as
1935possible (see Chapter 11: Sovereignty). The main obstacles standing in the
1936way of greater clarity are removed entirely by the all important finding that
1937the 14th amendment was never properly approved and adopted, just like the
193816th amendment.
1939# # #
1940The Matrix
1941Page 3 - 11 of 12
1942Reader's Notes:
1943The Federal Zone:
1944Page 3 - 12 of 12
1945Reader’s Notes:
1946Page 4 - 1 of 16
1947Chapter 4:
1948The Three United States
1949In the previous chapter, a handy matrix was developed to organize the
1950key terms which define the concepts of status and jurisdiction as they apply
1951to federal income taxation. In particular, an alien is any individual who is
1952not a citizen of the "United States**". The term "citizen" has a specific
1953legal meaning in the Code of Federal Regulations ("CFR") which promulgate the
1954Internal Revenue Code ("IRC"):
1955Every person born or naturalized in the United States** and subject to
1956its jurisdiction is a citizen.
1957[26 CFR 1.1-1(c), emphasis added]
1958What, then, is meant by the term "United States" and what is meant by
1959the phrase "its jurisdiction"? In this regulation, is the term "United
1960States" a singular phrase, a plural phrase, or is it both?
1961The astute reader has already noticed that an important clue is given
1962by regulations which utilize the phrase "its jurisdiction". The term "United
1963States" in this regulation must be a singular phrase, otherwise the
1964regulation would need to utilize the phrase "their jurisdiction" or "their
1965jurisdictions" to be grammatically correct.
1966As early as the year 1820, the U.S. Supreme Court was beginning to
1967recognize that the term "United States" could designate either the whole, or
1968a particular portion, of the American empire. In a case which is valuable,
1969not only for its relevance to federal taxes, but also for its terse and
1970discrete logic, Chief Justice Marshall exercised his characteristic
1971brilliance in the following passage:
1972The power, then, to lay and collect duties, imposts, and excises, may
1973be exercised, and must be exercised throughout the United States. Does
1974this term designate the whole, or any particular portion of the
1975American empire? Certainly this question can admit of but one answer.
1976It is the name given to our great republic, which is composed of states
1977and territories. The District of Columbia, or the territory west of
1978the Missouri, is not less within the United States* than Maryland or
1979Pennsylvania ....
1980[Loughborough v. Blake, 15 U.S. (5 Wheat.) 317]
1981[5 L.Ed. 98 (1820), emphasis added]
1982By 1945, the year of the first nuclear war on planet Earth, the U.S.
1983Supreme Court had come to dispute Marshall's singular definition, but most
1984people were too distracted to notice. The high Court confirmed that the term
1985"United States" can and does mean three completely different things,
1986depending on the context:
1987The Federal Zone:
1988Page 4 - 2 of 16
1989The term "United States" may be used in any one of several senses. [1]
1990It may be merely the name of a sovereign* occupying the position
1991analogous to that of other sovereigns in the family of nations. [2] It
1992may designate the territory over which the sovereignty of the United
1993States** extends, or [3] it may be the collective name of the states***
1994which are united by and under the Constitution.
1995[Hooven & Allison Co. v. Evatt, 324 U.S. 652 (1945)]
1996[brackets, numbers and emphasis added]
1997This same Court authority is cited by Black's Law Dictionary, Sixth Edition,
1998in its definition of "United States":
1999United States. This term has several meanings. [1] It may be merely
2000the name of a sovereign occupying the position analogous to that of
2001other sovereigns in family of nations, [2] it may designate territory
2002over which sovereignty of United States extends, or [3] it may be
2003collective name of the states which are united by and under the
2004Constitution. Hooven & Allison Co. v. Evatt, U.S. Ohio, 324 U.S. 652,
200565 S.Ct. 870, 880, 89 L.Ed. 1252.
2006[brackets, numbers and emphasis added]
2007In the first sense, the term "United States*" can refer to the nation,
2008or the American empire, as Justice Marshall called it. The "United States*"
2009is one member of the United Nations. When you are traveling overseas, you
2010would go to the U.S.* embassy for help with passports and the like. In this
2011instance, you would come under the jurisdiction of the President, through his
2012agents in the U.S.* State Department, where "U.S.*" refers to the sovereign
2013nation. The Informer summarizes Citizenship in this "United States*" as
2014follows:
20151. I am a Citizen of the United States* like you are a Citizen of
2016China. Here you have defined yourself as a National from a
2017Nation with regard to another Nation. It is perfectly OK to call
2018yourself a "Citizen of the United States*." This is what
2019everybody thinks the tax statutes are inferring. But notice the
2020capital "C" in Citizen and where it is placed. Please go back to
2021basic English.
2022[Which One Are You?, page 11]
2023[emphasis added]
2024Secondly, the term "United States**" can also refer to "the federal
2025zone", which is a separate nation-state over which the Congress has exclusive
2026legislative jurisdiction. (See Appendix Y for a brief history describing how
2027this second meaning evolved.) In this sense, the term "United States**" is a
2028singular phrase. It would be proper, for example, to say, "The United
2029States** is ..." or "Its jurisdiction is ..." and so on. The Informer
2030describes citizenship in this United States** as follows:
2031The Three United States
2032Page 4 - 3 of 16
20332. I am a United States** citizen. Here you have defined yourself
2034as a person residing in the District of Columbia, one of its
2035Territories, or Federal enclaves (area within a Union State) or
2036living abroad, which could be in one of the States of the Union
2037or a foreign country. Therefore you are possessed by the entity
2038United States** (Congress) because citizen is small case. Again
2039go back to basic english [sic]. This is the "United States**"
2040the tax statutes are referring to. Unless stated otherwise, such
2041as 26 USC 6103(b)(5).
2042[Which One Are You?, page 11]
2043[emphasis added]
2044Thirdly, the term "United States***" can refer to the 50 sovereign
2045States which are united by and under the Constitution for the United States
2046of America. In this third sense, the term "United States***" does not
2047include the federal zone, because the Congress does not have exclusive
2048legislative authority over any of the 50 sovereign States of the Union. In
2049this sense, the term "United States***" is a plural, collective term. It
2050would be proper therefore to say, "These United States***" or "The United
2051States*** are ..." and so on. The Informer completes the trio by describing
2052Citizenship in these "United States***" as follows:
20533. I am a Citizen of these United States***. Here you have defined
2054yourself as a Citizen of all the 50 States united by and under
2055the Constitution. You are not possessed by the Congress (United
2056States**). In this way you have a national domicile, not a State
2057or United States** domicile and are not subject to any
2058instrumentality or subdivision of corporate governmental
2059entities.
2060[Which One Are You?, pages 11-12]
2061[emphasis added]
2062Author and scholar Lori Jacques summarizes these three separate governmental
2063jurisdictions in the same sequence, as follows:
2064It is noticeable that Possessions of the United States** and sovereign
2065states of the United States*** of America are NOT joined under the
2066title of "United States." The president represents the sovereign
2067United States* in foreign affairs through treaties, Congress represents
2068the sovereign United States** in Territories and Possessions with Rules
2069and Regulations, and the state citizens are the sovereignty of the
2070United States*** united by and under the Constitution .... After
2071becoming familiar with these historical facts, it becomes clear that in
2072the Internal Revenue Code, Section 7701(a)(9), the term "United
2073States**" is defined in the second of these senses as stated by the
2074Supreme Court: it designates the territory over which the sovereignty
2075of the United States** extends.
2076[A Ticket to Liberty, Nov. 1990, pages 22-23]
2077[emphasis added, italics in original]
2078The Federal Zone:
2079Page 4 - 4 of 16
2080It is very important to note the careful use of the word "sovereign" by
2081Chief Justice Stone in the Hooven case. Of the three different meanings of
2082"United States" which he articulates, the United States is "sovereign" in
2083only two of those three meanings. This is not a grammatical oversight on the
2084part of Justice Stone. Sovereignty is not a term to be used lightly, or
2085without careful consideration. In fact, it is the foundation for all
2086governmental authority in America, because it is always delegated downwards
2087from the true source of sovereignty, the People themselves. This is the
2088entire basis of our Constitutional Republic. Sovereignty is so very
2089important and fundamental, an entire chapter of this book is later dedicated
2090to this one subject (see Chapter 11 infra).
2091The federal zone, over which the sovereignty of the United States**
2092extends, is the District of Columbia, the territories and possessions
2093belonging to Congress, and a limited amount of land within the States of the
2094Union, called federal "enclaves".
2095The Secretary of the Treasury can only claim exclusive jurisdiction
2096over this federal zone and over citizens of this zone. In particular, the
2097federal enclaves within the 50 States can only come under the exclusive
2098jurisdiction of Congress if they consist of land which has been properly
2099"ceded" to Congress by the act of a State Legislature. A good example of a
2100federal enclave is a "ceded" military base. The authority to exercise
2101exclusive legislative jurisdiction over the District of Columbia and the
2102federal enclaves originates in Article 1, Section 8, Clause 17 ("1:8:17") in
2103the U.S. Constitution. By virtue of the exclusive authority that is vested
2104in Congress by this clause, Congress shall have the power:
2105To exercise exclusive Legislation in all Cases whatsoever, over such
2106District (not exceeding ten Miles square) as may, by Cession of
2107particular States, and the Acceptance of Congress, become the Seat of
2108the Government of the United States**, and to exercise like Authority
2109over all Places purchased by the Consent of the Legislature of the
2110State in which the Same shall be, for the Erection of Forts, Magazines,
2111Arsenals, dock-Yards, and other needful Buildings;
2112[Constitution for the United States of America]
2113[Article l, Section 8, Clause 17]
2114[emphasis added]
2115The power of Congress to exercise exclusive legislative authority over
2116its territories and possessions, as distinct from the District of Columbia
2117and the federal enclaves, is given by a different authority in the U.S.
2118Constitution. This authority is Article 4, Section 3, Clause 2 ("4:3:2"), as
2119follows:
2120The Congress shall have Power to dispose of and make all needful Rules
2121and Regulations respecting the Territory or other Property belonging to
2122the United States**; ....
2123[Constitution for the United States of America]
2124[Article 4, Section 3, Clause 2]
2125[emphasis added]
2126The Three United States
2127Page 4 - 5 of 16
2128Within these areas, it is essential to understand that the Congress is not
2129subject to the same constitutional limitations which restrict its power in
2130the areas of land over which the 50 States exercise their respective
2131sovereign authorities:
2132... [T]he United States** may acquire territory by conquest or by
2133treaty, and may govern it through the exercise of the power of Congress
2134conferred by Section 3 of Article IV of the Constitution .... In
2135exercising this power, Congress is not subject to the same
2136constitutional limitations, as when it is legislating for the United
2137States***. ... And in general the guaranties [sic] of the Constitution,
2138save as they are limitations upon the exercise of executive and
2139legislative power when exerted for or over our insular possessions,
2140extend to them only as Congress, in the exercise of its legislative
2141power over territory belonging to the United States**, has made those
2142guaranties [sic] applicable.
2143[Hooven & Allison Co. v. Evatt, 324 U.S. 652 (1945)]
2144[emphasis added]
2145In other words, the guarantees of the Constitution extend to the
2146federal zone only as Congress makes those guarantees applicable, either to
2147the territory or to the citizens of that zone, or both. Remember, this is
2148the same Hooven case which officially defined three separate and distinct
2149meanings of the term "United States". The Supreme Court ruled that this case
2150would be the last time it would address official definitions of the term
2151"United States". Therefore, the Hooven case must be judicially noticed by
2152the entire American legal community. See Appendix W for other rulings and
2153for citations to important essays published in the Harvard Law Review on the
2154controversy that surrounds the meaning of "United States", even today. In
2155particular, author Langdell's article "The Status of Our New Territories" is
2156a key historical footing for the three Hooven definitions. To avoid
2157confusion, be careful to note that Langdell arranges the three "United
2158States" in a sequence that is different from that of Hooven:
2159Thirdly. -- ... [T]he term "United States" has often been used to
2160designate all territory over which the sovereignty of the United
2161States** extended. [a tautology] The conclusion, therefore, is that,
2162while the term "United States" has three meanings, only the first and
2163second of these are known to the Constitution; and that is equivalent
2164to saying that the Constitution of the United States*** as such does
2165not extend beyond the limits of the States which are united by and
2166under it, -- a proposition the truth of which will, it is believed, be
2167placed beyond doubt by an examination of the instances in which the
2168term "United States" is used in the Constitution.
2169[Langdell, "The Status of Our New Territories" ]
2170[12 Harvard Law Review 365, 371]
2171[emphasis added]
2172Note carefully that Langdell's third definition and Hooven's second
2173definition both exhibit subtle tautologies, that is, they use the word they
2174are defining in the definitions of the word defined. A careful reading of
2175his article reveals that Langdell's third definition of "United States"
2176The Federal Zone:
2177Page 4 - 6 of 16
2178actually implies the whole American "empire", namely, the States and the
2179federal zone combined, making it identical to Justice Marshall's definition
2180(see above). Therefore, because it contains a provable tautology, the second
2181Hooven definition is clearly ambiguous too; it can be interpreted in at
2182least two completely different ways: (1) as the federal zone only, or (2)
2183as the 50 States and the federal zone combined (i.e., the whole "empire").
2184Tautologies like this are rampant throughout federal statutes and case law.
2185For example, consider the following provision from Title 18, where federal
2186crimes are defined:
2187Section 5. United States defined
2188The term "United States", as used in this title in a territorial sense,
2189includes all places and waters, continental or insular, subject to the
2190jurisdiction of the United States, except the Canal Zone.
2191[18 U.S.C. 5, emphasis added]
2192[note the tautology]
2193So now, what is "sovereignty" in this context? The definitive solution
2194to this nagging ambiguity is found in the constitutional meaning of the word
2195"exclusive". Strictly speaking, the federal government is "sovereign" over
2196the 50 States only when it exercises one of a very limited set of powers
2197enumerated for it in Article 1, Section 8, in the Constitution. In this
2198sense, the federal government does NOT exercise exclusive jurisdiction inside
2199the 50 States of the Union; it does, however, exercise exclusive
2200jurisdiction inside the federal zone. This exclusive authority originates
2201from 1:8:17 and 4:3:2 in the U.S. Constitution, as quoted above.
2202When Congress is legislating for the federal zone, the resulting
2203legislation is local or municipal in scope, rendering it "foreign" with
2204respect to State laws. When Congress is legislating for the entire nation,
2205the resulting legislation is general or universal in scope. The U.S. Supreme
2206Court explained the difference very clearly in 1894 when it analyzed a
2207federal perjury statute with this distinction in mind:
2208This statute is one of universal application within the territorial
2209limits of the United States*, and is not limited to those portions
2210which are within the exclusive jurisdiction of the national government,
2211such as the District of Columbia. Generally speaking, within any state
2212of this Union the preservation of the peace and the protection of
2213person and property are the functions of the state government, and are
2214not part of the primary duty, at least, of the nation. The laws of
2215congress in respect to those matters do not extend into the territorial
2216limits of the states, but have force only in the District of Columbia,
2217and other places that are within the exclusive jurisdiction of the
2218national government.
2219[Caha v. United States, 152 U.S. 211, 215 (1894)]
2220[emphasis added]
2221Now, apply sections 1:8:17 and 4:3:2 in the U.S. Constitution to the
2222jurisdictional claims of the Secretary of the Treasury for "internal" revenue
2223laws, as follows:
2224The Three United States
2225Page 4 - 7 of 16
2226The term "United States**" when used in a geographical sense includes
2227any territory under the sovereignty of the United States**. It
2228includes the states, the District of Columbia, the possessions and
2229territories of the United States**, the territorial waters of the
2230United States**, the air space over the United States**, and the seabed
2231and subsoil of those submarine areas which are adjacent to the
2232territorial waters of the United States** and over which the United
2233States** has exclusive rights, in accordance with international law,
2234with respect to the exploration and exploitation of natural resources.
2235[26 CFR 1.911-2(g), emphasis added]
2236[note the tautology again]
2237Here's the tautology, in case you missed it:
2238"United States" includes any territory under the sovereignty of the
2239United States and over which the United States has exclusive rights.
2240This is very much like saying:
2241A potato is a plant that grows in a potato field.
2242[Speech of Vice President Dan Quayle]
2243[1992 Campaign Spelling Bee]
2244Notice the singular form of the phrase "the United States** has ...";
2245notice also the pivotal term "exclusive rights". When this regulation says
2246that the jurisdiction "includes the states", it cannot mean all the land
2247areas enclosed within the boundaries of the 50 States, because Congress does
2248not have exclusive jurisdiction over the 50 States. Within the 50 States,
2249Congress only has exclusive jurisdiction over the federal enclaves inside the
2250boundaries of the 50 States. These enclaves must have been officially
2251"ceded" to Congress by an explicit act of the State Legislatures involved.
2252Without a clear act of "cession" by one of the State legislatures, the
225350 States retain their own exclusive, sovereign jurisdiction inside their
2254borders, and Congress cannot lawfully take any of their own sovereign
2255jurisdictions away from the several States. This separation of powers is one
2256of the key reasons why we have a "federal government" as opposed to a
2257"national government"; its powers are limited to the set specifically
2258enumerated for it by the U.S. Constitution.
2259Technically speaking, the 50 States are "foreign countries" with
2260respect to each other and with respect to the federal zone. In the Supreme
2261Law Library, the essay entitled "A Cogent Summary of Federal Jurisdictions"
2262develops this concept in plain English language. A key authority on this
2263question is the case of Hanley v. Donoghue, in which the U.S. Supreme Court
2264defined separate bodies of State law as being legally "foreign" with respect
2265to each other:
2266The Federal Zone:
2267Page 4 - 8 of 16
2268No court is to be charged with the knowledge of foreign laws; but they
2269are well understood to be facts which must, like other facts, be proved
2270before they can be received in a court of justice. [cites omitted] It
2271is equally well settled that the several states of the Union are to be
2272considered as in this respect foreign to each other, and that the
2273courts of one state are not presumed to know, and therefore not bound
2274to take judicial notice of, the laws of another state.
2275[Hanley v. Donoghue, 116 U.S. 1, 29 L. Ed. 535]
2276[6 S.Ct. 242, 244 (1885), emphasis added]
2277Another key U.S. Supreme Court authority on this question is the case
2278of In re Merriam's Estate, 36 N.E. 505 (1894). The authors of Corpus Juris
2279Secundum ("CJS"), a legal encyclopedia, relied in part upon this case to
2280arrive at the following conclusion about the "foreign" corporate status of
2281the federal government:
2282The United States government is a foreign corporation with respect to a
2283state. [citing In re Merriam's Estate, 36 N.E. 505, 141 N.Y. 479,
2284affirmed U.S. v. Perkins, 16 S.Ct. 1073, 163 U.S. 625, 41 L.Ed 287]
2285[19 C.J.S. 883, emphasis added]
2286Before you get the idea that this meaning of "foreign" is now totally
2287antiquated, consider the current edition of Black's Law Dictionary, Sixth
2288Edition, which defines "foreign state" very clearly, as follows:
2289The several United States*** are considered "foreign" to each other
2290except as regards their relations as common members of the Union. ...
2291The term "foreign nations," as used in a statement of the rule that the
2292laws of foreign nations should be proved in a certain manner, should be
2293construed to mean all nations and states other than that in which the
2294action is brought; and hence one state of the Union is foreign to
2295another, in the sense of that rule.
2296[emphasis added]
2297And a recent federal statute proves that Congress still refers to the
229850 States as "countries". When a State court in Alaska needed a federal
2299judge to handle a case overload, Congress amended Title 28 to make that
2300possible. In its reference to the 50 States, the statute is titled the
2301"Assignment of Judges to courts of the freely associated compact states".
2302Then, Congress refers to these freely associated compact states as
2303"countries":
2304(b) The Congress consents to the acceptance and retention by any
2305judge so authorized of reimbursement from the countries referred
2306to in subsection (a) .... [!!!]
2307[28 U.S.C. 297, 11/19/88, emphasis added]
2308Indeed, international law is divided roughly into two groups: (1) public
2309international law and (2) private international law. As it turns out,
2310citizenship is a term of private international law (also known as municipal
2311law) in which the terms "state", "nation" and "country" are all synonymous:
2312The Three United States
2313Page 4 - 9 of 16
2314Private international law assumes a more important aspect in the United
2315States than elsewhere, for the reason that the several states, although
2316united under the same sovereign authority and governed by the same laws
2317for all national purposes embraced by the Federal Constitution, are
2318otherwise, at least so far as private international law is concerned,
2319in the same relation as foreign countries. The great majority of
2320questions of private international law are therefore subject to the
2321same rules when they arise between two states of the Union as when they
2322arise between two foreign countries, and in the ensuing pages the words
2323"state," "nation," and "country" are used synonymously and
2324interchangeably, there being no intention to distinguish between the
2325several states of the Union and foreign countries by the use of varying
2326terminology.
2327[16 Am Jur 2d, Conflict of Laws, Sec. 2]
2328[emphasis added]
2329The Supreme Court of the Philippine Islands has also found that
2330"citizenship", strictly speaking, is a term of municipal law. According to
2331that Court, it is municipal law which regulates the conditions on which
2332citizenship is acquired:
2333Citizenship, says Moore on International Law, strictly speaking, is a
2334term of municipal law and denotes the possession within the particular
2335state of full civil and political rights subject to special
2336disqualifications, such as minority, sex, etc. The conditions on which
2337citizenship are [sic] acquired are regulated by municipal law. There
2338is no such thing as international citizenship nor international law
2339(aside from that which might be contained in treaties) by which
2340citizenship is acquired.
2341[Roa v. Collector of Customs, 23 Philippine 315, 332 (1912)]
2342[emphasis added]
2343The foreign relationship between the 50 States and the federal zone is
2344also recognized in the definition of a "foreign country" that is found in the
2345Instructions for Form 2555, entitled "Foreign Earned Income", as follows:
2346Foreign Country. A foreign country is any territory (including the air
2347space, territorial waters, seabed, and subsoil) under the sovereignty
2348of a government other than the United States**. It does not include
2349U.S.** possessions or territories.
2350[Instructions for Form 2555: Foreign Earned Income]
2351[Department of the Treasury, Internal Revenue Service]
2352[emphasis added]
2353Notice that a "foreign country" does NOT include U.S.** possessions or
2354territories. U.S.** possessions and territories are not "foreign" with
2355respect to the federal zone; they are "domestic" with respect to the federal
2356zone because they are inside the federal zone. This relationship is also
2357confirmed by the Treasury Secretary's official definition of a "foreign
2358country" that is published in the Code of Federal Regulations:
2359The Federal Zone:
2360Page 4 - 10 of 16
2361The term "foreign country" when used in a geographical sense includes
2362any territory under the sovereignty of a government other than that of
2363the United States**. It includes the territorial waters of the foreign
2364country (determined in accordance with the laws of the United
2365States**), the air space over the foreign country, and the seabed and
2366subsoil of those submarine areas which are adjacent to the territorial
2367waters of the foreign country and over which the foreign country has
2368exclusive rights, in accordance with international law, with respect to
2369the exploration and exploitation of natural resources.
2370[26 CFR 1.911-2(h), emphasis added]
2371[note the subtle tautology again]
2372If this regulation were to be interpreted any other way, except that
2373which is permitted by the U.S. Constitution, then the sovereign jurisdiction
2374of the federal government would stand in direct opposition to the sovereign
2375jurisdiction of the 50 States of the Union. In other words, such an
2376interpretation would be reduced to absurd consequences (in Latin, reductio ad
2377absurdum). Sovereignty is the key. It is indivisible. There cannot be two
2378sovereign governmental authorities over any one area of land. Sovereignty is
2379the authority to which there is politically no superior. Sovereignty is
2380vested in one or the other sovereign entity, such as a governmental body or a
2381natural born Person (like you and me).
2382This issue of jurisdiction as it relates to Sovereignty is a major key
2383to understanding our system under our Constitution.
2384[The Omnibus, Addendum II, page 11]
2385In reviewing numerous acts of Congress, author and scholar Lori Jacques
2386has come to the inescapable conclusion that there are at least two classes of
2387citizenship in America: one for persons born outside the territorial
2388jurisdiction of the United States**, and one for persons born inside the
2389territorial jurisdiction of the United States**. This territorial
2390jurisdiction is the area of land over which the United States** is sovereign
2391and over which it exercises exclusive legislative jurisdiction, as stated in
2392the Hooven case and the many others which have preceded it, and followed it:
2393When reading the various acts of Congress which had declared various
2394people to be "citizens of the United States", it is immediately
2395apparent that many are simply declared "citizens of the United
2396States***" while others are declared to be "citizens of the United
2397States**, subject to the jurisdiction of the United States**." The
2398difference is that the first class of citizen arises when that person
2399is born out of the territorial jurisdiction of the United States**
2400Government. 3A Am Jur 1420, Aliens and Citizens, explains: "A Person
2401is born subject to the jurisdiction of the United States**, for
2402purposes of acquiring citizenship at birth, if his birth occurs in
2403territory over which the United States** is sovereign ..."
2404[!!]
2405[A Ticket to Liberty, Nov. 1990, page 32]
2406[emphasis added]
2407The Three United States
2408Page 4 - 11 of 16
2409The above quotation from American Jurisprudence is a key that has
2410definitive importance in the context of sovereignty (see discussion of "The
2411Key" in Appendix P). Note the pivotal word "sovereign", which controls the
2412entire meaning of this passage. A person is born "subject to its
2413jurisdiction", as opposed to "their jurisdictions", if his birth occurs in
2414territory over which the "United States**" is sovereign. Therefore, a person
2415is born subject to the jurisdiction of the "United States**" if his birth
2416occurs inside the federal zone. Conversely, a natural born person is born a
2417Sovereign if his birth occurs outside the federal zone and inside the 50
2418States. This is jus soli, the law of the soil, whereby citizenship is
2419usually determined by laws governing the soil on which one is born.
2420Sovereignty is a principle that is so important and so fundamental, a
2421subsequent chapter of this book is dedicated entirely to discussing its
2422separate implications for political authorities and for sovereign
2423individuals. It is also important to keep the concept of sovereignty
2424uppermost in your thoughts, where it belongs, as we begin our descent into
2425the dense jungle called statutory construction. (This is your Captain
2426speaking.) So, fasten your seat belts. The Hooven decision sets the stage
2427for a critical examination of key definitions that are found in the IRC
2428itself. It requires some effort, but we shall prove that these key
2429definitions are deliberately ambiguous.
2430One of the many statutory definitions of the term "United States" is
2431found in chapter 79 of the IRC, where the general definitions are located:
2432When used in this title, where not otherwise distinctly expressed or
2433manifestly incompatible with the intent thereof -- ...
2434(9) United States. -- The term "United States" when used in a
2435geographical sense includes only the States and the District of
2436Columbia.
2437[IRC 7701(a)(9), emphasis added]
2438Setting aside for the moment the intended meaning of the phrase "in a
2439geographical sense", it is obvious that the District of Columbia and "the
2440States" are essential components in the IRC definition of the "United
2441States". There is no debate about the meaning of "the District of Columbia",
2442but what are "the States"? The same question can be asked about a different
2443definition of "United States" that is found in another section of the IRC:
2444For purposes of this chapter --
2445(2) United States. -- The term "United States" when used in a
2446geographical sense includes the States, the District of Columbia,
2447the Commonwealth of Puerto Rico, and the Virgin Islands.
2448[IRC 3306(j)(2), emphasis added]
2449Again, there is no apparent debate about the meanings of the terms "the
2450Commonwealth of Puerto Rico" and "the Virgin Islands". But what are "the
2451States"? Are they the 50 States of the Union? Are they the federal states
2452which together constitute the federal zone? Determining the correct meaning
2453The Federal Zone:
2454Page 4 - 12 of 16
2455of "the States" is therefore pivotal to understanding the statutory
2456definition of "United States" in the Internal Revenue Code. The next chapter
2457explores this question in great detail.
2458In addition to keeping sovereignty uppermost in your thoughts, keep
2459your eyes fixed on the broad expanse of the dense jungle you are about to
2460enter. This jungle was planted and watered by a political body with a dual,
2461or split personality. On the one hand, Congress is empowered to enact
2462general laws for the 50 States, subject to certain written restrictions. On
2463the other hand, it is also empowered to enact "municipal" statutes for the
2464federal zone, subject to a different set of restrictions. Therefore, think
2465of Congress as "City Hall" for the federal zone. In 1820, Justice Marshall
2466described it this way:
2467... [Counsel] has contended, that Congress must be considered in two
2468distinct characters. In one character as legislating for the states;
2469in the other, as a local legislature for the district [of Columbia].
2470In the latter character, it is admitted, the power of levying direct
2471taxes may be exercised; but, it is contended, for district purposes
2472only, in like manner as the legislature of a state may tax the people
2473of a state for state purposes. Without inquiring at present into the
2474soundness of this distinction, its possible influence on the
2475application in this district of the first article of the constitution,
2476and of several of the amendments, may not be altogether unworthy of
2477consideration.
2478[Loughborough v. Blake, 15 U.S. 317]
2479[5 L.Ed. 98 (1820), emphasis added]
2480The problem thus becomes one of deciding which of these "two distinct
2481characters" is doing the talking. The IRC language used to express the
2482meaning of the "States" is arguably the best place to undertake a careful
2483diagnosis of this split personality. (Therapy comes later.)
2484Just to illustrate how confusing and ambiguous the term "United States"
2485can be, in 1966 an organization known as the International Bureau of Fiscal
2486Documentation in Amsterdam, Netherlands, joined the Practising Law Institute
2487in New York City to publish a book on U.S. income taxation of foreign
2488corporations and nonresident aliens. Chapter III of that book discusses the
2489definitions of "United States", "Possessions", "Foreign" and "Domestic".
2490Right at the outset, this chapter violates good language conventions by
2491admitting that the book uses several concepts in preceding chapters before
2492defining those concepts:
2493The classification of foreign taxpayers in Chapter II was based on
2494several concepts which are discussed in this and succeeding chapters.
2495For example, Chapter II referred to the term "United States," but it
2496did not clarify whether the term includes a United States "possession."
2497[U.S. Income Taxation of Foreign Corporations]
2498[and Nonresident Aliens, by Sidney I. Roberts]
2499[William C. Warren, Practising Law Institute]
2500[New York City, 1966, page III-1]
2501The Three United States
2502Page 4 - 13 of 16
2503Not unlike the U.S. Supreme Court in the Hooven case, the authors of this
2504book then proceed to admit that the term "United States" is used at least
2505three different ways in the IRC:
2506The terms "United States," "domestic" and "foreign" are used in at
2507least three different senses in the Code: geographical, sovereign and
2508legislative.
2509[page III-2, emphasis added]
2510Logical people would be correct to expect these 3 different terms to be
2511defined 3 different ways (a total of 9 definitions in all). So, it is only
2512fair to ask, what are the three different senses for the term "United States"
2513as understood by Sidney Roberts and William Warren? Let us consider each one
2514separately. The first one is the "geographical" sense:
2515(1) In the geographical sense, the term "United States" is used to
2516refer to less than all of the spatial area under United States
2517sovereignty, namely, the 50 States and the District of Columbia.
2518[cites IRC 7701(a)(9)] The converse of "United States," in this
2519geographical sense, is the term "without the United States."
2520[cites IRC 862(a)]
2521[page III-2, emphasis added]
2522Even though this language exhibits the same tautology seen above, we
2523can use logic to infer that "all of the spatial area under United States
2524sovereignty" refers to the 50 States and the federal zone combined, just like
2525Justice Marshall's "empire". This inference is fair because "the 50 States
2526and the District of Columbia" together comprise a geographical area that is
2527"less than all of the spatial area under United States sovereignty",
2528according to Roberts and Warren. By citing IRC Sec. 7701(a)(9), the authors
2529make it clear that they do equate "the States" with "the 50 States". For
2530lots of reasons which will become painfully obvious in the next chapter, this
2531equation is simply not justified. Remember the Kennelly letter?
2532Now consider their second sense. The second meaning of "United States"
2533is what they call the "sovereign" sense:
2534(2) In the sovereign sense, the word "foreign" (for example, in the
2535term "foreign country") is used to refer to the entire spatial
2536area under the sovereignty of a country other than the United
2537States. [cites IRC 911(a)] A term representing the converse of
2538"foreign" in the sovereign sense is not found in the Code. It
2539should be recognized that the word "foreign," as well as the term
2540"United States," are spatial or territorial concepts.
2541[page III-2, emphasis added]
2542Once again, this language exhibits the same old tautology. Since we
2543now know that Congress does refer to the 50 States as "countries", it is not
2544exactly clear from this language whether a State of the Union is a "foreign
2545country" or not. Relying on the logical inference we made from "all of the
2546spatial area" found in (1) above, it is fair to say that the authors do not
2547regard the 50 States as "foreign" with respect to the "United States" in this
2548The Federal Zone:
2549Page 4 - 14 of 16
2550second sense. The 50 States fall within their definition of "the entire
2551spatial area under the sovereignty" of this country.
2552But, the plot suddenly thickens when the authors contradict themselves.
2553Even though they began this discussion by stating that "domestic" and
2554"foreign" are used in at least three different senses in the Code, they then
2555admit that a term representing the converse of "foreign" in the sovereign
2556sense is not found in the Code. Why wouldn't that be the term "domestic"?
2557Similarly, they ask the reader to believe that "United States" has a
2558sovereign sense, but they don't exactly define its meaning in this sense, and
2559they also contradict themselves again by saying that "United States" is a
2560spatial or territorial concept (i.e., a geographical and not a sovereign
2561concept, right?). Then they state that "it should be recognized." Well, why
2562should it be recognized, if they don't explain why?
2563Their third meaning of "United States" is what they call the
2564"legislative" sense:
2565(3) In the legislative sense, the term "domestic" (for example, in
2566the term "domestic corporation") is used to refer to the grant of
2567a corporate franchise by the Federal Government, the Congress of
2568the United States, or the governments of the 50 States, thereby
2569excluding the grant of a franchise by the government of a
2570possession of the United States. [cites IRC 7701(a)(4)] The
2571converse of "domestic" in this franchise sense is "foreign."
2572[cites IRC 7701(a)(5)]
2573[page III-2]
2574So, what is the meaning of "United States" in this legislative sense?
2575It appears to be missing again, even though we were told up front that
2576"United States" is used in at least three different senses in the Code.
2577Here, the authors really play their hand. Contrary to authorities
2578cited above and in subsequent chapters, they argue that the term "domestic
2579corporation" refers to the grant of a corporate franchise by the federal
2580government or by the governments of each of the 50 States. This sounds an
2581awful lot like their "geographical" sense of the "United States", which
2582combines the 50 States and the District of Columbia.
2583So, it's not entirely clear how this third sense is any different from
2584the first sense, particularly since the authors have already argued that the
2585"United States" is a spatial or territorial concept, not a legislative
2586concept. By citing IRC Section 7701(a)(4), the authors again make it clear
2587that they do equate "the States" with "the 50 States". This section of the
2588IRC reads as follows:
2589(3) Domestic. -- The term "domestic" when applied to a corporation
2590or partnership means created or organized in the United States or
2591under the law of the United States or of any State.
2592[IRC 7701(a)(4)]
2593The Three United States
2594Page 4 - 15 of 16
2595But, the meaning of "any State" in this definition of "domestic" is
2596controlled by the definition of "State" at IRC 7701(a)(9). After all,
2597Section 7701(a) does contain the general definitions for most of the Code.
2598We must now examine this latter definition of "State" very critically, since
2599so much of the IRC turns on the precise meaning of this term. Any lack of
2600precision in this definition will eventually lead to ambiguous and
2601contradictory results. We shall soon see that such ambiguous and
2602contradictory results were intentional, in order to effect a sophisticated
2603and lucrative deception on all Americans.
2604Authors Sidney Roberts and William Warren should also explain why a
2605U.N. symbol is found on their cover page, and why their analysis fails to
2606cite any relevant decisions of the U.S. Supreme Court. By 1966, the Hooven
2607decision was already 21 years old! Last but not least, their text falls far
2608short of the 9 separate definitions which simple logic would dictate.
2609Are you beginning to detect a fair amount of duplicity in this Code?
2610Actually, when it comes to the term "United States", we have discovered a
2611real "triplicity". As I write this, my word processor tells me that
2612"triplicity" does not even exist! Well, it does now, so we had better add it
2613to our standard lexicon for decoding and debunking the Code of Internal
2614Revenue. (Don't look now, but "Internal" means "Municipal"!)
2615# # #
2616The Federal Zone:
2617Page 4 - 16 of 16
2618Reader’s Notes:
2619Page 5 - 1 of 20
2620Chapter 5:
2621What State Are You In?
2622Answer:
2623Mostly liquid, some solid, and occasional gas!
2624This answer is only partially facetious. In something as important as
2625a Congressional statute, one would think that key terms like "State" would be
2626defined so clearly as to leave no doubt about their meaning. Alas, this is
2627not the case in the Internal Revenue Code ("IRC") brought to you by Congress.
2628The term "State" has been deliberately defined so as to confuse the casual
2629reader into believing that it means one of the 50 States of the Union, even
2630though it doesn't say "50 States" in so many words. For the sake of
2631comparison, we begin by crafting a definition which is deliberately designed
2632to create absolutely no doubt or ambiguity about its meaning:
2633For the sole purpose of establishing a benchmark of clarity, the term
2634"State" means any one of the 50 States of the Union, the District of
2635Columbia, the territories and possessions belonging to the Congress,
2636and the federal enclaves lawfully ceded to the Congress by any of the
263750 States of the Union.
2638Now, compare this benchmark with the various definitions of the word "State"
2639that are found in Black's Law Dictionary and in the Internal Revenue Code.
2640Black's is a good place to start, because it clearly defines two different
2641kinds of "states". The first kind of state defines a member of the Union,
2642i.e., one of the 50 States which are united by and under the U.S.
2643Constitution:
2644The section of territory occupied by one of the United States***. One
2645of the component commonwealths or states of the United States of
2646America.
2647[emphasis added]
2648The second kind of state defines a federal state, which is entirely
2649different from a member of the Union:
2650Any state of the United States**, the District of Columbia, the
2651Commonwealth of Puerto Rico, and any territory or possession subject to
2652the legislative authority of the United States. Uniform Probate Code,
2653Section 1-201(40).
2654[emphasis added]
2655Notice carefully that a member of the Union is not defined as being
2656"subject to the legislative authority of the United States". Also, be aware
2657that there are also several different definitions of "State" in the IRC,
2658depending on the context. One of the most important of these is found in a
2659chapter specifically dedicated to providing definitions, that is, Chapter 79
2660(not exactly the front of the book). To de-code the Code, read it backwards!
2661In this chapter of definitions, we find the following:
2662The Federal Zone:
2663Page 5 - 2 of 20
2664When used in this title, where not otherwise distinctly expressed or
2665manifestly incompatible with the intent thereof -- ...
2666(10) State. -- The term "State" shall be construed to include the
2667District of Columbia, where such construction is necessary to
2668carry out provisions of this title.
2669[IRC 7701(a)(10), emphasis added]
2670Already, it is obvious that this definition leaves much to be debated
2671because it is ambiguous and it is not nearly as clear as our "established
2672benchmark of clarity" (which will be engraved in marble a week from Tuesday).
2673Does the definition restrict the term "State" to mean only the District of
2674Columbia? Or does it expand the term "State" to mean the District of
2675Columbia in addition to the 50 States of the Union? And how do we decide?
2676Even some harsh critics of federal income taxation, like Otto Skinner,
2677have argued that ambiguities like this are best resolved by interpreting the
2678word "include" in an expansive sense, rather than in a restrictive sense. To
2679support his argument, Skinner cites the definitions of "includes" and
2680"including" that are actually found in the Code:
2681Includes and Including. -- The terms "includes" and "including" when
2682used in a definition contained in this title shall not be deemed to
2683exclude other things otherwise within the meaning of the term defined.
2684[IRC 7701(c), emphasis added]
2685Skinner reasons that the Internal Revenue Code provides for an expanded
2686definition of the term "includes" when it is used in other definitions
2687contained in that Code. Using his logic, then, the definition of "State" at
2688IRC Sec. 7701(a)(10) must be interpreted to mean the District of Columbia, in
2689addition to other things. But what other things? Are the 50 States to be
2690included also? What about the territories and possessions? And what about
2691the federal enclaves ceded to Congress by the 50 States? If the definition
2692itself does not specify any of these things, then where, pray tell, are these
2693other things "distinctly expressed" in the Code? If these other things are
2694distinctly expressed elsewhere in the Code, is their expression in the Code
2695manifestly compatible with the intent of that Code? Should we include also a
2696state of confusion to our understanding of the Code?
2697Quite apart from the meaning of "includes" and "including", defining
2698the term "include" in an expansive sense leads to an absurd result that is
2699manifestly incompatible with the Constitution. If the expansion results in
2700defining the term "State" to mean the District of Columbia in addition to the
270150 States of the Union, then these 50 States must be situated within the
2702federal zone. Remember, the federal zone is the area of land over which the
2703Congress has unrestricted, exclusive legislative jurisdiction. But, the
2704Congress does not have unrestricted, exclusive legislative jurisdiction over
2705any of the 50 States. It is bound by the chains of the Constitution in this
2706other zone, to paraphrase Thomas Jefferson. Specifically, Congress is
2707required to apportion direct taxes which it levies inside the 50 States.
2708This is a key limitation on the power of Congress; it has never been
2709expressly repealed (as Prohibition was repealed).
2710What State Are You In?
2711Page 5 - 3 of 20
2712Unlike the Brushaber case, other federal cases can be cited to support
2713the conclusions that taxes on "income" are direct taxes, and that the 16th
2714Amendment actually removed this apportionment rule from direct taxes laid on
2715"income". Sorry, but the U.S. Supreme Court is not always consistent in this
2716area, and the Appellate Courts are even less consistent. These other cases
2717are highly significant, if only because they provide essential evidence of
2718other attempts by federal courts to isolate the exact effects of a ratified
271916th Amendment. The following ruling by the Sixth Circuit Court of Appeals
2720is unique, among all the relevant federal cases, for its clarity and
2721conciseness on this question:
2722The constitutional limitation upon direct taxation was modified by the
2723Sixteenth Amendment insofar as taxation of income was concerned, but
2724the amendment was restricted to income, leaving in effect the
2725limitation upon direct taxation of principal.
2726[Richardson v. United States, 294 F.2d 593, 596 (1961)]
2727[emphasis added]
2728The constitutional limitation upon direct taxes is apportionment. By
2729inference, if income taxes were controlled by the apportionment rule prior to
2730the 16th Amendment, then they must be direct taxes. It is not difficult to
2731find Supreme Court decisions which arrived at similar conclusions about the
273216th Amendment, long before the Richardson case:
2733... [I]t does not extend the taxing power to new or excepted subjects,
2734but merely removed all occasion, which otherwise might exist, for an
2735apportionment among the states of taxes laid on income, whether it be
2736derived from one source or another.
2737[Peck & Co. v. Lowe, 247 U.S. 165 (1918)]
2738[emphasis added]
2739And, in what is arguably one of the most significant Supreme Court
2740decisions to define the precise meaning of "income", the Eisner Court simply
2741paraphrased the Peck decision when it attributed the exact same effect to the
274216th Amendment, namely, income taxes had become direct taxes relieved of
2743apportionment:
2744As repeatedly held, this did not extend the taxing power to new
2745subjects, but merely removed the necessity which otherwise might exist
2746for an apportionment among the States of taxes laid on income. ...
2747A proper regard for its genesis, as well as its very clear
2748language, requires also that this Amendment shall not be extended by
2749loose construction, so as to repeal or modify, except as applied to
2750income, those provisions of the Constitution that require an
2751apportionment according to population for direct taxes upon property,
2752real and personal.
2753[Eisner v. Macomber, 252 U.S. 189, 205-206 (1919)]
2754[emphasis added]
2755The Federal Zone:
2756Page 5 - 4 of 20
2757Contrary to statements about it in the Brushaber decision, the earlier
2758Pollock case, without any doubt, defined income taxes as direct taxes. It
2759also overturned an Act of Congress precisely because that Act had levied a
2760direct tax without apportionment:
2761First. We adhere to the opinion already announced, that, taxes
2762on real estate being indisputably direct taxes, taxes on the rents or
2763income of real estate are equally direct taxes.
2764Second. We are of the opinion that taxes on personal property,
2765or on the income of personal property, are likewise direct taxes.
2766[Pollock v. Farmers' Loan & Trust Co.]
2767[158 U.S. 601 (1895), emphasis added]
2768Another U.S. Supreme Court decision is worthy of note, not only because
2769it appears to attribute the exact same effect to the 16th Amendment, but also
2770because it fails to clarify which meaning of the term "United States" is
2771being used. The Plaintiff was Charles B. Shaffer, an Illinois Citizen and
2772resident of Chicago:
2773No doubt is suggested (the former requirement of apportionment having
2774been removed by constitutional amendment) as to the power of Congress
2775thus to impose taxes upon incomes produced within the borders of the
2776United States [?] or arising from sources located therein, even though
2777the income accrues to a nonresident alien.
2778[Shaffer v. Carter, 252 U.S. 37, 54 (1920)]
2779[emphasis and question mark added]
2780In the Shaffer decision, it is obvious that Justice Pitney again
2781attributed the same effect to the 16th Amendment. However, if he defined
2782"United States" to mean the federal zone, then he must have believed that
2783Congress also had to apportion direct taxes within that zone before the 16th
2784Amendment was "declared" ratified. Such a belief contradicts the exclusive
2785legislative authority which Congress exercises over the federal zone:
2786In exercising this power [to make all needful rules and regulations
2787respecting territory or other property belonging to the United
2788States**], Congress is not subject to the same constitutional
2789limitations, as when it is legislating for the United States***.
2790[Hooven & Allison Co. v. Evatt, 324 U.S. 652 (1945)]
2791[emphasis added]
2792On the other hand, if Justice Pitney defined "United States" to mean
2793the several States of the Union, he as much admits that the Constitution
2794needed amending to authorize an unapportioned direct tax on income produced
2795or arising from sources within the borders of those States. Unfortunately
2796for us, Justice Pitney did not clearly specify which meaning he was using,
2797and we are stuck trying to make sense of Supreme Court decisions which
2798contradict each other. For example, compare the rulings in Peck, Eisner,
2799Pollock and Shaffer (as quoted above) with the rulings in Brushaber and
2800Stanton v. Baltic Mining Co., and also with the ruling In re Becraft (a
2801What State Are You In?
2802Page 5 - 5 of 20
2803recent Appellate case). To illustrate, the Stanton court ruled as follows:
2804... [T]he Sixteenth Amendment conferred no new power of taxation but
2805simply prohibited the previous complete and plenary power of income
2806taxation possessed by Congress from the beginning from being taken out
2807of the category of indirect taxation to which it inherently belonged
2808....
2809[Stanton v. Baltic Mining Company, 240 U.S. 103 (1916)]
2810[emphasis added]
2811Now, contrast the Stanton decision with a relatively recent decision of
2812the Ninth Circuit Court of Appeals in San Francisco. In re Becraft is
2813classic because that Court sanctioned a seasoned defense attorney $2,500 for
2814raising issues which the Court called "patently absurd and frivolous",
2815sending a strong message to any licensed attorney who gets too close to
2816breaking the "Code". First, the Court reduced attorney Lowell Becraft's
2817position to "one elemental proposition", namely, that the 16th Amendment does
2818not authorize a direct non-apportioned income tax on resident United States**
2819citizens, and thus such citizens are not subject to the federal income tax
2820laws. Then, the 9th Circuit dispatched Becraft's entire argument with
2821exemplary double-talk, as follows:
2822For over 75 years, the Supreme Court and the lower federal courts have
2823both implicitly and explicitly recognized the Sixteenth Amendment's
2824authorization of a non-apportioned direct income tax on United States**
2825citizens residing in the United States*** and thus the validity of the
2826federal income tax laws as applied to such citizens. See, e.g.,
2827Brushaber .... [M]uch of Becraft's reply is also devoted to a
2828discussion of the limitations of federal jurisdiction to United
2829States** territories and the District of Columbia and thus the
2830inapplicability of the federal income tax laws to a resident of one of
2831the states*** [from footnote 2].
2832[In re Becraft, 885 F.2d 547, 548 (1989)]
2833[emphasis added]
2834Here, the 9th Circuit credits the 16th Amendment with authorizing a
2835non-apportioned direct tax, completely contrary to Brushaber. Then, the term
2836"United States" is used two different ways in the same sentence; we know
2837this to be true because a footnote refers to "one of the [50] states". The
2838Court also uses the term "resident" to mean something different from the
2839statutory meaning of "resident" and "nonresident", thus exposing another key
2840facet of their fraud (see Chapter 3). Be sure to recognize what's missing
2841here, namely, any mention whatsoever of State Citizens.
2842For the lay person, doing this type of comparison is a daunting if not
2843impossible task, and demonstrates yet another reason why federal tax law
2844should be nullified for vagueness, if nothing else. If Appellate and Supreme
2845Court judges cannot be clear and consistent on something as fundamental as a
2846constitutional amendment, then nobody can. And their titles are Justice.
2847Are you in the State of Confusion yet?
2848The Federal Zone:
2849Page 5 - 6 of 20
2850When it comes to federal income taxes, we are thus forced to admit the
2851existence of separate groups of Supreme Court decisions that flatly
2852contradict each other. One group puts income taxes into the class of
2853indirect taxes; another group puts them into the class of direct taxes. One
2854group argues that a ratified 16th Amendment did not change or repeal any
2855other clause of the Constitution; another group argues that it relieved
2856income taxes from the apportionment rule. Even experts disagree. To
2857illustrate the wide range of disagreement on such fundamental constitutional
2858issues, consider once again the conclusion of legal scholar Vern Holland,
2859quoted in a previous chapter:
2860[T]he Sixteenth Amendment did not amend the Constitution. The United
2861States Supreme Court by unanimous decisions determined that the
2862amendment did not grant any new powers of taxation; that a direct tax
2863cannot be relieved from the constitutional mandate of apportionment;
2864and the only effect of the amendment was to overturn the theory
2865advanced in the Pollock case which held that a tax on income, was in
2866legal effect, a tax on the sources of the income.
2867[The Law That Always, page 220]
2868[emphasis added]
2869Now consider an opposing view of another competent scholar. After much
2870research and much litigation, author and attorney Jeffrey A. Dickstein offers
2871the following concise clarification:
2872A tax imposed on all of a person's annual gross receipts is a direct
2873tax on personal property that must be apportioned. A tax imposed on
2874the "income" derived from those gross receipts is also a direct tax on
2875property, but as a result of the Sixteenth Amendment, Congress no
2876longer has to enact legislation calling for the apportionment of a tax
2877on that income.
2878[Judicial Tyranny and Your Income Tax, pages 60-61]
2879[emphasis added]
2880Recall now that 17,000 State-certified documents have been assembled to
2881prove that the 16th Amendment was never ratified. As a consistent group, the
2882Pollock, Peck, Eisner and Richardson decisions leave absolutely no doubt
2883about the consequences of the failed ratification: the necessity still
2884exists for an apportionment among the 50 States of all direct taxes, and
2885income taxes are direct taxes. Using common sense as our guide, an expansive
2886definition of "include" results in defining the term "State" to mean the
2887District of Columbia in addition to the 50 States. This expansive definition
2888puts the 50 States inside the federal zone, where Congress has no
2889restrictions on its exclusive legislative jurisdiction. But, just a few
2890sentences back, we proved that the rule of apportionment still restrains
2891Congress inside the 50 States. This is an absurd result: it is not possible
2892for the restriction to exist, and not to exist, at the same time, in the same
2893place, for the same group of people, for the same laws, within the same
2894jurisdiction. Congress cannot have its cake and eat it too, as much as it
2895would like to! Absurd results are manifestly incompatible with the intent of
2896the IRC (or so we are told).
2897What State Are You In?
2898Page 5 - 7 of 20
2899Other problems arise from Skinner's reasoning. First of all, like so
2900much of the IRC, the definitions of "includes" and "including" are outright
2901deceptions in their own right. A grammatical approach can be used to
2902demonstrate that these definitions are thinly disguised tautologies. Note,
2903in particular, where the Code states that these terms "shall not be deemed to
2904exclude other things". This is a double negative. Two negatives make a
2905positive. This phrase, then, is equivalent to saying that the terms "shall
2906be deemed to include other things". Continuing with this line of reasoning,
2907the definition of "includes" includes "include", resulting in an obvious
2908tautology. (We just couldn't resist.) Forgive them, for they know not what
2909they do.
2910The definitions of "includes" and "including" can now be rewritten so
2911as to "include other things otherwise within the meaning of the term
2912defined". So, what things are otherwise within the meaning of the term
2913"State", if those things are not distinctly expressed in the original
2914definition? You may be dying to put the 50 States of the Union among those
2915things that are "otherwise within the meaning of the term", but you are using
2916common sense. The Internal Revenue Code was not written with common sense in
2917mind; it was written with deception in mind. The rules of statutory
2918construction apply a completely different standard. Author Ralph Whittington
2919has this to say about the specialized definitions that are exploited by
2920lawyers, attorneys, lawmakers, and judges:
2921The Legislature means what it says. If the definition section states
2922that whenever the term "white" is used (within that particular section
2923or the entire code), the term includes "black," it means that "white"
2924is "black" and you are not allowed to make additions or deletions at
2925your convenience. You must follow the directions of the Legislature, NO
2926MORE -- NO LESS.
2927[Omnibus, Addendum II, p. 2]
2928Unfortunately for Otto Skinner and others who try valiantly to argue
2929the expansive meaning of "includes" and "including", Treasury Decision No.
29303980, Vol. 29, January-December 1927, and some 80 court cases have adopted
2931the restrictive meaning of these terms:
2932The supreme Court of the State ... also considered that the word
2933"including" was used as a word of enlargement, the learned court being
2934of the opinion that such was its ordinary sense. With this we cannot
2935concur. It is its exceptional sense, as the dictionaries and cases
2936indicate.
2937[Montello Salt Co. v. State of Utah, 221 U.S. 452 (1911)]
2938[emphasis added]
2939An historical approach yields similar results. Without tracing the
2940myriad of income tax statutes which Congress has enacted over the years, it
2941is instructive to examine the terminology found in a revenue statute from the
2942Civil War era. The definition of "State" is almost identical to the one
2943quoted from the current IRC at the start of this chapter. On June 30, 1864,
2944Congress enacted legislation which contained the following definition:
2945The Federal Zone:
2946Page 5 - 8 of 20
2947The word "State," when used in this Title, shall be construed to
2948include the Territories and the District of Columbia, where such
2949construction is necessary to carry out its provisions.
2950[Title 35, Internal Revenue, Chapter 1, page 601]
2951[Revised Statutes of the United States**]
2952[43rd Congress, 1st Session, 1873-74]
2953Aside from adding "the Territories", the two definitions are nearly
2954identical. The Territories at that point in time were Washington, Utah,
2955Dakota, Nebraska, Colorado, New Mexico, and the Indian Territory.
2956One of the most fruitful and conclusive methods for establishing the
2957meaning of the term "State" in the IRC is to trace the history of changes to
2958the United States Codes which occurred when Alaska and Hawaii were admitted
2959to the Union. Because other authors have already done an exhaustive job on
2960this history, there is no point in re-inventing their wheels here.
2961It is instructive to illustrate these Code changes as they occurred in
2962the IRC definition of "State" found at the start of this chapter. The first
2963Code amendment became effective on January 3, 1959, when Alaska was admitted
2964to the Union:
2965Amended 1954 Code Sec. 7701(a)(10) by striking out "Territories", and
2966by substituting "Territory of Hawaii".
2967[IRC 7701(a)(10)]
2968The second Code amendment became effective on August 21, 1959, when Hawaii
2969was admitted to the Union:
2970Amended 1954 Code Sec. 7701(a)(10) by striking out "the Territory of
2971Hawaii and" immediately after the word "include".
2972[IRC 7701(a)(10)]
2973Applying these code changes in reverse order, we can reconstruct the
2974IRC definitions of "State" by using any word processor and simple "textual
2975substitution" as follows:
2976Time 1: Alaska is a U.S.** Territory
2977Hawaii is a U.S.** Territory
29787701(a)(10): The term "State" shall be construed to include the
2979Territories and the District of Columbia, where such
2980construction is necessary to carry out provisions of this
2981title.
2982What State Are You In?
2983Page 5 - 9 of 20
2984Alaska joins the Union. Strike out "Territories" and substitute "Territory
2985of Hawaii":
2986Time 2: Alaska is a State of the Union
2987Hawaii is a U.S.** Territory
29887701(a)(10): The term "State" shall be construed to include the
2989Territory of Hawaii and the District of Columbia, where
2990such construction is necessary to carry out provisions of
2991this title.
2992Hawaii joins the Union. Strike out "the Territory of Hawaii and" immediately
2993after the word "include":
2994Time 3: Alaska is a State of the Union
2995Hawaii is a State of the Union
29967701(a)(10): The term "State" shall be construed to include the District
2997of Columbia, where such construction is necessary to carry
2998out provisions of this title.
2999Author Lori Jacques has therefore concluded that the term "State" now
3000includes only the District of Columbia, because the former Territories of
3001Alaska and Hawaii have been admitted to the Union, Puerto Rico has been
3002granted the status of a Commonwealth, and the Philippine Islands have been
3003granted their independence (see United States Citizen versus National of the
3004United States, page 9, paragraph 5). It is easy to see how author Lori
3005Jacques could have overlooked the following reference to Puerto Rico, found
3006near the end of the IRC:
3007Commonwealth of Puerto Rico. -- Where not otherwise distinctly
3008expressed or manifestly incompatible with the intent thereof,
3009references in this title to possessions of the United States** shall be
3010treated as also referring to the Commonwealth of Puerto Rico.
3011[IRC 7701(d)]
3012In order to conform to the requirements of the Social Security scheme,
3013a completely different definition of "State" is found in the those sections
3014of the IRC that deal with Social Security. This definition was also amended
3015on separate occasions when Alaska and Hawaii were admitted to the Union. The
3016first Code amendment became effective on January 3, 1959, when Alaska was
3017admitted:
3018Amended 1954 Code Sec. 3121(e)(1), as it appears in the amendment note
3019for P.L. 86-778, by striking out "Alaska," where it appeared following
3020"includes".
3021[IRC 3121(e)(1)]
3022The second Code amendment became effective on August 21, 1959, when Hawaii
3023was admitted to the Union:
3024The Federal Zone:
3025Page 5 - 10 of 20
3026Amended 1954 Code Sec. 3121(e)(1), as it appears in the amendment note
3027for P.L. 86-778, by striking out "Hawaii," where it appeared following
3028"includes".
3029[IRC 3121(e)(1)]
3030Applying these code changes in reverse order, as above, we can reconstruct
3031the definitions of "State" in this section of the IRC as follows:
3032Time 1: Alaska is a U.S.** Territory
3033Hawaii is a U.S.** Territory
30343121(e)(1): The term "State" includes Alaska, Hawaii, the District of
3035Columbia, Puerto Rico, and the Virgin Islands.
3036Alaska joins the Union. Strike out "Alaska," where it appeared following
3037"includes":
3038Time 2: Alaska is a State of the Union
3039Hawaii is a U.S.** Territory
30403121(e)(1): The term "State" includes Hawaii, the District of Columbia,
3041Puerto Rico, and the Virgin Islands.
3042Hawaii joins the Union. Strike out "Hawaii," where it appeared following
3043"includes":
3044Time 3: Alaska is a State of the Union
3045Hawaii is a State of the Union
30463121(e)(1): The term "State" includes the District of Columbia, Puerto
3047Rico, and the Virgin Islands.
3048Puerto Rico becomes a Commonwealth. For services performed after 1960, Guam
3049and American Samoa are added to the definition:
3050Time 4: Puerto Rico becomes a Commonwealth
3051Guam and American Samoa join Social Security
30523121(e)(1): The term "State" includes the District of Columbia, the
3053Commonwealth of Puerto Rico, the Virgin Islands, Guam, and
3054American Samoa.
3055Notice carefully how Alaska and Hawaii only fit these definitions of
3056"State" before they joined the Union. It is most revealing that these
3057Territories became States when they were admitted to the Union, and yet the
3058United States Codes had to be changed because Alaska and Hawaii were defined
3059in those Codes as "States" before admission to the Union, but not afterwards.
3060This apparent anomaly is perfectly clear, once the legal and deliberately
3061misleading definition of "State" is understood. The precise history of
3062changes to the Internal Revenue Code is detailed in Appendix B of this book.
3063The changes made to the United States Codes when Alaska joined the Union were
3064assembled in the Alaska Omnibus Act. The changes made to the federal Codes
3065when Hawaii joined the Union were assembled in the Hawaii Omnibus Act.
3066What State Are You In?
3067Page 5 - 11 of 20
3068The following table summarizes the sections of the IRC that were
3069affected by these two Acts:
3070IRC Section Alaska Hawaii
3071changed: joins: joins:
3072----------- ------ ------
30732202 X X
30743121(e)(1) X X
30753306(j) X X
30764221(d)(4) X X
30774233(b) X X
30784262(c)(1) X X
30794502(5) X X
30804774 X X
30817621(b) X <-- Note!
30827653(d) X X
30837701(a)(9) X X
30847701(a)(10) X X
3085Section 7621(b) sticks out like a sore thumb when the changes are
3086arrayed in this fashion. The Alaska Omnibus Act modified this section of the
3087IRC, but the Hawaii Omnibus Act did not. Let's take a close look at this
3088section and see if it reveals any important clues:
3089Sec. 7621. Internal Revenue Districts.
3090(a) Establishment and Alteration. -- The President shall establish
3091convenient internal revenue districts for the purpose of
3092administering the internal revenue laws. The President may from
3093time to time alter such districts.
3094[IRC 7621(a)]
3095Now witness the chronology of amendments to IRC Section 7621(b), entitled
3096"Boundaries", as follows:
3097Time 1: Alaska is a U.S.** Territory.
3098<1/3/59 Hawaii is a U.S.** Territory. ("<" means "before")
30997621(b): Boundaries. -- For the purpose mentioned in
3100subsection (a), the President may subdivide any State,
3101Territory, or the District of Columbia, or may unite two or
3102more States or Territories into one district.
3103Time 2: Alaska is a State of the Union.
31041/3/59 Hawaii is a U.S.** Territory.
31057621(b): Boundaries. -- For the purpose mentioned in
3106subsection (a), the President may subdivide any State,
3107Territory, or the District of Columbia, or may unite into
3108one District two or more States or a Territory and one or
3109more States.
3110The Federal Zone:
3111Page 5 - 12 of 20
3112Time 3: Alaska is a State of the Union.
31132/1/77 Hawaii is a State of the Union.
31147621(b): Boundaries. -- For the purpose mentioned in
3115subsection (a), the President may subdivide any State or
3116the District of Columbia, or may unite into one district
3117two or more States.
3118The reason why the Hawaii Omnibus Act did not change section 7621(b) is
3119not apparent from reading the statute, nor has time permitted the research
3120necessary to determine why this section was changed in 1977 and not in 1959.
3121After Alaska joined the Union, Hawaii was technically the only remaining
3122Territory. This may explain why the term "Territories" was changed to
3123"Territory" at Time 2 above. However, this is a relatively minor matter,
3124when compared to the constitutional issue that is involved here. There is an
3125absolute constitutional restriction against subdividing or joining any of the
312650 States, or any parts thereof, without the consent of Congress and of the
3127Legislatures of the States affected. This restriction is very much like the
3128restriction against direct taxes within the 50 States without apportionment:
3129New States may be admitted by the Congress into this Union; but no new
3130State shall be formed or erected within the Jurisdiction of any other
3131State; nor any State be formed by the Junction of two or more States,
3132or Parts of States, without the Consent of the Legislatures of the
3133States concerned as well as of the Congress.
3134[Constitution for the United States of America]
3135[Article 4, Section 3, Clause 1, emphasis added]
3136This point about new States caught the keen eye of author and scholar
3137Eustace Mullins. In his controversial and heart-breaking book entitled A
3138Writ for Martyrs, Mullins establishes the all-important link between the
3139Internal Revenue Service and the Federal Reserve System, and does so by
3140charging that Internal Revenue Districts are "new states" unlawfully
3141established within the jurisdiction of legal States of the Union, as follows:
3142The income tax amendment and the Federal Reserve Act were passed in the
3143same year, 1913, because they function as an essential team, and were
3144planned to do so. The Federal Reserve districts and the Internal
3145Revenue Districts are "new states," which have been established within
3146the jurisdiction of legal states of the Union.
3147[see Appendix "I", page I-12, emphasis added]
3148Remember, the federal zone is the area of land over which the Congress
3149exercises an unrestricted, exclusive legislative jurisdiction. The Congress
3150does not have unrestricted, exclusive legislative jurisdiction over any of
3151the 50 States. It is bound by the chains of the Constitution. This point is
3152so very important, it bears repeating throughout the remaining chapters of
3153this book. As in the apportionment rule for direct taxes and the uniformity
3154rule for indirect taxes, Congress cannot join or divide any of the 50 States
3155without the explicit approval of the Legislatures of the State(s) involved.
3156This means that Congress cannot unilaterally delegate such a power to the
3157President. Congress cannot lawfully exercise (nor delegate) a power which it
3158What State Are You In?
3159Page 5 - 13 of 20
3160simply does not have.
3161How, then, is it possible for section 7621(b) of the IRC to give this
3162power to the President? The answer is very simple: the territorial scope of
3163the Internal Revenue Code is the federal zone. The IRC only applies to the
3164land that is internal to that zone. Indeed, a leading legal encyclopedia
3165leaves no doubt that the terms "municipal law" and "internal law" are
3166equivalent:
3167International law and Municipal or internal law.
3168... [P]ositive law is classified as international law, the law
3169which governs the interrelations of soverign states, and municipal law,
3170which is, when used in contradistinction to international law, the
3171branch of the law which governs the internal affairs of a sovereign
3172state.
3173However, the term "municipal law" has several meanings, and in
3174order to avoid confusing these meanings authorities have found more
3175satisfactory Bentham's phrase "internal law," this being the equivalent
3176of the French term "droit interne," to express the concept of internal
3177law of a sovereign state.
3178The phrase "municipal law" is derived from the Roman law, and
3179when employed as indicating the internal law of a sovereign state the
3180word "municipal" has no specific reference to modern municipalities,
3181but rather has a broader, more extensive meaning, as discussed in the
3182C.J.S. definition Municipal.
3183[52A C.J.S. 741, 742 ("Law")]
3184[emphasis added]
3185If the territorial scope of the IRC were the 50 States of the Union,
3186then section 7621(b) would, all by itself, render the entire Code
3187unconstitutional for violating clause 4:3:1 of the Constitution (see above).
3188Numerous other constitutional violations would also occur if the territorial
3189scope of the IRC were the 50 States. A clear and unambiguous definition of
3190"State" must be known before status and jurisdiction can be decided with
3191certainty. The IRC should be nullified for vagueness; this much is certain.
3192After seeing and verifying all of the evidence discussed above, the
3193editors of a bulletin published by the Monetary Realist Society wrote the
3194following long comment about the obvious problems it raises:
3195A serious reader could come to the conclusion that Missouri, for
3196example, is not one of the United States referred to in the code. This
3197conclusion is encouraged by finding that the code refers to Hawaii and
3198Alaska as states of the United States before their admission to the
3199union! Is the IRS telling us that the only states over which it has
3200jurisdiction are Guam, Washington D.C., Puerto Rico, the Virgin
3201Islands, etc.? Well, why not write and find out? Don't expect an
3202answer, though. Your editor has asked this question and sought to have
3203both of his Senators and one Congresswoman prod the IRS for a reply
3204when none was forthcoming. Nothing.
3205The Federal Zone:
3206Page 5 - 14 of 20
3207And isn't that strange? It would be so simple for the service to
3208reply, "Of course Missouri is one of the United States referred to in
3209the code" if that were, indeed, the case. What can one conclude from
3210the government's refusal to deal with this simple question except that
3211the government cannot admit the truth about United States citizenship?
3212I admit that the question sounds silly. Everybody knows that Missouri
3213is one of the United States, right? Sure, like everybody knows what a
3214dollar is! But the IRS deals with "silly" questions every day, often
3215at great length. After all, the code occupies many feet of shelf
3216space, and covers almost any conceivable situation. It just doesn't
3217seem to be able to cope with the simplest questions!
3218["Some Thoughts on the Income Tax"]
3219[The Bulletin of the Monetary Realist Society]
3220[March 1993, Number 152, page 2]
3221[emphasis added]
3222Although this book was originally intended to focus on the Internal
3223Revenue Code, the other 49 United States Codes contain a wealth of additional
3224proof that the term "State" does not always refer to one of the 50 States of
3225the Union. Just to illustrate, the following statutory definition of the
3226term "State" was found in Title 8, the Immigration and Nationality Act, as
3227late as the year 1987:
3228(36) The term "State" includes (except as used in section 310(a) of
3229title III [8 USCS Section 1421(a)]) the District of Columbia,
3230Puerto Rico, Guam, and the Virgin Islands of the United States.
3231[8 U.S.C. 1101(a)(36), circa 1987]
3232[emphasis added]
3233The "exception" cited in this statute tells the whole story here. In
3234section 1421, Congress needed to refer to courts of the 50 States, because
3235their own local constitutions and laws have granted to those courts the
3236requisite jurisdiction to naturalize. For this reason, Congress made an
3237explicit exception to the standard, federal definition of "State" quoted
3238above. The following is the paragraph in section 1421 which contained the
3239exceptional uses of the term "State" (i.e. Union State, not federal state):
32401421. Jurisdiction to naturalize
3241(a) Exclusive jurisdiction to naturalize persons as citizens of the
3242United States** is hereby conferred upon the following specified
3243courts: District courts of the United States now existing, or
3244which may hereafter be established by Congress in any State ...
3245also all courts of record in any State or Territory now existing,
3246or which may hereafter be created, having a seal, a clerk, and
3247jurisdiction in actions at law or equity, or law and equity, in
3248which the amount in controversy is unlimited.
3249[8 U.S.C. 1421(a), circa 1987]
3250[emphasis added]
3251What State Are You In?
3252Page 5 - 15 of 20
3253In a section entitled "State Courts", the interpretive notes and
3254decisions for this statute contain clear proof that the phrase "in any State"
3255here refers to any State of the Union (e.g. New York):
3256Under 8 USCS Section 1421, jurisdiction to naturalize was conferred
3257upon New York State Supreme Court by virtue of its being court of
3258record and having jurisdiction in actions at law and equity. Re Reilly
3259(1973) 73 Misc 2d 1073, 344 NYS2d 531.
3260[8 USCS 1421, Interpretive Notes and Decisions]
3261[Section II. State Courts, emphasis added]
3262Subsequently, Congress removed the reference to this exception in the amended
3263definition of "State", as follows:
3264(36) The term "State" includes the District of Columbia, Puerto Rico,
3265Guam, and the Virgin Islands of the United States.
3266[8 U.S.C. 1101(a)(36), circa 1992]
3267Two final definitions prove, without any doubt, that the IRC can also
3268define the terms "State" and "United States" to mean the 50 States as well as
3269the other federal states. The very existence of multiple definitions provides
3270convincing proof that the IRC is intentionally vague, particularly in the
3271section dedicated to general definitions (IRC 7701(a)). The following
3272definition is taken from Subtitle D, Miscellaneous Excise Taxes, Subchapter
3273A, Tax on Petroleum (which we all pay taxes at the pump to use):
3274In General. -- The term "United States" means the 50 States, the
3275District of Columbia, the Commonwealth of Puerto Rico, any possession
3276of the United States, the Commonwealth of the Northern Mariana Islands,
3277and the Trust Territory of the Pacific Islands. [!!]
3278[IRC 4612(a)(4)(A), emphasis added]
3279Notice that this definition uses the term "means". Why is this
3280definition so clear, in stark contrast to other IRC definitions of the
3281"United States"? Author Ralph Whittington provides the simple, if not
3282obvious, answer:
3283The preceding is a true Import Tax, as allowed by the Constitution; it
3284contains all the indicia of being Uniform, and therefore passes the
3285Constitutionality test and can operate within the 50 Sovereign States.
3286The language of this Revenue Act is simple, specific and definitive,
3287and it would be impossible to attach the "Void for Vagueness Doctrine"
3288to it.
3289[The Omnibus, page 83, emphasis added]
3290The following definition of "State" is required only for those Code
3291sections that deal with the sharing of tax return information between the
3292federal government and the 50 States of the Union. In this case, the 50
3293States need to be mentioned in the definition. So, the lawmakers can do it
3294when they need to (and not do it, in order to put the rest of us into a state
3295of confusion, within a State of the Union):
3296The Federal Zone:
3297Page 5 - 16 of 20
3298(5) State -- The term "State" means -- [!!]
3299(A) any of the 50 States, the District of Columbia, the
3300Commonwealth of Puerto Rico, the Virgin Islands, the Canal
3301Zone, Guam, American Samoa, and the Commonwealth of the
3302Northern Mariana Islands ....
3303[IRC 6103(b)(5), emphasis added]
3304It is noteworthy [!!] that these sections of the IRC also utilize the
3305term "means" instead of the terms "includes" and "including", and instead of
3306the phrase "shall be construed to include". It is certainly not impossible
3307to be clear. If it were impossible to be clear, then just laws would not be
3308possible at all, and the Constitution could never have come into existence
3309anywhere on this planet. Authors like The Informer (as he calls himself)
3310consider the very existence of multiple definitions of "State" and "United
3311States" to be highly significant proof of fluctuating statutory intent, even
3312though a definition of "intent" is nowhere to be found in the Code itself.
3313Together with evidence from the Omnibus Acts, these fluctuating definitions
3314also expose perhaps the greatest fiscal fraud that has ever been perpetrated
3315upon any people at any time in the history of the world.
3316Having researched all facets of the law in depth for more than ten full
3317years, The Informer summarizes what we have learned thus far with a careful
3318precision that was unique for its time:
3319The term "States" in 26 USC 7701(a)(9) is referring to the federal
3320states of Guam, Virgin Islands, Etc., and NOT the 50 States of the
3321Union. Congress cannot write a municipal law to apply to the
3322individual nonresident alien inhabiting the States of the Union. Yes,
3323the IRS can go into the States of the Union by Treasury Decision Order,
3324to seek out those "taxpayers" who are subject to the tax, be they a
3325class of individuals that are United States** citizens, or resident
3326aliens. They also can go after nonresident aliens that are under the
3327regulatory corporate jurisdiction of the United States**, when they are
3328effectively connected with a trade or business with the United States**
3329or have made income from a source within the United States** ....
3330[Which One Are You?, page 98, emphasis added]
3331Nevertheless, despite a clarity that was rare, author Lori Jacques has
3332found good reasons to dispute even this statement. In a private
3333communication, she explained that the Office of the Federal Register has
3334issued a statement indicating that Treasury Department Orders ("TDO") 150-10
3335and 150-37 (regarding taxation) were not published in the Federal Register.
3336Evidently, there are still no published orders from the Secretary of the
3337Treasury giving the Commissioner of Internal Revenue the requisite authority
3338to enforce the Internal Revenue Code within the 50 States of the Union.
3339Furthermore, under Title 3, Section 103, the President of the United
3340States, by means of Presidential Executive Order, has not delegated authority
3341to enforce the IRC within the 50 States of the Union. Treasury Department
3342Order No. 150-10 can be found in Commerce Clearinghouse Publication 6585 (an
3343unofficial publication). Section 5 reads as follows:
3344What State Are You In?
3345Page 5 - 17 of 20
3346U.S. Territories and Insular Possessions. The Commissioner shall, to
3347the extent of authority otherwise vested in him, provide for the
3348administration of the United States internal revenue laws in the U.S.
3349Territories and insular possessions and other authorized areas of the
3350world.
3351Thus, the available evidence indicates that the only authority
3352delegated to the Internal Revenue Service is to enforce tax treaties with
3353foreign territories, U.S. territories and possessions, and Puerto Rico. To
3354be consistent with the law, Treasury Department Orders, particularly TDO's
3355150-10 and 150-37, needed to be published in the Federal Register. Thus,
3356given the absence of published authority delegations within the 50 States,
3357the obvious conclusion is that the various Treasury Department orders found
3358at Internal Revenue Manual 1229 have absolutely no legal bearing, force, or
3359effect on sovereign Citizens of the 50 States. Awesome, yes? Our hats are
3360off, once again, to Lori Jacques for her superb legal research.
3361The astute reader will notice another basic disagreement between
3362authors Lori Jacques and The Informer. Lori Jacques concludes that the term
3363"State" now includes only the District of Columbia, a conclusion that is
3364supported by IRC Sec. 7701(a)(10). The Informer, on the other hand,
3365concludes that the term "States" refers to the federal states of Guam, Virgin
3366Islands, etc. These two conclusions are obviously incompatible, because
3367singular and plural must, by law, refer to the same things. (See Title 1 of
3368the United States Code for rules of federal statutory construction).
3369It is important to realize that both conclusions were reached by people
3370who have invested a great deal of earnest time and energy studying the
3371relevant law, regulations, and court decisions. If these honest Americans
3372can come to such diametrically opposed conclusions, after competent and
3373sincere efforts to find the truth, this is all the more reason why the Code
3374should be declared null and void for vagueness.
3375Actually, this is all the more reason why we should all be pounding
3376nails into its coffin, by every lawful method available to boycott this
3377octopus. The First Amendment guarantees our fundamental right to boycott
3378arbitrary government, by our words and by our deeds.
3379Moreover, the "void for vagueness" doctrine is deeply rooted in our
3380right to due process (under the Fifth Amendment) and our right to know the
3381nature and cause of any criminal accusation (under the Sixth Amendment). The
3382latter right goes far beyond the contents of any criminal indictment. The
3383right to know the nature and cause of any accusation starts with the statute
3384which a defendant is accused of violating. A statute must be sufficiently
3385specific and unambiguous in all its terms, in order to define and give
3386adequate notice of the kind of conduct which it forbids.
3387The essential purpose of the "void for vagueness doctrine" with respect
3388to interpretation of a criminal statute, is to warn individuals of the
3389criminal consequences of their conduct. ... Criminal statutes which
3390fail to give due notice that an act has been made criminal before it is
3391done are unconstitutional deprivations of due process of law.
3392[U.S. v. De Cadena, 105 F.Supp. 202, 204 (1952), emphasis added]
3393The Federal Zone:
3394Page 5 - 18 of 20
3395If it fails to indicate with reasonable certainty just what conduct the
3396legislature prohibits, a statute is necessarily void for uncertainty, or
3397"void for vagueness" as the doctrine is called. In the De Cadena case, the
3398U.S. District Court listed a number of excellent authorities for the origin
3399of this doctrine (see Lanzetta v. New Jersey, 306 U.S. 451) and for the
3400development of the doctrine (see Screws v. United States, 325 U.S. 91,
3401Williams v. United States, 341 U.S. 97, and Jordan v. De George, 341 U.S.
3402223). Any prosecution which is based upon a vague statute must fail,
3403together with the statute itself. A vague criminal statute is
3404unconstitutional for violating the 5th and 6th Amendments. The U.S. Supreme
3405Court has emphatically agreed:
3406[1] That the terms of a penal statute creating a new offense must be
3407sufficiently explicit to inform those who are subject to it what
3408conduct on their part will render them liable to its penalties is a
3409well-recognized requirement, consonant alike with ordinary notions of
3410fair play and the settled rules of law; and a statute which either
3411forbids or requires the doing of an act in terms so vague that men of
3412common intelligence must necessarily guess at its meaning and differ as
3413to its application violates the first essential of due process of law.
3414[Connally et al. v. General Construction Co.]
3415[269 U.S 385, 391 (1926), emphasis added]
3416The debate that is currently raging over the correct scope and proper
3417application of the IRC is obvious, empirical proof that men of common
3418intelligence are differing with each other. For example, The Informer's
3419conclusions appear to require definitions of "includes" and "including" which
3420are expansive, not restrictive. The matter could be easily decided if the
3421IRC would instead exhibit sound principles of statutory construction, state
3422clearly and directly that "includes" and "including" are meant to be used in
3423the expansive sense, and itemize those specific persons, places, and/or
3424things that are "otherwise within the meaning of the terms defined". If the
3425terms "includes" and "including" must be used in the restrictive sense, the
3426IRC should explain, clearly and directly, that expressions like "includes
3427only" and "including only" must be used, to eliminate vagueness completely.
3428Alternatively, the IRC could exhibit sound principles of statutory
3429construction by explaining clearly and directly that "includes" and
3430"including" are always meant to be used in the restrictive sense.
3431Better yet, abandon the word "include" entirely, together with all of
3432its grammatical variations, and use instead the word "means" (which does not
3433suffer from a long history of semantic confusion). It would also help a lot
3434if the 50 States were consistently capitalized and the federal states were
3435not. The reverse of this convention can be observed in the regulations for
3436Title 31 (see 31 CFR Sections 51.2 and 52.2 in the Supreme Law Library).
3437These, again, are excellent grounds for deciding that the IRC is vague
3438and therefore null and void. Of course, if the real intent is to expand the
3439federal zone in order to subjugate the 50 states under the dominion of
3440Federal States (defined along something like ZIP code boundaries a la the
3441Buck Act, codified in Title 4), and to replace the sovereign Republics with a
3442monolithic socialist dictatorship, carved up into arbitrary administrative
3443What State Are You In?
3444Page 5 - 19 of 20
3445"districts", that is another problem altogether. Believe it or not, the case
3446law which has interpreted the Buck Act admits to the existence of a "State
3447within a state"! So, which State within a state are you in? Or should we be
3448asking this question: "In the State within which state are you?" (Remember:
3449a preposition is a word you should never end a sentence with!)
3450The absurd results which obtain from expanding the term "State" to mean
3451the 50 States, however, are problems which will not go away, no matter how
3452much we clarify the definitions of "includes" and "including" in the IRC.
3453There are 49 other U.S. Codes which have the exact same problem. Moreover,
3454the mountain of material evidence impugning the ratification of the so-called
345516th Amendment should leave no doubt in anybody's mind that Congress must
3456still apportion all direct taxes levied inside the sovereign borders of the
345750 States. The apportionment restrictions have never been repealed.
3458Likewise, Congress is not empowered to delegate unilateral authority to
3459the President to subdivide or to join any of the 50 States. There are many
3460other constitutional violations which result from expanding the term "State"
3461to mean the 50 States of the Union. In this context, the mandates and
3462prohibitions found in the Bill of Rights are immediately obvious,
3463particularly as they apply to Union State Citizens (as distinct from United
3464States** citizens a/k/a federal citizens). Clarifying the definitions of
3465"includes" and "including" in the IRC is one thing; clarifying the exact
3466extent of sovereign jurisdiction is quite another. Congress is just not
3467sovereign within the borders of the 50 States.
3468Sorry, all you Senators and Representatives. When you took office, you
3469did not take an oath to uphold and defend the Ten Commandments. You did not
3470take an oath to uphold and defend the Uniform Commercial Code. You did not
3471take an oath to uphold and defend the Communist Manifesto. You did take an
3472oath to uphold and defend the Constitution for the United States of America.
3473It should be obvious, at this point, that capable authors like Lori
3474Jacques and The Informer do agree that the 50 States do not belong in the
3475standard definition of "State" because they are in a class that is different
3476from the class known as federal states. Remember the Kennelly letter?
3477Within the borders of the 50 States, the "geographical" extent of
3478exclusive federal jurisdiction is strictly confined to the federal enclaves;
3479this extent does not encompass the 50 States themselves.
3480We cannot blame the average American for failing to appreciate this
3481subtlety. The confusion that results from the vagueness we observe is
3482inherent in the Code and evidently intentional, which raises some very
3483serious questions concerning the real intent of that Code in the first place.
3484Could money have anything to do with it? That question answers itself.
3485# # #
3486The Federal Zone:
3487Page 5 - 20 of 20
3488Reader's Notes:
3489Page 6 - 1 of 14
3490Chapter 6:
3491Empirical Results
3492Up to this point, we have defined a set of key terms and created a
3493scheme for understanding how these key terms relate to each other. This
3494scheme was summarized in the form of a diagram which we have called The
3495Matrix (see chapter 3 and also the original cover of this book). The Matrix
3496is a two-by-two table which permutes every combination of citizen, alien,
3497resident and nonresident, to create four unique cases:
34981. resident citizen
34992. resident alien
35003. nonresident citizen
35014. nonresident alien
3502As a body of law, the Internal Revenue Code ("IRC") and its regulations
3503together require all "citizens" and all "residents" of the United States** to
3504pay taxes on their worldwide incomes. This requirement applies to three of
3505the four cases shown above, namely, resident citizens, resident aliens and
3506nonresident citizens. In the fourth case, nonresident aliens only pay tax on
3507income which is effectively connected with a U.S.** trade or business, and on
3508income from sources within the U.S.** (like Frank Brushaber's dividend).
3509Their tax liability is succinctly summarized by the Code itself. Note how
3510the relevant Code section utilizes the phrase "includes only" as follows:
3511General Rule. -- In the case of a nonresident alien individual, except
3512where the context clearly indicates otherwise, gross income includes
3513only -- [!!]
3514(1) gross income which is derived from sources within the United
3515States** and which is not effectively connected with the conduct
3516of a trade or business within the United States**, and
3517(2) gross income which is effectively connected with the conduct of a
3518trade or business within the United States**.
3519[IRC 872(a), emphasis added]
3520This may sound all well and good, in theory. How does it work in
3521practice? With so many words to document the recipe for pudding, how does
3522the pudding taste? Three case histories provide some of the necessary proof.
3523Appendix A is a winning brief proving that the income tax provisions of the
3524IRC are municipal statutes.
3525Case 1
3526Figure 1 shows a letter which an American Citizen sent to the District
3527Director of the Internal Revenue Service in Ogden, Utah State. This letter
3528was prepared in response to an unsigned letter from the IRS, requesting that
3529he file a 1040 Form. Note, in particular, his use of the key words
3530The Federal Zone:
3531Page 6 - 2 of 14
3532Figure 1: Letter to District Director
3533December 5, 1990
3534District Director
3535Internal Revenue Service
3536Ogden, Utah 84201
3537Re: NRA SSN #___-__-____
3538On or about December 1, 1990, I received an unsigned document claiming
3539that you have not received the tax return 1040, and requesting that the form
35401040 be filed. I have enclosed a copy of that request. I know of no such
3541code that requires me to file a "tax return 1040". If you know of such a
3542code, please identify that code for me.
3543I have enclosed a copy of the letter that I have sent to the Director
3544of the Foreign Operations District, concerning this matter.
3545In researching the revenue code book which your people kindly supplied
3546to me, I discovered that only an "individual" is required to file a tax
3547return (26 U.S.C. 6012) and then only under certain circumstances. In
3548looking at Section 7701(a)(1) of the code, I discovered that the term
3549"individual" is defined as a "person". Then, in checking under 7701(a)(30),
3550I discovered the definition of a "United States person" as meaning a "citizen
3551of the United States", "resident of the United States", "domestic
3552corporation", "domestic partnership" and a "domestic trust or estate". There
3553is no INDIVIDUAL defined under 7701(a)(30) and therefore I cannot be an
3554"individual" within the meaning of 7701(a)(1) and/or 26 U.S.C. 6012.
3555As well, the Supreme Court in the case of Wills v. Michigan State
3556Police, 105 L.Ed.2d 45 (1989) made it perfectly clear that I, the sovereign,
3557cannot be named in any statute as merely a "person", or "any person". I am a
3558member of the "sovereignty" as defined in Yick Wo v. Hopkins, 118 U.S. 356
3559and the Dred Scott case, 60 U.S. 393.
3560Therefore and until you can prove otherwise, I am not a "taxpayer", nor
3561an "individual" that is required to file a tax return. Please forward to me
3562a letter stating that I am not liable for this tax return, or produce the
3563documentation that requires me to file the "requested" tax return.
3564If you have any questions concerning this letter, you may write to me
3565at the address shown below. Please sign all papers so that I know who I am
3566dealing with. Until such a time as I hear from you or your office, I will
3567take the position that I am no longer liable for filing the return. Failure
3568to respond will be taken as meaning that you have "acquiesced" and that, from
3569this date forward, the doctrine of "estoppel by acquiescence" will prevail.
3570Sincerely,
3571/s/ NRA
3572Empirical Results
3573Page 6 - 3 of 14
3574"citizen of the United States**", "resident of the United States**",
3575"domestic corporation", "domestic partnership", "domestic trust or estate"
3576and "sovereign". He asserted his status by explicitly claiming to be a
3577sovereign who was not the "person" defined at IRC 7701(a)(1), and who was not
3578the "United States** person" defined at 7701(a)(30). The IRC defines
3579"person" as follows:
3580Person. -- The term "person" shall be construed to mean and include an
3581individual, a trust, estate, partnership, association, company or
3582corporation.
3583[IRC 7701(a)(1)]
3584At that time, the IRC defined "United States** person" as follows:
3585United States** person. -- The term "United States** person" means --
3586(A) a citizen or resident of the United States**,
3587(B) a domestic partnership,
3588(C) a domestic corporation, and
3589(D) any estate or trust (other than a foreign estate or foreign
3590trust, within the meaning of Section 7701(a)(31)).
3591[IRC 7701(a)(30), emphasis added]
3592Again, note the use of the key words "citizen", "resident", "domestic",
3593and "foreign" which have been highlighted for emphasis. These key words
3594relate directly to The Matrix. The key words "domestic" and "foreign" relate
3595directly to the boundaries of the federal zone, that is, the "United
3596States**" as that term is defined in relevant sections of the United States
3597Codes ("U.S.C."). A domestic corporation is one which was chartered inside
3598the federal zone. A foreign estate or foreign trust are foreign because they
3599were established outside the federal zone. Without making these statements
3600in so many words, our intrepid American's letter in Figure 1 can be used to
3601draw the following inferences about his status with respect to the exclusive
3602legislative jurisdiction of the "United States**":
36031. He is a sovereign as defined by the Supreme Court
36042. He is not a citizen of the United States**
36053. He is not a resident of the United States**
36064. He is not a domestic corporation
36075. He is not a domestic partnership
36086. He is not a domestic estate and
36097. He is not a domestic trust
3610There is one important thing his letter did not state explicitly about
3611him, and that is his status as a nonresident alien. Nevertheless, this
3612inference can, in turn, be drawn from two of the above inferences: (2) he is
3613not a citizen of the United States** and (3) he is not a resident of the
3614United States**. As a human being, he is not an artificial "person" like a
3615corporation, partnership, estate, or trust. If he is not a citizen of the
3616United States**, then he is an alien. If he is not a resident of the United
3617States**, then he is a nonresident. Therefore, he is a nonresident alien,
3618according to the Code and its regulations.
3619The Federal Zone:
3620Page 6 - 4 of 14
3621Now, let's take the pudding out of the oven and see how it tastes.
3622After taking some time to review his letter, the IRS addressed the following
3623response to our intrepid American:
3624Department of the Treasury
3625Internal Revenue Service
3626Ogden, UT 84201
3627In reply refer to: 9999999999
3628June 27, 1991 LTR 2358C
3629___-__-____ 8909 05 0000
3630Input Op: 9999999999 07150
3631To: NRA
3632Address
3633City, State Zip
3634Taxpayer Identification Number : ___-__-____
3635Tax Form : 1040
3636Tax Period : Sep. 30, 1989
3637Correspondence Received Date : June 13, 1991
3638Dear Taxpayer:
3639Based on our information, you are no longer liable for filing this tax
3640return. We may contact you in the future if issues arise that need
3641clarification. You do not need to reply to this letter.
3642Sincerely yours,
3643/s/ J. M. Wood
3644Chief, Collection Branch
3645P.S. "J. M. Wood" is a phony name, so you won’t ever be able to charge
3646the real me with extortion and racketeering.
3647Case 2
3648It would have been interesting to see what kind of response NRA would
3649have received if he had stated explicitly his status as a nonresident alien.
3650Based on what we know already about the law and its regulations, such an
3651explicit statement might have expedited the processing of his letter. But,
3652hindsight is always 20/20. Fortunately, we do have another example where an
3653American Citizen did just that, in response to a similar IRS request for a
36541040 form. The following is the text of the IRS request:
3655[please see next page]
3656Empirical Results
3657Page 6 - 5 of 14
3658Department of the Treasury
3659Internal Revenue Service
3660Ogden, UT 94201
3661Date of this Notice: 08-19-91
3662Taxpayer Identification: (ssn)
3663Form: 1040
3664Tax Periods: 12-31-89
3665To: ARN
3666Your tax return is overdue -- Contact us immediately
3667We still have not received your tax return, Form 1040 U.S. Individual
3668Income Tax Return, for the year ending 12-31-89.
3669We must resolve this matter. Contact us immediately, or we may take
3670the following action:
36711. Summon you to come in with your books and records as
3672provided by Sections 7602 and 7603 of the Internal Revenue
3673Code;
36742. Criminal prosecution that includes a fine, imprisonment, or
3675both, for persons who willfully fail to file a tax return
3676or provide tax information (Code Section 7203).
3677To prevent these actions, file your tax return today and attach your
3678payment for any tax due.
3679Even if you can't pay the entire amount of tax you owe now, it is
3680important that you file your tax return today.
3681Pay as much as you can and tell us when you will pay the rest.
3682We may be able to arrange for you to pay in installments.
3683Detach and enclose the form below with your return. To expedite
3684processing, use the enclosed envelope.
3685If you are not required to file or have previously filed, please
3686contact us at the phone number shown above.
3687[unsigned]
3688The Federal Zone:
3689Page 6 - 6 of 14
3690I always enjoy it very much when the IRS states that "you can pay in
3691installments". Somebody should write to them and recommend that they
3692consider augmenting their "Services" by implementing a layaway plan. They
3693may even have a special form for this very thing: Service Augmentation
3694Request Form (RF) #6666666, kind of like their "internal" Form 4685, as
3695described on page 34 of the IRS Printed Product Catalog, Document 7130:
3696Form 4685 41890S (Each)
3697News Clipping Mounting Guide
3698This guide sheet is used for mounting news clippings
3699for submittal to the National Office.
3700C:PA:L Internal Use
3701Now, our second intrepid American, coded with the initials ARN (Non
3702Resident Alien abbreviated backwards) also took it upon himself to respond in
3703writing. This time, however, he wrote the following words right on the IRS
3704letter and sent it back to them, certified mail, return receipt requested, on
3705September 13, 1991:
3706PLEASE BE ADVISED that ARN is a non-resident alien of the United
3707States**, never having lived, worked, nor having income from any source
3708within the District of Columbia, Puerto Rico, Virgin Islands, Guam,
3709American Samoa or any other Territory within the United States**, which
3710entity has its origin and jurisdiction from Article 1, Section 8,
3711Clause 17, of the U.S. Constitution. Therefore, he is a non-taxpayer
3712outside of the venue and jurisdiction of 26 U.S.C.
3713This response gets right to the point. In his first sentence, ARN is
3714explicit and unequivocal about his status as a nonresident alien with respect
3715to the United States**. He has never lived or worked in the United States**.
3716He has never had income from any source inside ("within") the District of
3717Columbia, Puerto Rico, Virgin Islands, Guam, American Samoa, or any other
3718Territory within the United States**. He exhibits his knowledge of the
3719relevant constitutional authority for "internal" revenue laws by correctly
3720citing Article 1, Section 8, Clause 17 ("1:8:17") of the U.S. Constitution.
3721Lastly, he concludes that he is a "non-taxpayer" who is outside the venue and
3722jurisdiction of 26 U.S.C. (i.e., Title 26, United States Code).
3723English Philosopher William of Occam (1300-1349) put it succinctly when
3724he said:
3725"The simplest solution is the best."
3726Contrast this, the simplest of statements, with one dictionary’s definition
3727of "Occam's razor", as it is called:
3728Occam's razor n [William of Ockham]: a scientific and philosophic
3729rule that entities should not be multiplied unnecessarily which is
3730interpreted as requiring that the simplest of competing theories be
3731preferred to the more complex or that explanations of unknown phenomena
3732be sought first in terms of known quantities.
3733[Webster's New Collegiate Dictionary]
3734[G. & C. Merriam Co.]
3735[Springfield, Mass. 1981]
3736Empirical Results
3737Page 6 - 7 of 14
3738We wonder if the people who write for G. & C. Merriam Company also
3739obtain supplementary compensation for services performed inside the exclusive
3740legislative jurisdiction of the federal democracy of the United States**
3741(i.e., moonlight in the federal zone).
3742Exactly two weeks later, ARN received the following letter from J. M.
3743Wood, signed with "hand writing" that lines up perfectly with the same
3744signature received by NRA. Could it have been a computer signature?
3745Department of the Treasury
3746Internal Revenue Service
3747Ogden, UT 84201
3748In reply refer to: 9999999999
3749Sep. 30, 1991 LTR 2358C
3750___-__-____ 8902 30 000
3751Input Op: 9999999999 07150
3752To: ARN
3753Address
3754City, State Zip
3755Taxpayer Identification Number : ___-__-____
3756Tax Form : 1040
3757Tax Period : Dec. 31, 1989
3758Correspondence Received Date : Sep. 16, 1991
3759Dear Taxpayer:
3760Based on our information, you are no longer liable for filing a tax
3761return for this period. If other issues arise, we may need to contact
3762you in the future. You do not need to reply to this letter.
3763Sincerely yours,
3764/s/ J. M. Wood
3765Chief, Collection Branch
3766P.S. "J. M. Wood" is a phony name, so you won’t ever be able to charge
3767the real me with extortion and racketeering.
3768Now, that's what we call fast internal revenue service.
3769Case 3
3770A keen appreciation for the precise limits of exclusive federal
3771jurisdiction has spread like wildfire since the initial publication of The
3772Federal Zone and books like it. Other Sovereign Americans have mastered the
3773subject so well, their communications with the IRS are quite stunning to
3774behold, even now. Our third case is the written dialogue between SOV and
3775IRS. It began when IRS demanded an explanation why SOV was not required to
3776The Federal Zone:
3777Page 6 - 8 of 14
3778Figure 2: Letter to Chief, Collection Branch
3779May 27, 1993
3780Dear Chief,
3781You have asked me to explain why I am not one required to provide
3782information/statements to your office. My filing status is outside the
3783territorial jurisdiction of the "United States" as defined at Title 18 U.S.C.
3784(Crimes), Section 7(3), to wit:
3785Any lands reserved or acquired for the use of the United States, and
3786under the exclusive or concurrent jurisdiction thereof, or any place
3787purchased or otherwise acquired by the United States by consent of the
3788legislature of the State in which the same shall be, for the erection
3789of a fort, magazine, arsenal, dockyard, or other needful building.
3790I do NOT reside, nor do I live within, the Federal jurisdiction of the
3791United States. The Federal jurisdiction is foreign with respect to the 50
3792states, just as the 50 states are foreign with respect to each other (see
3793U.S. v. Perkins, 163 U.S. 625, affirming In re Merriam's Estate, 36 NE 505;
3794see also Title 28, Section 297, wherein the freely associated compact states
3795are FOREIGN COUNTRIES with respect to the corporate United States
3796Government).
3797The Independent Sovereign state of Illinois and the Sovereign
3798individual, SOV, are NOT subject to federal law outside the exclusive
3799legislative jurisdiction of Congress as defined by the Constitution at
3800Article 1, Section 8, Clauses 1 thru 18.
3801"All legislation is prima facie territorial."
3802[American Banana Co. v. United Fruit Co.]
3803[213 U.S. 347, 356-357 (1909)]
3804"Legislation is presumptively territorial and confined to limits over
3805which the law-making power has jurisdiction."
3806[New York Central R.R. Co. v. Chisholm]
3807[268 U.S. 29, 31-32 (1925)]
3808... [T]he "canon of construction which teaches that legislation of
3809Congress, unless a contrary intent appears, is meant to apply only
3810within the territorial jurisdiction of the United States ...."
3811[U.S. v. Spelar, 338 U.S. 217, 222]
3812[70 S.Ct. 10 (1949)]
3813Since I am not a resident of the Federal Corporate United States and
3814did not conduct a trade or business within the Corporate Federal government,
3815I elected not to file or report any of my private affairs to this FOREIGN
3816jurisdiction. "With Explicit Reservation of All Rights" U.C.C. 1-207
3817/s/ SOV
3818Empirical Results
3819Page 6 - 9 of 14
3820provide information to them. Figure 2 shows every detail of the letter which
3821SOV wrote to them on Form 9358: "Information About Your Tax Return for
3822INDIVIDUAL Taxpayers Only". This letter expands upon territorial
3823jurisdiction by citing several decisions on this subject by the U.S. Supreme
3824Court, in addition to two key federal statutes. Without question, the quoted
3825language of Title 18 refers to 1:8:17 in the Constitution for the United
3826States of America ("fort, magazine, arsenal, dockyard, or other needful
3827building"). The quoted language of Title 28, U.S.C., section 297, shows that
3828Congress still refers to the 50 States as "countries". SOV then ends his
3829letter by reserving all his rights under the Common Law.
3830It took almost two months for the IRS to process this letter. Here is
3831their response:
3832Department of the Treasury
3833Internal Revenue Service
3834Kansas City, MO 64999
3835In reply refer to: 9999999999
3836July 30, 1993 LTR 2358C
3837___-__-____ 9012 30 000
3838Input Op: 9999999999 07463
3839To: SOV
3840Address
3841City, State Zip
3842Taxpayer Identification Number : ___-__-____
3843Tax Form : 1040
3844Tax Period : Dec. 31, 1990
3845Correspondence Received Date : July 22, 1993
3846Dear Taxpayer:
3847Thank you for providing the overdue tax return we requested for the
3848period(s) shown above. If there is an amount due, we will send you a
3849bill after we process your return. If you are due a refund, you will
3850receive it soon. You do not need to respond to this letter.
3851If you have any questions about this letter, you may write us at the
3852address shown above or you may call the IRS telephone number listed in
3853your local directory.
3854Sincerely yours,
3855/s/ Dorothy O. Smith
3856Chief, Collection Branch
3857P.S. "Dorothy O. Smith" is also a phony name, so you won’t ever be
3858able to charge the real me with extortion and racketeering.
3859The Federal Zone:
3860Page 6 - 10 of 14
3861To give you some idea just how far we need to elevate the importance of
3862status and jurisdiction, consider the following lengthy quotes from the
3863written work of author, attorney at law and constitutional expert Jeffrey A.
3864Dickstein. These quotes were buried deep among footnotes at the end of the
3865chapters in his brilliant book entitled Judicial Tyranny and Your Income Tax:
3866The term "individual" which is used not only in Section 6012(a)(1) but
3867also in Section 1 as the subject upon whose income the tax is imposed,
3868is not defined in the Internal Revenue Code. It is, however, defined
3869in the treasury regulations accompanying Section 1. The regulations
3870make a distinction between "citizens" and "residents" of the United
3871States**, and define a "citizen" as every person born or naturalized in
3872the United States** and subject to its jurisdiction [see 26 CFR Section
38731.1-1 (a) - (c)]. An extremely strong argument can be made that the
3874federal income tax as passed by Congress and as implemented by the
3875Treasury Department was only meant to apply to individuals within the
3876"territorial or exclusive legislative jurisdiction of the United
3877States**," as those individuals would be subject to the "jurisdiction
3878of the United States**." These exclusive areas, per Article I, Section
38798, Clause 17, of the United States Constitution, are Washington, D.C.,
3880federal enclaves and United States** possessions and territories.
3881Outside of these exclusive areas, state law controls, not federal law.
3882Thus a State citizen, residing in a State, would not meet the two part
3883test for being an "individual" upon whose income the tax is imposed by
3884Section 1 of the Internal Revenue Code, and would not have the "status"
3885of a "taxpayer." It is the official policy of the I.R.S. [Policy P-
3886(11)-23] to issue, upon written request, rulings and determination
3887letters regarding status for tax purposes prior to the filing of a
3888return. On August 29, 1988, I requested such a "status determination"
3889from the I.R.S. on behalf of one of my clients; as of the date of the
3890publication of this book, the I.R.S. had still not responded.
3891[Judicial Tyranny and Your Income Tax, pages 83-84]
3892Evidently, Dickstein was exposed to this particular argument by another
3893attorney and constitutional expert, Lowell Becraft of Huntsville, Alabama.
3894It is very revealing that Dickstein could justify the following observations
3895even with a legal presumption that the Sixteenth Amendment had been ratified:
3896... Attorney Lowell Becraft of Huntsville, Alabama, has made a powerful
3897territorial/legislative jurisdictional argument that under the Supreme
3898Court's holding in Brushaber, the income tax cannot be imposed anywhere
3899except within those limited areas within the states in which the
3900Federal government has exclusive legislative authority under Article I,
3901Section 8, Clause 17, of the United States Constitution, such as on
3902military bases, national forests, etc., and within United States
3903territories, such as Puerto Rico, etc. Indeed, Treasury Department
3904delegation orders and the language of Treasury Regulation 26 C.F.R.
3905Section 1.1-1(c) fully supports Mr. Becraft's scholarly analysis.
3906[Judicial Tyranny and Your Income Tax, p. 33]
3907Empirical Results
3908Page 6 - 11 of 14
3909After publishing Judicial Tyranny, Jeffrey Dickstein made an absolutely
3910stunning presentation to Judge Paul E. Plunkett in defense of William J.
3911Benson before the federal district court in Chicago. From the transcript of
3912that hearing, it is obvious that Dickstein had continued to distill his vast
3913knowledge even further, by isolating the following essential core:
3914The statutes are in the Internal Revenue Code. I submit they mean
3915something different if the Sixteenth Amendment was ratified than they
3916do if the Sixteenth Amendment was not ratified. If the Sixteenth
3917Amendment was ratified it means you can go into the states and collect
3918this direct tax without apportionment. If it's not ratified you can't
3919go into the states and do that. And since Pollock says it's a direct
3920tax, what other connotation can you give to the statutes? The
3921connotation that makes it constitutional is that it applies everywhere
3922except within the states -- which would be where? On army bases,
3923federal enclaves, Washington, D.C., the possessions and the
3924territories.
3925[You Can Rely On The Law That Never Was!, pages 20-21]
3926[emphasis added]
3927Sometimes, the answer is staring us right in the face. In retrospect,
3928we dedicate this chapter to Jeffrey Dickstein, who has done so much to bring
3929the truth about our federal government into the bright light of day. Jeff,
3930we have only ourselves to blame for not paying closer attention to your every
3931words.
3932In the passage quoted above from pages 83 and 84 of Judicial Tyranny,
3933author Dickstein refers to IRS Policy #P-(11)-23, from the official Internal
3934Revenue Manual (IRM). This "policy" reads as follows:
3935RULINGS, DETERMINATION LETTERS, AND CLOSING AGREEMENTS AS TO SPECIFIC
3936ISSUES
3937P-(11)-23 (Approved 6-14-87)
3938Rulings and determination letters in general
3939Rulings and determination letters are issued to individuals and
3940organizations upon written requests, whenever appropriate in the
3941interest of wise and sound tax administration, as to their status for
3942tax purposes and as to the tax effect of their acts or transactions,
3943prior to their filing of returns or reports as required by the revenue
3944laws. Rulings are issued only by the National Office. Determination
3945letters are issued only by District Directors and the Director of
3946International Operations. Reference to District Director or district
3947office in these policy statements also includes the office of the
3948Director of International Operations.
3949[emphasis added]
3950This IRS "policy", as published in their Internal Revenue Manual,
3951prompted the National Commodity and Barter Association in Denver, Colorado,
3952to draft the following example of a request letter, updated by this author
3953for extra clarity and authority:
3954The Federal Zone:
3955Page 6 - 12 of 14
3956EXAMPLE OF REQUEST LETTER
3957Director of International Operations
3958Foreign Operations Division
3959Internal Revenue Service
396011601 Roosevelt Boulevard
3961Philadelphia, Commonwealth of Pennsylvania
3962Dear Director:
3963My research of the Internal Revenue Code and related Regulations
3964has left me confused about my status for purposes of Federal Income
3965Taxation.
3966Pursuant to I.R.M. Policy #P-(11)-23, "upon written request" I
3967can obtain from your office a determination of my status for purposes
3968of Federal Income Taxation.
3969This is my written, formal request for a determination letter as
3970to my status for Federal Income Tax purposes.
3971Please take note that your determination letter must be signed
3972under penalty of perjury, per IRC Section 6065.
3973If this is not the proper format for making this request, please
3974send me the proper format with instructions.
3975If I do not receive a determination letter from you within 30
3976days, I will be entitled to presume that I am not subject to any
3977provisions of the IRC.
3978Sincere yours,
3979/s/ John Q. Doe
3980All Rights Reserved
3981What is the lesson in all of this? At the end of Chapter 1, we
3982expressed our intention to elevate status and jurisdiction to the level of
3983importance which they have always deserved. We are by no means and in no way
3984advising any Americans to utter, or to sign their names on, any statements
3985which they know to be false. On the contrary, it is fair to say that we have
3986been criticized more often in life for being too honest.
3987If you are a nonresident alien with respect to the federal zone, then
3988say so. If you are not a nonresident alien with respect to the federal zone,
3989then think about changing your status. You can if you want to, because
3990involuntary servitude is forbidden everywhere in this land. It's the 13th
3991Amendment, properly ratified right after the Civil War, and that is the
3992supreme Law everywhere in America!
3993# # #
3994Empirical Results
3995Page 6 - 13 of 14
3996Reader’s Notes:
3997The Federal Zone:
3998Page 6 - 14 of 14
3999Reader’s Notes:
4000Page 7 - 1 of 14
4001Chapter 7:
4002Inside Sources
4003Frank Brushaber was taxed on a dividend he received from the stock of a
4004domestic corporation. Remember, the term "domestic" in this context means
4005"inside the federal zone". The dividend came, therefore, from a "source"
4006that was situated inside this zone. The exact legal meaning of the term
4007"source" has been the subject of much debate, both inside and outside the
4008federal courts. We would not presume to be the ones who settle this debate
4009once and for all, least of all in the few pages dedicated to this chapter.
4010It is important to understand that the Brushaber Court's decision
4011turned, in large part, on a determination of the "source" of the dividend
4012which Frank Brushaber received. That source was a domestic corporation which
4013had been chartered by Congress to build a railroad and telegraph through the
4014Utah Territory (from the "Union" to the "Pacific"). As such, it was an
4015"inside source" -- a source that was situated (read "domiciled") inside the
4016federal zone.
4017Frank Brushaber's income was "unearned" income. This means that he did
4018not exchange any of his labor in order to receive the dividend paid to him by
4019the Union Pacific Railroad Company. Earned income, on the other hand, is
4020income which is derived from exchanging labor for something of value, like
4021money. Also beyond the scope of this chapter are the sad debate, and
4022considerable mass of IRS-sponsored confusion, that surround the legal
4023definition of "income". Whatever you do, do not waste your time searching
4024the IRC for a clear definition of the term "income", because it just simply
4025does not exist:
4026The general term "income" is not defined in the Internal Revenue Code.
4027[U.S. v. Ballard, 535 F.2d 400, 404]
4028[(8th Circuit, 1976)]
4029Author Jeffrey Dickstein has done an extremely thorough job of
4030documenting the history of judicial definitions of this term. Many of those
4031definitions are in direct conflict with each other, but all Supreme Court
4032decisions on the question have been completely consistent with each other.
4033In Appendix J of this book, you will find one of our formal petitions
4034to Congress, in which are summarized a number of rulings on this issue by the
4035Supreme Court and by lower courts which concur. If you must also review the
4036courts which do not concur, you gluttons for punishment should buy
4037Dickstein's great book on the subject.
4038Back to sources. IRS Publication 54 explains in simple terms that:
4039"The source of earned income is the place where you perform the services." I
4040always enjoyed it when Sister Theresa Marie would tell our third-grade class
4041in parochial school that the whole world is divided into persons, places and
4042things. How I long for those simpler days! The courts have used the
4043technical term "situs", instead of the word "place", as follows:
4044The Federal Zone:
4045Page 7 - 2 of 14
4046We think the language of the statutes clearly demonstrates the
4047intendment [sic] of Congress that the source of income is the situs of
4048the income-producing service.
4049[C.I.R. v. Piedras Negras HB Co., 127 F.2d 260 (1942)]
4050[emphasis added]
4051It is useful to repeat the IRC section which was quoted in the last
4052chapter. Specifically, in the case of a nonresident alien individual, except
4053where the context clearly indicates otherwise, gross income includes only:
4054(1) gross income which is derived from sources within the United
4055States** and which is not effectively connected with the conduct
4056of a trade or business within the United States**, and
4057(2) gross income which is effectively connected with the conduct of a
4058trade or business within the United States**.
4059[IRC 872(a), emphasis added]
4060The term "gross income" is crucial, because it is the quantity which
4061triggers the filing requirement. It is like a threshold, or so we are told
4062by august members of the black robe, like Judge Eugene Lynch of the United
4063States District Court ("USDC") in San Francisco. IRC Section 6012 reads, in
4064pertinent part:
4065General Rule. -- Returns with respect to income taxes under subtitle A
4066shall be made by the following:
4067(1)(A) Every individual having for the taxable year gross income
4068which equals or exceeds the exemption amount ...
4069except that subject to such conditions, limitations, and exceptions and
4070under such regulations as may be prescribed by the Secretary,
4071nonresident alien individuals subject to the tax imposed by section 871
4072... may be exempted from the requirement of making returns under this
4073section.
4074[IRC 6012(a), emphasis added]
4075Section 6012 is a pivotal section, if only because the IRS is now
4076citing this section (among others) as their authority for requiring
4077"taxpayers" to make and file income tax returns. As you can plainly read
4078with your own eyes, nonresident alien individuals may be exempted from the
4079requirement of making returns.
4080Diving into the many thousands of regulations which have been
4081"prescribed by the Secretary" is also beyond the scope of this book. For
4082now, realize that the regulations do exist, and that the quantity "gross
4083income" for nonresident aliens includes only the following two things: (1)
4084gross income derived from sources within the United States** and (2) gross
4085income that is effectively connected with a U.S.** trade or business. That's
4086it!
4087Inside Sources
4088Page 7 - 3 of 14
4089You will note that the Code and its regulations make frequent use of
4090the terms "within" and "without", in order to contrast the two terms as
4091antonyms, or opposites. In this context, the term "within" is synonymous
4092with "inside"; the term "without" is synonymous with "outside". "Within"
4093and "without" are antonyms. And the term "antonym" is an antonym for a
4094synonym! ("Good grief," declared Charlie Brown.) Thus, if you are outside
4095the federal zone, you are "without" the United States** in the languid
4096language of federal tax law. (Languid: drooping or flagging from, or as if
4097from exhaustion.) Can we ever get along "without" the United States**? :-)
4098The importance of "within" and "without" cannot be emphasized too much.
4099In the context of everything we now know about jurisdiction within the
4100federal zone, these terms are crucial to understanding the territorial extent
4101of the IRC. To underscore this point, consider IRC Section 862, entitled
4102"Income from Sources Without the United States**":
4103(a) Gross Income from Sources without United States**. --
4104The following items of gross income shall be treated as income
4105from sources without the United States**: ...
4106(3) compensation for labor or personal services performed
4107without the United States**.
4108[IRC 862(a)-(a)(3), emphasis added]
4109Now, turn to IRS Form 1040NR. A copy of this form is found in Appendix
4110K. The "NR" stands for "Non Resident". Nonresident aliens file this form to
4111report and pay tax on gross income as defined in IRC Section 872(a). On page
4112one of the 1990 version of this form, there is a block of line items numbered
41138 thru 22. These items are summed to produce a total on line 23. "This is
4114your total effectively connected income," states the form. Now, turn the
4115form clockwise 90 degrees. Note, in particular, the phrase near the left
4116margin of page one, which reads:
4117Income Effectively Connected With U.S.** Trade/Business
4118If you are a nonresident alien and you have no income which is
4119effectively connected with a U.S.** trade or business, then you can, in good
4120conscience, put a big fat ZERO on line 23. But, this is not the whole story.
4121On page 4 of Form 1040NR, there is a table for computing "Tax on Income Not
4122Effectively Connected with a U.S.** Trade or Business". What would this be?
4123Recall IRC Section 872(a), quoted above. The only other component of
4124gross income for nonresident aliens is income derived from sources within the
4125United States**, like Frank Brushaber's stock dividend. Lo and behold, this
4126table itemizes such things as dividends, interest, royalties, pensions, and
4127annuities. These are all items of unearned income, i.e., profits and gains
4128derived from U.S.** sources other than compensation for labor or personal
4129services performed "within" the United States**. The total tax is computed
4130and entered on line 81 of Form 1040NR. Unfortunately, true to form, line 81
4131in this table says that "This is your tax on income not effectively connected
4132with a U.S.** trade or business." This is very deceptive. Remember, gross
4133income for nonresident aliens includes only two kinds of gross income:
4134The Federal Zone:
4135Page 7 - 4 of 14
4136(1) gross income derived from sources within the U.S.** which is not
4137effectively connected with a U.S.** trade or business and
4138(2) gross income which is effectively connected with the conduct of a
4139trade or business within the United States**
4140Line 81 of Form 1040NR is referring to the first kind of gross income,
4141namely, gross income which is "not effectively connected with a U.S.** trade
4142or business". The second kind of gross income is entered on page 1 at line
414323 of this form. Again, it's simple when you know enough to decode the Code.
4144It's also very easy to get confused when the confusion is intentional.
4145("Encode" and "decode" are antonyms, by the way.)
4146Unfortunately, the filing requirements for nonresident aliens are not
4147as straightforward as you might think, because the regulations contain
4148certain rules that are not found in the Code itself, and the Code is
4149frequently vague. To understand these requirements, the regulations must be
4150reviewed as they apply to your particular situation. A brief overview is in
4151order here.
4152If you are a nonresident alien with no gross income from sources within
4153the U.S.**, and with no U.S.** trade or business, is it a good idea to file a
41541040NR with zeroes everywhere? No, it is not. The main reason is that
4155filing any 1040 form can provide the IRS with a legal reason to presume that
4156you are a "taxpayer", as that term is defined in the IRC. A later chapter of
4157this book will explore the "law of presumption" in some detail. Your filed
4158return can be used as evidence that you are a taxpayer, that is, one who is
4159subject to any internal revenue tax because you are engaged in a "revenue
4160taxable activity". A U.S.** trade or business is a revenue taxable activity.
4161Thus, a key issue for nonresident aliens is whether or not they are engaged
4162in any U.S.** trade or business. The CFR says this about the filing
4163requirement for nonresident aliens:
4164... [E]very nonresident alien individual ... who is engaged in a trade
4165or business in the United States at any time during the taxable year or
4166who has income which is subject to taxation under subtitle A of the
4167Code shall make a return on Form 1040NR. For this purpose it is
4168immaterial that the gross income for the taxable year is less than the
4169minimum amount specified in section 6012(a) for making a return. Thus,
4170a nonresident alien individual who is engaged in a trade or business in
4171the United States** at any time during the taxable year is required to
4172file a return on Form 1040NR even though
4173(a) he has no income which is effectively connected with the conduct
4174of a trade or business in the United States**,
4175(b) he has no income from sources within the United States**, or
4176(c) his income is exempt from income tax by reason of an income tax
4177convention or any section of the Code.
4178[26 CFR 1.6012-1(b)(1)]
4179[emphasis added]
4180Inside Sources
4181Page 7 - 5 of 14
4182Thus, the gross income "threshold" defined in the filing requirement at
4183IRC 6012(a) is not relevant if a nonresident alien is engaged in any U.S.**
4184trade or business. Conversely, the rules are somewhat different if a
4185nonresident alien is not engaged in any U.S.** trade or business. The
4186regulations have this to say about a nonresident alien in the latter
4187situation:
4188A nonresident alien individual ... who at no time during the taxable
4189year is engaged in a trade or business in the United States** is not
4190required to make a return for the taxable year if his tax liability for
4191the taxable year is fully satisfied by the withholding of tax at source
4192under chapter 3 of the Code.
4193[26 CFR 1.6012-1(b)(2), emphasis added]
4194If a nonresident alien has no U.S.** trade or business and no tax
4195liability that required withholding (such as U.S.** source income), then a
4196return is not required. If you are a nonresident alien and you remain in
4197doubt as to whether or not you are required to file a Form 1040NR, you might
4198begin by reading all the rules found in the Instructions for Form 1040NR. In
4199general, the instructions are much easier to read than the regulations, but
4200also understand that the regulations have the force of law and the
4201instructions do not. The instructions for Form 1040NR address the question
4202of who must file as follows:
4203Use Form 1040NR if any of the four conditions listed below and on page
42042 applies to you:
42051. You were a nonresident alien engaged in a trade or business in
4206the United States** during 1990. You must file Form 1040NR even
4207if:
4208a. none of your income came from a trade or business conducted
4209in the United States**,
4210b. you have no income from U.S.** sources, or
4211c. your income is exempt from U.S.** tax.
4212In any of the above three cases, do not complete the schedules
4213for Form 1040NR. Instead, attach a list of the kinds of
4214exclusions you claim and the amount of each.
42152. You were a nonresident alien not engaged in a trade or business
4216in the United States** during 1990 with income on which not all
4217U.S.** tax that you owe was withheld.
42183. You represent a deceased person who would have had to file Form
42191040NR.
42204. You represent an estate or trust that would have had to file Form
42211040NR.
4222[Instructions for Form 1040NR, page 1]
4223The Federal Zone:
4224Page 7 - 6 of 14
4225Now, what is a "trade or business" within the United States**? Author
4226and legal scholar Lori Jacques has concluded that the meaning of a "trade or
4227business" is confined to performing the functions of a public office. This
4228conclusion is supported by an explicit definition of "trade or business" that
4229is found in the IRC itself:
4230Trade or Business. -- The term "trade or business" includes the
4231performance of the functions of a public office.
4232[IRC 7701(a)(26)]
4233The Informer has come to the same conclusion, after years of research.
4234All of this "trade or business" activity, thus defined, boils down to one
4235simple thing: government employment. If you work for the federal government,
4236even if you are a nonresident alien, the Congress reserves the power to
4237define that work as a "privilege", the exercise of which Congress can tax.
4238The measure of that tax is the amount of income derived. Author Lori Jacques
4239summarizes government employment as follows:
4240It appears that the federal income tax is the graduated tax on income
4241effectively connected with a U.S.** trade or business as described in
4242IR Code Sec. 871(b) which is government employment. Remember the
4243nonresident alien does not pay tax on non U.S.** source income. If the
4244nonresident alien signs a Form W-4 he is obviously presumed to be a
4245government employee with "effectively connected income."
4246[United States Citizen v. National of the United States]
4247[page 39, emphasis added]
4248Another competent author and IRS critic, Frank Kowalik, has also
4249arrived at similar conclusions about the "taxability" of employment with the
4250federal government. In his thorough book entitled IRS Humbug, IRS Weapons of
4251Enslavement, Kowalik argues with exhaustive proof that a tax "return" is
4252really just a kickback. Government employees are expected to return or "kick
4253back" some of their earnings to the Treasury, in obvious and grateful tribute
4254to the great giver of all federal privileges, Uncle Sam. Kowalik's arguments
4255and accompanying complaints are so persuasive that Rep. Jack Brooks, Chairman
4256of the House Judiciary Committee, scheduled Kowalik's request for redress as
4257Petition No. 107. In a personal letter to me, Frank Kowalik wrote the
4258following:
4259I read with interest your Redress (12-24-90) to Barbara Boxer. I also
4260delivered a Redress to Congress making Tom Foley, House Speaker, my
4261personal representative. My book "IRS Humbug" was an exhibit in this
4262Redress. Jack Brooks, Chairman of the House Judiciary Committee, was
4263among those copied. From his letter (copy attached) my Redress has
4264been referred to the Committee on the Judiciary as Petition No. 107.
4265As I understand it, it will be heard in the session after the holidays.
4266I also provide information on "IRS Humbug" that covers the fact that
4267federal income tax is not a tax on labor. It is a kickback program
4268between the federal government and its employees.
4269[personal communication, December 10, 1991]
4270[emphasis added]
4271Inside Sources
4272Page 7 - 7 of 14
4273Taken together, The Informer, Lori Jacques and Frank Kowalik appear
4274unanimous in understanding the term "trade or business" to include only the
4275performance of the functions of a public office. This conclusion is, of
4276course, supported by the explicit definition of "trade or business" which is
4277found in the IRC itself at Section 7701(a)(26). Note, however, that this
4278definition does not say "includes only"; it says "includes".
4279Once again, we are haunted by the ambiguity that results from not
4280knowing for sure whether "includes" is expansive or restrictive. If
4281"includes" is restrictive, then The Informer, Lori Jacques, and Frank Kowalik
4282are all correct about the inferences they have drawn from the Code and its
4283regulations. If "includes" is expansive, however, then we have to look
4284elsewhere for things that are "otherwise within the meaning of the term
4285defined", that is, otherwise within the meaning of "U.S.** trade or
4286business". Remember the Kennelly letter?
4287An expansive intent is manifested by the explicit definitions of
4288"includes" and "including" that are found at IRC 7701(c). The issues of
4289statutory construction that arise from these definitions of "includes" and
4290"including" are so complex, a subsequent chapter of this book will revisit
4291these terms in more detail. The conclusions in that chapter should already
4292be obvious to you. For now, suffice it to say that the intended
4293clarification at 7701(c) is anything but. The hired lawyers who wrote this
4294stuff should have known better than to use terms that have a long history of
4295semantic confusion. For this reason, and for this reason alone, we are now
4296convinced that the confusion is inherent in the language chosen by these
4297hired "guns" and is, therefore, deliberate.
4298There is some evidence that the meaning of "trade or business" is not
4299limited to the performance of the functions of a public office. The Code
4300itself contains a second definition of "trade or business within the United
4301States**" as follows:
4302Trade or Business within the United States**. --
4303For purposes of this part, part II, and chapter 3, the term "trade or
4304business within the United States**" includes the performance of
4305personal services within the United States** at any time within the
4306taxable year ....
4307[IRC 864(b), emphasis added]
4308It is tempting to interpret this definition only "for purposes of this
4309part, part II, and chapter 3". We will not take the bait, because it is more
4310important to stay above a major addiction of the federal zone: obfuscation.
4311You may have already begun to notice how frequently the IRC makes reference
4312to other sections, subsections, subparts, subtitles, and subchapters. Sure,
4313these other places in the law must be taken into account before the
4314"performance of personal services" can be fully understood as defined. We
4315can see that as well as anybody else. But two can play this game. Is there
4316any reason in the statute to suspect that these remote references might not
4317even be valid? First, read the following sub-statute within the statute, and
4318then decide for yourself (go ahead, you have our permission):
4319The Federal Zone:
4320Page 7 - 8 of 14
4321Construction of Title.
4322[Sec. 7806(b)]
4323(b) Arrangement and Classification. -- No inference, implication, or
4324presumption of legislative construction shall be drawn or made by
4325reason of the location or grouping of any particular section or
4326provision or portion of this title, nor shall any table of
4327contents, table of cross references, or similar outline,
4328analysis, or descriptive matter relating to the contents of this
4329title be given any legal effect. The preceding sentence also
4330applies to the side notes and ancillary tables contained in the
4331various prints of this Act before its enactment into law.
4332[IRC 7806(a), emphasis added]
4333Many people, unschooled in the finer points of statutory construction,
4334interpret this section of the IRC to mean that the entire Code has no legal
4335effect. However, a close reading reveals that this section is limited to
4336tables of contents, tables of cross references, side notes, ancillary tables
4337and outlines, in other words, everything but the meat of the Code.
4338Nevertheless, notice the last sentence; it contains a rule which also
4339applies the "preceding sentence" to the side notes and ancillary tables
4340contained in the various prints of the Code before its enactment into law.
4341So, the obvious question is this: has Title 26 been enacted into law? The
4342shocking answer is: NO, it has not been enacted into positive law. In a
4343preface dated January 14, 1983, and included in the 1982 edition of the
4344United States Code, Speaker of the House Thomas P. O'Neill wrote the
4345following:
4346Titles 1, 3, ... 23, 28, ... have been revised, codified, and enacted
4347into positive law and the text thereof is legal evidence of the laws
4348therein contained. The matter contained in the other titles of the
4349Code is prima facie evidence of the laws.
4350Notice that Title 26 is clearly missing from the list of titles which
4351have been enacted into positive law. This fact can also be confirmed by
4352examining the inside cover page of any volume of the United States Codes in
4353any law library. There you will find that Title 26 is missing the asterisk
4354"*" which indicates that the title has been enacted into positive law.
4355The implications of this finding can be found in Subtitle F, Subchapter
4356B, which deals with effective dates and related provisions. There the
4357general rule for provisions of subtitle F reads as follows:
4358General Rule. -- The provisions of subtitle F shall take effect on the
4359day after the date of enactment of this title and shall be applicable
4360with respect to any tax imposed by this title.
4361[IRC 7851(a)(6)(A)]
4362[emphasis added]
4363Inside Sources
4364Page 7 - 9 of 14
4365Believe it or not, subtitle F contains all the enforcement provisions
4366of the IRC, such as filing requirements, assessment and collection, liens,
4367levies and seizures. In other words, the enforcement provisions of the
4368Internal Revenue Code have still not taken effect because, as of this
4369writing, Title 26 has still not been enacted. If you don't mind getting
4370frustrated, notice also that IRC section 7851 is also part of subtitle F!
4371If the Code itself is entirely too frustrating to decipher, it is no
4372wonder why the IRS has published literally hundreds of instruction booklets
4373and official IRS "Publications" to help "clarify" the myriad rules and forms.
4374At last count, there were more than 5,000 IRS forms in the IRS Printed
4375Product Catalog quoted elsewhere in this book.
4376To conclude our discussion of "U.S.** trade or business", you might
4377want to obtain a copy of IRS Publication 519, U.S. Tax Guide for Aliens.
4378This 40-page booklet expresses the English language in words that are much
4379easier to understand than the Code itself. It even has its own Index. Be
4380forewarned, however, that official IRS "Publications" do not have the force
4381of law because they have not been published in the Federal Register, nor do
4382any of them display control numbers and expiration dates issued by the Office
4383of Management and Budget ("OMB"). (If the IRS makes an error, it's not their
4384fault anyway.) Publication 519 has this to say about a trade or business
4385inside the United States**:
4386Trade or Business
4387Whether you are engaged in a trade or business in the United States**
4388depends on the nature of your activities. The discussions that follow
4389will help you determine whether you are engaged in a trade or business
4390in the United States**.
4391Personal Services
4392If you perform personal services in the United States** at any time
4393during the tax year, you usually are considered engaged in a trade or
4394business in the United States**. You are engaged in a trade or
4395business in the United States** if you perform services in this country
4396and receive compensation such as wages, salaries, fees, tips, bonuses,
4397honoraria, or commissions.
4398[Publication 519: U.S. Tax Guide for Aliens]
4399[page 8]
4400Back to sources one more time. (It's so easy to get sidetracked by
4401some remote code reference that has no legal effect!) The interested reader
4402and intrepid investigator will be happy to know that there are literally
4403"oodles" of regulations which go into details, great and small, about the
4404life and times of Mr. and Mrs. Nonresident Alien. Here is a blockbuster for
4405which I am eternally grateful to Tarzan The Informer for weeding out of the
4406jungle of slippery lines and double negatives:
4407The Federal Zone:
4408Page 7 - 10 of 14
4409Nonresident aliens. A nonresident alien individual never has selfemployment
4410income. While a nonresident alien individual who derives
4411income from a trade or business carried on within the United States**,
4412Puerto Rico, the Virgin Islands, Guam, or American Samoa (whether by
4413agents or employees, or by a partnership of which he is a member) may
4414be subject to the applicable income tax provisions on such income, such
4415nonresident alien individual will not be subject to the tax on selfemployment
4416income, since any net earnings which he may have from selfemployment
4417do not constitute self-employment.
4418[26 CFR 1402(b)-3(d), emphasis added]
4419A nonresident alien individual never has self-employment income. We agree
4420completely with The Informer: "never" always means never.
4421The point of this chapter is to stress the extreme importance of
4422understanding "sources" as they affect the nonresident alien like you and me.
4423Remember how Frank Brushaber ultimately lost his bid to the Supreme Court of
4424the United States. He received a dividend that was issued by a "domestic"
4425corporation. Even though he was found to be a nonresident alien with respect
4426to the United States**, his dividend was found to be unearned income from a
4427source inside the United States**, inside the federal zone.
4428The Informer nicely summarizes the overall situation as follows:
4429YOU ARE NOT TAXABLE IF YOU ARE:
4430ITEM 1: a non resident alien NOT carrying on a trade or business
4431with the U.S.** or State of a Union State;
4432ITEM 2: a non resident alien NOT making source income from within
4433the United States**;
4434ITEM 3: a non resident alien NOT having a trademark, patent, or
4435copyright;
4436ITEM 4: a non resident who is NOT a fiduciary, so you cannot be a
4437person of incidence with respect to a person of adherence;
4438then the income tax is not imposed, under subtitle A, chapter 1 on a
4439non resident alien. So you fit the description under 26 USC Sections
44402(d) & 872.
4441[Which One Are You?, page 24]
4442[emphasis in original]
4443The complex issues of patents, trademarks, copyrights and fiduciaries
4444are beyond the scope of this book. Our "sources" tell us that The Informer
4445is writing another book, hopefully to clarify some of the legal in's and
4446out's of being a fiduciary. Author Lori Jacques has arrived at a remarkably
4447similar conclusion about nonresident aliens. The first person "I" in the
4448following excerpt is author Lori Jacques:
4449Inside Sources
4450Page 7 - 11 of 14
4451It is conclusive the Department of Treasury, Internal Revenue
4452Service, has no authority within the several states, it is just as
4453conclusive that any income deriving from within the jurisdiction of the
4454national government is taxable to the person receiving it. The
4455treasury decision on Brushaber confirms that.
4456The tax on the nonresident alien conforms to all constitutional
4457provisions:
44581. Uniform taxation of 30% on unearned income from U.S.** sources.
44592. No reporting of private information as the tax is withheld at
4460source or else the government has all the information of amount
4461it has paid -- just return the receipt to prove the tax was paid.
44623. Graduated taxation on income received from trade or business
4463conducted within the United States**, permitted because only the
4464states are parties to the compact guaranteeing unalienable rights
4465and uniform/apportioned taxation. The federal areas are always
4466exempt from laws guaranteeing equal treatment.
44674. No public notice has been published in the Federal Register since
4468state citizens, nonresident to the United States** as defined,
4469are not affected by the delegation of authority orders.
4470After the evidence is in, I now believe that under the internal
4471revenue law I am a "national" and a nonresident alien to federal
4472jurisdiction who has no U.S.** source income nor any effectively
4473connected income with a U.S.** trade or business for which I am liable
4474to render a return.
4475[United States Citizen v. National of the United States]
4476[page 44, emphasis added]
4477This lengthy excerpt does an excellent job of summarizing a mountain of
4478earnest legal research and writing by author and scholar Lori Jacques. Our
4479hat's off to you, Lori, for doing a "totally boss" and uniquely thorough job.
4480We take issue only with Lori’s statement above that "the Internal Revenue
4481Service has no authority within the several States." Without clarifying the
4482tax liability that attaches to income from "inside sources", this statement
4483could be misleading. Remember that Frank Brushaber's liability attached to
4484income from such a source, and he lived in New York City, in the Borough of
4485Brooklyn.
4486The Informer has accurately qualified the precise extent of federal tax
4487jurisdiction within the 50 States of the Union as follows:
4488[Please see next page.]
4489The Federal Zone:
4490Page 7 - 12 of 14
4491Yes, the IRS can go into the States of the Union by Treasury Decision
4492Order, to seek out those "taxpayers" who are subject to the tax, be
4493they a class of individuals that are United States** citizens, or
4494resident aliens. They also can go after nonresident aliens that are
4495under the regulatory corporate jurisdiction of the United States**,
4496when they are effectively connected with a trade or business with the
4497United States** or have made income from a source within the United
4498States** that they have entered into an agreement with, for then they
4499are in the state of the forum.
4500[Which One Are You?, page 98]
4501[emphasis added]
4502For the reader who is motivated to investigate the question of "inside
4503sources" in greater detail, Appendix V in this edition of The Federal Zone
4504contains an Affidavit of Applicable Law. This affidavit contains numerous
4505citations to IRC sections which are pertinent to the crucial distinction
4506between "inside" sources and "outside" sources. This same affidavit can be
4507used formally to deny specific liability for federal income taxes during any
4508given calendar year(s). You might also share this Affidavit with tax
4509attorneys you may know, and solicit their evaluations. Updating this
4510Affidavit with appropriate changes is the legal responsibility of the Affiant
4511who signs it.
4512# # #
4513Inside Sources
4514Page 7 - 13 of 14
4515Reader's Notes:
4516The Federal Zone:
4517Page 7 - 14 of 14
4518Reader’s Notes:
4519Page 8 - 1 of 14
4520Chapter 8:
4521Is it Voluntary?
4522One of the great deceptions in federal income taxation is the
4523widespread IRS propaganda that the system is "voluntary". Commissioners of
4524the IRS have repeatedly published statements to this effect in all kinds of
4525places like the Federal Register, annual reports to Congress, various
4526instruction booklets, and other printed materials. Even the Supreme Court
4527has joined the cadre (cacophony?) of federal government officials who admit,
4528when cornered, that it is voluntary. So, this "voluntary" thing has not been
4529a mistake or an occasional slip here and there; it has been the consistent
4530policy of top officials of the Internal Revenue Service, the Justice
4531Department and the Supreme Court, believe it or not. A thorough sampling of
4532these admissions is now in order.
4533In 1953, Mr. Dwight E. Avis, head of the Alcohol and Tobacco Tax
4534Division of the Bureau of Internal Revenue, made the following remarkable
4535statement to a subcommittee of the Committee on Ways and Means in the House
4536of Representatives:
4537Let me point this out now: Your income tax is 100 percent voluntary
4538tax, and your liquor tax is 100 percent enforced tax. Now, the
4539situation is as different as day and night.
4540[Internal Revenue Investigation]
4541[Hearings before a Subcommittee of the ]
4542[Committee on Ways and Means]
4543[Feb. 3 thru Mar. 13, 1953, emphasis added]
4544In 1971, the following quote was found in the IRS instruction booklet
4545for Form 1040:
4546Each year American taxpayers voluntarily file their tax returns and
4547make a special effort to pay the taxes they owe.
4548[emphasis added]
4549In 1974, Donald C. Alexander, Commissioner of Internal Revenue,
4550published the following statement in the March 29 issue of the Federal
4551Register:
4552The mission of the Service is to encourage and achieve the highest
4553possible degree of voluntary compliance with the tax laws and
4554regulations ....
4555[Vol. 39, No. 62, page 11572]
4556[emphasis added]
4557One year later, in 1975, his successor, Mortimer Caplin authored the
4558following statement in the Internal Revenue Audit Manual:
4559Our tax system is based on individual self-assessment and voluntary
4560compliance.
4561[emphasis added]
4562The Federal Zone:
4563Page 8 - 2 of 14
4564In 1980, yet another IRS Commissioner, Jerome Kurtz (their turnover is
4565high) issued a similar statement in their Internal Revenue Annual Report:
4566The IRS's primary task is to collect taxes under a voluntary compliance
4567system.
4568[emphasis added]
4569Even the Supreme Court of the United States has held that the system of
4570federal income taxation is voluntary:
4571Our tax system is based upon voluntary assessment and payment, not upon
4572distraint.
4573[Flora v. United States, 362 U.S. 145]
4574[emphasis added]
4575The dictionary defines "distraint" to mean the act or action of distraining,
4576that is, seizing by distress, levying a distress, or taking property by
4577force.
4578IRS Publication 21 is widely distributed to high schools. It
4579acknowledges that compliance with a law that requires the filing of returns
4580is voluntary. (Get to those young minds early, and it's easier to wash their
4581brains later on in life.) At the same time, it suggests that the filing of a
4582return is mandatory, as follows:
4583Two aspects of the Federal income tax system -- voluntary compliance
4584with the law and self-assessment of tax -- make it important for you to
4585understand your rights and responsibilities as a taxpayer. "Voluntary
4586compliance" places on the taxpayer the responsibility for filing an
4587income tax return. You must decide whether the law requires you to
4588file a return. If it does, you must file your return by the date it is
4589due.
4590[emphasis added]
4591Perhaps one of the most famous quotes on this question came from Roger
4592M. Olsen, Assistant Attorney General, Tax Division, Department of Justice,
4593Washington, D.C. On Saturday, May 9, 1987, author, colleague and
4594constitutional authority Godfrey Lehman was in the audience when Olsen told
4595an assemblage of tax lawyers:
4596We encourage voluntary compliance by scaring the heck out of you!
4597[emphasis added]
4598This was a remarkable admission by an Assistant Attorney General in the
4599Justice Department, or the "Just Us" department, as they have come to be
4600known in certain circles of the well informed.
4601What gives? Are there any bases in law for concluding that federal
4602income taxes are truly voluntary, in the everyday garden variety of the term?
4603Yes, there are several. Some of these reasons may be "old hat" to those of
4604you who are in these certain circles. Other reasons may come as a total
4605shock, particularly because the federal government has been guilty of
4606systematic fraud against the American people. Let us begin with this fraud.
4607Is It Voluntary?
4608Page 8 - 3 of 14
4609Reach into your wallet and pull out a dollar bill. Already, you have a
4610big problem in your hands. Read what it says on the front of your dollar
4611bill. It says "Federal Reserve Note". First of all, the Federal Reserve is
4612not "federal". It is no more federal than Federal Express, or Federated
4613Hardware Stores. For detailed proof, see Lewis v. United States, 680 F.2d
46141239 (9th Circuit, 1982). There is no government copyright or trademark on
4615using the word "federal".
4616Secondly, there is no "reserve". Federal Reserve banks are privileged
4617to loan money they don't have. This is called "fractional reserve" banking.
4618Thirdly, Federal Reserve Notes are not real promissory notes, because
4619they do not promise to pay anything, like gold, or silver, or something else
4620with real substance.
4621The Federal Reserve system was conceived by a conspiracy of bankers and
4622politicians who met secretly off the coast of Georgia to create the Federal
4623Reserve Act. This Act of Congress was designed to remove the Constitution as
4624a constraint on the financial operations of the U.S. government. It created
4625a private credit monopoly which Congressman Louis T. McFadden once called
4626"one of the most corrupt institutions the world has ever known". Congressman
4627McFadden was Chairman of the House Banking and Currency Committee from 1920
4628to 1933.
4629The operations of the Federal Reserve are complicated and secretive.
4630For example, this huge syndicate of private banks has never been publicly
4631audited. We will do our best to simplify its operations for you. The
4632Federal Reserve was set up to encourage Congress to spend money it doesn't
4633have -- lots of it. Rather than honestly taxing Americans for all the money
4634it wants to spend, Congress runs up a huge deficit which it covers by
4635printing ink on paper and calling them bonds, or Treasury Bills ("T-Bills").
4636Some of these T-bills are purchased by hard-working Americans like you
4637and me, with money that we obtained from real labor, something that has real
4638value. But the deficits have become so huge, the wage earners do not have
4639enough money to purchase all these bonds every year. So, Congress walks
4640across the street and offers these bonds to the Federal Reserve. The FED
4641says, "Sure, we'll buy those bonds. Your interest rate is 8.25, or 9 and a
4642half. Take it or leave it." Congress always takes it, because there's
4643nobody else with that kind of money. Remember, the Federal Reserve is a
4644private credit monopoly.
4645Now, what does the FED use to purchase those bonds? They create money
4646out of thin air, using bookkeeping entries to manufacture credit out of
4647nothing. They used to do it with pen and ink, then typewriters, and now
4648computers do the job. This artificial money would normally create very rapid
4649inflation. This happened in Germany just prior to World War II, when Louis
4650McFadden was a Congressman. It eventually took a wheel barrow full of
4651Deutsche marks just to buy one loaf of bread. Imagine that, if you can!
4652The bankers realized that a mechanism was needed to withdraw this
4653artificial money out of circulation as quickly as it was put into
4654circulation. Enter the Internal Revenue Service. The IRS is really a
4655collection agency for the Federal Reserve. The FED pumps money into the
4656The Federal Zone:
4657Page 8 - 4 of 14
4658economy, and the IRS sucks it out of the economy, like two pumps working in
4659tandem. This has the effect of artificially maintaining the purchasing power
4660of this "fiat money", as it is called by monetary experts.
4661This is one of the primary purposes of the income tax. We know this to
4662be true, because a man named Beardsley Ruml explained it clearly in an essay
4663he published in the magazine American Affairs in January of 1946. Beardsley
4664Ruml was Chairman of the Federal Reserve Bank of New York, so he was in a
4665position to know. The shocking fact is that federal income taxes do not pay
4666for any government services; they are used to make interest payments on the
4667federal debt. For proof, read the Grace Commission report. These interest
4668payments are now approaching 40 percent of the annual federal budget.
4669The Federal Reserve Act is unconstitutional for many reasons, foremost
4670among which is that Congress delegated to a private municipal corporation a
4671power which Congress never had, that is, to counterfeit money. It is
4672unlawful for Congress to exercise a power which is not authorized to it by
4673the Constitution. The people, you and I, and the 50 States reserve all
4674powers not expressly delegated to the federal government.
4675Congress got hooked on this sweetheart deal and started spending money
4676so fast, it quickly bankrupted the federal government. This may also come as
4677a shock to many of you. And you might feel that what I am about to say is
4678paranoid or crazy. We felt this way too when we first discovered it. We
4679couldn't believe it. So we investigated. Our research discovered that the
4680bankers foreclosed the United States Treasury no later than the year 1933.
4681They called the loans and confiscated all the gold then being held by the
4682U.S. Treasury.
4683An Act of Congress caused all that gold to be transferred to the
4684Federal Reserve Banks. Remember, those are private banks, and the Treasury
4685Department is not the U.S. Treasury Department. If you need proof, try
4686enclosing a check payable to the "U.S. Department of the Treasury" with your
4687next tax return. Notice also that IRS stationery says "Department of the
4688Treasury" and not the "U.S. Department of the Treasury". This is mail fraud.
4689To secure the rest of their debt, Congress then liened, in effect, on
4690the future property and earnings of all the American people, through Social
4691Security taxes, payroll withholding taxes, inheritance taxes, and the like.
4692Congress mortgaged the American people, using our labor and our property as
4693collateral.
4694What Congress did was analogous to this: I walk into a large
4695department store and see a new toaster I want. I tell the sales person to
4696ship it to my home tomorrow, and to send the bill to Willie Brown. Now, when
4697Willie Brown gets the bill for this toaster, he's going to be pretty mad, and
4698rightly so. He didn't order the toaster; he doesn't own the toaster; he
4699wasn't a party to the toaster transaction. In fact, he didn't even know
4700about it. And yet, I am holding him responsible to pay for the toaster. In
4701this example, I am Congress; the department store is the Federal Reserve;
4702and Willie Brown represents the American People (some of the time).
4703Is It Voluntary?
4704Page 8 - 5 of 14
4705This is fraud, because Congress did not openly and freely disclose the
4706real reasons for its actions. Lack of full disclosure is grounds for fraud
4707in any contract. The Uniform Commercial Code says so. And yet, all
4708Americans are being unlawfully enslaved by this fraud, to help discharge the
4709debt which Congress has tried to impose upon all of us. (Rumor has it that
4710the New York banking establishment refers to our money as Federal Reserve
4711Accounting Unit Devices, F-R-A-U-D. Film at 11.)
4712Your "income" is private property. Absent an apportioned direct tax,
4713or some commercial agreement to the contrary, the federal government is not
4714empowered to obtain a controlling interest in, or otherwise lien on private
4715property so as to compel a private Citizen's specific performance to any
4716third-party debt or obligation.
4717Moreover, it is a well established principle in law that government
4718cannot tax a Sovereign State Citizen for freely exercising a right guaranteed
4719by the U.S. Constitution. The acquisition and exchange of private property
4720is such a right. The pursuit of common-law occupations is another such
4721right.
4722Now, if you want to "volunteer" to help reduce the national debt, you
4723may, and Congress will of course accept your "gift" without question. You
4724have the right to volunteer yourself as a third-party to the outstanding
4725principal debt which Congress has amassed. As a "principal" in your own
4726right, you have the right to obligate yourself as a "performance unit" on the
4727national debt (unlike so many Americans whose birth certificates have ended
4728up, without their knowledge, in the hands of the International Monetary Fund
4729in Brussels, Belgium. See Appendix T if you decide to revoke your birth
4730certificate.) Thus obligated, you will have turned yourself into someone who
4731is subject to all the rules and regulations which have been established by
4732the Secretary of the Treasury to discharge the massive federal debt. But, as
4733long as you remain a Sovereign State Citizen, who is neither a resident nor a
4734citizen of the United States**, and as long as you do not derive income from
4735sources inside the United States** or from a U.S.** trade or business, you
4736are completely outside the jurisdiction of the federal zone. The federal
4737debt is not your burden to carry.
4738You cannot be compelled, at law, to perform under any third-party debt
4739or obligation. If you are ever so compelled, it is extortion, or "taxtortion"
4740as Godfrey Lehman calls it. You are not only the victim of
4741extortion. You are also the victim of an extortion racket and massive fiscal
4742fraud which Congress and other officials of the federal government have
4743perpetrated upon Sovereign State Citizens at least since 1913, the year the
4744Federal Reserve Act was passed into law, and also the year the so-called 16th
4745Amendment was simply "declared" into law: two pumps, working in tandem, one
4746pumping money and credit into the economy, the other sucking it out of the
4747economy. The Rothschild-Hamilton money and banking system, as it is called,
4748is older than everyone alive. Now you know why the IRS sucks!
4749The constitutional experts and experienced staff at the National
4750Commodity and Barter Association in Denver, Colorado, have done a fine job of
4751summarizing "voluntary compliance" in one of their aging flyers that is still
4752circulating:
4753The Federal Zone:
4754Page 8 - 6 of 14
4755The term "voluntary compliance" appears to be contradictory, but
4756careful analysis shows the words to be accurate and appropriate. An
4757act is voluntary when one does it of his own free will, not because he
4758is forced by law to do it. If a law applies to an individual, his
4759compliance with the law is mandatory, not voluntary. However,
4760individuals engaged in occupations of common right are not subject to
4761the income (excise) tax. For them, compliance with the law is
4762voluntary, not mandatory, because the law does not apply to them.
4763[brochure entitled Must You Pay Income Tax?]
4764So, now you know at least some of the many reasons why federal
4765officials admit that income taxes are voluntary. It's a deception, because
4766they will admit that it's voluntary, but they won't tell you why. Quite
4767possibly, they don't even know why because they, too, have been deceived.
4768When the U.S. Treasury's gold was transferred into the vaults of the Federal
4769Reserve banks, lots of people were deceived into believing that Uncle Sam was
4770simply moving that gold out of his right hand and into his left hand. Many
4771of those deceived were Uncle Sam's employees. Only an elite few really knew
4772that the Federal Reserve was established as a private corporation, a Class A
4773common stock corporation, to be exact.
4774Are there any other reasons, like this, why federal income taxes are
4775voluntary? Yes. In previous chapters, the concepts of "U.S.** resident",
4776"nonresident", "U.S.** citizen", and "alien" were explored in some detail.
4777Nonresident aliens with respect to the federal zone are required to pay taxes
4778only on income derived from sources within that zone. Those sources may be a
4779"U.S.**" trade or business, "U.S.**" corporations which sell stocks and bonds
4780and pay dividends, or employment with the federal government.
4781Doing business with the federal zone is your option; it's voluntary.
4782Nobody is compelling you to buy stock from a domestic "U.S.**" corporation.
4783Nobody is compelling you to derive income from a "U.S.**" trade or business.
4784Nobody is compelling you to work for the federal government. But, if you
4785choose to do so, then you will be held liable for federal taxes on the
4786"privilege" of deriving income from these sources, because these sources are
4787situated inside a zone over which the Congress has exclusive legislative
4788jurisdiction. That is, Congress can do pretty much whatever it wants inside
4789that zone. If you don't like the tax rates, then don't choose a U.S.** trade
4790or business. If you don't want to reside inside their zone, then move
4791somewhere else. If you don't want to be one of their "citizens", then
4792expatriate. Remember, involuntary servitude is forbidden everywhere in this
4793land, even within the federal zone. It's relatively simple, when the
4794boundaries and authorities of the federal zone are taken into full account,
4795the Account for Better Citizenship.
4796When we say that Congress can do pretty much whatever it wants inside
4797the federal zone, we mean to say that Congress is free to create a system of
4798democratic socialism within that zone (see Appendix W). Outside the federal
4799zone, Congress is bound by the chains of the Constitution to guarantee a
4800Republic to the 50 States. Social Security is perhaps the most glaring
4801example of a "voluntary" system offered by the democratic socialists who
4802actually write the laws. These socialists then pay the "law makers" to vote
4803for the laws, even though the real "makers" are not the ones who do the
4804Is It Voluntary?
4805Page 8 - 7 of 14
4806actual voting. (If you want to have some fun, ask your representatives in
4807the House or Senate if they've ever read the IRC, and if so, how much of it
4808they have read and understood.) The actual scope of Social Security is
4809limited to the federal zone, except for those outside the zone who wish to
4810partake of its "benefits" knowingly, intentionally, and voluntarily. Ralph
4811F. Whittington nails it down as follows:
4812Do you now understand that the Social Security Act was written
4813under the authority of Article 1, Section 8, Clause 17, and Article 4,
4814Section 3, Clause 2, of the Constitution, exclusive authority given to
4815the Congress by "WE THE PEOPLE"???
4816The "USE" of a Social Security Account Number is evidence of the
4817following:
48181. You are a card carrying and practicing member of National
4819Socialism.
48202. You have voluntarily derogated your "Sovereignty", and make
4821public and notorious declaration that you prefer to have the
4822protection of Congress, and prefer to be a "Subject" under the
4823"Exclusive Powers" of Congress and the Bureaucrats that have been
4824assigned certain duties by Congress.
48253. You make a public and notorious declaration that you are a
4826"Taxpayer", and will follow the rules as laid down in the United
4827States Code Title 26 (Tax Code), and the various other Laws which
4828are written for enforcement upon the "Subjects of Congress".
48294. The use of your Social Security Account Number is evidence of
4830your FRANCHISE with the Federal Government, a Franchise that
4831provides you with Privileges and Advantages, protected by the
4832Federal Government.
48335. Makes you, voluntarily, a "United States** Person" (per
4834definition). See 26 U.S.C., Sec. 7701(a)(30).
48356. You have rejected the protections of the Constitution for a dole,
4836and prefer to be judged in the "King's Court" if you violate any
4837of his rules.
4838[The Omnibus, pages 73-74]
4839[emphasis in original]
4840Thus, if you are participating knowingly, intentionally, and
4841voluntarily in the "Franchise" called "Social Security", then your
4842participation is evidence that you have volunteered to classify yourself as a
4843"taxpayer", as that term is defined in the Internal Revenue Code. Under the
4844"Law of Presumption", your use of a Social Security Number can be seen by the
4845federal government as prima facie evidence that you have opted to obtain
4846benefits from the federal zone. If you are not participating knowingly,
4847intentionally, and voluntarily, then the government's presumption can be
4848rebutted. Aside from creating money via fractional counterfeits, how else do
4849you think the feds obtain the money which they pay to "benefit" recipients?
4850Contrary to federal propaganda, there still is no free lunch.
4851The Federal Zone:
4852Page 8 - 8 of 14
4853Remember, there is no "reserve", not in the Federal Reserve, and
4854certainly not in Social Security. As the famous "baby boom" advances in age,
4855this generational cohort is acting like a "pig in a python" to devastate the
4856fiscal integrity of the entire Social Security system. Perhaps you thought
4857that Social Security was really an insurance fund, like an annuity. That's
4858another grand deception (and fraud), the details of which are also beyond the
4859scope of this chapter. Funds have not been "set aside" for you. Social
4860Security is a TAX, and it says so in the law. It's a tax with a bear trap
4861hidden in the bushes. That bear trap converts you from a Sovereign into a
4862subject. Now that you know, you may want to consider changing your status,
4863while you still can. At the very least, continue to educate yourself about
4864this.
4865There is yet another reason why federal income taxes are voluntary.
4866The Internal Revenue Code says that nonresident aliens may "elect" to be
4867treated as "residents". Think back to The Matrix. If you are a nonresident
4868alien, you are in row 2, column 2. Now, think of it as a game of checkers,
4869on a board with only four squares. It's your move. If you volunteer to move
4870from the square at row 2/column 2 to any other square, you will thereby incur
4871a tax liability. According to Publication 519, an alien may be both a
4872resident alien and a nonresident alien during the same tax year:
4873This usually occurs for the year you arrive in or depart from the
4874United States**.
4875[Publication 519, U.S. Tax Guide for Aliens, page 3]
4876Such an alien is called a "dual status" alien.
4877A nonresident alien can also "elect" or volunteer to be treated as a
4878resident alien. Our reading of the law and the related publications leads us
4879to conclude that this "election" is available only to a nonresident alien who
4880is married, but we are open to persuasion on this point. Specifically, the
4881IRC has this to say about "elections":
4882Election to Treat Nonresident Alien Individual as Resident of the
4883United States**. --
4884(1) In General. -- A nonresident alien individual with respect to
4885whom this subsection is in effect for the taxable year shall be
4886treated as a resident of the United States** --
4887(A) for purposes of chapters 1 and 5 for all of such taxable
4888year, and
4889(B) for purposes of chapter 24 (relating to wage withholding)
4890for payments of wages made during such taxable year.
4891[continued next page]
4892Is It Voluntary?
4893Page 8 - 9 of 14
4894(2) Individuals with Respect to Whom This Subsection is in Effect. –
4895This subsection shall be in effect with respect to any individual
4896who, at the close of the taxable year for which an election under
4897this subsection was made, was a nonresident alien individual
4898married to a citizen or resident of the United States**, if both
4899of them made such election to have the benefits of this
4900subsection apply to them.
4901[IRC 6013(g), emphasis added]
4902The Instructions for IRS Form 1040NR, U.S. Nonresident Alien Income Tax
4903Return, shed more light on these "election returns":
4904Election to be Taxed as a Resident Alien
4905Under some circumstances you can elect to be taxed as a U.S.** resident
4906for the whole year. You can make this election if either of the
4907following applies to you:
4908- You were a nonresident alien on the last day of the tax year, and
4909your spouse was a U.S.** citizen or resident alien on the last
4910day of the tax year.
4911- You were a nonresident alien at the beginning of the tax year,
4912but you were a resident alien on the last day of the tax year and
4913your spouse was a U.S.** citizen or resident alien on the last
4914day of the tax year. (This also applies if both you and your
4915spouse were nonresident aliens at the beginning of the tax year
4916and both were resident aliens at the end of the tax year.)
4917If you elect in 1990 to be taxed as a U.S.** resident, you and your
4918spouse must file a joint return on Form 1040 or 1040A for 1990. Your
4919worldwide income for the whole year will be taxed under U.S.** tax
4920laws. You must agree to keep the records, books, and other information
4921needed to figure the tax. If you made the election in an earlier year,
4922you may file a joint return or separate return on Form 1040 or 1040A
4923for 1990. Your worldwide income for the whole year must be included
4924whether you file a joint or separate return.
4925[Instructions for Form 1040NR, page 2]
4926[emphasis added]
4927If nonresident aliens "elect" to be treated as "resident" aliens, they
4928are thereby required to file IRS Form 1040 or 1040A instead of Form 1040NR.
4929Filing Form 1040 or 1040A can be taken by the government as prima facie
4930evidence that you want to be treated as a "resident". This, in turn, allows
4931the government to presume that you have volunteered to be treated as a
4932"taxpayer", that is, one who is entitled to the "benefits", and subject to
4933the liabilities, of the federal zone's legislative democracy. The chain of
4934cause and effect is clarified considerably by couching the discussion in
4935terms of The Matrix: four-square checkers (like candidate Richard M. Nixon's
4936famous pet dog). Author and scholar Lori Jacques has summarized it
4937succinctly as follows:
4938The Federal Zone:
4939Page 8 - 10 of 14
4940IR Code Sec. 6013(g) grants an election to treat nonresident alien
4941spouse as resident of the United States**. If the nonresident alien
4942individual makes this election by filing a 1040 form, then returns must
4943be filed for the current year and all subsequent years until the
4944election is terminated.
4945[United States Citizen v. National of the United States]
4946[page 40, emphasis added]
4947Again, an "election" can be terminated voluntarily. This termination
4948is described in the IRC as follows:
4949Termination of Election. -- An election under this subsection shall
4950terminate at the earliest of the following times:
4951(A) Revocation by Taxpayers. -- If either taxpayer revokes the
4952election, as of the first taxable year for which the last day
4953prescribed by law for filing the return of tax under chapter 1
4954has not yet occurred.
4955[IRC 6013(g)(4)]
4956We have not taken the time to determine if there are similar provisions
4957in the IRC and its regulations for unmarried nonresident aliens. (Remember,
4958the Code has 2,000 pages and the regulations have 10,000 pages.) Author Lori
4959Jacques has taken note of the CFR provisions for terminating "voluntary"
4960withholding, which may be effective in this case. An affidavit is attached
4961to an individual's Form W-4, specifying the name, address and Social Security
4962Number of the employee making the request, the name and address of the
4963employer, and a statement that the employee desires to terminate withholding
4964of federal income tax and desires that the agreement terminate on a specific
4965date. The report by Lori Jacques goes on to explain:
4966This arrangement can be found in 2 USC 60 for the Congress. Possibly
4967the same format could be used, thereby revoking a presumed election to
4968be treated as "resident of the United States**."
4969For the nonresident alien's exemption from withholding and taxation to
4970apply, a statement is to be made stating the kind of exclusion claim.
4971(1) No income from United States** source
4972(2) No income from effectively connected United States** source
4973(3) No income from a trade or business conducted within the United
4974States**
4975(4) Income excluded under "fundamental law"
4976[United States Citizen v. National of the United States]
4977[page 40, emphasis added]
4978A close examination of the CFR regulations for terminating voluntary
4979withholding reveals a trap, however. A number of natural born Sovereign
4980State Citizens have been misled by well intended but ignorant Patriots who
4981thought they had found in those regulations a method to stop paycheck
4982withholding, without any adverse consequences. This method is the infamous
4983section "1441" of the CFR:
4984Is It Voluntary?
4985Page 8 - 11 of 14
49861.1441-5 Claiming to be a person not subject to withholding.
4987(a) Individuals. For purposes of chapter 3 of the Code, an
4988individual's written statement that he or she is a citizen or
4989resident of the United States** may be relied upon by the payer
4990of the income as proof that such individual is a citizen or
4991resident of the United States**.
4992[26 CFR 1.1441-5, emphasis added]
4993In a now famous circular entitled "We Will Pay $10,000 If You Can Prove
4994the Following Statements of Fact To Be False!", the Save-A-Patriot Fellowship
4995included the following "fact":
4996FACT #23: The implementation of IRS Treasury Regulation 1.1441-5 is
4997explained in Publication 515 on page 2: If an individual gives you
4998[the domestic employer or withholding agent] a written statement, in
4999duplicate, stating that he or she is a citizen or resident of the
5000United States, and you do not know otherwise, you may accept this
5001statement and are relieved from the duty of withholding the tax.
5002IRS Publication 515 is entitled Withholding of Tax on Nonresident
5003Aliens and Foreign Corporations, and the Save-A-Patriot quotation is
5004accurate. However, by referring to The Matrix in chapter 3 of this book (and
5005on the original cover), it should now be obvious why such a statement is
5006precisely the wrong thing to do. Nonresident aliens thereby declare
5007themselves to be either citizens of the United States** or residents of the
5008United States**, voluntarily rendering themselves liable for federal income
5009taxes. To underscore why section 1441 is a trap, a Sovereign California
5010Citizen received the following in a letter from the Employment Development
5011Department of the State of California after filing a 1441 statement:
5012Your statement submitted in compliance with Title 26, Code of Federal
5013Regulations, Section 1.1441-5, specifically Section 1.1441-5(c) is also
5014noted. Your declaration, received without a date, has been logged and
5015filed into EDD records.
5016[Employment Development Department]
5017[private communication]
5018[emphasis added]
5019Author Lori Jacques summarizes the "1441" statement with surgical
5020accuracy:
5021... [I]t seems rather incomprehensible to file a statement claiming to
5022be a U.S.** citizen (if one is not) making oneself obligated for a tax
5023on income from whatever source -- within and without the United
5024States**. Although one may be exempt from the 30% withholding under
5025this provision, employers do not withhold a flat 30% rate anyway. Some
5026day that declaration of U.S.** citizenship will surely come back to
5027haunt its declarant when the IRS wants the returns and payment of a
5028graduated tax for all of that undeclared income.
5029[A Ticket to Liberty, November 1990 edition, page 45]
5030[emphasis added]
5031The Federal Zone:
5032Page 8 - 12 of 14
5033There is a much better method for nonresident aliens to stop
5034withholding. It is called a "Certificate of Exemption from Withholding in
5035Lieu of W-4". This certificate is authorized by section 3402(n) of the IRC
5036(see Appendix X). Details for completing and serving this certificate can
5037also be obtained from Doc Scott's great book entitled Free at Last -- From
5038the IRS, listed in the Bibliography (see Appendix N). Be careful to avoid
5039explicitly declaring yourself as an "employee", however, since this term has
5040a specific meaning in that chapter of the IRC (see the definition of
5041"employee" at IRC 3401(c)). Your certificate is made so as to be "consistent
5042with", or in pari materia with, section 3402(n).
5043Alternatively, IRS Form 8233 can be used as an alternative to a
5044CERTIFICATE OF EXEMPTION FROM WITHHOLDING IN LIEU OF W-4. The following is
5045the abstract describing Form 8233 in the IRS Printed Product Catalog,
5046Document 7130:
50478233 62292K (Each)
5048Exemption from Withholding of Compensation for Personal Services
5049Used by non resident alien individuals to claim exemption from
5050withholding on compensation for personal services because of an income
5051tax treaty or the personal exemption amount. D:R:FP:F Tax Related
5052Public Use
5053[IRS Printed Product Catalog]
5054[Document 7130, Rev. 6-89, p. 66]
5055Summary
5056It is really exciting to discover that federal income taxes are indeed
5057voluntary for nonresident aliens who derive no income from sources inside the
5058federal zone. It is equally exciting to discover that aliens who have
5059"elected" to be "resident aliens" may also terminate that election.
5060(Terminating an election is something that most of us would never even think
5061of doing! Let's all work and pray to ensure it never happens in this
5062country.)
5063Lastly, is it imperative to understand that the filing of prior 1040
5064forms can be taken as evidence that a nonresident alien has elected to be a
5065resident alien, for purposes of federal tax law. The federal government is
5066thereby entitled to presume that you are either required to file, or that you
5067have elected to be treated as one who is required to file, if and when your
5068signed 1040 or 1040A form arrives in a pouch of mail destined for an IRS
5069Service Center. The Law of Presumption is so important, the next chapter
5070will be dedicated to this one subject. Even the perjury oath under which you
5071sign your name on IRS tax forms is a subtle indicator of your status vis-avis
5072the federal zone. For proof, see Appendix R for the relevant statute
5073from Title 28 of the United States Code.
5074# # #
5075Is It Voluntary?
5076Page 8 - 13 of 14
5077Reader’s Notes:
5078The Federal Zone:
5079Page 8 - 14 of 14
5080Reader’s Notes:
5081Page 9 - 1 of 10
5082Chapter 9:
5083The Law of Presumption
5084A nonresident alien who has filed one or more Forms 1040 in the past is
5085presumed by the IRS to be an individual who was required to file those forms.
5086The filed forms entitle the IRS to presume that this individual either was
5087required to file, or elected to be treated as one who is required to file.
5088Such a requirement would be triggered by changing to resident status,
5089changing to citizen status, and/or opting to derive income from a source
5090inside the federal zone (like federal employment). Accordingly, the IRS is
5091entitled to presume that this nonresident alien has "volunteered" to become a
5092"taxpayer", that is, a person who is subject to any internal revenue tax.
5093Quite apart from the day-to-day assumptions we all make about life in
5094general, the term "presumption" has a very special meaning in law. A
5095presumption in law is a logical inference which is made in favor of a
5096particular fact. The Uniform Commercial Code ("UCC") defines "presumption"
5097and "presumed" as follows:
5098"Presumption" or "presumed" means that the trier of fact must find the
5099existence of the fact presumed unless and until evidence is introduced
5100which would support a finding of its nonexistence.
5101[UCC 1-201 (31)]
5102Black's Law Dictionary, Sixth Edition, defines "presumption" as follows:
5103A presumption is a rule of law, statutory or judicial, by which finding
5104of a basic fact gives rise to existence of presumed fact, until
5105presumption is rebutted. ... A legal device which operates in the
5106absence of other proof to require that certain inferences be drawn from
5107the available evidence.
5108There are, in law, two different and directly opposite kinds of
5109presumptions: a conclusive presumption and a rebuttable presumption. A
5110conclusive presumption is one for which proof is available to render some
5111fact so "conclusive", it cannot be rebutted. To "rebut" a fact is to expose
5112it as false, to disprove it. Thus, a "rebuttable fact" is one which can be
5113disproven and exposed as false. In other words, a rebuttable fact is a
5114lawyer's way of describing a fact that is not a fact. (1984 was a long time
5115ago; the book 1984 is even older than that.)
5116The opposite kind of presumption is a rebuttable presumption. A
5117rebuttable presumption is a one that can be overturned or disproven by
5118showing sufficient proof. We are interested primarily in this second type of
5119presumptions -- rebuttable presumptions -- because the Code of Federal
5120Regulations makes explicit certain presumptions about nonresident aliens.
5121The regulations have this to say about the proof of alien residence:
5122The Federal Zone:
5123Page 9 - 2 of 10
5124Proof of residence of aliens.
5125(a) Rules of evidence. The following rules of evidence shall govern
5126in determining whether or not an alien within the United States**
5127has acquired residence therein for purposes of the income tax.
5128(b) Nonresidence presumed. An alien by reason of his alienage, is
5129presumed to be a nonresident alien.
5130[26 CFR 1.871-4, emphasis added]
5131The regulations are very clear about a key presumption which the IRS
5132does make about aliens. Because of their "alienage", that is, because of
5133their status as aliens in the first place, all aliens are presumed by
5134Treasury regulations to be nonresident aliens. This presumption is built
5135into the law, because the Code of Federal Regulations is considered to have
5136the force of law.
5137(The CFR is judicially noticed, and courts have ruled that the CFR is a
5138supplement to the published Federal Register, which puts the general public
5139on actual notice too.)
5140This presumption is not a conclusive presumption, however; it is a
5141rebuttable presumption. The regulations establish the rules by which this
5142presumption can be rebutted or disproven, as follows:
5143Other aliens. In the case of other [not departing] aliens, the
5144presumption as to the alien's nonresidence may be overcome by proof --
5145(i) That the alien has filed a declaration of his intention to become
5146a citizen of the United States** under the naturalization laws;
5147or
5148(ii) That the alien has filed Form 1078 or its equivalent; or
5149(iii) Of acts and statements of the alien showing a definite intention
5150to acquire residence in the United States** or showing that his
5151stay in the United States** has been of such an extended nature
5152as to constitute him a resident.
5153[26 CFR 1.871-4]
5154Filing a declaration of intent to become a U.S.** citizen will "rebut
5155the presumption". Acts or statements by aliens showing a definite intent to
5156acquire residence will also "rebut the presumption".
5157Form 1078 is a Certificate of Alien Claiming Residence in the United
5158States**. The IRS Printed Product Catalog, Document 7130, describes this
5159form as follows:
5160The Law of Presumption
5161Page 9 - 3 of 10
51621078 171951 (Each)
5163Certificate of Alien Claiming Residence in the United States
5164Who May File. A resident alien may file the original and one copy of
5165this certificate with the withholding agent to claim the benefit of
5166U.S.** residence for income tax purposes. (A withholding agent is
5167responsible for withholding tax from your income.) D:RF:F Tax Form or
5168Instruction
5169[page 10, emphasis added]
5170Notice, in particular, the explicit reference to "the benefit of U.S.**
5171residence for income tax purposes". What are the benefits of U.S.**
5172residence for income tax purposes? Recall, from the previous chapter, the
5173"benefits" of being under the protection of Congress and thereby subject to
5174its exclusive jurisdiction. The actual scope of Social Security, for
5175example, is limited to the federal zone, except for those outside the zone
5176who wish to partake of its "benefits" voluntarily. Under the law of
5177presumption, your use of a Social Security Number can be seen by the federal
5178government as proof that you have opted to obtain benefits from the federal
5179zone. Form 1078 is likewise ready-made for those who begin as nonresident
5180aliens, but later opt to declare themselves "resident" in the United States**
5181in order to claim the benefit of that "residence". Simply stated, Form 1078
5182declares a nonresident alien to be a "resident" for income tax purposes. It
5183moves nonresident aliens out of the square at row 2/column 2 in The Matrix,
5184and into the square at row 1/column 2.
5185There are other ways by which the presumed nonresidence of aliens can
5186be rebutted, or disproven, thereby moving their four-square checkers into a
5187square that is within the federal zone. The regulations make reference to
5188Form 1078 or its equivalent. (Try to find a definition of the term
5189"equivalent" in the statute or its regulations.) If nonresident aliens sign
5190a Form W-4, for example, they are presumed to be government employees with
5191income from a source inside the federal zone. Employers are to treat all
5192employees as "residents" and to withhold pay as if the employers have not
5193been instructed otherwise.
5194Notice how the presumption has shifted. Contrary to the regulations at
519526 CFR 1.871-4 (quoted above), employers are told by the IRS to make the
5196opposite "presumption" about the residence of their employees, even if they
5197are not true "employees" as that term is defined in the IRC. If individuals
5198have W-4 and W-2 forms, the presumption is that they were either required to
5199sign these forms, or they have made elections to be treated as residents.
5200Recall that the instructions for Form 1040NR describe the "election to be
5201taxed as a resident alien". This is accomplished by filing an income tax
5202return on Form 1040 or 1040A, and attaching a statement confirming the
5203"election".
5204An extremely subtle indicator of one's status is the perjury oath which
5205is found on IRS forms. Under Title 28 of the U.S. Code, Section 1746, there
5206are two different perjury oaths to which penalties attach: one within the
5207United States**, and one without the United States** (see Appendix R for the
5208precise wording of 28 U.S.C. 1746). If an oath is executed without the
5209United States**, it reads as follows:
5210The Federal Zone:
5211Page 9 - 4 of 10
5212I declare ... under the laws of the United States of America that the
5213foregoing is true and correct.
5214[emphasis added]
5215If an oath is executed within the United States**, it reads as follows:
5216I declare ... that the foregoing is true and correct.
5217Thus, your signature under the latter oath can be presumed to mean that you
5218are already subject to the jurisdiction of the United States**. This latter
5219oath is the one found on IRS Form 1040.
5220Federal courts now appear to be proceeding on the basis of the
5221presumption that we are all "citizens of the United States**" because the
5222courts have shifted onto defendants the burden of proving that they are not
5223"citizens of the United States**". Despite the obvious logical problem that
5224arises from trying to prove a negative, the United States District Court in
5225Delaware ruled as follows when it granted an IRS petition to enforce a
5226summons:
5227Defendant's protestations to effect that he derived no benefit from
5228United States government had no bearing on his legal obligation to pay
5229income taxes; unless he could establish that he was not a citizen of
5230the United States, IRS possessed authority to attempt to determine his
5231federal tax liability. U.S.C.A. Const. Art. 1, Sec. 8, Cl. 1; Amend.
523216; 26 U.S.C.A. Sec. 1. [!!]
5233[United States v. Slater, 545 F.Supp. 179 (1982)]
5234[emphasis added]
5235It should be clear by now that the IRS may well be making presumptions
5236about your status which are, in fact, not correct. If an original
5237presumption of nonresidence has been rebutted, for example, because a
5238nonresident alien filed one or more 1040 forms in the past, the filed forms
5239do not cast the situation into concrete. The IRS is entitled to formulate a
5240presumption from these filed forms, but this presumption is also rebuttable.
5241If you filed under the mistaken belief that you were required to file, that
5242mistaken belief, in and of itself, does not suddenly turn you into a person
5243who is required to file. Tax liability is not a matter of belief; it is a
5244matter that arises from status and jurisdiction.
5245The best approach is to "clean the slate". In other words, clear the
5246administrative record of any written documents which may have been filed in
5247error, or in the mistaken belief that the filer was required. In Appendix F
5248of this book, there is an Affidavit of Rescission which can be used to clean
5249the slate. This affidavit is not meant to be a document with universal
5250application, because everyone's situation is different. For example, the
5251affidavit makes certain statements about the laws and regulations which have
5252been studied by the individual who signs it. Not everyone has read these
5253same laws and regulations.
5254The affidavit does, however, cover a wide range of factual matters
5255which will serve to educate the reader about the constructive fraud which
5256Congress and other federal officials have perpetrated on the American people.
5257The Law of Presumption
5258Page 9 - 5 of 10
5259Various qualified organizations are now available to assist individuals with
5260the procedure for executing this affidavit, filing it with a County Recorder,
5261and serving it on the appropriate government officials. The State Citizen
5262Service Center in Canoga Park, California Republic, is one such organization.
5263Their mailing location is found in the list of organizations in Appendix M of
5264this book.
5265Now, let's have a little fun with this law of presumption, as it is
5266called. The law works both ways. This means that you can use it to your
5267advantage as well as anyone else can. One of the most surprising and
5268fascinating discoveries made by the freedom movement in America concerns the
5269bank signature card. If you have a checking or savings account at a bank,
5270you may remember being asked by the bank officer to sign your name on several
5271documents when you opened that account. One of these documents was the bank
5272signature card. You may have been told that the bank needed your signature
5273in order to compare it with the signatures that would be found on the checks
5274you write, to detect forgeries. That explanation sounded reasonable, so you
5275signed your name on the card.
5276What the bank officer probably did not tell you was that you signed
5277your name on a contract whereby you agreed to abide by all rules and
5278regulations of the Secretary of the Treasury. You see, bank signature cards
5279typically contain such a clause in the fine print. These rules and
5280regulations include, but are not limited to the IRC (all 2,000 pages of it)
5281and the Code of Federal Regulations for the IRC (all 10,000 pages of it).
5282These rules may also include every last word of the Federal Reserve Act,
5283another gigantic statute. Now, did the bank have all 12,000 pages of the IRC
5284and its regulations on exhibit for you to examine upon request, before you
5285signed the card? Your bank should be willing, at the very least, to identify
5286clearly what rules and regulations adhere to your signature.
5287You are presumed to be a person who knows how to read, and who knows
5288how to read a contract before signing your name to it. Once your signature
5289is on the contract, the federal government is entitled to presume that you
5290knew what you were doing when you signed this contract. Their presumption is
5291that you entered into this contract knowingly, intentionally, and
5292voluntarily. Why? Because your signature is on the contract. That's why.
5293Is this presumption rebuttable? You bet it is. Here's why:
5294Instead of telling you that the bank needed your signature to catch
5295forgeries, imagine that the bank officer described the signature card as
5296follows:
5297Your signature on this card will create a contract relationship
5298between you and the Secretary of the Treasury. This Secretary is not
5299the U.S. Secretary of the Treasury, because the U.S. Treasury
5300Department was bankrupted in the year 1933. The Treasury Department
5301referred to on this card is a private entity which has been set up to
5302enforce private rules and regulations. These rules and regulations
5303have been established to discharge the bankruptcy of the federal
5304government. Your signature on this card will be understood to mean
5305that you are volunteering to subject yourself to a foreign
5306jurisdiction, a municipal corporation known as the District of Columbia
5307and its private offspring, the Federal Reserve system. You accept the
5308The Federal Zone:
5309Page 9 - 6 of 10
5310benefits of limited liability offered to you by this corporation for
5311using their commercial paper, Federal Reserve Notes, to discharge your
5312own debts without the need for gold or silver.
5313By accepting these benefits, you are admitting to the waiver of
5314all rights guaranteed to you by the Constitution for the United States
5315of America, because that Constitution cannot impair any obligations in
5316the contract you will enter by signing this card. Your waiver of these
5317rights will be presumed to be voluntary and as a result of knowingly
5318intelligent acts done with sufficient awareness of the relevant
5319circumstances and likely consequences, as explained by the Supreme
5320Court in the case of Brady v. U.S. With your signature on this card,
5321the Internal Revenue Service, a collection agency for the Federal
5322Reserve system, will be authorized to attach levies against any and all
5323of your account balances in order to satisfy any unpaid liabilities
5324which the IRS determines to exist. You will waive all rights against
5325self-incrimination. You will not be entitled to due process in federal
5326administrative tribunals, where the U.S. Constitution cannot be invoked
5327to protect you. Your home, papers and effects will not be secured
5328against search and seizure. Now, please sign this card.
5329How does the law of presumption help you in this situation? First of
5330all, you presumed that your signature was required, to compare it with the
5331signatures on checks you planned to write. This was a reasonable
5332presumption, because that's what the bank officer told you, but it is also a
5333rebuttable presumption, because of what the fine print says. That fine print
5334can be used to rebut, or disprove, your presumption when push comes to shove
5335in a court of law. The federal government is entitled to presume that you
5336knew what you were doing when you signed this contract. Well, did you? Did
5337the bank officer explain all the terms and conditions attached thereto, as
5338explained above? Did you read all 12,000 pages of law and regulations before
5339deciding to sign this contract? Did you even know they existed? Was your
5340signature on this contract a voluntary, intentional and knowingly intelligent
5341act done with sufficient awareness of all its relevant consequences and
5342likely circumstances? The Supreme Court has stated clearly that:
5343Waivers of Constitutional Rights not only must be voluntary, but must
5344be knowingly intelligent acts done with sufficient awareness of the
5345relevant circumstances and likely consequences.
5346[Brady v. United States, 397 U.S. 742, 748 (1970)]
5347Fortunately, the federal government's presumption about you is also
5348rebuttable. Why? Because the feds are guilty of fraud, among other reasons,
5349by not disclosing the nature of the bankruptcy which they are using to
5350envelope the American people, like an octopus with a suction tentacle in
5351everybody's wallet, adults and children alike. The banks became unwitting
5352parties to this fraud because the Congress has obtained a controlling
5353interest in the banks through the Federal Deposit Insurance Corporation and
5354their traffic in Federal Reserve Notes and other commercial paper issued by
5355the Federal Reserve banks, with the help of their agent, the private Treasury
5356Department. For further details, read "Return to Constitutional Money" by
5357Dr. Edwin Vieira, Jr., in the Supreme Law Library on the Internet.
5358The Law of Presumption
5359Page 9 - 7 of 10
5360Because this fraud can attach to bank accounts without your knowledge
5361or consent, it is generally a good idea to notify your bank(s), in writing,
5362that the IRS cannot inspect any of your bank records unless you have
5363specifically authorized such inspections by executing IRS Form 6014. The IRS
5364Printed Products Catalog describes this form as follows:
53656014 42996R (Each)
5366Authorization -- Access to Third Party Records for Internal Revenue
5367Service Employees
5368Authorization from Taxpayer to third party for IRS employees to examine
5369records. Re-numbered as a 4-digit form from Letter 995(DO) (7/77).
5370Changes suggested per IRM Section 4082.1 to help secure the correct
5371information from the third party. EX:E:D Tax Related Public Use
5372[IRS Printed Product Catalog]
5373[Document 7130, Rev. 6-89, p. 49]
5374Make explicit reference to this Form in a routine letter to your
5375bank(s). Inform the appropriate bank officers that they must have a
5376completed Form 6014 on file, with your authorized signature, before they can
5377legally allow any IRS employees to examine your records. Then state,
5378discretely, that you hereby reserve your fundamental right to withhold your
5379authorized signature from Form 6014, because it might otherwise constitute a
5380waiver of your 4th Amendment Rights, and no agency of government can compel
5381you to waive any of your fundamental Rights such as those explicitly
5382guaranteed by the 4th Amendment in the Constitution for the United States of
5383America. (Banks are chartered by the States in which they do business, and
5384as such they are "agencies" of State government.)
5385For good measure, you might also cite pertinent sections in your State
5386Constitution, particularly where it mandates that the U.S. Constitution is
5387the supreme Law of the Land, as it does in the California Constitution of
53881879. Finally, you may wish to state that Form 6014 is not applicable to you
5389anyway, because you are not a "Taxpayer" as that term is defined by Section
53907701(a)(14) of the Internal Revenue Code. Therefore, the bank is simply not
5391authorized to release information about you to IRS employees, period!
5392Social Security is another example of a fraudulent contract with builtin
5393presumptions. Your signature on the original application for Social
5394Security, the SS-5 Form, is presumed by the federal government to mean that
5395you knew what you were getting into, namely, that you knew it was voluntary,
5396that you knew it wasn't a true insurance program, that you knew it was a tax,
5397that you knew Congress reserved to itself the authority to change the rules
5398at any time, and that you knew it would render you a subject of the Congress
5399because you knowingly, intentionally, and voluntarily chose to accept the
5400"benefits" of this government program.
5401Now ask yourself the 64,000 dollar questions: How could you have known
5402any of these things, if nobody told you? How could you have known, if the
5403real truth was systematically kept from you? How could you have known, if
5404all applicable terms and conditions were not disclosed to you before you
5405joined the program? And how could you have made a capable, adult decision in
5406The Federal Zone:
5407Page 9 - 8 of 10
5408this matter when you signed the form as a minor, or your parents signed it
5409for you? The answers to these questions are all the same: there is just no
5410way. For the record, Black's Sixth Edition defines "fraud" as follows:
5411An intentional perversion of truth for the purpose of inducing another
5412in reliance upon it to part with some valuable thing belonging to him
5413or to surrender a legal right. A false representation of a matter of
5414fact, whether by words or by conduct, by false or misleading
5415allegations, or by concealment of that which should have been
5416disclosed, which deceives and is intended to deceive another so that he
5417shall act upon it to his legal injury.
5418[emphasis added]
5419The case law with respect to fraud is crystal clear:
5420Constructive fraud as well as actual fraud may be the basis of
5421cancellation of an instrument.
5422[El Paso Natural Gas Co. v. Kysar Insurance Co.]
5423[605 Pacific 2d. 240 (1979)]
5424How do you reverse these ominous presumptions which the federal
5425government is entitled to make about the "contract" you signed at your
5426friendly local bank, or the "contract" you signed to apply for Social
5427Security? Spend some time to read carefully the Affidavit found in Appendix
5428F of this book. This Affidavit is normally served on the Secretary of the
5429Treasury. You might also be motivated to obtain and study some of the other
5430books listed in the Bibliography (Appendix N) and/or to join some of the
5431organizations listed in Appendix M. The situation is a serious one, but
5432knowledge can help to set you free. It is better to light a candle than to
5433curse the darkness. And light always drives out darkness; darkness never
5434drives out light.
5435# # #
5436The Law of Presumption
5437Page 9 - 9 of 10
5438Reader's Notes:
5439The Federal Zone:
5440Page 9 - 10 of 10
5441Reader’s Notes:
5442Page 10 - 1 of 14
5443Chapter 10:
5444The Fundamental Law
5445The law of presumption is in the class of laws akin to esoteric
5446technicalities. It is quite possible that we could get along quite well
5447without it. The fundamental law, on the other hand, is just what it says:
5448it is a law that is essential, of central importance. We could not get along
5449without it. It determines the essential structure and function of our
5450society. It serves as an original and generating source. A fundamental
5451right, for example, is one which is innate to all free people. When used as
5452a noun, the term "fundamental" refers to one of the minimum constituents,
5453without which a system would not be what it is. In Latin, it is the sine qua
5454non, without which there is nothing. What, then, is the fundamental law in
5455our country?
5456The fundamental law in America is the Constitution for the United
5457States of America. Black's Law Dictionary, Sixth Edition, contains a
5458definition of "fundamental law" as follows:
5459Fundamental law. The law which determines the constitution of
5460government in a nation or state, and prescribes and regulates the
5461manner of its exercise. The organic law of a nation or state; its
5462constitution.
5463The Constitution is a contract of delegated powers. These powers flow
5464downhill, like water down a mountain stream. The ultimate source of all
5465power is the Creator, who endowed His creations with certain unalienable
5466rights. You and I are His creations, and we receive our power directly from
5467the Creator; there is nothing standing between us and the Creator.
5468We the people, in turn, delegate some of our powers to the States of
5469the Union. We do not relinquish our powers; we delegate them. The 50
5470States exist to defend our rights in ways which are difficult if not
5471impossible for individuals to defend those rights alone.
5472Power from the 50 States continues to flow downhill in the form of a
5473contract to the federal government. The Constitution for the United States
5474of America is a contract of powers delegated to the federal government by the
547550 States, to perform specific enumerated services which are difficult, if
5476not impossible, for individual States to provide for themselves.
5477The fundamental law is, therefore, a "law of agency" whereby the 50
5478States created an agent in the federal government to exercise a limited set
5479of government services on behalf of the 50 States. These States in turn
5480perform a limited set of services for their creators, the People, above whom
5481there is nothing but the Creator.
5482The fundamental law is the foundation of our society. In the United
5483States of America, it is the U.S. Constitution. Through this document, our
5484fundamental rights are secured and protected against infringement by the
5485federal government and by the State governments, because the States are also
5486parties to this contract.
5487The Federal Zone:
5488Page 10 - 2 of 14
5489To paraphrase the Declaration of Independence, we hold these truths to
5490be self-evident: that all of us are created equal; that we are endowed by
5491our Creator with certain unalienable rights; that among these are the rights
5492to life, liberty, and the pursuit of happiness; that to secure these rights,
5493governments are instituted among us, deriving their just power from our
5494consent. These rights are unalienable, fundamental, and inherent.
5495The fundamental law is intimately connected with fundamental rights,
5496because the ultimate purpose of that law is to protect and defend the
5497fundamental rights of Sovereign individuals. The Supreme Court of the United
5498States put it very eloquently when it said:
5499Sovereignty itself is, of course, not subject to law, for it is the
5500author and source of law; but in our system, while sovereign powers
5501are delegated to the agencies of government, sovereignty itself remains
5502with the people, by whom and for whom all government exists and acts.
5503And the law is the definition and limitation of power.
5504[Yick Wo v. Hopkins, 118 U.S. 356, 370 (1886)]
5505[emphasis added]
5506Every Sovereign State Citizen is endowed with certain unalienable
5507rights, for the enjoyment of which no written law or statute is required.
5508"These are fundamental or natural rights, recognized among all free people,"
5509wrote Chancellor Kent in the case of United States v. Morris. The U.S.
5510Supreme Court has repeatedly stated that fundamental rights are natural
5511rights which are inherent in State Citizenship:
5512This position is that the privileges and immunities clause protects all
5513citizens against abridgment by states of rights of national citizenship
5514as distinct from the fundamental or natural rights inherent in state
5515citizenship.
5516[Madden v. Kentucky, 309 U.S. 83 (1940)]
5517[84 L.Ed. 590, at 594; emphasis added]
5518What are the fundamental or natural rights recognized among all free people?
5519Chancellor Kent answered as follows:
5520That the rights to lease land and to accept employment as a laborer for
5521hire are fundamental rights, inherent in every free citizen, is
5522indisputable.
5523[United States v. Morris, 125 F.Rept. 322, 331 (1903)]
5524One of the most precious of fundamental rights is the natural right to
5525enjoy the fruits of our own labor, our own "industry". In the year 1919, the
5526Secretary of the Treasury recognized as "fundamental" the right of Sovereign
5527State Citizens to accept employment as laborers for hire, and to enjoy the
5528fruits of their own labor:
5529The Fundamental Law
5530Page 10 - 3 of 14
5531Gross income excludes the items of income specifically exempt by ...
5532fundamental law free from such tax.
5533[Treasury Decisions under Internal Revenue Laws
5534of the United States, Vol. 21, Article 71]
5535[emphasis added]
5536In the year 1921, the Secretary of the Treasury reiterated this statement
5537concerning the fundamental law:
5538Gross income excludes the items of income specifically exempted by the
5539statute and also certain other kinds of income by statute or
5540fundamental law free from tax.
5541[Treasury Decision 3146, Vol. 23, page 376]
5542[emphasis added]
5543And again in the year 1924, the identical statement was published concerning
5544the fundamental law:
5545Gross income excludes the items of income specifically exempted by the
5546statute and also certain other kinds of income by statute or
5547fundamental law free from tax.
5548[Treasury Decision 3640, Vol. 26, page 769]
5549[emphasis added]
5550The Constitution is, therefore, the fundamental law. Within the 50
5551States where Congress is restrained by the Constitution, "gross income"
5552excludes certain kinds of income which are free from tax under the
5553fundamental law. Labor is personal property. The fruits of labor are
5554personal property. A tax on personal property is a direct tax, or
5555"capitation" tax. Outside the federal zone and inside the 50 States,
5556Congress is restrained from imposing a direct tax on Sovereign State
5557Citizens, unless that tax is apportioned (see 1:9:4 and 1:2:3).
5558Apportionment is a very simple concept. If California has 10 percent
5559of the nation's population, then California's "portion" would be 10 percent
5560of any direct tax levied by Congress (see Appendix Q). Thus, the income from
5561labor is also personal property, which is free from direct taxation by
5562Congress, unless that tax is apportioned among the 50 States of the Union.
5563In the year 1895, the Supreme Court overturned an Act of Congress precisely
5564because it levied a direct tax without apportionment on a State Citizen:
5565First. We adhere to the opinion already announced, that, taxes
5566on real estate being indisputably direct taxes, taxes on the rents or
5567income of real estate are equally direct taxes.
5568Second. We are of the opinion that taxes on personal property,
5569or on the income of personal property, are likewise direct taxes.
5570The Federal Zone:
5571Page 10 - 4 of 14
5572Third. The tax imposed by sections twenty-seven to thirty-seven,
5573inclusive, of the act of 1894, so far as it falls on the income of real
5574estate and of personal property, being a direct tax within the meaning
5575of the Constitution, and therefore, unconstitutional and void because
5576not apportioned according to representation, all those sections,
5577consisting of one entire scheme of taxation, are necessarily invalid.
5578[Pollock v. Farmers' Loan & Trust Co.]
5579[158 U.S. 601 (1895)]
5580[emphasis added]
5581It is important to realize that Charles Pollock was a Citizen of
5582Massachusetts; he was not a citizen of the United States**. This fact is
5583often overlooked in discussions of the Pollock case, because the U.S. Supreme
5584Court's decision explored the history and meaning of direct taxes in such
5585great depth. Pollock's political status can easily get lost like a needle in
5586a haystack. Even experts like author and attorney Jeffrey Dickstein have
5587been mistaken about Pollock's status:
5588The Pollock Court clearly found that a tax on the entire income of a
5589United States** citizen was a direct tax that required apportionment to
5590withstand constitutional validity.
5591[Judicial Tyranny and Your Income Tax, page 20]
5592[emphasis added]
5593Nevertheless, the political status of Charles Pollock is clearly established
5594in the very first sentence of the Pollock decision, as follows:
5595This was a bill filed by Charles Pollock, a citizen of the state of
5596Massachusetts, on behalf of himself and all other stockholders of the
5597defendant company similarly situated, against the Farmers' Loan & Trust
5598Company, a corporation of the state of New York, and its directors ....
5599[Pollock v. Farmers' Loan & Trust Co.]
5600[157 U.S. 673, 674 (1895)]
5601[emphasis added]
5602Notice also that the Farmers' Loan & Trust Company was a corporation of
5603the State of New York. As such, it was a foreign corporation with respect to
5604the federal zone, not a domestic corporation. This is one of the key factual
5605differences between the Pollock and Brushaber cases. This difference has
5606similarly been ignored by many of those who have done any analysis of
5607Pollock. A headnote in the decision explains the corporate implications, as
5608understood by the Supreme Court at that time:
56095. In so far as the act levies a tax upon income derived from
5610municipal bonds, it is invalid, because such tax is a tax on the
5611power of the states and their instrumentalities to borrow money,
5612and consequently repugnant to the constitution.
5613[Pollock v. Farmers' Loan & Trust Co.]
5614[157 U.S. 673 (1895), emphasis added]
5615The Fundamental Law
5616Page 10 - 5 of 14
5617The Pollock case has never been overturned and is still the holding
5618case law on direct taxes. In light of some 17,000 State-certified documents
5619which prove that the so-called 16th Amendment never became law, the
5620importance of the Pollock ruling is vastly enhanced. All direct taxes levied
5621upon State Citizens inside the 50 States must be apportioned, as required by
5622the U.S. Constitution.
5623The situation within the federal zone is entirely different. Remember
5624that Congress has exclusive legislative authority within the federal zone.
5625This means that Congress is not restrained by the Constitution within this
5626zone. Therefore, Congress is not required to apportion a direct tax within
5627the federal zone. When it comes to law, the areas inside and outside the
5628federal zone are heterogeneous with respect to each other, resulting in a
5629principle of territorial heterogeneity. This principle states that areas
5630within the federal zone are subject to one set of rules; the areas without
5631the federal zone are subject to a different set of rules. The Constitution
5632rules outside the zone; the acts of Congress rule inside the zone. (See
5633Appendix W for a summary of Downes v. Bidwell, the pivotal case on this
5634question.) In describing the powers delegated to Congress by Article 1,
5635Section 8, Clause 17, and by Article 4, Section 3, Clause 2, of the U.S.
5636Constitution, the Supreme Court has explained this principle as follows:
5637In exercising this power, Congress is not subject to the same
5638constitutional limitations, as when it is legislating for the United
5639States***. ... And in general the guarantees of the Constitution, save
5640as they are limitations upon the exercise of executive and legislative
5641power when exerted for or over our insular possessions, extend to them
5642only as Congress, in the exercise of its legislative power over
5643territory belonging to the United States**, has made those guarantees
5644applicable.
5645[Hooven & Allison Co. v. Evatt, 324 U.S. 653 (1945)]
5646[emphasis added]
5647Without referring to it as such, author Lori Jacques describes the principle
5648of territorial heterogeneity as follows:
5649The "graduated income tax" is not a constitutionally authorized tax
5650within the several states; however, Congress is apparently not
5651prohibited from levying that type of tax upon the "subjects of the
5652sovereign" in the Possessions and Territories. The definitions of
5653"United States" and "State" are stated "geographically to include" only
5654those areas constitutionally within congress' exclusive legislative
5655jurisdiction upon whom a graduated tax can be imposed.
5656[A Ticket to Liberty, November 1990 edition]
5657[page 54, emphasis added]
5658The limitation against direct taxes without apportionment is not the
5659only limitation on Congress outside the federal zone. There are many other
5660limitations. The most famous of these is the Bill of Rights, which recently
5661celebrated its 200th Anniversary (with little if any fanfare by federal
5662government officials). The Bill of Rights is the first 10 amendments to the
5663U.S. Constitution.
5664The Federal Zone:
5665Page 10 - 6 of 14
5666There is a widespread misunderstanding that the U.S. Constitution, as
5667amended by the Bill of Rights, is the source of those rights which are
5668enumerated in the first 10 amendments. Even Black's Law Dictionary makes
5669this "fundamental" error as follows:
5670Fundamental rights. Those rights which have their source, and are
5671explicitly or implicitly guaranteed, in the federal constitution.
5672The rights enumerated in the Bill of Rights did not have their source
5673in the federal Constitution. If this were the case, then our unalienable
5674rights would not have existed before that Constitution was written. Of
5675course, this is nonsense. The Declaration of Independence existed long
5676before the U.S. Constitution. One has only to read that Declaration
5677carefully to appreciate the source of our fundamental, unalienable rights.
5678We are endowed "by our Creator with certain unalienable rights". These
5679rights are not endowed by the Constitution. They are inherent rights which
5680exist quite independently of any form of government we might invent to secure
5681those rights. We relinquish our rights if and only if we waive those rights
5682knowingly, intentionally, and voluntarily, or act in such a way as to
5683infringe on the rights of others. As the Supreme Court has said:
5684... [A]cquiescence in loss of fundamental rights will not be presumed.
5685[Ohio Bell v. Public Utilities Commission]
5686[301 U.S. 292]
5687Unfortunately, public awareness of the Bill of Rights is in a sorry
5688state. The following article was published in the San Francisco Chronicle on
5689the 200th Anniversary of the signing of the Bill of Rights:
5690The right to be ignorant
5691A new survey shows most Americans don't know much about James
5692Madison's handiwork or the legacy he left them.
5693The poll, commissioned by the American Bar Association in honor
5694of the Bill of Rights' 200th birthday, found that:
5695> Sixty-seven percent of those surveyed don't know the Bill
5696of Rights is the first 10 amendments to the Constitution. That's worse
5697than the 59 percent found in a similar survey in 1987, when the fiveyear
5698celebration of the Constitution's bicentennial started.
5699> Only 10 percent know the Bill of Rights was approved to
5700protect individuals and states against the power of the federal
5701government.
5702> More than half are willing to give up some of their Fourth
5703Amendment protections against search and seizure to help win the war on
5704drugs.
5705> 51 percent believe government should prohibit hate speech
5706that demeans someone's race, sex, national origin or religion, despite
5707First Amendment free-speech protections.
5708The Fundamental Law
5709Page 10 - 7 of 14
5710> Forty-six percent think Congress should be able to ban
5711media coverage of any national security issue unless government gives
5712its prior approval, despite the First Amendment's free-press guarantee.
5713[San Francisco Chronicle]
5714[December 16, 1991, page A-20]
5715The Bill of Rights must be viewed as a set of rules which constrain
5716Congress from passing laws which infringe on our unalienable rights. The
5717Bill of Rights does not say that the Constitution endows us with the right to
5718freedom of speech. It does say that "Congress shall make no law ...
5719abridging the freedom of speech, or of the press." There is a world of
5720difference between these two views.
5721Similarly, it is a common mistake to believe that we enjoy only those
5722rights which are enumerated in the Bill of Rights. This is also a
5723fundamental error. The rights which are enumerated in the Bill of Rights are
5724not the only rights which we enjoy. This is clearly expressed by the 9th and
572510th Amendments:
5726The enumeration in the Constitution, of certain rights, shall not be
5727construed to deny or disparage others retained by the people.
5728[Constitution for the United States of America]
5729[Ninth Amendment]
5730The powers not delegated to the United States by the Constitution, nor
5731prohibited by it to the States, are reserved to the States
5732respectively, or to the people.
5733[Constitution for the United States of America]
5734[Tenth Amendment]
5735With this in mind, it is important to appreciate how the Bill of Rights
5736can be utilized to restrain federal government agents outside the federal
5737zone. Even if it is does operate as a private mercantile organization, the
5738IRS is an "agency" of the federal government. The right to be secure in our
5739persons, houses, papers and effects is guaranteed by the 4th Amendment:
5740The right of the people to be secure in their persons, houses, papers,
5741and effects, against unreasonable searches and seizures, shall not be
5742violated, and no Warrants shall issue, but upon probable cause,
5743supported by Oath or affirmation, and particularly describing the place
5744to be searched, and the persons or things to be seized.
5745[Constitution for the United States of America]
5746[Fourth Amendment]
5747Similarly, the rights against self-incrimination and of due process of
5748law are also guaranteed by the 5th Amendment:
5749The Federal Zone:
5750Page 10 - 8 of 14
5751... [N]or shall any person be subject for the same offense to be twice
5752put in jeopardy of life or limb; nor shall be compelled in any
5753criminal case to be a witness against himself, nor be deprived of life,
5754liberty, or property, without due process of law; nor shall private
5755property be taken for public use without just compensation.
5756[Constitution for the United States of America]
5757[Fifth Amendment]
5758The Internal Revenue Service is well aware of these amendments to the
5759U.S. Constitution. For example, many persons are incorrect to believe that
5760the IRS has authority to force disclosure of private books and records. Even
5761though the IRS may have authority to issue a summons in certain
5762circumstances, it has absolutely no authority to compel disclosure of private
5763books and records. This means that you must bring your books and records to
5764an audit, if lawfully summoned to do so, but you are under no obligation to
5765open those books and records, or to submit them to the Internal Revenue
5766Service. As amazing as this may seem, this restraint is documented in the
5767official IRS Tax Audit Guidelines (IR Manual MT 9900-26, 1-29-75), as
5768follows:
5769242.12 Books and Records of An Individual
5770(1) An individual taxpayer may refuse to exhibit his books and
5771records for examination on the ground that compelling him to do
5772so might violate his right against self-incrimination under the
5773Fifth Amendment and constitute an illegal search and seizure
5774under the Fourth Amendment. However, in the absence of such
5775claims, it is not error for a court to charge the jury that it
5776may consider the refusal to produce books and records, in
5777determining willfulness.
5778(2) The privilege against self-incrimination does not permit a
5779taxpayer to refuse to obey a summons issued under IRC 7602 or a
5780court order directing his appearance. He is required to appear
5781and cannot use the Fifth Amendment as an excuse for failure to do
5782so, although he may exercise it in connection with specific
5783questions. He cannot refuse to bring his records, but may
5784decline to submit them for inspection on Constitutional grounds.
5785In the Vader case [U.S. v. Vader, 119 F.Supp. 330], the
5786Government moved to hold a taxpayer in contempt of court for
5787refusal to obey a court order to produce his books and records.
5788He refused to submit them for inspection by the Government,
5789basing his refusal on the Fifth Amendment. The court denied the
5790motion to hold him in contempt, holding that disclosure of his
5791assets would provide a starting point for a tax evasion case.
5792[emphasis added]
5793Note, in particular, where this IR Manual uses the phrase "in the
5794absence of such claims". In general if you do not assert your rights,
5795explicitly and in a timely fashion, then you can be presumed to have waived
5796them. There's the "law of presumption" again. You can, therefore, assert
5797The Fundamental Law
5798Page 10 - 9 of 14
5799your rights under the Fourth and Fifth Amendments to the Constitution, by
5800refusing to submit your books and records for inspection, even though you
5801cannot refuse to bring those books and records to an audit. This may seem
5802like splitting hairs. However, if the federal government could compel your
5803submission of books and records to IRS agents, then the federal government
5804could compel persons to be witnesses against themselves. This would violate
5805the Fifth Amendment. Similarly, the federal government could compel the
5806search and seizure of books and records without a warrant issued upon
5807probable cause and describing the place to be searched and the persons or
5808things to be seized. This would violate the Fourth Amendment. Agencies of
5809the federal government are constrained by law to avoid infringing upon the
5810rights guaranteed by the Fourth and Fifth Amendments to the U.S.
5811Constitution.
5812How do you assert your rights in a polite yet convincing way, so that
5813everyone who needs to know is placed on notice that you have done so? One of
5814the most effective ways of asserting your rights is to become totally alert
5815to every document which bears your signature, past, present and future. Know
5816that your signature is the touch which magically transforms common pieces of
5817paper into commercial contracts, or "commercial agreements" as they are
5818called in the Uniform Commercial Code. Always sign your name with the
5819following phrase immediately above your signature on all contracts which
5820involve bank credit or Federal Reserve Notes:
5821With Explicit Reservation of All My Rights
5822and Without Prejudice U.C.C. 1-207
5823A short-hand way of doing the same thing is to utilize the phrase "All
5824Rights Reserved". This phrase appears in most published books and in film
5825credits. The use of these phrases above your signature on any document
5826indicates that you have exercised the "Remedy" provided for you in the
5827Uniform Commercial Code ("UCC") in Article 1 at Section 207. This "Remedy"
5828provides a valid legal mechanism to reserve a fundamental, common law right
5829which you possess. Under the common law, you enjoy the right not to be
5830compelled to perform under any contract or commercial agreement which you did
5831not enter knowingly, intentionally and voluntarily.
5832Moreover, your explicit reservation of rights serves notice upon all
5833administrative agencies of government, whether international, national,
5834state, or local, that you do not, and will not, accept the liability
5835associated with the "compelled" benefit of any unrevealed commercial
5836agreements. As you now know from reading previous chapters, the federal
5837government is famous for making presumptions about you, because your
5838signature is on documents which bind you to "commercial agreements" with tons
5839of unrevealed terms and conditions. Think back to the terms and conditions
5840attached to the bank signature card, for example. An unrevealed term is
5841proof of constructive fraud, and constructive fraud is a legal basis for
5842cancelling any written instrument.
5843Last but not least, your valid reservation of rights results in
5844preserving all your rights, and prevents the loss of any such rights by
5845application of the concepts of waiver or estoppel. A "waiver" has occurred
5846when you sign your name on an agreement which states that you knowingly,
5847intentionally, and voluntarily waive one of your fundamental rights. Kiss it
5848The Federal Zone:
5849Page 10 - 10 of 14
5850goodbye. As long as you are not infringing on the rights of others, only you
5851can waive one or more of your fundamental rights. In law, "estoppel" means
5852that a party is prevented by his own conduct from claiming a right, to the
5853detriment of another party who was entitled to rely on such conduct and who
5854has acted accordingly:
5855Estoppel is a bar or impediment which precludes allegation or denial of
5856a certain fact or state of facts, in consequence of previous allegation
5857or denial or conduct or admission, or in consequence of a final
5858adjudication of the matter in a court of law.
5859[Black's Law Dictionary, Sixth Edition]
5860If all parties were acting in good faith, for example, estoppel
5861prevents you from changing your mind and claiming a right after the fact, in
5862order to get out of an otherwise valid contract. The doctrine of estoppel
5863holds that an inconsistent position or course of conduct may not be adopted
5864to the loss or injury of another. However, if the other party has been
5865responsible for actual fraud, constructive fraud or deliberate
5866misrepresentation, then the estoppel doctrine goes out the window and the
5867contract is necessarily null and void. And there is no statute of
5868limitations on fraud.
5869The remedy provided for us in the Uniform Commercial Code was first
5870brought to our attention by a Patriot named Howard Freeman, who has written a
5871classic essay entitled "The Two United States and the Law". This essay does
5872an excellent job of describing the tangled legal mess that has resulted from
5873the bankruptcy of the federal government in the year 1933. Specifically, the
5874Supreme Court decision of Erie Railroad v. Thompkins in 1938 changed our
5875entire legal system in this country from public law to private commercial
5876law. Prior to 1938, all Supreme Court decisions were based upon public law,
5877i.e., the system of law that was controlled by Constitutional limitations.
5878Ever since the Erie decision in 1938, all Supreme Court decisions have been
5879based upon what is termed "public policy". Public policy concerns commercial
5880transactions made under the Uniform Commercial Code ("UCC"). Freeman
5881describes the overall consequences for our system of government as follows:
5882Our national Congress works for two nations foreign to each other, and
5883by legal cunning both are called The United States. One is the Union
5884of Sovereign States, under the Constitution, termed in this article the
5885Continental United States***. The other is a Legislative Democracy
5886which has its origin in Article I, Section 8, Clause 17 of the
5887Constitution, here termed the Federal United States**. Very few
5888people, when they see some "law" passed by Congress, ask themselves,
5889"Which nation was Congress working for when it passed this or that socalled
5890law?" Or, few ask, "Does this particular law apply only to
5891residents of the District of Columbia and other named enclaves, or
5892territories, of the Democracy called the Federal United States**?"
5893The "Federal United States**" to which Freeman refers is the federal
5894zone. Because of its sweetheart deal with the Federal Reserve, Congress
5895deliberately failed in its duty to provide a constitutional medium of
5896exchange for the Citizens of the 50 States. Instead of real money, Congress
5897created a "wealth" of commercial credit for the federal zone, where it is not
5898The Fundamental Law
5899Page 10 - 11 of 14
5900bound by constitutional limitations. After the tremendous depression that
5901began in 1929, Congress used its emergency authority to remove the remaining
5902real money (gold and silver) from circulation inside the 50 States, and made
5903the commercial paper of the federal zone a legal tender for all Citizens of
5904the 50 States to use in discharging their debts. Freeman goes on to describe
5905the "privilege" we now enjoy for being able to discharge our debts with
5906limited liability, that is, by using worthless commercial paper instead of
5907intrinsically valuable gold and silver:
5908... Congress granted the entire citizenry of the two nations the
5909"benefit" of limited liability in the discharge of all debts by telling
5910the citizenry that the gold and silver coins of the Republic were out
5911of date and cumbersome. The citizens were told that gold and silver
5912(substance) was no longer needed to pay their debts, that they were now
5913"privileged" to discharge debt with this more "convenient" currency,
5914issued by the Federal United States**. Consequently, everyone was
5915forced to "go modern," and to turn in their gold as a patriotic
5916gesture. The entire news media complex went along with the scam and
5917declared it to be a forward step for our democracy, no longer referring
5918to America as a Republic.
5919You are strongly encouraged to read and study Freeman's entire essay,
5920which is available from the Authors section of the Supreme Law Library on the
5921Internet, along with other writings by Howard Freeman. The compound metaphor
5922of "Two United States" is rich in meanings and long on prophetic insight.
5923America is now submerged in a tangled legal mess which began in 1868
5924and reached critical mass in 1913. This mess is due, in large part, to
5925systematic efforts to destroy the U.S. Constitution as the fundamental law in
5926this country, and to devolve the nation from a Republic into a Democracy (mob
5927rule) and eventually a socialist dictatorship. The U.S. Supreme Court gave
5928its official blessing to the dubious principle of territorial heterogeneity
5929in The Insular Cases. These controversial precedents then paved the way for
5930unrestricted monetary devolution under a private credit monopoly created by
5931the Federal Reserve Act; this Act followed closely behind the fraudulent
593216th Amendment in order to justify "municipal" income taxation (two pumps,
5933working in tandem). The Supreme Court stepped into line once again when
5934their Erie decision threw out almost 100 years of common law precedent.
5935Echoing Justice Harlan's eloquent dissent in Downes v. Bidwell, author Lori
5936Jacques identifies territorial heterogeneity as a root cause of the disease
5937she calls "governmental absolutism":
5938There has been no cure for the disease of governmental absolutism
5939introduced into our body politic by the acquisition of Dependencies and
5940the subsequent alleged Sixteenth Amendment. ... [T]hrough Rules and
5941Regulations meant for the Territories and insular Possessions, which
5942are not limited by the Constitution, Congress has extended this limited
5943legislative power into the several states by clever design thereby
5944usurping the states' right to a republican form of Government and
5945virtually destroying the concept of Liberty of the individual. ...
5946[Please see next page.]
5947The Federal Zone:
5948Page 10 - 12 of 14
5949Until the person who receives benefits from the Government is not
5950permitted to vote, or buy himself benefits to the detriment of another,
5951the Liberty of the Individual will be denied. "Benefits" granted by
5952the Government are the rights transferred by the Individual to the
5953Government and then returned as "privileges" by its formula of
5954felicific calculus.
5955[A Ticket to Liberty, November 1990 edition]
5956[pages 145-146, emphasis added]
5957These efforts to destroy the Constitution have not been entirely
5958successful, however. Due to the concerted efforts of many courageous
5959Americans like Howard Freeman, the United States Constitution is alive, if
5960not well, and remains the supreme Law of the Land even today. Any statute,
5961to be valid, must be in agreement with the Constitution and, therefore, with
5962all relevant provisions for amending it. It is impossible for both the
5963Constitution and a law violating it to be valid; one must prevail. That
5964"one" is the Constitution, the fundamental law in these United States***.
5965This rule is succinctly stated as follows:
5966The general rule is that an unconstitutional statute, though
5967having the form and name of law, is in reality no law, but is wholly
5968void and ineffective for any purpose; since unconstitutionality dates
5969from the time of its enactment, and not merely from the date of the
5970decision so branding it. An unconstitutional law, in legal
5971contemplation, is as inoperative as if it had never been passed. Such
5972a statute leaves the question that it purports to settle just as it
5973would be[,] had the statute not been enacted.
5974Since an unconstitutional law is void, the general principles
5975follow that it imposes no duties, confers no rights, creates no office,
5976bestows no power or authority on anyone, affords no protection, and
5977justifies no acts performed under it ....
5978A void act cannot be legally consistent with a valid one. An
5979unconstitutional law cannot operate to supersede any existing valid
5980law. Indeed, insofar as a statute runs counter to the fundamental law
5981of the land, it is superseded thereby.
5982No one is bound to obey an unconstitutional law, and no courts
5983are bound to enforce it.
5984[16 Am Jur 2d, Sec. 177, emphasis added]
5985The vivid pattern that has now painfully emerged is that "citizens of
5986the United States", as defined in federal tax law, are the intended victims
5987of a modern statutory slavery that was predicted by the infamous Hazard
5988Circular soon after the Civil War began. This Circular admitted that chattel
5989slavery was doomed, so the bankers needed to invent a new kind of slaves.
5990These statutory slaves are now burdened with a bogus federal debt which is
5991spiralling out of control. The White House budget office recently invented a
5992new kind of "generational accounting" so as to project a tax load of seventyone
5993percent on future generations of these "citizens of the United States".
5994The final version of that report upped the projection to eighty percent. It
5995is our duty to ensure that this statutory slavery is soon gone with the wind,
5996just like its grisly and ill-fated predecessor.
5997The Fundamental Law
5998Page 10 - 13 of 14
5999Reader’s Notes:
6000The Federal Zone:
6001Page 10 - 14 of 14
6002Reader’s Notes:
6003Page 11 - 1 of 20
6004Chapter 11:
6005Sovereignty
6006The issue of sovereignty as it relates to jurisdiction is a major key
6007to understanding our system of government under the Constitution. In the
6008most common sense of the word, "sovereignty" is autonomy, freedom from
6009external control. The sovereignty of any government usually extends up to,
6010but not beyond, the borders of its jurisdiction. This jurisdiction defines a
6011specific territorial boundary which separates the "external" from the
6012"internal", the "within" from the "without". It may also define a specific
6013function, or set of functions, which a government may lawfully perform within
6014a particular territorial boundary. Black's Law Dictionary, Sixth Edition,
6015defines sovereignty to mean:
6016... [T]he international independence of a state, combined with the
6017right and power of regulating its internal affairs without foreign
6018dictation.
6019On a similar theme, Black's defines "sovereign states" to be those which are
6020not under the control of any foreign power:
6021No foreign power or law can have control except by convention. This
6022power of independent action in external and internal relations
6023constitutes complete sovereignty.
6024It is a well established principle of law that the 50 States are
6025"foreign" with respect to each other, just as the federal zone is "foreign"
6026with respect to each of them. See In re Merriam's Estate, 36 NE 505 (1894).
6027The status of being foreign is the same as "belonging to" or being "attached
6028to" another state or another jurisdiction. The proper legal distinction
6029between the terms "foreign" and "domestic" is best seen in Black's
6030definitions of foreign and domestic corporations, as follows:
6031Foreign corporation. A corporation doing business in one state though
6032chartered or incorporated in another state is a foreign corporation as
6033to the first state, and, as such, is required to consent to certain
6034conditions and restrictions in order to do business in such first
6035state.
6036Domestic corporation. When a corporation is organized and chartered in
6037a particular state, it is considered a domestic corporation of that
6038state.
6039The federal zone is an area over which Congress exercises exclusive
6040legislative jurisdiction. It is the area over which the federal government
6041exercises its sovereignty. Despite its obvious importance, the subject of
6042federal jurisdiction had been almost entirely ignored outside the courts
6043until the year 1954. In that year, a detailed study of federal jurisdiction
6044was undertaken. The occasion for the study arose from a school playground,
6045of all places. The children of federal employees residing on the grounds of
6046a Veterans' Administration hospital were not allowed to attend public schools
6047in the town where the hospital was located. An administrative decision
6048against the children was affirmed by local courts, and finally affirmed by
6049The Federal Zone:
6050Page 11 - 2 of 20
6051the State supreme court. The residents of the area on which the hospital was
6052located were not "residents" of the State, since "exclusive legislative
6053jurisdiction" over this area had been ceded by the State to the federal
6054government.
6055A committee was assembled by Attorney General Herbert Brownell, Jr.
6056Their detailed study was reported in a publication entitled Jurisdiction over
6057Federal Areas within the States, April 1956 (Volume I) and June 1957 (Volume
6058II). The committee's report demonstrates, beyond any doubt, that the
6059sovereign States and their laws are outside the legislative and territorial
6060jurisdiction of the United States** federal government. They are totally
6061outside the federal zone. A plethora of evidence is found in the myriad of
6062cited court cases (700+) which prove that the United States** cannot exercise
6063exclusive legislative jurisdiction outside territories or places purchased
6064from, or ceded by, the 50 States of the Union. Attorney General Brownell
6065described the committee's report as an "exhaustive and analytical exposition
6066of the law in this hitherto little explored field". In his letter of
6067transmittal to President Dwight D. Eisenhower, Brownell summarized the two
6068volumes as follows:
6069Together, the two parts of this Committee's report and the full
6070implementation of its recommendations will provide a basis for
6071reversing in many areas the swing of "the pendulum of power * * * from
6072our states to the central government" to which you referred in your
6073address to the Conference of State Governors on June 25, 1957.
6074[Jurisdiction over Federal Areas within the States]
6075[Letter of Transmittal, page V, emphasis added]
6076Once a State is admitted into the Union, its sovereign jurisdiction is
6077firmly established over a predefined territory. The federal government is
6078thereby prevented from acquiring legislative jurisdiction, by means of
6079unilateral action, over any area within the exterior boundaries of this
6080predefined territory. State assent is necessary to transfer jurisdiction to
6081Congress:
6082The Federal Government cannot, by unilateral action on its part,
6083acquire legislative jurisdiction over any area within the exterior
6084boundaries of a State. Article 1, Section 8, Clause 17, of the
6085Constitution, provides that legislative jurisdiction may be transferred
6086pursuant to its terms only with the consent of the legislature of the
6087State in which is located the area subject to the jurisdictional
6088transfer.
6089[Jurisdiction over Federal Areas within the States]
6090[Volume II, page 46, emphasis added]
6091Under Article 1, Section 8, Clause 17, of the Constitution, States of
6092the Union have enacted statutes consenting to the federal acquisition of any
6093land, or of specific tracts of land, within those States. Secondly, the
6094federal government has also made "reservations" of jurisdiction over certain
6095areas in connection with the admission of a State into the Union. A third
6096means for transfer of legislative jurisdiction has also come into
6097considerable use over time, namely, a general or special statute whereby a
6098State makes a cession of specific functional jurisdiction to the federal
6099Sovereignty
6100Page 11 - 3 of 20
6101government. Nevertheless, the Committee report explained that "... the
6102characteristics of a legislative jurisdiction status are the same no matter
6103by which of the three means the Federal Government acquired such status"
6104[Volume II, page 3]. There is simply no federal legislative jurisdiction
6105without consent by a State, cession by a State, or reservation by the federal
6106government:
6107It scarcely needs to be said that unless there has been a transfer of
6108jurisdiction (1) pursuant to clause 17 by a Federal acquisition of land
6109with State consent, or (2) by cession from the State to the Federal
6110Government, or unless the Federal Government has reserved jurisdiction
6111upon the admission of the State, the Federal Government possesses no
6112legislative jurisdiction over any area within a State, such
6113jurisdiction being for exercise entirely by the State ....
6114[Jurisdiction over Federal Areas within the States]
6115[Volume II, page 45, emphasis added]
6116The areas which the 50 States have properly ceded to the federal
6117government are called federal "enclaves":
6118By this means some thousands of areas have become Federal islands,
6119sometimes called "enclaves," in many respects foreign to the States in
6120which they are situated. In general, not State but Federal law is
6121applicable in an area under the exclusive legislative jurisdiction of
6122the United States**, for enforcement not by State but Federal
6123authorities, and in many instances not in State but in Federal courts.
6124[Jurisdiction over Federal Areas within the States]
6125[Volume II, page 4, emphasis added]
6126These federal enclaves are considered foreign with respect to the States
6127which surround them, just as the 50 States are considered foreign with
6128respect to each other and to the federal zone: "...[T]he several states of
6129the Union are to be considered as in this respect foreign to each other ...."
6130Hanley v. Donoghue, 116 U.S. 1 (1885). Once a State surrenders its
6131sovereignty over a specific area of land, it is powerless over that land; it
6132is without authority; it cannot recapture any of its transferred jurisdiction
6133by unilateral action, just as the federal government cannot acquire
6134jurisdiction over State area by its unilateral action. The State has
6135transferred its sovereign authority to a foreign power:
6136Once a State has, by one means or another, transferred jurisdiction to
6137the United States**, it is, of course, powerless to control many of the
6138consequences; without jurisdiction, it is without the authority to
6139deal with many of the problems, and having transferred jurisdiction to
6140the United States**, it cannot unilaterally capture any of the
6141transferred jurisdiction.
6142[Jurisdiction over Federal Areas within the States]
6143[Volume II, page 7, emphasis added]
6144Once sovereignty has been relinquished, a State no longer has the
6145authority to enforce criminal laws in areas under the exclusive jurisdiction
6146The Federal Zone:
6147Page 11 - 4 of 20
6148of the United States**. Privately owned property in such areas is beyond the
6149taxing authority of the State. Residents of such areas are not "residents"
6150of the State, and hence are not subject to the obligations of residents of
6151the State, and are not entitled to any of the benefits and privileges
6152conferred by the State upon its residents. Residents of federal enclaves
6153usually cannot vote, serve on juries, or run for office. They do not, as
6154matter of right, have access to State schools, hospitals, mental
6155institutions, or similar establishments.
6156The acquisition of exclusive jurisdiction by the Federal Government
6157renders unavailable to the residents of the affected areas the benefits of
6158the laws and the judicial and administrative processes of the State relating
6159to adoption, the probate of wills and administration of estates, divorce, and
6160many other matters. Police, fire-fighting, notaries, coroners, and similar
6161services performed by, or under, the authority of a State may result in legal
6162sanction within a federal enclave. The "old" State laws which apply are only
6163those which are consistent with the laws of the "new" sovereign authority,
6164using the following principle from international law:
6165The vacuum which would exist because of the absence of State law or
6166Federal legislation with respect to civil matters in areas under
6167Federal exclusive legislative jurisdiction has been partially filled by
6168the courts, through extension to these areas of a rule of international
6169law that[,] when one sovereign takes over territory of another[,] the
6170laws of the original sovereign in effect at the time of the taking[,]
6171which are not inconsistent with the laws or policies of the second[,]
6172continue in effect, as laws of the succeeding sovereign, until changed
6173by that sovereign.
6174[Jurisdiction over Federal Areas within the States]
6175[Volume II, page 6, commas added for clarity]
6176[emphasis added]
6177It is clear, then, that only one "state" can be sovereign at any given
6178moment in time, whether that "state" be one of the 50 Union States, or the
6179federal government of the United States**. Before ceding a tract of land to
6180Congress, a State of the Union exercises its sovereign authority over any
6181land within its borders:
6182Save only as they are subject to the prohibitions of the Constitution,
6183or as their action in some measure conflicts with the powers delegated
6184to the national government or with congressional legislation enacted in
6185the exercise of those powers, the governments of the states are
6186sovereign within their territorial limits and have exclusive
6187jurisdiction over persons and property located therein.
6188[72 American Jurisprudence 2d, Section 4]
6189[emphasis added]
6190After a State has ceded a tract of land to Congress, the situation is
6191completely different. The United States**, as the "succeeding sovereign",
6192then exercises its sovereign authority over that land. In this sense,
6193sovereignty is indivisible, even though the Committee's report documented
6194numerous situations in which jurisdiction was actually shared between the
6195federal government and one of the 50 States. Even in this situation,
6196Sovereignty
6197Page 11 - 5 of 20
6198however, sovereignty rests either in the State, or in the federal government,
6199but never both. Sovereignty is the authority to which there is politically
6200no superior. Outside the federal zone, the States of the Union remain
6201sovereign, and their laws are completely outside the exclusive legislative
6202jurisdiction of the federal government of the United States**.
6203This understanding of the separate sovereignties possessed by each of
6204the State and federal governments was not only valid during the Eisenhower
6205administration; it has been endorsed by the U.S. Supreme Court as recently as
62061985. In that year, the high Court examined the "dual sovereignty doctrine"
6207when it ruled that successive prosecutions by two States for the same conduct
6208were not barred by the Double Jeopardy Clause of the Fifth Amendment. The
6209"crucial determination" turned on whether State and federal powers derive
6210from separate and independent sources. The Supreme Court explained that the
6211doctrine of dual sovereignty has been uniformly upheld by the courts:
6212It has been uniformly held that the States are separate sovereigns with
6213respect to the Federal Government because each State's power to
6214prosecute derives from its inherent sovereignty, preserved to it by the
6215Tenth Amendment, and not from the Federal Government. Given the
6216distinct sources of their powers to try a defendant, the States are no
6217less sovereign with respect to each other than they are with respect to
6218the Federal Government.
6219[Heath v. Alabama, 474 U.S. 82, 89-90 (1985)]
6220Now, if a State of the Union is sovereign, is it correct to say that
6221the State exercises an authority to which there is absolutely no superior?
6222No, this is not a correct statement. There is no other organized body which
6223is superior to the organized body which retains sovereignty. The sovereignty
6224of governments is an authority to which there is no organized superior, but
6225there is absolutely a superior body, and that superior body is the People of
6226the United States*** of America:
6227The words "people of the United States" and "citizens" are synonymous
6228terms, and mean the same thing. They both describe the political body
6229who, according to our republican institutions, form the sovereignty,
6230and who hold the power and conduct the government through their
6231representatives. They are what we familiarly call the "sovereign
6232people," and every citizen is one of this people, and a constituent
6233member of this sovereignty.
6234[Dred Scott v. Sandford, 19 How. 393 (1856)]
6235[emphasis added]
6236The source of all sovereignty in a constitutional Republic like the 50
6237States, united by and under the Constitution for the United States of
6238America, is the People themselves. Remember, the States, and the federal
6239government acting inside those States, are both bound by the terms of a
6240contract known as the U.S. Constitution. That Constitution is a contract of
6241delegated powers which ultimately originate in the sovereignty of the
6242Creator, who endowed creation, individual People like you and me, with
6243sovereignty in that Creator's image and likeness. Nothing stands between us
6244and the Creator. We think it is fair to say that the Supreme Court of the
6245United States was never more eloquent when it described the source of
6246sovereignty as follows:
6247The Federal Zone:
6248Page 11 - 6 of 20
6249Sovereignty itself is, of course, not subject to law, for it is the
6250author and source of law; but in our system, while sovereign powers
6251are delegated to the agencies of government, sovereignty itself remains
6252with the people, by whom and for whom all government exists and acts.
6253And the law is the definition and limitation of power. It is indeed,
6254quite true, that there must always be lodged somewhere, and in some
6255person or body, the authority of final decision; and in many cases of
6256mere administration the responsibility is purely political, no appeal
6257except to the ultimate tribunal of the public judgement, exercised
6258either in the pressure of opinion or by means of the suffrage. But the
6259fundamental rights to life, liberty, and the pursuit of happiness,
6260considered as individual possessions, are secured by those maxims of
6261constitutional law which are the monuments showing the victorious
6262progress of the race in securing to men the blessings of civilization
6263under the reign of just and equal laws, so that, in the famous language
6264of the Massachusetts Bill of Rights, the government of the commonwealth
6265"may be a government of laws and not of men." For, the very idea that
6266one man may be compelled to hold his life, or the means of living, or
6267any material right essential to the enjoyment of life, at the mere will
6268of another, seems to be intolerable in any country where freedom
6269prevails, as being the essence of slavery itself.
6270[Yick Wo v. Hopkins, 118 U.S. 356, 370 (1886)]
6271[emphasis added]
6272More recently, the Supreme Court reiterated the fundamental importance
6273of US the People as the source of sovereignty, and the subordinate status
6274which Congress occupies in relation to the sovereignty of the People. The
6275following language is terse and right on point:
6276In the United States***, sovereignty resides in the people who act
6277through the organs established by the Constitution. [cites omitted]
6278The Congress as the instrumentality of sovereignty is endowed with
6279certain powers to be exerted on behalf of the people in the manner and
6280with the effect the Constitution ordains. The Congress cannot invoke
6281the sovereign power of the people to override their will as thus
6282declared.
6283[Perry v. United States, 294 U.S. 330, 353 (1935)]
6284[emphasis added]
6285No discussion of sovereignty would be complete, therefore, without
6286considering the sovereignty that resides in "US", the People. The Supreme
6287Court has often identified the People as the source of sovereignty in our
6288republican form of government. Indeed, the federal Constitution guarantees
6289to every State in the Union a "Republican Form" of government, in so many
6290words:
6291Section 4. The United States shall guarantee to every State in this
6292Union a Republican Form of Government ....
6293[Constitution for the United States of America]
6294[Article 4, Section 4, emphasis added]
6295Sovereignty
6296Page 11 - 7 of 20
6297What exactly is a "Republican Form" of government? It is one in which the
6298powers of sovereignty are vested in the People and exercised by the People.
6299Black's Law Dictionary, Sixth Edition, makes this very clear in its various
6300definitions of "government":
6301Republican government. One in which the powers of sovereignty are
6302vested in the people and are exercised by the people, either directly,
6303or through representatives chosen by the people, to whom those powers
6304are specially delegated. In re Duncan, 139 U.S. 449, 11 S.Ct. 573, 35
6305L.Ed. 219; Minor v. Happersett, 88 U.S. (21 Wall.) 162, 22 L.Ed. 627.
6306The Supreme Court has clearly distinguished between the operation of
6307governments in Europe, and government in these United States*** of America,
6308as follows:
6309In Europe, the executive is almost synonymous with the sovereign power
6310of a State; and generally includes legislative and judicial authority.
6311... Such is the condition of power in that quarter of the world, where
6312it is too commonly acquired by force or fraud, or both, and seldom by
6313compact. In America, however, the case is widely different. Our
6314government is founded upon compact. Sovereignty was, and is, in the
6315people.
6316[Glass v. The Sloop Betsey, 3 Dall 6 (1794)]
6317[emphasis added]
6318The federal Constitution makes a careful distinction between natural
6319born Citizens and citizens of the United States** (compare 2:1:5 with Section
63201 of the so-called 14th Amendment). One is an unconditional Sovereign by
6321natural birth, who is endowed by the Creator with certain unalienable rights;
6322the other has been granted the revocable privileges of U.S.** citizenship,
6323endowed by the Congress of the United States**. One is a Citizen, the other
6324is a subject. One is a Sovereign, the other is a subordinate. One is a
6325Citizen of our constitutional Republic; the other is a citizen of a
6326legislative democracy (the federal zone). Notice the superior/subordinate
6327relationship between these two statuses. I am forever indebted to M. J.
6328"Red" Beckman, co-author of The Law That Never Was with Bill Benson, for
6329clearly illustrating the important difference between the two. Red Beckman
6330has delivered many eloquent lectures based on the profound simplicity of the
6331following table:
6332Chain of command and authority in a:
6333Majority Rule Constitutional
6334Democracy Republic
6335X Creator
6336Majority Individual
6337Government Constitution
6338Public Servants Government
6339Case & Statute Law Public Servants
6340Corporations Statute Law
6341individual Corporations
6342The Federal Zone:
6343Page 11 - 8 of 20
6344In this illustration, a democracy ruled by the majority places the
6345individual at the bottom, and an unknown elite, Mr. "X" at the top. The
6346majority (or mob) elects a government to hire public "servants" who write
6347laws primarily for the benefit of corporations. These corporations are
6348either owned or controlled by Mr. X, a clique of the ultra-wealthy who seek
6349to restore a two-class "feudal" society. They exercise their vast economic
6350power so as to turn all of America into a "feudal zone". The rights of
6351individuals occupy the lowest priority in this chain of command. Those
6352rights often vanish over time, because democracies eventually self-destruct.
6353The enforcement of laws within this scheme is the job of administrative
6354tribunals, who specialize in holding individuals to the letter of all rules
6355and regulations of the corporate state, no matter how arbitrary and with
6356little if any regard for fundamental human rights:
6357A democracy that recognizes only manmade laws perforce obliterates the
6358concept of Liberty as a divine right.
6359[A Ticket to Liberty, November 1990 edition, page 146]
6360[emphasis added]
6361In the constitutional Republic, however, the rights of individuals are
6362supreme. Individuals delegate their sovereignty to a written contract,
6363called a constitution, which empowers government to hire public servants to
6364write laws primarily for the benefit of individuals. The corporations occupy
6365the lowest priority in this chain of command, since their primary objectives
6366are to maximize the enjoyment of individual rights, and to facilitate the
6367fulfillment of individual responsibilities. The enforcement of laws within
6368this scheme is the responsibility of sovereign individuals, who exercise
6369their power in three arenas: the voting booth, the trial jury, and the grand
6370jury. Without a jury verdict of "guilty", for example, no law can be
6371enforced and no penalty exacted. The behavior of public servants is tightly
6372restrained by contractual terms, as found in the written U.S. Constitution.
6373Statutes and case law are created primarily to limit and define the scope and
6374extent of public servant power.
6375Sovereign individuals are subject only to a Common Law, whose primary
6376purposes are to protect and defend individual rights, and to prevent anyone,
6377whether public official or private person, from violating the rights of other
6378individuals. Within this scheme, Sovereigns are never subject to their own
6379creations, and the constitutional contract is such a creation. To quote the
6380Supreme Court, "No fiction can make a natural born subject." Milvaine v.
6381Coxe's Lessee, 8 U.S. 598 (1808). That is to say, no fiction, be it a
6382corporation, a statute law, or an administrative regulation, can mutate a
6383natural born Sovereign into someone who is subject to his own creations.
6384Author and scholar Lori Jacques has put it succinctly as follows:
6385As each state is sovereign and not a territory of the United States**,
6386the meaning is clear that state citizens are not subject to the
6387legislative jurisdiction of the United States**. Furthermore, there is
6388not the slightest intimation in the Constitution which created the
6389"United States" as a political entity that the "United States" is
6390sovereign over its creators.
6391[A Ticket to Liberty, Nov. 1990, p. 32]
6392[emphasis added]
6393Sovereignty
6394Page 11 - 9 of 20
6395Accordingly, if you choose to investigate the matter, you will find a
6396very large body of legal literature which cites another fiction, the socalled
639714th Amendment, from which the federal government presumes to derive
6398general authority to treat everyone in America as subjects and not as
6399Sovereigns:
6400Section 1. All persons born or naturalized in the United States**, and
6401subject to the jurisdiction thereof, are citizens of the United
6402States** and of the State wherein they reside.
6403[United States Constitution, Fourteenth Amendment [sic]]
6404[emphasis added]
6405A careful reading of this amendment reveals an important subtlety which
6406is lost on many people who read it for the first time. The citizens it
6407defines are second class citizens because the "c" is lower-case, even in the
6408case of the State citizens it defines. Note how the amendment defines
6409"citizens of the United States**" and "citizens of the State wherein they
6410reside"! It is just uncanny how the wording of this amendment closely
6411parallels the Code of Federal Regulations ("CFR") which promulgates Section 1
6412of the Internal Revenue Code ("IRC"). Can it be that this amendment had
6413something to do with subjugation, by way of taxes and other means? Yes, it
6414most certainly did. IRC section 1 is the section which imposes income taxes.
6415The corresponding section of the CFR defines who is a "citizen" as follows:
6416Every person born or naturalized in the United States** and subject to
6417its jurisdiction is a citizen.
6418[26 CFR 1.1-1(c), emphasis added]
6419Notice the use of the term "its jurisdiction". This leaves no doubt that the
6420"United States**" is a singular entity in this context. In other words, it
6421is the federal zone. Do we dare to speculate why the so-called 14th
6422Amendment was written instead with the phrase "subject to the jurisdiction
6423thereof"? Is this another case of deliberate ambiguity? You be the judge.
6424Not only did this so-called "amendment" fail to specify which meaning
6425of the term "United States" was being used; like the 16th Amendment, it also
6426failed to be ratified, this time by 15 of the 37 States which existed in
64271868. The House Congressional Record for June 13, 1967, contains all the
6428documentation you need to prove that the so-called 14th Amendment was never
6429ratified into law (see page 15,641 et seq.). For example, it itemizes all
6430States which voted against the proposed amendment, and the precise dates when
6431their Legislatures did so. "I cannot believe that any court, in full
6432possession of its faculties, could honestly hold that the amendment was
6433properly approved and adopted." State v. Phillips, 540 P.2d 936, 941 (1975).
6434The Utah Supreme Court has detailed the shocking and sordid history of the
643514th Amendment's "adoption" in the case of Dyett v. Turner, 20 Utah 2d 403,
6436439 P.2d 266, 270 (1968).
6437A great deal of written material on the 14th Amendment has been
6438assembled into computer files by Richard McDonald, whose mailing address is
6439585-D Box Canyon Road, Canoga Park, California Republic (not "CA"). He
6440requests that ZIP codes not be used on his incoming mail (use the foreign
6441address format found in USPS Publication 221 instead).
6442The Federal Zone:
6443Page 11 - 10 of 20
6444Richard McDonald has done a mountain of legal research and writing on
6445the origins and effects of the so-called 14th Amendment. He documents how
6446key court decisions like the Slaughter House Cases, among many others, all
6447found that there is a clear distinction between a Citizen of a State and a
6448citizen of the United States** . A State Citizen is a Sovereign, whereas a
6449citizen of the United States** is a subject of Congress.
6450The exercise of federal citizenship is a statutory privilege which can
6451be taxed with excises. The exercise of State Citizenship is a Common Law
6452Right which simply cannot be taxed, because governments cannot tax the
6453exercise of a right, ever.
6454The case of U.S. v. Cruikshank is famous, not only for confirming this
6455distinction between State Citizens and federal citizens, but also for
6456establishing a key precedent in the area of due process. This precedent
6457underlies the "void for vagueness" doctrine which can and should be applied
6458to nullify the IRC. On the issue of citizenship, the Cruikshank court ruled
6459as follows:
6460We have in our political system a government of the United States** and
6461a government of each of the several States. Each one of these
6462governments is distinct from the others, and each has citizens of its
6463own who owe it allegiance, and whose rights, within its jurisdiction,
6464it must protect. The same person may be at the same time a citizen of
6465the United States** and a citizen of a State, but his rights of
6466citizenship under one of these governments will be different from those
6467he has under the other. Slaughter-House Cases
6468[United States v. Cruikshank, 92 U.S. 542 (1875)]
6469[emphasis added]
6470The leading authorities for this pivotal distinction are, indeed, a
6471series of U.S. Supreme Court decisions known as the Slaughter House Cases,
6472which examined the so-called 14th Amendment in depth. An exemplary paragraph
6473from these cases is the following:
6474It is quite clear, then, that there is a citizenship of the United
6475States** and a citizenship of a State, which are distinct from each
6476other and which depend upon different characteristics or circumstances
6477in the individual.
6478[Slaughter House Cases, 83 U.S. 36, 16 Wall. 36]
6479[21 L.Ed. 394 (1873)]
6480[emphasis added]
6481A similar authority is found in the case of K. Tashiro v. Jordan, decided by
6482the Supreme Court of the State of California almost fifty years later.
6483Notice, in particular, how the California Supreme Court again cites the
6484Slaughter House Cases:
6485Sovereignty
6486Page 11 - 11 of 20
6487That there is a citizenship of the United States** and a citizenship of
6488a state, and the privileges and immunities of one are not the same as
6489the other is well established by the decisions of the courts of this
6490country. The leading cases upon the subjects are those decided by the
6491Supreme Court of the United States and reported in 16 Wall. 36, 21 L.
6492Ed. 394, and known as the Slaughter House Cases.
6493[K. Tashiro v. Jordan, 256 P. 545, 549 (1927)]
6494[affirmed 278 U.S. 123 (1928)]
6495[emphasis added]
6496The Slaughter House Cases are quite important to the issue of
6497citizenship, but the pivotal case on the subject is the famous Dred Scott
6498decision, decided in 1856, prior to the Civil War. In this case, the U.S.
6499Supreme Court wrote one of the longest decisions in the entire history of
6500American jurisprudence. In arriving at their understanding of the precise
6501meaning of Citizenship, as understood by the Framers of the Constitution, the
6502high Court left no stone unturned in their search for relevant law:
6503We have the language of the Declaration of Independence and of the
6504Articles of Confederation, in addition to the plain words of the
6505Constitution itself: we have the legislation of the different States,
6506before, about the time, and since the Constitution was adopted; we
6507have the legislation of Congress, from the time of its adoption to a
6508recent period; and we have the constant and uniform action of the
6509Executive Department, all concurring together, and leading to the same
6510result. And if anything in relation to the construction of the
6511Constitution can be regarded as settled, it is that which we now give
6512to the word "citizen" and the word "people."
6513[Dred Scott v. Sandford, 19 How. 393 (1856)]
6514[emphasis added]
6515In the fundamental law, the notion of a "citizen of the United States"
6516simply did not exist before the 14th Amendment; at best, this notion is a
6517fiction within a fiction. In discussing the power of the States to
6518naturalize, the California Supreme Court put it rather bluntly when it ruled
6519that there was no such thing as a "citizen of the United States":
6520A citizen of any one of the States of the union, is held to be, and
6521called a citizen of the United States, although technically and
6522abstractly there is no such thing. To conceive a citizen of the United
6523States who is not a citizen of some one of the States, is totally
6524foreign to the idea, and inconsistent with the proper construction and
6525common understanding of the expression as used in the Constitution,
6526which must be deduced from its various other provisions. The object
6527then to be attained, by the exercise of the power of naturalization,
6528was to make citizens of the respective States.
6529[Ex Parte Knowles, 5 Cal. 300 (1855)]
6530[emphasis added]
6531This decision has never been overturned!
6532The Federal Zone:
6533Page 11 - 12 of 20
6534What is the proper construction and common understanding of the term
6535"Citizen of the United States" as used in the original U.S. Constitution,
6536before the so-called 14th Amendment? This is an important question, because
6537this status is still a qualification for the federal offices of Senator,
6538Representative and President.
6539No Person can be a Representative unless he has been a Citizen of the
6540United States for seven years (1:2:2); no Person can be a Senator unless he
6541has been a Citizen of the United States for nine years (1:3:3); no Person
6542can be President unless he is a natural born Citizen, or a Citizen of the
6543United States (2:1:5).
6544If these requirements had been literally obeyed, there could have been
6545no elections for Representatives to Congress for at least seven years after
6546the adoption of the Constitution, and no one would have been eligible to be a
6547Senator for nine years after its adoption.
6548Author John S. Wise, in a rare book now available on Richard McDonald's
6549electronic bulletin board system ("BBS"), explains away the problem very
6550simply as follows:
6551The language employed by the convention was less careful than that
6552which had been used by Congress in July of the same year, in framing
6553the ordinance for the government of the Northwest Territory. Congress
6554had made the qualification rest upon citizenship of "one of the United
6555States***," and this is doubtless the intent of the convention which
6556framed the Constitution, for it cannot have meant anything else.
6557[Studies in Constitutional Law:]
6558[A Treatise on American Citizenship]
6559[by John S. Wise, Edward Thompson Co. (1906)]
6560[emphasis added]
6561This quote from the Northwest Ordinance is faithful to the letter and to the
6562spirit of that law. In describing the eligibility for "representatives" to
6563serve in the general assembly for the Northwest Territory, the critical
6564passage from that Ordinance reads as follows:
6565... Provided, That no person be eligible or qualified to act as a
6566representative, unless he shall have been a citizen of one of the
6567United States*** three years, and be a resident in the district, or
6568unless he shall have resided in the district three years; ....
6569[Northwest Ordinance, Section 9, July 13, 1787]
6570[The Confederate Congress]
6571[emphasis added]
6572Without citing the case as such, the words of author John S. Wise sound
6573a close, if not identical parallel to the argument for the Respondent filed
6574in the case of People v. De La Guerra, decided by the California Supreme
6575Court in 1870. The following long passage elaborates the true meaning of the
6576Constitutional qualifications for the federal offices of President and
6577Representative:
6578Sovereignty
6579Page 11 - 13 of 20
6580As it was the adoption of the Constitution by the Conventions of nine
6581States that established and created the United States***, it is obvious
6582there could not then have existed any person who had been seven years a
6583citizen of the United States***, or who possessed the Presidential
6584qualifications of being thirty-five years of age, a natural born
6585citizen, and fourteen years a resident of the United States***. The
6586United States*** in these provisions, means the States united. To be
6587twenty-five years of age, and for seven years to have been a citizen of
6588one of the States which ratifies the Constitution, is the qualification
6589of a representative. To be a natural born citizen of one of the States
6590which shall ratify the Constitution, or to be a citizen of one of said
6591States at the time of such ratification, and to have attained the age
6592of thirty-five years, and to have been fourteen years a resident within
6593one of the said States, are the Presidential qualifications, according
6594to the true meaning of the Constitution.
6595[People v. De La Guerra, 40 Cal. 311, 337 (1870)]
6596[emphasis added]
6597Indeed, this was the same exact understanding that was reached by the
6598U.S. Supreme Court in Dred Scott. There, the high Court clearly reinforced
6599the sovereign status of Citizens of the several States. The sovereigns are
6600the Union State Citizens, i.e. the Citizens of the States United:
6601It is true, every person, and every class and description of persons,
6602who were at the time of the adoption of the Constitution recognized as
6603citizens in the several States, became also citizens of this new
6604political body; but none other; it was formed by them, and for them
6605and their posterity, but for no one else. And the personal rights and
6606privileges guarantied [sic] to citizens of this new sovereignty were
6607intended to embrace those only who were then members of the several
6608state communities, or who should afterwards, by birthright or
6609otherwise, become members, according to the provisions of the
6610Constitution and the principles on which it was founded.
6611[Dred Scott v. Sandford, 19 How. 393, 404 (1856)]
6612[emphasis added]
6613Thus, the phrase "Citizen of the United States" as found in the
6614original Constitution is synonymous with the phrase "Citizen of one of the
6615United States***", i.e., a Union State Citizen. This simple explanation will
6616help to cut through the mountain of propaganda and deception which have been
6617foisted on all Americans by government bureaucrats and their high-paid
6618lawyers. Federal citizens were not even contemplated as such when the
6619organic U.S. Constitution was first drafted. For authority, see the case of
6620Pannill v. Roanoke, 252 F. 910, 914-915 (1918), as quoted in the Preface.
6621With this understanding firmly in place, it is very revealing to
6622discover that many reprints of the Constitution now utilize a lower-case "c"
6623in the clauses which describe the qualifications for the offices of Senator,
6624Representative and President. This is definitely wrong, and it is probably
6625deliberate, so as to confuse everyone into equating Citizens of the United
6626States with citizens of the United States, courtesy of the so-called 14th
6627Amendment. This is another crucial facet of the federal tax fraud.
6628The Federal Zone:
6629Page 11 - 14 of 20
6630There is a very big difference between the two statuses, not the least
6631of which is the big difference in their respective liabilities for the income
6632tax.
6633Moreover, it is quite clear that one may be a State Citizen without
6634also being a "citizen of the United States", whether or not the 14th
6635Amendment was properly ratified! According to the Louisiana Supreme Court,
6636the highest exercise of a State's sovereignty is the right to declare who are
6637its own Citizens:
6638A person who is a citizen of the United States** is necessarily a
6639citizen of the particular state in which he resides. But a person may
6640be a citizen of a particular state and not a citizen of the United
6641States**. To hold otherwise would be to deny to the state the highest
6642exercise of its sovereignty, -- the right to declare who are its
6643citizens.
6644[State v. Fowler, 41 La. Ann. 380, 6 S. 602 (1889)]
6645[emphasis added]
6646This right is reserved to each of the 50 States by the Tenth Amendment.
6647In a book to which this writer has returned time and time again, author
6648Alan Stang faithfully recites some of the other relevant court authorities,
6649all of which ultimately trace back to the Slaughter House Cases and the Dred
6650Scott decision:
6651Indeed, just as one may be a "citizen of the United States" and not a
6652citizen of a State; so one apparently may be a citizen of a State but
6653not of the United States. On July 21, 1966, the Court of Appeal of
6654Maryland ruled in Crosse v. Board of Supervisors of Elections, 221 A.2d
6655431; a headnote in which tells us: "Both before and after the
6656Fourteenth Amendment to the federal Constitution, it has not been
6657necessary for a person to be a citizen of the United States in order to
6658be a citizen of his state ...." At page 434, Judge Oppenheimer cites
6659a Wisconsin ruling in which the court said this: "Under our complex
6660system of government, there may be a citizen of a state, who is not a
6661citizen of the United States in the full sense of the term ...."
6662[Tax Scam, 1988 edition, pages 138-139]
6663[emphasis added]
6664Conversely, there may be a citizen of the United States** who is not a
6665Citizen of any one of the 50 States. In People v. De La Guerra quoted above,
6666the published decision of the California Supreme Court clearly maintained
6667this crucial distinction between the two classes of citizenship, and did so
6668only two years after the alleged ratification of the so-called 14th
6669Amendment:
6670[Please see next page.]
6671Sovereignty
6672Page 11 - 15 of 20
6673I have no doubt that those born in the Territories, or in the District
6674of Columbia, are so far citizens as to entitle them to the protection
6675guaranteed to citizens of the United States** in the Constitution, and
6676to the shield of nationality abroad; but it is evident that they have
6677not the political rights which are vested in citizens of the States.
6678They are not constituents of any community in which is vested any
6679sovereign power of government. Their position partakes more of the
6680character of subjects than of citizens. They are subject to the laws
6681of the United States**, but have no voice in its management. If they
6682are allowed to make laws, the validity of these laws is derived from
6683the sanction of a Government in which they are not represented. Mere
6684citizenship they may have, but the political rights of citizens they
6685cannot enjoy until they are organized into a State, and admitted into
6686the Union.
6687[People v. De La Guerra, 40 Cal. 311, 342 (1870)]
6688[emphasis added]
6689Using language that was much more succinct, author Luella Gettys, Ph.D. and
6690"Sometime Carnegie Fellow in International Law" at the University of Chicago,
6691explained it quite nicely this way:
6692... [A]s long as the territories are not admitted to statehood no state
6693citizenship therein could exist.
6694[The Law of Citizenship in the United States]
6695[Chicago, Univ. of Chicago Press, 1934, p. 7]
6696This clear distinction between the Union States and the territories is
6697endorsed officially by the U.S. Supreme Court. Using language very similar
6698to that of the California Supreme Court in the De La Guerra case, the high
6699Court explained the distinction this way in the year 1885, seventeen years
6700after the adoption of the so-called 14th amendment:
6701The people of the United States***, as sovereign owners of the national
6702territories, have supreme power over them and their inhabitants. ...
6703The personal and civil rights of the inhabitants of the territories are
6704secured to them, as to other citizens, by the principles of
6705constitutional liberty, which restrain all the agencies of government,
6706state and national; their political rights are franchises which they
6707hold as privileges in the legislative discretion of the congress of the
6708United States**. This doctrine was fully and forcibly declared by the
6709chief justice, delivering the opinion of the court in National Bank v.
6710County of Yankton, 101 U.S. 129.
6711[Murphy v. Ramsey, 114 U.S. 15 (1885)]
6712[italics in original, emphasis added]
6713The political rights of the federal zone's citizens are "franchises" which
6714they hold as "privileges" at the discretion of the Congress of the United
6715States**. Indeed, the doctrine declared earlier in the National Bank case
6716leaves no doubt that Congress is the municipal authority for the territories:
6717The Federal Zone:
6718Page 11 - 16 of 20
6719All territory within the jurisdiction of the United States* not
6720included in any State must, necessarily, be governed by or under the
6721authority of Congress. The Territories are but political subdivisions
6722of the outlying dominion of the United States**. They bear much the
6723same relation to the General Government that counties do to the States,
6724and Congress may legislate for them as States do for their respective
6725municipal organizations. The organic law of a Territory takes the
6726place of a constitution, as the fundamental law of the local
6727government. It is obligatory on and binds the territorial authorities;
6728but Congress is supreme and, for the purposes of this department of its
6729governmental authority, has all the powers of the People of the United
6730States***, except such as have been expressly or by implication
6731reserved in the prohibitions of the Constitution.
6732[First National Bank v. Yankton, 101 U.S. 129 (1880)]
6733[emphasis added]
6734This knowledge can be extremely valuable. In one of the brilliant text
6735files on his electronic bulletin board system (BBS), Richard McDonald
6736utilized his voluminous research into the so-called 14th Amendment and
6737related constitutional law when he made the following pleading in opposition
6738to a traffic citation, of all things, in Los Angeles county municipal court:
673917. The Accused Common-Law Citizen [Defendant] hereby places all
6740parties and the court on NOTICE, that he is not a "citizen of the
6741United States**" under the so-called 14th Amendment, a juristic person
6742or a franchised person who can be compelled to perform to the
6743regulatory Vehicle Codes which are civil in nature, and challenges the
6744In Personam jurisdiction of the Court with this contrary conclusion of
6745law. This Court is now mandated to seat on the law side of its
6746capacity to hear evidence of the status of the Accused Citizen.
6747[see MEMOLAW.ZIP on Richard McDonald's electronic BBS]
6748[see also FMEMOLAW.ZIP and Appendix Y, emphasis added]
6749You might be wondering why someone would go to so much trouble to
6750oppose a traffic citation. Why not just pay the fine and get on with your
6751life? The answer lies, once again, in the fundamental and supreme Law of our
6752Land, the Constitution for the United States of America. Sovereign State
6753Citizens have learned to assert their fundamental rights, because rights
6754belong to the belligerent claimant in person. The Constitution is the last
6755bastion of the Common Law in our country. Were it not for the Constitution,
6756the Common Law would have been history a long time ago. The interpretation
6757of the Constitution is directly influenced by the fact that its provisions
6758are framed in the language of the English common law:
6759There is, however, one clear exception to the statement that there is
6760no national common law. The interpretation of the constitution of the
6761United States is necessarily influenced by the fact that its provisions
6762are framed in the language of the English common law, and are to be
6763read in the light of its history.
6764[United States v. Wong Kim Ark, 169 U.S. 891, 893 (1898)]
6765[emphasis added]
6766Sovereignty
6767Page 11 - 17 of 20
6768Under the Common Law, we are endowed by our Creator with the right to
6769travel. "Driving", on the other hand, is defined in State Vehicle Codes to
6770mean the act of chauffeuring passengers for hire. "Passengers" are those who
6771pay a "driver" to be chauffeured. Guests, on the other hand, are those who
6772accompany travelers without paying for the transportation. Driving, under
6773this definition, is a privilege for which a State can require a license.
6774Similarly, if you are a citizen of the United States**, you are subject to
6775its jurisdiction, and a State government can prove that you are obligated
6776thereby to obey all administrative statutes and regulations to the letter of
6777the law. These regulations include, of course, the requirement that all
6778subjects apply and pay for licenses to use the State and federal highways,
6779even though the highways belong to the People. The land on which they were
6780built, and the materials and labor expended in their construction, were all
6781paid for with taxes obtained from the People. Provided that you are not
6782engaged in any "privileged" or regulated activity, you are free to travel
6783anywhere you wish within the 50 States. Those States are real parties to the
6784U.S. Constitution and are therefore bound by all its terms.
6785Another one of your Common Law rights is the right to own property free
6786and clear of any liens. ("Unalienable" rights are rights against which no
6787lien can be established precisely because they are un-lien-able.) You enjoy
6788the right to own your automobile outright, without any lawful requirement
6789that you "register" it with the State Department of Motor Vehicles. The
6790State governments violated your fundamental rights when they concealed the
6791legal "interest" which they obtained in your car, by making it appear as if
6792you were required to register the car when you purchased it, as a condition
6793of purchase. This is fraud. If you don't believe me, then try to obtain the
6794manufacturer's statement of origin ("MSO") the next time you buy a new car or
6795truck. The implications and ramifications of driving around without a
6796license, and/or without registration, are far beyond the scope of this book.
6797Suffice it to say that effective methods have already been developed to deal
6798with law enforcement officers and courts, if and when you are pulled over and
6799cited for traveling without a license or tags. Richard McDonald is second to
6800none when it comes to preparing a successful defense to the civil charges
6801that might result. A Sovereign is someone who enjoys fundamental, Common Law
6802rights, and owning property free and clear is one of those fundamental
6803rights.
6804If you have a DOS-compatible personal computer and a modem, Richard
6805McDonald can provide you with instructions for accessing his electronic
6806bulletin board system ("BBS") and Internet website. There is a mountain of
6807information, and some of his computer files were rather large when he began
6808his BBS. Users were complaining of long transmission times to "download"
6809text files over phone lines from his BBS to their own personal computers.
6810So, McDonald used a fancy text "compression" program on all the text files
6811available on his BBS. As a consequence, BBS users must first download a DOS
6812program which "decompresses" the compressed files. Once this program is
6813running on your personal computer, you are then free to download all other
6814text files and to decompress them at your end. For example, the compressed
6815file "14AMREC.ZIP" contains the documentation which proves that the so-called
681614th Amendment was never ratified. If you have any problems or questions,
6817Richard McDonald is a very patient and generous man. And please tell him
6818where you read about him and his work (voice: 818-703-5037, BBS: 818-888-
68199882). His website is at Internet domain http://www.state-citizen.org.
6820The Federal Zone:
6821Page 11 - 18 of 20
6822As you peruse through McDonald's numerous court briefs and other
6823documents, you will encounter many gems to be remembered and shared with your
6824family, friends and associates. His work has confirmed an attribute of
6825sovereignty that is of paramount importance. Sovereignty is never diminished
6826in delegation. Thus, as sovereign individuals, we do not diminish our
6827sovereignty in any way by delegating our powers to State governments, to
6828perform services which are difficult, if not impossible for us to perform as
6829individuals. Similarly, States do not diminish their sovereignty by
6830delegating powers to the federal government, via the Constitution. As
6831McDonald puts it, powers delegated do not equate to powers surrendered:
683217. Under the Constitutions, "... we the People" did not surrender our
6833individual sovereignty to either the State or Federal Government.
6834Powers "delegated" do not equate to powers surrendered. This is a
6835Republic, not a democracy, and the majority cannot impose its will upon
6836the minority because the "LAW" is already set forth. Any individual
6837can do anything he or she wishes to do so long as it does not damage,
6838injure, or impair the same Right of another individual. This is where
6839the concept of a corpus delicti comes from to prove a "crime" or a
6840civil damage.
6841[see MEMOLAW.ZIP on Richard McDonald's electronic BBS]
6842[see also FMEMOLAW.ZIP and Appendix Y, emphasis added]
6843Indeed, to be a Citizen of the United States*** of America is to be one
6844of the Sovereign People, "a constituent member of the sovereignty, synonymous
6845with the people" [see 19 How. 404]. According to the 1870 edition of
6846Bouvier's Law Dictionary, the People are the fountain of sovereignty. It is
6847extremely revealing that there is no definition of "United States" as such in
6848this dictionary. However, there is an important discussion of the "United
6849States of America", where the delegation of sovereignty clearly originates in
6850the People and nowhere else:
6851The great men who formed it did not undertake to solve a question that
6852in its own nature is insoluble. Between equals it made neither
6853superior, but trusted to the mutual forbearance of both parties. A
6854larger confidence was placed in an enlightened public opinion as the
6855final umpire. The people parcelled out the rights of sovereignty
6856between the states and the United States**, and they have a natural
6857right to determine what was given to one party and what to the other.
6858... It is a maxim consecrated in public law as well as common sense and
6859the necessity of the case, that a sovereign is answerable for his acts
6860only to his God and to his own conscience.
6861[Bouvier's Law Dictionary, 14th Edition, 1870]
6862[defining "United States of America"]
6863[emphasis added]
6864We don't need to reach far back into another century to find proof that
6865the People are sovereign. In a Department of Justice manual revised in the
6866year 1990 (Document No. M-230), the meaning of American Citizenship was
6867described with these eloquent and moving words by the Commissioner of
6868Immigration and Naturalization: "You are no longer a subject of a
6869government!" Remember the 14th amendment?
6870Sovereignty
6871Page 11 - 19 of 20
6872The Meaning of American Citizenship
6873Commissioner of Immigration and Naturalization
6874Today you have become a citizen of the United States of America.
6875You are no longer an Englishman, a Frenchman, an Italian, a Pole.
6876Neither are you a hyphenated-American -- a Polish-American, an Italian-
6877American. You are no longer a subject of a government. Henceforth,
6878you are an integral part of this Government -- a free man -- a Citizen
6879of the United States of America.
6880This citizenship, which has been solemnly conferred on you, is a
6881thing of the spirit -- not of the flesh. When you took the oath of
6882allegiance to the Constitution of the United States, you claimed for
6883yourself the God-given unalienable rights which that sacred document
6884sets forth as the natural right of all men.
6885You have made sacrifices to reach this desired goal. We, your
6886fellow citizens, realize this, and the warmth of our welcome to you is
6887increased proportionately. However, we would tincture it with friendly
6888caution.
6889As you have learned during these years of preparation, this great
6890honor carries with it the duty to work for and make secure this longedfor
6891and eagerly-sought status. Government under our Constitution makes
6892American citizenship the highest privilege and at the same time the
6893greatest responsibility of any citizenship in the world.
6894The important rights that are now yours and the duties and
6895responsibilities attendant thereon are set forth elsewhere in this
6896manual. It is hoped that they will serve as a constant reminder that
6897only by continuing to study and learn about your new country, its
6898ideals, achievements, and goals, and by everlastingly working at your
6899citizenship can you enjoy its fruits and assure their preservation for
6900generations to follow.
6901May you find in this Nation the fulfillment of your dreams of
6902peace and security, and may America, in turn, never find you wanting in
6903your new and proud role of Citizen of the United States.
6904[Basic Guide to Naturalization and Citizenship]
6905[Immigration and Naturalization Service]
6906[U.S. Department of Justice]
6907[page 265, emphasis added]
6908# # #
6909The Federal Zone:
6910Page 11 - 20 of 20
6911Reader's Notes:
6912Page 12 - 1 of 16
6913Chapter 12:
6914Includes What?
6915Now, we juxtapose the sublime next to the ridiculous. In a previous
6916chapter, the issues of statutory construction that arose from the terms
6917"includes" and "including" were so complex, another chapter is required to
6918revisit these terms in greater detail. Much of the debate revolves around an
6919apparent need to adopt either an expansive or a restrictive meaning for these
6920terms, and to stay with this choice. The restrictive meaning settles a host
6921of problems. It confines the meaning of all defined terms to the list of
6922items which follow the words "include", "includes" and "including". An
6923official Treasury Decision, T.D. 3980, and numerous court decisions have
6924reportedly sided with this restrictive school of ambiguous terminology. The
6925Informer provides a good illustration of this school of thought by defining
6926"includes" and "include" very simply as follows:
6927... [T]o use "includes" as defined in IRC is restrictive.
6928[Which One Are You?, page 20]
6929... [I]n tax law it is defined as a word of restriction ....
6930[Which One Are You?, page 131]
6931In every definition that uses the word "include", only the words that
6932follow are defining the Term.
6933[Which One Are You?, page 13]
6934Author Ralph Whittington cites Treasury Decision ("T.D.") 3980 as his
6935justification for joining the restrictive school. According to his reading
6936of this T.D., the Secretary of the Treasury has adopted a restrictive meaning
6937by stating that "includes" means to "comprise as a member", to "confine", to
6938"comprise as the whole a part". This was the definition as found in the New
6939Standard Dictionary at the time this T.D. was published:
6940"(1) To comprise, comprehend, or embrace as a component part, item, or
6941member; as, this volume includes all his works, the bill includes
6942his last purchase."
6943"(2) To enclose within; contain; confine; as, an oyster shell
6944sometimes includes a pearl."
6945It is defined by Webster as follows:
6946"To comprehend or comprise, as a genus of the species, the whole
6947a part, an argument or reason the inference; to take or reckon
6948in; to contain; embrace; as this volume includes the essays to
6949and including the tenth."
6950The Century Dictionary defines "including," thus: "to comprise as a
6951part."
6952[Treasury Decision 3980, January-December, 1927]
6953[Vol. 29, page 64, emphasis added]
6954The Federal Zone:
6955Page 12 - 2 of 16
6956Authors like Whittington may have seized upon a partial reading of this
6957T.D., in order to solve what we now know to be a source of great ambiguity in
6958the IRC and in other United States Codes. For example, contrary to the
6959dictionary definitions cited above, page 65 of T.D. 3980 goes on to say the
6960following:
6961Perhaps the most lucid statement the books afford on the subject is in
6962Blanck et al. v. Pioneer Mining Co. et al. (Wash.; 159 Pac. 1077,
69631079), namely, "the word 'including' is a term of enlargement and not a
6964term of limitation, and necessarily implies that something is intended
6965to be embraced in the permitted deductions beyond the general language
6966which precedes. But granting that the word 'including' is a term of
6967enlargement, it is clear that it only performs that office by
6968introducing the specific elements constituting the enlargement. It
6969thus, and thus only, enlarges the otherwise more limited, preceding
6970general language. * * * The word 'including' introduces an
6971enlarging definition of the preceding general words, 'actual cost of
6972the labor,' thus of necessity excluding the idea of a further
6973enlargement than that furnished by the enlarging clause to introduced.
6974When read in its immediate context, as on all authority it must be
6975read, the word 'including' is obviously used in the sense of its
6976synonymous 'comprising; comprehending; embracing.'"
6977[Treasury Decision 3980, January-December, 1927]
6978[Vol. 29, page 65, emphasis added]
6979Now, didn't that settle the matter once and for all? Yes? No?
6980Treasury Decision 3980 is really not all that decisive, since it obviously
6981joins the restrictive school on one page, and then jumps ship to the
6982expansive school on the very next page. If you are getting confused already,
6983that's good. At least when it comes to "including", be proud of the fact you
6984are not alone:
6985This word has received considerable discussion in opinions of the
6986courts. It has been productive of much controversy.
6987[Treasury Decision 3980, January-December, 1927]
6988[Vol. 29, page 64, paragraph 3, emphasis added]
6989Amen to that!
6990One of my goals in this chapter is to demonstrate how the continuing
6991controversy is proof that terms with a long history of semantic confusion
6992should never be used in a Congressional statute. Such terms are proof that
6993the statute is null and void for vagueness. The confusion we experience is
6994inherent in the language, and no doubt deliberate, because the controversy
6995has not exactly been a well kept national security secret.
6996Let us see if the Restrictive School leads to any absurd results.
6997Reductio ad absurdum to the rescue again! Notice what results obtain for the
6998definition of "State" as found in 7701(a), the "Definitions" section of the
6999Internal Revenue Code:
7000Includes What?
7001Page 12 - 3 of 16
7002Step 1: Define "State" as follows:
7003The term "State" shall be construed to include the District of
7004Columbia, where such construction is necessary to carry out provisions
7005of this title.
7006[IRC 7701(a)(10)]
7007Step 2: Define "United States" as follows:
7008The term "United States" when used in a geographical sense includes
7009only the States and the District of Columbia.
7010[IRC 7701(a)(9)]
7011Step 3: Substitute text from one into the other:
7012The term "United States" when used in a geographical sense includes
7013only the Districts of Columbia and the District of Columbia. (Or is it
7014the District of Columbias?)
7015This is an absurd result, no? yes? none of the above? Is the
7016definition of "United States" clarified by qualifying it with the phrase
7017"when used in a geographical sense"? yes or no? This qualifier only makes
7018our situation worse, because the IRC rarely if ever distinguishes Code
7019sections which do use "United States" in a geographical sense, from Code
7020sections which do not use it in a geographical sense. Nor does the Code tell
7021us which sense to use as the default, that is, the intended meaning we should
7022use when the Code does not say "in a geographical sense". Identical problems
7023arise if we must be specific as to "where such construction is necessary to
7024carry out provisions of this title", as stated in 7701(a)(10). Where is it
7025not so necessary? What is "this title"? See IRC 7851(a)(6)(A), in chief.
7026The Informer's work is a good example of the confusion that reigns in
7027this empire of verbiage. Having emphatically sided with the Restrictive
7028School, he then goes on to define the term "States" to mean Guam, Virgin
7029Islands and "Etc.", as follows:
7030The term "States" in 26 USC 7701(a)(9) is referring to the federal
7031states of Guam, Virgin Islands, Etc., and NOT the 50 States of the
7032Union.
7033[Which One Are You?, page 98]
7034You can't have it both ways, can you? no? yes? maybe? Let us
7035marshall some help directly from the IRC itself. Against the fierce winds of
7036hot air emanating from the Restrictive School of Language Arts, there is a
7037section of the IRC which does appear to evidence a contrary intent to utilize
7038the expansive sense:
7039Includes and Including. The terms "includes" and "including" when used
7040in a definition contained in this title shall not be deemed to exclude
7041other things otherwise within the meaning of the term defined.
7042[IRC 7701(c), emphasis added]
7043The Federal Zone:
7044Page 12 - 4 of 16
7045Perhaps we should give this school a completely different name. How
7046about the Federal Area of Restrictive Terminology (F-A-R-T)? All in favor,
7047say AYE! (Confusion is a gaseous state.)
7048Section 7701(c) utilizes the key phrase "other things", which now
7049requires us to examine the legal meaning of things. (So, what else is new?)
7050Black's Law Dictionary, Sixth Edition, defines "things" as follows:
7051Things. The objects of dominion or property as contra-distinguished
7052from "persons." Gayer v. Whelan, 138 P.2d 763, 768. ... Such permanent
7053objects, not being persons, as are sensible, or perceptible through the
7054senses.
7055[emphasis added]
7056This definition, in turn, requires us to examine the legal meaning of
7057"persons" in Black's, as follows:
7058Person. In general usage, a human being (i.e. natural person), though
7059by statute term may include labor organizations, partnerships,
7060associations, corporations, legal representatives, trustees, trustees
7061in bankruptcy, or receivers.
7062Here, Black's Law Dictionary states that "person" by statute may include
7063artificial persons, in addition to natural persons. How, then, does the IRC
7064define "person"?
7065Person. -- The term "person" shall be construed to mean and include an
7066individual, a trust, estate, partnership, association, company or
7067corporation.
7068[IRC 7701(a)(1)]
7069Unfortunately, the IRC does not define the term "individual", so,
7070without resorting to the regulations in the CFR, we must again utilize a law
7071dictionary like Black's Sixth Edition:
7072Individual. As a noun, this term denotes a single person as
7073distinguished from a group or class, and also, very commonly, a private
7074or natural person as distinguished from a partnership, corporation, or
7075association ....
7076[emphasis added]
7077Therefore, "things" and "persons" must be distinguished from each
7078other, but the term "person" is not limited to human beings because it shall
7079be construed to mean and include an individual, trust, estate, partnership,
7080association, company or corporation. So, are we justified in making the
7081inference that individuals, trusts, estates, partnerships, associations,
7082companies and corporations are excluded from "things" as that term is used in
7083Section 7701(c)? This author says YES.
7084Notice also the strained grammar that is found in the phrase "shall be
7085construed to mean and include". Why not use the simpler grammar found in the
7086phrase "means and includes"? The answer: because the term "includes" is
7087defined by IRC 7701(c) to be expansive, that's why! But the term "include"
7088is not mentioned in 7701(c); therefore, it must be restrictive and is
7089Includes What?
7090Page 12 - 5 of 16
7091actually used as such in the IRC. Accordingly, no individual, trust, estate,
7092partnership, association, company or corporation could otherwise fall within
7093the statutory meaning of a term explicitly defined by the IRC because, being
7094"persons", none of these is a "thing"! Logically, then, "includes" and
7095"including" are also restrictive when they are used in IRC definitions of
7096"persons". Utterly amazing, yes?
7097Author Otto Skinner, as we already know from a previous chapter, cites
7098Section 7701(c) of the IRC as proof that we all belong in the Expansive
7099School of Language Science. Followers of this school argue that "includes
7100only" should be used, and is actually used in the IRC, when a restrictive
7101meaning is intended. In other words, "includes" and "including" are always
7102expansive. An intent contrary to the expansive sense is evidenced by using
7103"includes only" whenever necessary. Fine. All in favor say AYE. All
7104opposed, jump ship. The debate is finished yes? Not so fast. Cheerleaders,
7105put down your pom-poms. The operative concepts introduced by 7701(c) are
7106those "things otherwise within the meaning of the term defined". Now, the 64
7107million dollar question is this:
7108How does something join the class of things that are "within the
7109meaning of the term defined", if that something is not enumerated in
7110the definition?
7111We can obtain some help in answering this question by referring to an
7112older clarification of "includes" and "including" that was published in the
7113Code of Federal Regulations in the year 1961. This clarification introduces
7114the notion of "same general class". (So, you might be in the right school,
7115but you may be in the wrong class. Detention after school!) This
7116clarification reads:
7117170.59 Includes and including.
7118"Includes" and "including" shall not be deemed to exclude things other
7119than those enumerated which are in the same general class.
7120[26 CFR 170.59, revised as of January 1, 1961]
7121In an earlier chapter, a double negative was detected in the
7122"clarification" found at IRC 7701(c), namely, the terms "not ... exclude" are
7123equivalent to saying "include" ("not-ex" = "in"). Two negatives make a
7124positive. Apply this same finding to regulation 170.59 above, and you get
7125the following:
7126"Includes" and "including" shall be deemed to include things other than
7127those enumerated which are in the same general class.
7128What are those things which are "in the same general class", if they
7129have not been enumerated in the definition? This is one of the many possible
7130variations of the 64 million dollar question asked above. Are we any closer
7131to an answer? yes? no? maybe? (Is this astronomy class, or basket
7132weaving?) If a person, place or thing is not enumerated in the statutory
7133definition of a term, is it not a violation of the rules of statutory
7134construction to join such a person, place or thing to that definition? One
7135The Federal Zone:
7136Page 12 - 6 of 16
7137of these rules is a canon called the "ejusdem generis" rule, defined in
7138Black's Law Dictionary, Sixth Edition, as follows:
7139Under "ejusdem generis" canon of statutory construction, where general
7140words follow the enumeration of particular classes of things, the
7141general words will be construed as applying only to things of the same
7142general class as those enumerated.
7143[emphasis added]
7144Here the term "same general class" is used once again. One of the
7145major points of this book is to distinguish the 50 States from the federal
7146zone, by using the principle of territorial heterogeneity. The 50 States are
7147in one class, because of the constitutional restraints under which Congress
7148must operate inside those 50 States. The areas within the federal zone are
7149in a different class, because these same constitutional restraints simply do
7150not limit Congress inside that zone. This may sound totally correct, in
7151theory, but the IRC is totally mum on this issue of "general class" (because
7152it has none). Yes, this is all the more reason why the IRC is null and void
7153for vagueness.
7154This conclusion is supported by two other rules of statutory
7155construction. The first of these is noscitur a sociis, in Latin. Black's
7156defines this rule as follows:
7157Noscitur a sociis. It is known from its associates. The meaning of a
7158word is or may be known from the accompanying words. Under the
7159doctrine of "noscitur a sociis", the meaning of questionable or
7160doubtful words or phrases in a statute may be ascertained by reference
7161to the meaning of other words or phrases associated with it.
7162[emphasis added]
7163In this context, the 50 States are associated with each other by sharing
7164their membership in the Union under the Constitution. The land areas within
7165the federal zone are associated with each other by sharing their inclusion
7166within the zone over which Congress has exclusive legislative jurisdiction.
7167The areas inside and outside the zone are therefore dissociated from each
7168other because of this key difference, i.e., the Union, in or out.
7169The second rule is inclusio unius est exclusio alterius, in Latin.
7170Black's defines this rule as follows:
7171Inclusio unius est exclusio alterius. The inclusion of one is the
7172exclusion of another. The certain designation of one person is an
7173absolute exclusion of all others. ... This doctrine decrees that where
7174law expressly describes [a] particular situation to which it shall
7175apply, an irrefutable inference must be drawn that what is omitted or
7176excluded was intended to be omitted or excluded.
7177[emphasis added]
7178Are we, or are we not, therefore, justified in drawing the following
7179irrefutable inferences?
7180Includes What?
7181Page 12 - 7 of 16
7182Places omitted from the statutory definitions of "State", "States" and
7183"United States" were intended to be omitted (like California, Maine,
7184Florida and Oregon).
7185"Include" is omitted from the definition of "includes" and "including"
7186because the latter terms were intended to be expansive, while the
7187former was intended to be restrictive.
7188Let's dive back into the Code in order to find any help we can get on this
7189issue. In Subtitle F, the Code contains a formal definition of "other terms"
7190as follows:
7191Other terms. -- Any term used in this subtitle with respect to the
7192application of, or in connection with, the provisions of any other
7193subtitle of this title shall have the same meaning as in such
7194provisions.
7195[IRC 7701(a)(28)]
7196Let's use the rules of grammar to decompose this definition of "other terms"
7197into two separate definitions, as follows:
7198Any term used in Subtitle F with respect to the application of the
7199provisions of any other subtitle shall have the same meaning as in such
7200provisions.
7201-or-
7202Any term used in Subtitle F in connection with the provisions of any
7203other subtitle shall have the same meaning as in such provisions.
7204Now, therefore, does IRC 7701(a)(28) clarify anything? For example, if there
7205is a different definition of "State" in the provisions of some other
7206subtitle, do we now know enough to decide whether or not:
7207(1) that different definition should be expanded with things that are
7208within the meaning as defined at 7701(a)(10)? Yes or No?
7209(2) the definition at 7701(a)(10) should be expanded with things that
7210are within the meaning of that different definition? Yes or No?
7211(3) all of the above are correct?
7212(4) none of the above is correct?
7213If you are having difficulty answering these questions, don't blame
7214yourself. With all this evidence staring you in the face, it is not
7215difficult to argue that the confusion which you are experiencing is inherent
7216in the statute and therefore deliberate.
7217To confuse our separate cheering squads even more, the word "shall"
7218means "may". Squad leaders, let's see those pom-poms. Since this may be
7219most difficult for many of you to swallow without convincing proof, the
7220following court decisions leave no doubt about the legal meaning of "shall".
7221The Federal Zone:
7222Page 12 - 8 of 16
7223In the decision of Cairo & Fulton R.R. Co. v. Hecht, 95 U.S. 170, the U.S.
7224Supreme Court stated:
7225As against the government the word "shall" when used in statutes, is to
7226be construed as "may," unless a contrary intention is manifest.
7227[emphasis added]
7228Does the IRC manifest a contrary intent? In the decision of George Williams
7229College v. Village of Williams Bay, 7 N.W.2d 891, the Supreme Court of
7230Wisconsin stated:
7231"Shall" in a statute may be construed to mean "may" in order to avoid
7232constitutional doubt.
7233In the decision of Gow v. Consolidated Coppermines Corp., 165 Atlantic 136,
7234that court stated:
7235If necessary to avoid unconstitutionality of a statute, "shall" will be
7236deemed equivalent to "may" ....
7237Maybe we can shed some light on the overall situation by treating the
7238terms "State" and "States" as completely different words. After all, the
7239definition of "United States" uses the plural form twice, and there is no
7240definition of "States" as such. Note carefully the following:
7241The term "State" shall be construed to include the District of
7242Columbia, where such construction is necessary to carry out provisions
7243of this title.
7244[IRC 7701(a)(10)]
7245The term "United States" when used in a geographical sense includes
7246only the States and the District of Columbia.
7247[IRC 7701(a)(9)]
7248So, can we assume that the singular form of words necessarily has a
7249meaning that is different from the plural form of words? This might help us
7250to distinguish the two terms "include" and "includes", since one is the
7251singular form of the verb, while the other can be the plural form of the
7252verb. For example, the sentence "It includes ..." has a singular subject and
7253a singular predicate. The sentence "They include ..." has a plural subject
7254and a plural predicate, but the sentence "I include ..." has a singular
7255subject and predicate. What if "include" is used as an infinitive, rather
7256than a predicate?
7257Recall that the "clarification" at IRC 7701(c) contains explicit
7258references to "includes" and "including", but not to the word "include".
7259Does this provide us with a definitive reason for deciding the term "include"
7260is restrictive, while the terms "includes" and "including" are expansive?
7261Some people, including this author, are completely satisfied that it does
7262(but not all people are so satisfied). What if these latter terms are used
7263in the restrictive sense of "includes only" or "including only"? Are you
7264getting even more confused now? Welcome to the state of confusion (surely a
7265gaseous state). Recall once again the definition of "State" at 7701(a)(10):
7266Includes What?
7267Page 12 - 9 of 16
7268The term "State" shall be construed to include the District of
7269Columbia, where such construction is necessary to carry out provisions
7270of this title.
7271[IRC 7701(a)(10)]
7272Now recall the definition of "United States" at 7701(a)(9):
7273The term "United States" when used in a geographical sense includes
7274only the States and the District of Columbia.
7275[IRC 7701(a)(9)]
7276Title 1 and the Code of Federal Regulations come to the rescue. Plural forms
7277and singular forms are interchangeable:
7278170.60 Inclusive language.
7279Words in the plural form shall include the singular and vice versa, and
7280words in the masculine gender shall include the feminine as well as
7281trusts, estates, partnerships, associations, companies, and
7282corporations.
7283[26 CFR 170.60, revised as of January 1, 1961]
7284Now, doesn't that really clarify everything? If "includes" is singular
7285and "include" is plural, using the above rule for "inclusive language", the
7286term "include" includes "includes". Wait, didn't we already make this
7287remarkable discovery in a previous chapter? Answer: No, in that chapter, we
7288discovered that "includes" includes "include". But, now we have conflicting
7289results. Didn't we just prove that one is restrictive and the other is
7290expansive? What gives? Remember, also, that "shall" means "may".
7291Therefore, our rule for "inclusive language" from the CFR can now be
7292rewritten to say that "words in the plural form MAY include the singular"
7293(and may NOT, depending on whether it is a week from Tuesday). If this is
7294Tuesday, then we must be in Belgium. At least one major mystery is now
7295solved, maybe! (MAYbe?)
7296Does the Code of Federal Regulations clarify any of the definitions
7297found in section 7701 of the Internal Revenue Code? The following table
7298lists the headings of corresponding sections from the CFR, beginning at 26
7299CFR 301.7701-1:
7300Definitions
7301301.7701-1 Classification of organizations for federal tax purposes
7302301.7701-2 Business entities; definitions
7303301.7701-3 Clarification of certain business entities
7304301.7701-4 Trusts
7305301.7701-5 Domestic, foreign, resident, and nonresident persons
7306301.7701-6 Definitions; person, fiduciary
7307301.7701-8 Military or naval forces and Armed Forces of the United
7308States
7309301.7701-9 Secretary or his delegate
7310301.7701-10 District director
7311301.7701-11 Social security number
7312301.7701-12 Employer identification number
7313The Federal Zone:
7314Page 12 - 10 of 16
7315301.7701-13 Pre-1970 domestic building and loan association
7316301.7701-13A Post-1969 domestic building and loan association
7317301.7701-14 Cooperative bank
7318301.7701-15 Income tax return preparer
7319301.7701-16 Other terms
7320301.7701-17T Collective-bargaining plans and agreements
7321[26 CFR 301.7701-1 thru 7701-17T]
7322This list contains such essential topics as trusts, associations,
7323cooperative banks, and pre-1970 and post-1969 domestic building and loan
7324associations. In fact, there are numerous pages dedicated to these building
7325and loan associations. However, the reader reaches the end of the list
7326without finding any reference to "State" or "United States". Instead, the
7327following regulation is found near the end of the list:
7328301.7701-16 Other terms.
7329For a definition of the term "withholding agent" see section 1.1441-
73307(a). Any other terms that are defined in section 7701 and that are
7331not defined in sections 301.7701-1 to 301.7701-15, inclusive, shall,
7332when used in this chapter, have the meanings assigned to them in
7333section 7701.
7334[26 CFR 301.7701-16]
7335Like it or not, we are right back where we started, in IRC Section
73367701, the "definitions" section of that Code, where "other terms" are defined
7337differently. You may pass "GO" again, but do not collect 200 dollars. You
7338must pay the bank instead! (Try changing that rule the next time you play
7339Monopoly. The Monopoly bank will, of course, end up owning everything in
7340sight.) You are also free to search some 10,000 pages of additional
7341regulations to determine if the fluctuating definitions of the terms "State"
7342and "United States" are clarified anywhere else in the Code of Federal
7343Regulations. Happy hunting!
7344The only way out of this swamp is to rely on something other than the
7345murky gyrations of conflicting, mutually destructive semantic mishmash. That
7346something is The Fundamental Law: Congress can only tax the Citizens of
7347foreign States under special and limited circumstances. Congress can only
7348levy a direct tax on Citizens of the 50 States if that tax is duly
7349apportioned. Congress can only levy an indirect tax on Citizens of the 50
7350States if that tax is uniform. These are the chains of the Constitution.
7351Read Thomas Jefferson.
7352The historical record documents undeniable proof that the confusion,
7353ambiguity and jurisdictional deceptions now built into the IRC were
7354deliberate. This historical record provides the "smoking gun" that proves
7355the real intent was deception. The first Internal Revenue Code was Title 35
7356of the Revised Statutes of June 22, 1874. On December 5, 1898, Mr. Justice
7357Cox of the Supreme Court of the District of Columbia delivered an address
7358before the Columbia Historical Society. In this address, he discussed the
7359history of the District of Columbia as follows:
7360Includes What?
7361Page 12 - 11 of 16
7362In June 1866, an act was passed authorizing the President to
7363appoint three commissioners to revise and bring together all the
7364statutes .... [T]he act does not seem, in terms, to allude to the
7365District of Columbia, or even to embrace it .... Without having any
7366express authority to do so, they made a separate revision and
7367collection of the acts of Congress relating to the District, besides
7368the collection of general statutes relating to the whole United States.
7369Each collection was reported to Congress, to be approved and enacted
7370into law .... [T]he whole is enacted into law as the body of the
7371statute law of the United States, under the title of Revised Statutes
7372as of 22 June 1874. ...
7373[T]he general collection might perhaps be considered, in a
7374limited sense as a code for the United States, as it embraced all the
7375laws affecting the whole United States within the constitutional
7376legislative jurisdiction of Congress, but there could be no complete
7377code for the entire United States, because the subjects which would be
7378proper to be regulated by a code in the States are entirely outside the
7379legislative authority of Congress.
7380[District of Columbia Code, Historical Section]
7381[emphasis added]
7382More than half a century later, the deliberate confusion and ambiguity
7383were problems that not only persisted; they were getting worse by the minute.
7384In the year 1944, during Roosevelt's administration, Senator Barkley made a
7385speech from the floor of the U.S. Senate in which he complained:
7386Congress is to blame for these complexities to the extent, and
7387only to the extent, to which it has accepted the advice, the
7388recommendations, and the language of the Treasury Department, through
7389its so-called experts who have sat in on the passage of every tax
7390measure since I can remember.
7391Every member of the House Ways and Means Committee and every
7392member of the Senate Finance Committee knows that every time we have
7393undertaken to write a new tax bill in the last 10 years we have started
7394out with the universal desire to simplify the tax laws and the forms
7395through which taxes are collected. We have attempted to adopt policies
7396which would simplify them.
7397When we have agreed upon a policy, we have submitted that policy
7398to the Treasury Department to write the appropriate language to carry
7399out that policy; and frequently the Treasury Department, through its
7400experts, has brought back language so complicated and circumambient
7401that neither Solomon nor all the wise men of the East could understand
7402it or interpret it.
7403[Congressional Record, 78th Congress, 2nd Session]
7404[Vol. 90, Part 2, February 23, 1944, pages 1964-5]
7405[emphasis added]
7406The Federal Zone:
7407Page 12 - 12 of 16
7408You have, no doubt, heard that ignorance of the law is no excuse for
7409violating the law. This principle is explicitly stated in the case law which
7410defines the legal force and effect of administrative regulations. But,
7411ambiguity and deception in the law are an excuse, and the ambiguity in the
7412IRC is a major cause of our ignorance.
7413Moreover, this principle applies as well to ambiguity and deception in
7414the case law. Lack of specificity leads to uncertainty, which leads in turn
7415to court decisions which are also void for vagueness. The 6th Amendment
7416guarantees our right to ignore vague and ambiguous laws, and this must be
7417extended to vague and ambiguous case law. In light of their enormous
7418influence in laying the foundations for territorial heterogeneity and a
7419legislative democracy for the federal zone, The Insular Cases have been
7420justly criticized, by peers, for lacking the minimum judicial precision
7421required in such cases:
7422The Absence of Judicial Precision. -- Whether the decisions in
7423the Insular Cases are considered correct or incorrect, it seems
7424generally admitted that the opinions rendered are deficient in
7425clearness and in precision, elements most essential in cases of such
7426importance. Elaborate discussions and irreconcilable differences upon
7427general principles, and upon fascinating and fundamental problems
7428suggested by equally indiscriminating dicta in other cases, complicate,
7429where they do not hide, the points at issue. It is extremely difficult
7430to determine exactly what has been decided; the position of the court
7431in similar cases arising in the future, or still pending, is entirely a
7432matter of conjecture. ...
7433It is still more to be regretted that the defects in the decision
7434under discussion are by no means exceptional. From our system of
7435allowing judges to express opinion upon general principles and of
7436following judicial precedent, two evils almost inevitably result: our
7437books are overcrowded with dicta, while dictum is frequently taken for
7438decision. Since the questions involved are both fundamental and
7439political, in constitutional cases more than in any others the
7440temptation to digress, necessarily strong, is seldom resisted; at the
7441same time it is strikingly difficult, in these cases, to distinguish
7442between decision, ratio decidendi, and dictum. Yet because the
7443questions involved are both extensive and political, and because the
7444evils of a dictum or of an ill-considered decision are of corresponding
7445importance, a precise analysis, with a thorough consideration of the
7446questions raised, and of those questions only, is imperative. The
7447continued absence of judicial precision may possibly become a matter of
7448political importance; for opinions such as those rendered cannot be
7449allowed a permanent place in our system of government.
7450[15 Harvard Law Review 220, anonymous]
7451The average American cannot be expected to have the skill required to
7452navigate the journey we just took through the verbal swamp that is the
7453Internal Revenue Code, nor does the average American have the time required
7454to make such a journey. Chicanery does not make good law. The rules of
7455statutory construction fully support this unavoidable conclusion:
7456Includes What?
7457Page 12 - 13 of 16
7458... [I]f it is intended that regulations will be of a specific and
7459definitive nature then it will be clear that the only safe method of
7460interpretation will be one that "shall suppress the mischief, and
7461advance the remedy, and to suppress subtle inventions and evasions for
7462the continuance of the mischief ...."
7463[Statutes and Statutory Construction, by J. G. Sutherland]
7464[3rd Edition, Volume 2, Section 4007, page 280 (1943)]
7465The U.S. Supreme Court has also agreed, in no uncertain terms, as follows:
7466... [K]eeping in mind the well settled rule that the citizen is exempt
7467from taxation unless the same is imposed by clear and unequivocal
7468language, and that where the construction of a tax law is doubtful, the
7469doubt is to be resolved in favor of those upon whom the tax is sought
7470to be laid.
7471[Spreckels Sugar Refining Co. v. McLain]
7472[192 U.S. 397 (1903), emphasis added]
7473In the interpretation of statutes levying taxes it is the established
7474rule not to extend their provisions, by implication, beyond the clear
7475import of the language used, or to enlarge their operations so as to
7476embrace matters not specifically pointed out. In case of doubt they
7477are construed most strongly against the Government, and in favor of the
7478citizen.
7479[United States v. Wigglesworth]
7480[2 Story 369, emphasis added]
7481On what basis, then, should the Internal Revenue Service be allowed to
7482extend the provisions of the IRC beyond the clear import of the language
7483used?
7484On what basis can the IRS act when that language has no clear import?
7485On what basis is the IRS justified in enlarging their operations so as
7486to embrace matters not specifically pointed out? The answer is tyranny. The
7487"golden" retriever has broken his leash and is now tearing up the
7488neighborhood to fetch the gold. What a service!
7489Consider for a moment the sheer size of the class of people now
7490affected by the fraudulent 16th Amendment. First of all, take into account
7491all those Americans who have passed away, but who paid taxes into the
7492Treasury after the year 1913. How many of those correctly understood all the
7493rules, when people like Frank R. Brushaber were confused as early as 1914?
7494Add to that number all those Americans who are still alive today and
7495who have paid taxes to the IRS because they thought there was a law, and they
7496thought that law was the 16th Amendment. After all, they were told as much
7497by numerous federal officials and possibly also their parents, friends,
7498relatives, school teachers, scout masters and colleagues. Don't high school
7499civics classes now spend a lot of time teaching students how to complete IRS
75001040 forms and schedules, instead of teaching the Constitution?
7501The Federal Zone:
7502Page 12 - 14 of 16
7503Donald C. Alexander, when he was Commissioner of Internal Revenue,
7504published an official statement in the Federal Register that the 16th
7505Amendment was the federal government's general authority to tax the incomes
7506of individuals and corporations (see Chapter 1 and Appendix J). Sorry,
7507Donald, you were wrong. At this point in time, it is impossible for us to
7508determine whether you were lying, or whether you too were a victim of the
7509fraud.
7510Just how many people are in the same general class of those affected by
7511the fraudulent 16th Amendment? Is it 200 million? Is it 300 million?
7512Whatever it is, it just boggles the imagination. It certainly does involve a
7513very large number of federal employees who went to work for Uncle Sam in good
7514faith.
7515It is clear, there is a huge difference between the area covered by the
7516federal zone, and the area covered by the 50 States. Money is a powerful
7517motivation for all of us. Congress had literally trillions of dollars to
7518gain by convincing most Americans they were inside its revenue base when, in
7519fact, most Americans were outside its revenue base, and remain outside even
7520today.
7521This is deception on a grand scale, and the proof of this deception is
7522found in the Code itself. It is no wonder why public relations "officials"
7523of the IRS cringe in fear when dedicated Patriots like Godfrey Lehman admit,
7524out loud and in person, that they have read the law.
7525It is quite stunning how the carefully crafted definitions of "United
7526States" do appear to unlock a Code that is horribly complex and deliberately
7527so. As fate would have it, these carefully crafted definitions also expose
7528perhaps the greatest fiscal fraud that has ever been perpetrated upon any
7529people at any time in the history of the world.
7530It is now time for a shift in the wind.
7531# # #
7532Includes What?
7533Page 12 - 15 of 16
7534Reader's Notes:
7535The Federal Zone:
7536Page 12 - 16 of 16
7537Reader’s Notes:
7538Page 13 - 1 of 8
7539Chapter 13:
7540Amendment 16 Post Mortem
7541The documented failure of the 16th Amendment to be ratified is a cause
7542for motivating all of us to isolate the precise effects of this failed
7543ratification. In previous chapters, a careful analysis of the relevant case
7544law revealed two competing groups of decisions. One group puts income taxes
7545in the category of direct taxes. Another group puts them in the category of
7546indirect taxes. One group argues that the 16th Amendment did amend the
7547Constitution by authorizing an unapportioned direct tax, but only on income,
7548leaving the apportionment rule intact for all other direct taxes. Another
7549group argues that the 16th Amendment did not really amend the Constitution;
7550it merely clarified the taxing power of Congress by overturning the
7551"principle" on which the Pollock case was decided. By distilling the cores
7552of these two competing groups, we are thereby justified in deciding that a
7553ratified 16th Amendment produced one or both of the following two effects:
75541. Inside the 50 States, it removed the apportionment restriction
7555from taxes laid on income, but it left this restriction in place
7556for all other direct taxes.
75572. It overturned the principle advanced in the Pollock case which
7558held that a tax on income is, in legal effect, a tax on the
7559source of that income.
7560Federal courts did not hesitate to identify the effects of a ratified
756116th Amendment. Now that the evidence against its ratification is so
7562overwhelming and incontrovertible, the federal courts are evidently unwilling
7563to identify the effects of the failed ratification. These courts have opted
7564to call it a "political" question, even though it wasn't a "political"
7565question in years immediately after Philander C. Knox declared it ratified.
7566It is difficult to believe that the federal courts are now incapable of
7567exercising the logic required to isolate the legal effects of the failed
7568ratification. Quite simply, if a ratified 16th Amendment had effect X, then
7569a failed ratification proves that X did not happen. What is X? Their
7570"political" unwillingness to exercise basic logic means that the federal
7571courts have abdicated their main responsibility -- to uphold and defend the
7572U.S. Constitution -- and that we must now do it for them instead (see
7573Appendix W concerning "Direct Taxation and the 1990 Census"). At a minimum,
7574the value of X is one or both of the two effects itemized above.
7575Some people continue to argue, even now, that the 16th Amendment
7576doesn't even matter at all. Soon after The Federal Zone began to circulate
7577among readers throughout America, the flow of complimentary letters grew to
7578become a steady phenomenon. As of this writing, no substantive criticisms
7579have been received of its two major theses, i.e., territorial heterogeneity
7580and void for vagueness. Occasional criticisms did occur, but most of them
7581were minor, lacking in substance, or lacking authority in law. The following
7582is exemplary of the most serious of these criticisms:
7583The Federal Zone:
7584Page 13 - 2 of 8
7585I fail to understand the harping on the invalid ratification of the
758616th Amendment. It really doesn't matter whether the amendment was
7587ratified or not -- Brushaber ruled "no new powers, no new subjects",
7588and further went on to tell us that Congress always had the power to
7589tax what the 16th Amendment said could be taxed.
7590[private communication, June 1, 1992]
7591It does matter whether the amendment was ratified or not, for several
7592reasons. One obvious reason is that the Federal Register contains at least
7593one official statement that the 16th Amendment is the federal government's
7594general authority to tax the incomes of individuals and corporations (see
7595Chapter 1 and Appendix J). If the amendment failed, then it cannot be the
7596government's general authority to tax the incomes of individuals and
7597corporations. There may be some other authority, but that authority is
7598definitely not the 16th Amendment. The official statement in the Federal
7599Register is further evidence of fraud and misrepresentation, even if its
7600author was totally innocent.
7601Another reason is that, contrary to Brushaber, other decisions of the
7602Supreme Court, as well as lower federal courts, have ruled that taxes on
7603incomes are direct taxes, and the 16th Amendment authorized an unapportioned
7604direct tax on incomes. Author Jeffrey Dickstein has done a very thorough job
7605of demonstrating how the Brushaber ruling stands in stark contrast to the
7606Pollock case before it, and to the Eisner case after it. The Brushaber
7607decision is an anomaly for this reason, and for this reason alone. It ruled
7608that income taxes are indirect excise taxes (which necessarily must be
7609uniform across the States of the Union). However, the Brushaber court failed
7610even to mention "The Insular Cases" and the doctrine of territorial
7611heterogeneity that issued therefrom (see Appendix W).
7612If the 16th Amendment authorized an unapportioned direct tax on
7613incomes, per Eisner, Peck, Shaffer and Richardson, then such a tax is not
7614required to be either uniform or apportioned. Therefore, this group of
7615decisions did interpret the 16th Amendment differently from Brushaber; they
7616conclude that it did amend the Constitution and that it did create a new
7617power, namely, the power to impose an unapportioned direct tax. Contrary to
7618the private communication quoted above, Congress has not always had the power
7619to impose an unapportioned direct tax on the States of the Union. In view of
7620the evidence which now proves that the 16th Amendment was never ratified, it
7621is correct to say that Congress has never had the power to impose an
7622unapportioned direct tax on the States of the Union. The Pollock decision
7623now becomes a major hurdle standing in the government's way, because the
7624Pollock Court clearly found that all taxes on income are direct taxes, and
7625all direct taxes levied inside the 50 States must be apportioned. The
7626Pollock decision is most relevant to any direct tax which Congress might levy
7627against the incomes and property of State Citizens, as distinct from citizens
7628of the United States**. (Each has citizens of its own.)
7629Put in the simplest of language, a ratified 16th Amendment either
7630changed the Constitution, or it did not change the Constitution. If it
7631changed the Constitution, one change that did occur was to authorize an
7632unapportioned direct tax on the incomes of State Citizens. If it did not
7633change the Constitution, the apportionment restriction has always been
7634Amendment 16 Post Mortem
7635Page 13 - 3 of 8
7636operative within the 50 States, even now. Either way, the failed
7637ratification proves that Congress must still apportion all direct taxes which
7638it levies upon the incomes and property of Citizens of the 50 States.
7639Corporations, on the other hand, are statutory creations, whether they
7640are domestic or foreign. As such, they enjoy the privilege of limited
7641liability. Congress is free to levy taxes on the exercise of this privilege
7642and to call them indirect excises. Within the 50 States, such an excise must
7643be uniform for it to be constitutional; within the federal zone, such an
7644excise need not be uniform. In the context of statutory privileges, the
7645apportionment rule is completely irrelevant. Therefore, the status of
7646"United States** citizens" is also a statutory privilege the exercise of
7647which can be taxed with indirect excises, regardless of where that privilege
7648might be exercised. The subject of such indirect taxes is the exercise of a
7649statutory privilege; the measure of such taxes is the amount of income
7650derived from exercising that privilege.
7651Justice White did all of us a great disservice by writing a ruling that
7652is tortuously convoluted, in grammar and in logic. If he had taken The
7653Insular Cases explicitly into account, and if he had distinguished Frank
7654Brushaber's situs from the situs of Brushaber's defendant, the principle of
7655territorial heterogeneity would have clarified the decision enormously.
7656Specifically, according to the doctrine established by Downes v. Bidwell in
76571901, Congress is not required to apportion direct taxes within the federal
7658zone, nor is Congress required to levy uniform excise taxes within the
7659federal zone. However, within the 50 States of the Union, all direct taxes
7660must still be apportioned, and all indirect excise taxes must still be
7661uniform. Now that we know the 16th Amendment never became law, these
7662restrictions still apply to any tax which Congress levies inside the 50
7663States. Quite naturally, a problem arises when one party is inside the
7664federal zone, and the other party is outside the federal zone. That was the
7665case in Brushaber.
7666The Downes doctrine defined the "exclusive" authorities of 1:8:17 and
76674:3:2 in the U.S. Constitution to mean that Congress was not subject to the
7668uniformity restriction on excise taxes levied inside the federal zone. By
7669necessary implication, Congress is not subject to the apportionment
7670restriction on direct taxes levied inside the federal zone. It is important
7671to realize that the Union Pacific Railroad Company was a domestic
7672corporation, incorporated by Congress, inside the federal zone. A tax on
7673such a corporation was a tax levied within the federal zone, where the
7674apportionment and uniformity restrictions simply did not exist.
7675Instead of making this important territorial distinction, Justice White
7676launched into an exercise of questionable logic, attributing statements to
7677the Pollock court which the Pollock court did not make, adding words to the
767816th Amendment that were not there, hoping his logic would persuade the rest
7679of us that the Pollock principle was now overturned. According to White, the
7680principle established in Pollock was that a tax on income was a tax on the
7681source of that income. In this context, White is distinguishing income from
7682source, in the same way that interest is distinguished from principal. This
7683same distinction was made by a federal Circuit court in the Richardson case
7684as late as the year 1961. In light of the overriding importance of the
7685Downes doctrine, it is difficult and also unnecessary to elevate the
7686The Federal Zone:
7687Page 13 - 4 of 8
7688importance of this distinction any higher; it is also important to keep it
7689in proper perspective. Within the federal zone, Congress can tax interest
7690and principal (income and source) without any regard for apportionment or
7691uniformity. Therefore, within the federal zone, the distinction is academic.
7692Whatever the merits of this distinction between income and source,
7693White was wrong to ignore the key Pollock holding that income taxes are
7694direct taxes. The Pollock decision investigated the relevant history of
7695direct taxes in depth. White was also wrong to ignore the clear legislative
7696history of the 16th Amendment, the stated purpose of which was to eliminate
7697the apportionment restriction which caused the Pollock court to overturn an
7698income tax Act in the first place. That Act was found to be unconstitutional
7699precisely because it levied a direct tax on incomes without apportionment.
7700Finally, White was wrong to launch into his lengthy discussion of the 16th
7701Amendment without even mentioning The Insular Cases, when these cases were
7702relatively recent authority for the proposition that Congress did not need an
7703amendment to impose taxes without apportionment or uniformity inside the
7704federal zone. This may be hindsight, but hindsight is always 20/20.
7705The relevance of the 16th Amendment to the tax on Frank Brushaber's
7706dividend is another matter. Two schools of thought have emerged, with
7707opposing views of that relevance. One school relies heavily on the key
7708precedents established by Pollock. Specifically, the original investment is
7709the "source" of Brushaber's income. A tax on the source is a direct tax.
7710Pollock found that a tax on income is a tax on the source. Therefore, a tax
7711on income is a direct tax. Without a ratified 16th Amendment, such a tax
7712must be apportioned whenever it is levied inside the 50 States. With a
7713ratified 16th Amendment, such a tax need not be apportioned whenever it is
7714levied inside the 50 States. This school argues that Brushaber's dividend
7715was taxable because the 16th Amendment removed the apportionment requirement
7716on such a tax. But, is the tax really levied "inside the 50 States", if the
7717activity which produced the income was actually inside the federal zone? The
7718importance of the Pollock principle now comes to the fore.
7719The competing school argues that a ratified 16th Amendment was not
7720strictly necessary for Congress to impose a direct tax on Brushaber's
7721dividend without apportionment. Granted, he was a State Citizen who lived
7722and worked within one of the States of the Union. For this reason, the
7723government found that he was a "nonresident alien" under their own rules. If
7724White's ruling did anything else, it held that Brushaber's dividend was also
7725taxable without apportionment and without uniformity because its "source" was
7726inside the federal zone, and that "source" was a taxable activity (profit
7727generation by a domestic corporation). In this context, it does make sense
7728to jettison the Pollock "principle" and to distinguish interest from
7729principal, dividend from original stock investment. Having done so, Justice
7730White could argue that the "source" of Brushaber's dividend was domestic
7731corporate activity and not Brushaber's original investment. Unfortunately
7732for all of us, however, Brushaber did not challenge the constitutionality of
7733the income tax as applied to his dividend, so this question was not properly
7734before the Supreme Court; Brushaber did challenge the constitutionality of
7735the income tax as applied to his defendant.
7736Unfortunately for Mr. Brushaber, he thought that the defendant was a
7737foreign corporation. The government was correct to point out that the
7738Amendment 16 Post Mortem
7739Page 13 - 5 of 8
7740defendant was actually a domestic corporation, chartered by Congress. As
7741such, this corporation's profits could be taxed by Congress without
7742apportionment or uniformity, and without an amendment authorizing such a tax.
7743For the same reasons, Brushaber's share of those same profits could also be
7744taxed without constitutional restrictions, and without an amendment
7745authorizing such a tax, even though he was outside the federal zone and
7746inside a State of the Union. In this context, it is revealing that the
7747Internal Revenue Code imposes a uniform "flat tax" when such income is
7748received by nonresident aliens, giving it the appearance of a uniform
7749indirect tax. However, this "uniformity" is not the consequence of a
7750constitutional requirement; it is the consequence of decisions by Congress
7751acting in its capacity as a majority-ruled legislative democracy.
7752Moreover, under the authority of the Downes doctrine, Congress is
7753empowered to define domestic corporate profits as "profits before dividends
7754are paid", and to penalize all domestic corporations which attempt to avoid
7755federal taxes by defining their profits as "profits after dividends are
7756paid." Within the federal zone, Congress has the power to assert a superior
7757claim to all profits of domestic corporations, and to define those profits
7758any way it chooses. By "superior claim" we mean that Congress comes before
7759stockholders inside the federal zone, even if the stockholders are outside
7760the federal zone, and even if the money they used to purchase their stock
7761came from a source that was outside the federal zone. A ratified 16th
7762Amendment would have had no effect whatsoever on the power of Congress to
7763levy a tax without any restrictions on any of the assets of domestic
7764corporations. A ratified 16th Amendment would have empowered Congress to
7765tax, without apportionment, dividends paid to State Citizens by foreign
7766corporations when both were inside the 50 States, but a ratified 16th
7767Amendment was not strictly necessary for Congress to tax dividends paid to
7768them by domestic corporations. Neither was a ratified 16th Amendment
7769necessary for Congress to tax dividends paid by either type of corporation to
7770citizens of other nations like France, since the latter citizens enjoy none
7771of the protections guaranteed by the Constitution for the United States of
7772America. In this context, it is important to make a careful distinction
7773between dividends and corporate profits.
7774It is clear that the second of these two competing schools of thought
7775has now prevailed. Even though there are serious logical and obvious
7776grammatical problems with Justice White's ruling, in retrospect he was right
7777to question the Pollock principle. The situs principle is easier to
7778understand, if only because it dovetails so squarely with the overriding
7779principles of territorial jurisdiction and territorial heterogeneity.
7780Moreover, it is entirely possible for the Pollock principle to yield to the
7781situs principle, even though the 16th Amendment was never actually ratified.
7782Remember that Justice White ruled in Brushaber that the only effect of the
778316th Amendment was to overturn the Pollock principle. If the amendment
7784failed, it could thereby be argued that the Pollock principle has never been
7785overturned. Nevertheless, subsequent case law has confirmed the superiority
7786of the situs principle: the source of income is the situs of the incomeproducing
7787activity. Sources are either inside or outside the federal zone.
7788Finally, like "income", the term "source" is not in the Constitution
7789either, because the amendment failed to be ratified. Recall the Eisner
7790prohibition, whereby Congress was told it did not have the power to define
7791The Federal Zone:
7792Page 13 - 6 of 8
7793"income" by any definition it might adopt (see Appendix J). Congress was
7794also told it did not have the power to define any other term in the U.S.
7795Constitution by any definition it might adopt. That prohibition was
7796predicated on a ratified 16th Amendment, the text of which introduced the
7797term "income" to the Constitution for the first time. Although the issue did
7798not arise as such and there is no court precedent per se, the exact same
7799logic applies to the term "source". The failed ratification means that
7800Congress is now free to legislate any definition it might adopt for the terms
7801"income" and "source", as long as the statutes containing those terms do not
7802otherwise violate the Constitution as lawfully amended. The source of income
7803is the situs of the income-producing activity. See Chapter 7.
7804On a more general level, the exact same logic can extend the Eisner
7805prohibition per force to render unconstitutional any and all federal statutes
7806which redefine the term "State" to mean anything other than a member of the
7807Union, because this term is used throughout the U.S. Constitution. In the
7808regulations at 31 CFR 51.2 and 52.2, for example, not only are there separate
7809definitions for the terms "State" and a "state"; but also, the Union member
7810is spelled with a small "s" and a de facto entity is spelled with a CAPITAL
7811"S" to denote a "State within a state".
7812Moreover, the case law which surrounds the Buck Act in Title 4 has
7813recognized the legal possibility of such a State within a state. Evidently,
7814the population of federal citizens inhabiting the 50 States of the Union are
7815legally regarded as a separate, inferior class endowed with the privileges of
7816a legislative democracy, as distinct from the fundamental Rights of all State
7817Citizens who inhabit those very same States. This logical reduction of the
7818Downes Doctrine is absurd, because it violates the fundamental principles of
7819equal protection of the law, and the Guarantee Clause. No new "State" shall
7820be erected, ever, without the consent of the States affected. California is
7821a Republic and not a democracy.
7822The explicit recognition of territorial jurisdiction, and of the status
7823of the parties with respect to that territorial jurisdiction, provides much
7824additional clarification to the Brushaber ruling. Such a clarification was
7825definitely needed because the almost incomprehensible grammar of the
7826Brushaber ruling is actually responsible for much of the confusion and
7827controversy that continue to persist in this field, even today. As Alan
7828Stang puts it, Justice White turned himself into a pretzel, and lots of other
7829people got twisted up in the process. A clear understanding of status and
7830jurisdiction, and a proper application of the principle of territorial
7831heterogeneity, together provide an elegant and sophisticated means to
7832eliminate much, if not all, of that confusion and controversy, once and for
7833all.
7834# # #
7835Amendment 16 Post Mortem
7836Page 13 - 7 of 8
7837Reader's Notes:
7838The Federal Zone:
7839Page 13 - 8 of 8
7840Reader’s Notes:
7841Page 14 - 1 of 8
7842Chapter 14:
7843Conclusions
7844The areas of land over which the federal government exercises exclusive
7845authority are the District of Columbia, the federal territories and
7846possessions, and the enclaves within the 50 States which have been ceded to
7847the federal government by the consent of State Legislatures. This book has
7848referred to these areas collectively as "the federal zone" -- the zone over
7849which Congress exercises exclusive legislative jurisdiction, the zone over
7850which the federal government is sovereign. Author Ralph Whittington itemizes
7851the federal "states" and possessions as follows:
7852(1) District of Columbia ......................... Federal State
7853(2) Commonwealth of Puerto Rico .................. Federal State
7854(3) Virgin Islands ............................... Federal State
7855(4) Guam ......................................... Federal State
7856(5) American Samoa ............................... Federal State
7857(6) Northern Mariana Islands ................ Federal Possession
7858(7) Trust Territory of the Pacific Islands .. Federal Possession
7859Inclusive of the aforementioned Federal State(s) and Federal
7860Possessions, the "exclusive Federal Jurisdiction" also extends over all
7861Places purchased by the Consent of the Legislature of one of the Fifty
7862State(s), in which the same shall be, for the Erection of Forts,
7863Magazines, Arsenals, dock-Yards, and other needful Buildings.
7864[The Omnibus, page 87]
7865[emphasis added]
7866In exercising its exclusive authority over the federal zone, Congress
7867is not subject to the same constitutional limitations that exist inside the
786850 States. For this reason, the areas that are inside and outside the
7869federal zone are heterogeneous with respect to each other.
7870This difference results in a principle of territorial heterogeneity:
7871the areas within the federal zone are subject to one set of rules; the areas
7872without (or outside) the federal zone are subject to a different set of
7873rules. The Constitution rules outside the zone and inside the 50 States.
7874The Congress rules inside the zone and outside the 50 States.
7875The 50 States are, therefore, in one general class, because all
7876constitutional restraints upon Congress are in force throughout the 50
7877States, without prejudice to any one State. The areas within the federal
7878zone are in a different general class, because these same constitutional
7879restraints simply do not limit Congress inside that zone.
7880Without referring to it as such, Lori Jacques has concisely defined the
7881taxing effects of territorial heterogeneity as follows:
7882The Federal Zone:
7883Page 14 - 2 of 8
7884The "graduated income tax" is not a constitutionally authorized
7885tax within the several states; however, Congress is apparently not
7886prohibited from levying that type of tax upon the "subjects of the
7887sovereign" in the Possessions and Territories.
7888The definitions of "United States" and "State" are stated
7889"geographically to include" only those areas constitutionally within
7890congress' exclusive legislative jurisdiction upon whom a graduated tax
7891can be imposed.
7892[A Ticket to Liberty, November 1990 edition, page 54]
7893[emphasis added]
7894It is in the area of taxation where the restraints of the Constitution
7895are most salient. Congress cannot levy indirect taxes inside the borders of
7896the 50 States unless the tax rates are uniform across those 50 States. The
7897mountain of material evidence which impugns the ratification of the so-called
789816th Amendment should leave no doubt in anybody's mind that Congress must
7899still apportion all direct taxes levied inside the borders of the 50 States
7900and outside the federal zone. For example, if California has 10 percent of
7901the nation's population, then the State of California would pay 10 percent of
7902any apportioned direct tax levied by Congress. Unfortunately, the IRS
7903currently enforces federal income taxes as direct taxes on the gross receipts
7904of individual persons without apportionment. This results in great tension
7905between the law and its administration.
7906Similarly, Congress is not empowered to delegate unilateral authority
7907to the President to divide or join any of the 50 States of the Union.
7908Dividing or joining States of the Union can only occur with the consent of
7909Congress and of the Legislatures of the States affected. For many reasons
7910like this, the IRC would be demonstrably unconstitutional if it applied to
7911areas over which the 50 States exercise sovereign jurisdiction.
7912It is conclusive, therefore, that the IRC is municipal law for the
7913federal zone only. As the municipal authority with exclusive legislative
7914jurisdiction, Congress is "City Hall" for the federal zone.
7915The Bill of Rights also constrains Congress from violating the
7916fundamental rights of Citizens of the 50 States. These rights include, but
7917are not limited to, the right to work for a living, and the right to enjoy
7918the fruits of individual labor. These activities are free from tax under the
7919fundamental law.
7920The fundamental law is the Constitution for the United States of
7921America, as lawfully amended. The first 10 amendments institutionalize a
7922number of explicit constraints on the acts of Congress within the 50 States.
7923The most salient of these amendments are those that mandate due process and
7924prohibit self-incrimination.
7925The Internal Revenue Code and its regulations impose taxes on the
7926worldwide income of United States** citizens and United States** residents.
7927Throughout this book, two stars "**" after the term "United States**" are
7928used to emphasize that the "United States" in this context has the second of
7929three separate and distinct meanings.
7930Conclusions
7931Page 14 - 3 of 8
7932These meanings were defined by the Supreme Court in the pivotal case of
7933Hooven & Allison Co. v. Evatt, which is still the standing case law on this
7934question. The high Court indicated that the Hooven case would be the last
7935time it would address a definition of the term "United States". Therefore,
7936this ruling, and the preceding case law and law review articles on which it
7937was based, must be judicially noticed by the entire American legal community.
7938The United States**, as that term is used in the IRC, is the area over
7939which Congress exercises exclusive legislative authority; it is the federal
7940zone. If you are not a United States** citizen, then you are an alien with
7941respect to this United States**. If you are not a United States** resident,
7942then you are nonresident with respect to this United States**.
7943Therefore, if you were born outside the federal zone, if you live and
7944work outside the federal zone, and if you were never naturalized or granted
7945residency privileges by the federal zone, then you are a nonresident alien
7946under the Internal Revenue Code, by definition. Be clear that an "alien"
7947here is not a creature from outer space. The term "alien" is the creation of
7948attorneys, and so is a "citizen of the United States", a status not even
7949contemplated with the organic U.S. Constitution was first drafted.
7950Nonresident aliens only pay taxes on income that is derived from
7951sources that are inside the federal zone. According to explicit language in
7952the Internal Revenue Code, gross income for nonresident aliens includes only
7953gross income which is effectively connected with the conduct of a trade or
7954business within the United States**, and gross income which is derived from
7955sources within the United States**, even if it is not connected with a U.S.**
7956trade or business. Thus, employment with the federal government produces
7957earnings which have their source inside the federal zone.
7958Similarly, unearned dividends paid to nonresident aliens from stocks or
7959bonds issued by U.S.** domestic corporations also have their source inside
7960the federal zone, and are therefore taxable. Frank Brushaber was such a
7961nonresident alien.
7962For any federal tax liability that does exist, a nonresident alien can
7963utilize Form 1040NR to report and remit that tax liability to the IRS. As a
7964general rule, a nonresident alien need not report or pay taxes on gross
7965income which is derived from sources that are outside the federal zone, or on
7966gross income which is effectively connected with the conduct of a trade or
7967business that is outside the federal zone.
7968The regulations specify a key exception to this general rule: a return
7969must be filed, however, by nonresident aliens engaged in any U.S.** trade or
7970business, whether or not they have derived income from any U.S.** sources.
7971The law of presumption has made it possible for the federal government
7972to impose income taxes on individuals who had no tax liability in the first
7973place. The regulations which promulgate the Internal Revenue Code make it
7974very clear that all aliens are presumed to be nonresident aliens because of
7975their "alienage", that is, because of their status as aliens from birth.
7976However, through their own ignorance, in combination with a systematic
7977and constructive fraud perpetrated upon them by the federal government,
7978The Federal Zone:
7979Page 14 - 4 of 8
7980nonresident aliens may have filed 1040 forms in the past, in the mistaken
7981belief they were required to do so, when they were not required to do so by
7982any statute or regulation.
7983The receipt of these forms, signed under internal U.S.** penalties of
7984perjury, entitles the federal government to presume that nonresident aliens
7985have "elected" to be treated as residents and/or they have volunteered to be
7986treated as taxpayers.
7987A completed, signed and submitted 1040 or 1040A form is a voluntarily
7988executed commercial agreement which can be used as prima facie evidence, in
7989criminal trials and civil proceedings, to show that nonresident aliens have
7990voluntarily subjected themselves to the federal income tax. This presumption
7991was described in a decision of the U.S. Court of Appeals for the 9th Circuit,
7992in the 1974 ruling of Morse v. U.S. which stated:
7993Accordingly, when returns were filed in Mrs. Morse's name declaring
7994income to her for 1944 to 1945, and making her potentially liable for
7995the tax due on that income, she became a taxpayer within the meaning of
7996the Internal Revenue Code.
7997[Morse v. United States, 494 F.2d 876, 880]
7998[emphasis added]
7999Within the borders of the 50 States, the "geographical" extent of
8000exclusive federal jurisdiction is confined to the federal enclaves; this
8001extent does not encompass the 50 States themselves. We cannot blame the
8002average American for failing to appreciate this subtlety, particularly when
8003officials in Congress and elsewhere in the federal government have been
8004guilty of constructive as well as actual fraud ever since the year 1868.
8005Not only are the key definitions of "State" and "United States"
8006confusing and vague; the term "income" isn't even defined in the Code or its
8007regulations, and neither is its "intent". Close examination of the Internal
8008Revenue Code ("IRC"), reveals that the meaning of "income" is simply not
8009defined, period! There is an important reason in law why this is the case.
8010At a time when the U.S. Supreme Court did not enjoy the benefit of
801117,000 State-certified documents which prove it was never ratified, that
8012Court assumed that the 16th Amendment was the supreme Law of the Land. In
8013what is arguably one of the most important rulings on the definition of
8014"income", the Supreme Court of the United States has clearly instructed
8015Congress that it is essential to distinguish between what is and what is not
8016"income", and to apply that distinction according to truth and substance,
8017without regard to form. In that instruction, the high Court has told
8018Congress it has absolutely no power to define "income" by any definition it
8019may adopt, because that term was considered by the Court to be a part of the
8020U.S. Constitution:
8021Congress cannot by any definition it may adopt conclude the matter,
8022since it cannot by legislation alter the Constitution, from which alone
8023it derives its power to legislate, and within whose limitations alone
8024that power can be lawfully exercised.
8025[Eisner v. Macomber, 252 U.S. 189, emphasis added]
8026Conclusions
8027Page 14 - 5 of 8
8028Clearly, the Internal Revenue Code has not distinguished between what
8029is, and what is not, income. To do so would be an exercise of power which
8030Congress has been told, in clear and certain terms, it simply does not have.
8031This is a Catch-22 from which the Congress cannot escape, without
8032officially admitting that the 16th Amendment is not Law. Congress either
8033defines income by statute, and thereby exercises a power which it does not
8034have, or it fails to define income, thereby rendering whole chunks of the
8035Internal Revenue Code null and void for vagueness.
8036If it argues that the word "income" is not really in the Constitution
8037after all, because the 16th Amendment was never ratified, Congress will be
8038free to legislate the meaning of "income" by any definition it may adopt, but
8039in doing so it will admit to the world that the "amendment" is null and void.
8040Moreover, the "void for vagueness" doctrine is deeply rooted in our
8041fundamental Right to due process (under the Fifth Amendment) and in our
8042fundamental Right to know the nature and cause of any criminal accusation
8043(under the Sixth Amendment). The latter right goes far beyond the contents
8044of any criminal indictment.
8045The right to know the nature and cause of any accusation starts with
8046the statute which a defendant is accused of violating. A statute must be
8047sufficiently specific and unambiguous in all its terms, in order to define
8048and give adequate notice of the kind of conduct which it forbids.
8049If it fails to indicate with reasonable certainty just what conduct the
8050legislature prohibits, a statute is necessarily void for uncertainty, or
8051"void for vagueness" as the doctrine is called. Any prosecution which is
8052based upon a vague statute must fail, together with the statute itself. A
8053vague criminal statute is unconstitutional for violating the 5th and 6th
8054Amendments.
8055The confusion that results from the vagueness we observe in the IRC is
8056inherent in the statutes and evidently intentional, which raises some very
8057serious questions concerning the real intent of those statutes in the first
8058place. The hired lawyers who wrote this stuff should have known better than
8059to use terms that have a long history of semantic confusion. For this
8060reason, and for this reason alone, we are now convinced that the confusion is
8061inherent in the language chosen by these hired "guns" and is therefore
8062deliberate.
8063Could money have anything to do with it? You bet it does.
8064It is clear that there is a huge difference between the area enclosed
8065by the federal zone, and the area enclosed by the 50 States of the Union. No
8066one will deny that money is a powerful motivation for all of us. Congress
8067had literally trillions of dollars to gain by convincing most Americans that
8068they were inside its revenue base when, in fact, most Americans were outside
8069its revenue base, and remain outside even today.
8070This is deception on a grand scale, and the proof of this deception is
8071found in the Code itself, and its various amendments over time.
8072The Federal Zone:
8073Page 14 - 6 of 8
8074It is quite stunning how the carefully crafted, multiple definitions of
8075terms like "State" and "United States" do unlock a huge number of statutes, a
8076mountain of regulations, and a pile of forms, instructions and publications
8077that are all horribly complex, and deliberately so.
8078As fate would have it, these carefully crafted definitions also expose
8079perhaps the greatest fiscal fraud that has ever been perpetrated upon any
8080people at any time in the history of the world.
8081It is now time for a shift in the wind. Let justice prevail. Let no
8082man or woman be penalized from the oppression that results from arbitrary
8083enforcement of vague and ambiguous statutes that benefit the few and injure
8084the many. The Constitution for the United States of America guarantees our
8085fundamental right to ignore vague and ambiguous laws because they violate the
80866th Amendment. This is the supreme Law of the Land. Unlike other
8087governments elsewhere in space and down through time, the federal government
8088of the United States of America is not empowered to be arbitrary.
8089The vivid pattern that has now painfully emerged is that "citizens of
8090the United States", as defined in federal tax law, are the intended victims
8091of a new statutory slavery that was predicted by the infamous Hazard Circular
8092soon after the Civil War began. This Circular admitted that chattel slavery
8093was doomed, so the bankers needed to invent a new kind of slaves.
8094These statutory slaves are now burdened with a bogus federal debt which
8095is spiralling out of control. In a preliminary report, the White House
8096budget office has invented a new kind of "generational accounting" so as to
8097project a tax load of seventy-one percent on future generations of these
8098"citizens of the United States". The final version of that accounting report
8099upped this projection to more than eighty percent! It is our duty to ensure
8100that this statutory slavery is soon gone with the wind, just like its grisly
8101and ill-fated predecessor.
8102In the long history of the world, only a few generations have been
8103granted the role of defending freedom in its hour of maximum danger. I
8104do not shrink from this responsibility -- I welcome it. I do not
8105believe that any of us would exchange places with any other people or
8106any other generation. The energy, the faith, the devotion which we
8107bring to this endeavor will light our country and all who serve it --
8108and the glow from that fire can truly light the world.
8109[President John Fitzgerald Kennedy]
8110[Inaugural Address, January 1961]
8111# # #
8112Conclusions
8113Page 14 - 7 of 8
8114Reader’s Notes:
8115The Federal Zone:
8116Page 14 - 8 of 8
8117Reader’s Notes: