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Hard Evidence That Form 1040 Has NO Legal Basis

May 21, 2005

Hard Evidence That Form 1040
Has NO Legal Basis In Law
http://www.givemeliberty.org/RTPLaw...e2005-05-21.htm

IRS Withdraws Criminal Allegation, Tax Convict Walks Free

Although the People's war against the income tax fraud and IRS abuse
has been lengthy and daunting and has left many freedom fighters
across our nation battered and bankrupt, there are continuing signs
that the tide of tyranny may finally be meeting effective resistance.

On April 12th 2005, William Wallace Lear of Muskegon Michigan
appeared in federal District Court in Grand Rapids to face IRS
charges claiming Lear had violated the terms of his probation.
William Lear had served one year in a federal detention facility in
Minnesota following his conviction in 2002 for Willful Failure to
File income tax returns (a misdemeanor). His probation began in
March, 2004.

The basis for the probation violation hearing was an IRS claim that
Lear failed to abide by the strict terms of his probation which
included the requirement that he file all his delinquent tax returns
and pay all back taxes and penalties owed.

Just as the hearing before Judge Gordon Quist began, the DOJ
attorneys moved to dismiss the IRS's probation violation claim
against Lear that would have sent him back to prison.

Although Lear had filed his missing returns signing them "under
duress" (which IRS does not allow) and failed to pay the taxes owing
on those returns, Judge Quist signed an order, completely releasing
Lear from federal custody. As of April 12th, Lear has been a free
man.

An important question remains: Why? Why would the IRS and DOJ walk
away from a golden opportunity to make headlines and send a
convicted tax protester back to prison?

Before answering the question, let's review some of the key
developments leading up to the April 12, 2005 probation violation
hearing.

After serving his 1-year sentence and after his return to his home
in Michigan to fulfill his probation, Bill Lear and his wife
Rose "dug back in" and continued to review the extensive body of
legal research that had originally caused Bill Lear not to file.

During the summer of 2004, they constructed a "Challenge of
Authority" document relying on legal material from various sources
including comprehensive research posted by WTP in May 2004 and that
has since been sent repeatedly by the Foundation (and others) to
various officials of the U.S. government, including the President's
current Advisory Panel on Federal Tax reform.

This research conclusively documents that IRS has no legal authority
to impose taxes on the wages and salaries of ordinary Americans.
Particularly damaging in the challenge was recently archived
documentation from the government itself clearly showing that IRS
Form 1040 is a "proposed" information collection form and that there
is no legal authority cited for its use.

On October 4, 2004, during a meeting in the offices of their
Congressional Representative Peter Hoekstra, the Lears formally
served their Challenge of Authority on three IRS agents and engaged
in a significant discussion about the limits of their authority. The
IRS agents refused to respond to the Challenge of Authority simply
stating that it is not the "practice" of IRS to respond to such
requests.

What the agents did not know, however, was that two weeks earlier,
on September 24th, the Lears had filed the same document as a formal
public legal record in their local county courthouse at office of
the Registrar of Deeds.

On February 28, 2005, after additional contacts with IRS officials
in which Bill Lear repeatedly asked the IRS to provide specific
legal guidance to him so he could know which tax form the law
required him to fill out, and thereby comply with the terms of his
probation, the Lears again confronted the IRS agents in a meeting in
Rep. Hoekstra's office.

At that meeting, and after a heated discussion with IRS agents,
confronting them with government documents and evidence clearly
showing Form 1040 has no authority in law, IRS ended the discussion
by telling Lear that the law required him to use "Form 1040" to file
his returns.

Frustrated and agitated with the exchange, IRS Agent J. McWilliams
stated that Lear "wasn't cooperating with the IRS", and that Lear
was "going back to prison."

On March 2, just days before Lear's probation was due to expire, IRS
filed a probation violation complaint with the federal probation
office. Lear was promptly served Notice of the hearing that could
send him back to prison.

On March 4, the Lears filed a Habeas Corpus regarding the original
conviction.

On March 9, Lear filed a pleading answering the alleged violation of
probation.

On March 10, Lear also decided to "hedge his bet" and filed the
delinquent tax returns, but signed the tax forms "under duress."

On March 14, 2005 - Lear appeared before Magistrate Joseph G.
Scoville who found cause for the violation and sent the case to
Judge Quist for a formal hearing.

It should be noted that IRS routinely rejects tax returns
signed "under duress" due to the obvious due process implications
related to the use of force, threat of force, or other intimidation
to coerce an individual to swear to a statement made
under "penalties of perjury." It should be further noted that
although required by the terms of his probation, Lear did not make
any payment toward the alleged taxes or penalties due for the
returns he was convicted for willfully failing to file.

Finally, on March 21st, the Lears filed a Motion to Quash the
Release Revocation Hearing. Contained within this motion was the
formal "Challenge of Authority" document that had been previously
recorded in their local county courthouse as a legal public record.

On April 12, Lear and his wife Rose appeared in court for Bill's
probation violation hearing.

Instead of publicly confronting the merits of the alleged probation
violation and asking the court to send a "recalcitrant tax convict"
back to prison, attorneys for the DOJ and IRS withdrew their
complaint alleging the probation violation.

WHY?

Because under Rule 902 of the Federal Rules of Evidence, a court
cannot deny the admissibility of relevant evidence consisting of
certified copies of public legal records as they are presumed to be
self-authenticating and valid as evidence.

Here is the text of Rule 902, sub-paragraph (4):

quote:

Extrinsic evidence of authenticity as a condition precedent to admissibility is not required with respect to the following: (4). Certified copies of public records. A copy of an official record or report or entry therein, or of a document authorized by law to be recorded or filed and actually recorded or filed in a public office, including data compilations in any form, certified as correct by the custodian or other person authorized to make the certification.

In other words, in facing a public criminal hearing where the
contents of Lear's "Challenge of Authority" was, without argument,
directly relevant to Lear's alleged violation, and knowing the
District Court could not deny its admittance as evidence, the DOJ
was faced with two unpleasant alternatives: either produce IRS
witnesses to explain away government documentation clearly showing
IRS Form 1040 is not a legally authorized form, or walk away from
the probation violation hearing.

IRS walked.

Rather than take a potential headline-making opportunity to publicly
chastise and send back to prison a convicted tax protester who had
dared � even after conviction -- to continue questioning the legal
authority of the government, the IRS and DOJ instead withdrew their
criminal complaint, thereby avoiding having to confront � on the
record � the damning evidence contained in Lear's formal Motion to
Quash and its "Challenge of Authority" exhibit. (Note the legal
argument regarding the lack of authority for Individual Form 1040
begins on page 4 of the Motion to Quash.)

By withdrawing the IRS complaint against Lear, DOJ avoided having to
publicly attempt to rebut Lear's legal research and having to admit
that the government could not cite any legal authority requiring the
filing of a 1040 Individual tax return.

On April 25th, despite the facts that Lear had filed defective
returns signed "under duress" and also failed to pay the taxes and
penalties owed for the returns he was convicted for failing to file,
Judge Quist signed a formal order completely freeing Bill Lear from
the terms of his probation.

The Sixth Circuit Court of Appeals in Cincinnati, Ohio is currently
considering whether to certify Lear's most recent Habeas Corpus
motion to vacate his conviction. That motion is also based upon the
new legal research contained in his "Challenge of Authority."


The Hard Evidence That
Form 1040 Has No Legal Authority

In their "Challenge of Authority" document, the Lears provide hard
documentary evidence that IRS Form 1040 has NO legal authority.

This evidence was presented by contrasting archived government
documents that have been filed pursuant to the federal
Administrative Procedures Act (APA) and Paperwork Reduction Act
(PRA).

Under the PRA, each and every government form that is used to
collect information from the general public under law must be linked
to its authorizing statutes and implementing regulations and have a
valid Office of Management and Budget "OMB" Form number. This
requirement of law provides an orderly means to identify which
statutes, regulations and forms are related.

As one item of evidence, the Lears produced a stamped copy of a 1987
Treasury Department document entitled, "Request for OMB Review"
which is required by the Paperwork Reduction Act. The request was
for IRS Form "1040-NR", the tax form used by Non-Resident Aliens to
report their "income".

Several things about this document are noteworthy:

The form used for the request is OMB Form "83"

On line 5 of Form 83, the administrative requester is required to
cite the statutes actually authorizing the collection of the
information. The authorizing statutes are, in fact, cited.

On line 27 of Form 83, the administrative requester is required to
cite the regulations actually authorizing the collection of the
information. The authorizing regulations are, in fact, cited.

Click Here to See the "OMB Form 83" Treasury request for IRS Form
1040-NR for use by Non-Resident Aliens

Here's where it gets very interesting:

The "Challenge of Authority" document also contains a similar
Treasury PRA request from 1996, but this one is for the "regular"
IRS Individual Form 1040 that millions of Americans file each year.

This Treasury administrative request is not made on OMB "Form 83" ---
- but rather using an alternate OMB form, "83-1" titled, "Paperwork
Reduction Act Submission".

Several very important differences between the OMB request forms
need to be noted:

OMB Form 83-1 does NOT require any specific citation of statutory
authority.

OMB Form 83-1 does NOT require any specific citation of regulatory
authority.

In the "Certification" box found on page 2 of Form 83-1, there are
specific references to
both PRA Regulations "5 CFR 1320.9" and "5 CFR 1320.8(b)(3)."

The attachments to this OMB Form 83-1 request consist primarily of a
list of Title 26 (Income Tax) regulations and statutes that are
merely (quoting) "associated" with IRS Form 1040.

Click here to see the Treasury request using OMB Form 83-1 for the
IRS Individual "Form 1040"

Here's the punch line:

IRS Form 1040-NR (for Non-Resident Aliens) is certified as complying
with the requirements of the PRA found at regulation 5 CFR 1320.8.
In its request to the OMB for IRS Form "1040-NR", the Department of
Treasury (IRS) clearly cites both the statutory and regulatory
authorities authorizing the use of the form to collect information
and certifies its request as such.

Click Here to read the Paperwork Reduction Act (PRA) form disclosure
requirements found at 5 CFR 1320.8.

Please specifically note that for the Treasury's request using
alternative OMB Form 83-1 for IRS Individual Form 1040, the Treasury
has formally certified the request under regulation 5 CFR 1320.9,
which is explicitly reserved for "PROPOSED" government forms.

Printed just below is the title header for federal regulation "5 CFR
1320.9":

[Code of Federal Regulations]
[Title 5, Volume 3]

[Revised as of January 1, 2005]
From the U.S. Government Printing Office via GPO Access
[CITE: 5 CFR 1320.9]

[Page 155]

TITLE 5--ADMINISTRATIVE PERSONNEL

CHAPTER III--OFFICE OF MANAGEMENT AND BUDGET

PART 1320_CONTROLLING PAPERWORK BURDENS ON THE PUBLIC--Table of
Contents

Sec. 1320.9 Agency certifications for proposed collections of
information.

As part of the agency submission to OMB of a proposed collection
of information, the agency (through the head of the agency,
the Senior Official, or their designee) shall certify
and provide a record supporting such certification)
that the proposed collection of information [...]

In short, if IRS Individual Form 1040 was actually authorized under
U.S. law, the Department of Treasury would have submitted it for OMB
certification using OMB "Form 83" which requires explicit citation
of the Form's authorizing statutes and regulations.

Instead, the IRS used alternative OMB Form "83-1" -- which is
designated ONLY for "proposed" government forms � and which does NOT
require any formal citation of legal authority allowing its use.

Furthermore, even though an attachment to the Treasury's request for
IRS Form 1040 (on OMB Form 83-1) contains a lengthy list of statutes
and regulations, and "Box 12" on the form is marked indicating the
form is "mandatory", a careful reading of the submission to OMB will
make it clear that the Department of Treasury is ONLY certifying
that:

Form 1040 is a "proposed form" and that, IF authorized, it would
meet the collection criteria established by regulation 5 CFR 1320.9,
and

That Form 1040 is only "associated" with the statutes and
regulations cited in the 1040 request, and

If Form 1040 were actually authorized by law, it would
be "mandatory".

As a final observation, it should be noted that both the 1987 Form
1040-NR request as well as the 1996 Form 1040 request were signed by
the same IRS officials, one Garrick R. Shear, the IRS Reports
Clearance Officer and one Lois K. Holland as/for the Departmental
Reports Management Officer. Lear's pleadings contain additional OMB
certifications, also signed by Shear & Holland.

In short, the Department of Treasury's clear and willful intent to
use OMB Form 83-1 (rather than OMB Form 83) to legally certify IRS
Individual Form 1040 as a valid government document, is compelling
proof establishing that IRS Form 1040 is merely a PROPOSED tax form,
and that there is NO LEGAL AUTHORITY that authorizes its use.


A Nation of Law?

The documentation presented above is additional evidence weighing
against our government, in favor of the People's Petition for
Redress of Grievances regarding a system of taxation that is without
reasonable question, devoid of constitutional and statutory
authority.

In this article we have shown once again, that the government simply
refuses to answer legitimate questions regarding its authority to
force People to pay a direct, un-apportioned tax on their labor ---
questions that are based on compelling documentary evidence
establishing that the government is abusing the People by violating
its power to tax.

As the government continues its refusal to properly respond to the
People's Petitions for Redress, the Petition process has
unfortunately reached the point where the People have been forced to
begin retaining their money as the means to peacefully enforce their
Right to secure proper Redress -- i.e., to obtain answers to the
People's legitimate questions regarding an array of substantive
violations of the founding principles and abuses of the limited
powers delegated to the government by those that created it to serve
them.

Thus far, the government has improperly responded to the People by
using the People's First Amendment Right to Petition for Redress of
Grievances as grounds for still further acts of abuse. The
government continues to apply heavy-handed enforcement actions
against the sovereign Petitioners who are exercising their Natural
Rights and dominion over their servant government.

The actions of the U.S. government are wholly unacceptable for a
free People. Under the circumstances, the People are morally,
legally and Constitutionally justified in retaining their money
until their grievances are redressed and their questions are
answered. There is no other non-violent way for the People to hold
their government accountable to the Constitution with its guarantee
of Individual Rights.

The We The People Foundation is committed to peacefully securing
freedom and reestablishing our founding principles -- no matter the
cost. It is a sign of hope and the power of Righteousness that in
the name of Liberty, a single, dedicated and determined Michigan
family has taken just a few tidbits of the body of evidence this
Foundation has made publicly available and has made a compelling
case in a federal court that the DOJ and IRS chose to walk away from.

Ours is a Nation of Law. The People must not, and cannot, tolerate a
government that ignores its own laws -- or the fundamental Rights of
those it is intended to serve.

No Answers, NO Taxes.

We ask you again, to support the work of the Foundation and please
consider a modest one-time or monthly donation to help us continue
our ongoing battles in the courts of law and public opinion against
those that would seek to slow our progress or silence our voice as
we demand Constitutional Order and reclaim Freedom.

Re: Hard Evidence That Form 1040 Has NO Legal Basis

quote:

Originally posted by DJMaytag the People's war against the income tax fraud and IRS abuse has been lengthy and daunting

Reading this post has been lengthy and daunting.

Sorry, I'm still in COR mood, should probably STFU.
I'll leave the discussing to you guys.
But I like paying my taxes, they're organised so fair here in Belgium

Re: Re: Hard Evidence That Form 1040 Has NO Legal Basis

quote:

Originally posted by Belgian Bonzai Reading this post has been lengthy and daunting. Sorry, I'm still in COR mood, should probably STFU. I'll leave the discussing to you guys. But I like paying my taxes, they're organised so fair here in Belgium

I was properly brainwashed by economics classes in high school and college, so I used to think of it as our civic duty to pay taxes, and even paid an extra $25 per check! (usually got a HUUUUGE return at the end of the year)

It wasn't until some research into the history of the tax code put some serious doubt in my mind as to whether or not I was really liable to pay taxes. I (like many others), relied up the idea that "everyone else has to do it, so I should to" and the old saying "the only certainties in life are death and taxes" to scare me into doing them. After having done some extensive research the past few years (and watched as several court cases went AGAINST the IRS) plus no longer filing, I'm convinced that something isn't right with the US tax system - and that I had been paying federal taxes that I didn't owe for years.

Re: Re: Re: Hard Evidence That Form 1040 Has NO Legal Basis

quote:

Originally posted by DJMaytag I was properly brainwashed by economics classes in high school and college, so I used to think of it as our civic duty to pay taxes, and even paid an extra $25 per check! (usually got a HUUUUGE return at the end of the year) It wasn't until some research into the history of the tax code put some serious doubt in my mind as to whether or not I was really liable to pay taxes. I (like many others), relied up the idea that "everyone else has to do it, so I should to" and the old saying "the only certainties in life are death and taxes" to scare me into doing them. After having done some extensive research the past few years (and watched as several court cases went AGAINST the IRS) plus no longer filing, I'm convinced that something isn't right with the US tax system - and that I had been paying federal taxes that I didn't owe for years.

Way to go champ
You're just like the average american who feels oppresed by taxes when they fail to realize they are the lowest taxed country in the civilized world.
Paying taxes is not fun but it's a civic duty. Without taxes there's not much outside of our homes that would work well.
In other terms it's a necessary evil.

I've read about several other successful cases challenging IRS rules & administrative procedures, but it is fairly clear that it is Constitutionally valid for the legislative branch to set taxes. If people in fact were not at all liable to pay federal taxes, how on earth would even the most basic government functions be paid for? Would we not have a military?

quote:

Originally posted by wolverine16 I've read about several other successful cases challenging IRS rules & administrative procedures, but it is fairly clear that it is Constitutionally valid for the legislative branch to set taxes. If people in fact were not at all liable to pay federal taxes, how on earth would even the most basic government functions be paid for? Would we not have a military?

Excise taxes, tariffs, foreigners working in the US on visas (non-resident aliens), and taxes on individuals/corporations engaged in international commerce. These things are all within the governments jurisdiction to tax, and were designed to be the government's primary source of income (there is still a pretty massive amount of money coming in from these sources today). I believe it was either Thomas Jefferson and Alexander Hamilton who was quoted as saying these things would be sufficient to fund the government.

You betcha we'd have a military, and it would be paid for with what I just listed. It would be vast difference in funds as compared to our current situation, but that would be a GOOD thing, as the focus would be on national DEFENSE, rather than wars of conquest like we're on in Iraq and Afghanistan. There's a good chance we could have averted 9/11 if we had a military that was supposed to do it's primary job - defend our country!

quote:

Originally posted by DJMaytag Excise taxes, tariffs, foreigners working in the US on visas (non-resident aliens), and taxes on individuals/corporations engaged in international commerce. These things are all within the governments jurisdiction to tax, and were designed to be the government's primary source of income (there is still a pretty massive amount of money coming in from these sources today). I believe it was either Thomas Jefferson and Alexander Hamilton who was quoted as saying these things would be sufficient to fund the government. You betcha we'd have a military, and it would be paid for with what I just listed. It would be vast difference in funds as compared to our current situation, but that would be a GOOD thing, as the focus would be on national DEFENSE, rather than wars of conquest like we're on in Iraq and Afghanistan. There's a good chance we could have averted 9/11 if we had a military that was supposed to do it's primary job - defend our country!

I have a slightly different interpretation of Article I, Section I, Clause 1:

quote:

The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States; but all Duties, Imposts and Excises shall be uniform throughout the United States

It seems to say they can collect taxes, which is stated in a very vague way, in addition to the items further listed.

I'm not sure we would have a sufficiently funded government without any income taxes, but that's an interesting question you bring up on whether we would have gone to war though, which I certainly agree defense is too heavily funded.

quote:

Originally posted by wolverine16 I have a slightly different interpretation of Article I, Section I, Clause 1: It seems to say they can collect taxes, which is stated in a very vague way, in addition to the items further listed.

Have a read over on http://taxableincome.net/articles/constitution.html to see a good explanation of the Constitutional limitations that the government has in regards to taxes.

I don't disagree that this part of the Constitution is valid. In fact, this further proves that most US citizens aren't subject to taxes on their income, because this part would have to have been repealed in order for the 16th Amendment to have truly allowed a tax on incomes as it's often mistaken for having.

The point of my original post was to show what the LAW says. The Constitution is simply a document that states what powers WE THE PEOPLE have granted the Federal government. The laws of the United States are based upon what the government can and cannot do, and rulings have been made to support this or make changes in the law if the law is wrong (ie the income tax act of 1894 was thrown out by the Supreme Court, as it was ruled unconstitutional). From the research that's been done, there seems to be NOTHING written into the law (the US Code, or Title 26 of the code in the case of taxes) that can be shown to prove that most US citizens are required to file and pay taxes on their income. Do a seach at http://uscode.house.gov/search/criteria.php and search for "1040" in Title 26. It's not surprising, given the research I've been following, that there is NO mention of a requirement to fill out a 1040 form in the Tax Code!

quote:

Originally posted by wolverine16 I'm not sure we would have a sufficiently funded government without any income taxes, but that's an interesting question you bring up on whether we would have gone to war though, which I certainly agree defense is too heavily funded.

It becomes a question of idealogy and history if every single person in the US had this info, and stopped giving the IRS money they didn't owe. At that point, the Federal government would be at a point of funding just like it was pre-1913, where it's ONLY source of income was from tariffs and excise taxes. The government was much smaller and less intrusive because it was limited by what it could spend. Can that be said of today's government?

Sure some services would have to go if everyone knew of this, but being the Constitutionalist that I am, I would be fine with this. The 10th Amendment would be the fall back, as the powers not delegated to the Federal government would then (properly, I might add) be reserved for the states to implement whatever services they feel are needed. At least this way, those in charge of those services at the state level are much more responsible and accountable to those in their respective states.

I might disagree about the authority of the IRS to collect taxes on IRS Form 1040 as well, but can ill afford lengthy litigation behind bars while doing so and irreparably damage my reputation for current and future employment. The incarcerated normally have the time to closely study case law, since they have nothing else to do but time, while normal folks have to work to make a living.


[[[smoke]]]

quote:

Originally posted by smokeape I might disagree about the authority of the IRS to collect taxes on IRS Form 1040 as well, but can ill afford lengthy litigation behind bars while doing so and irreparably damage my reputation for current and future employment. The incarcerated normally have the time to closely study case law, since they have nothing else to do but time, while normal folks have to work to make a living. [[[smoke]]]

Well, said individual was convicted and on probation... refused to comply with the terms of his probation then the IRS dropped their case against him and his probation sentence was set aside.

Vernice Kuglin went to trial with similar arguments and the IRS was unable to prove it's case against her, and she walked free.

I'm aware of a few others, but these are the most recent high profile cases. I'd be more than willing to let the government try to prove me wrong (in fact, I DARE THEM!). Given my spotty work history, I can certainly afford to take one for the team, in hopes of adding my name to a growing list of people who are challenging the government and winning so that the truth may come out for the rest of ya'll to benefit from.

BTW, I don't dispute that the IRS does have the authority to collect some forms of taxes. There certainly are types of taxes that the IRS does have jurisdiction over to collect, but I don't believe that my income falls in that category.

I applaud your sharing this information. About a year ago, We The People had a news conference on CNN (whatever) once and when I went to check out their website it became unreachable.

You, like I, are seeking answers to questions that the IRS refuses to answer. Do not be dissuaded by comments of people that don't have time to read Title 26.

What people fail to realize is that the Constitution does not apply to the IRS since they use the US Code Title 26 and therefore expects John Q. Public to use the same. And since Johnny is expected to peform under 26 IRC it becomes de facto as opposed to de jure.

And since people believe in "keeping with the Joneses", they do not care to challenge authority (public servants serve the public and not the opposite).

quote:

Although Lear had filed his missing returns signing them "under duress" (which IRS does not allow) and failed to pay the taxes owing on those returns, Judge Quist signed an order, completely releasing Lear from federal custody. As of April 12th, Lear has been a free man.

Hmm, I wonder why the IRS doesn't "allow" a 1040 signed under duress...

quote:

It should be noted that IRS routinely rejects tax returns signed "under duress" due to the obvious due process implications related to the use of force, threat of force, or other intimidation to coerce an individual to swear to a statement made under "penalties of perjury." It should be further noted that although required by the terms of his probation, Lear did not make any payment toward the alleged taxes or penalties due for the returns he was convicted for willfully failing to file.

[sarcasm]No the IRS wouldn't intimidate anyone, no not them, they're the good guys.[/sarcasm]

quote:

The continual intrusion into our minds of the hammering noises of arguments and propaganda can lead to two kinds of reactions. It may lead to apathy and indifference, the I-don't-care reaction, or to a more intensified desire to study and to understand. Unfortunately, the first reaction is the more popular one. Joost A. M. Meerloo, M.D The Rape of the Mind: The Psychology of Thought Control, Menticide, and Brainwashing

I like to study.

quote:

Originally posted by ogvh5150 You, like I, are seeking answers to questions that the IRS refuses to answer. Do not be dissuaded by comments of people that don't have time to read Title 26.

THAT'S the funny part, when people go on like they know all about taxes when they've never even done the research into Title 26.

Source

Like I said before, I've read some of the court cases involving the IRS. Maybe an alternative collection system would be better, but inreality if you look at the above graph simply eliminating individual & corporate income taxes would be impossible. Assuming you were to consider all that falls under "other" as Constitutional tax collection, you'd have a whopping 8% - 10% of current government revenue to pay for everything outside of what is collected from payroll taxes. So even if social security and medicare were somehow fully funded by payroll taxes, we'd be completely out of money to pay for anything else after reducing the military to 1/5 of it's current size.

Edit: Oops! I forgot, since we're in the process of completely eliminating the estate tax as well, we'll have even less than 8% of current revenue.

For anyone interested in my country's banking system and the IRS

http://www.amazon.com/exec/obidos/t...=glance&s=books

Re: For anyone interested in my country's banking system and the IRS

quote:

Originally posted by Trancer-X http://www.amazon.com/exec/obidos/t...=glance&s=books

Uh oh! A section of that book is the reason why my job gets so complicated, as people falsely believe that their mortgages are repaid just by signing the promissory note. I've actually seen answers filed that specifically cite Jekyll as a source. A lot of it is based on conspiracy theory and clouds what are otherwise some valid points.

quote:

Originally posted by wolverine16 Source Like I said before, I've read some of the court cases involving the IRS. Maybe an alternative collection system would be better, but inreality if you look at the above graph simply eliminating individual & corporate income taxes would be impossible.

Again, you're missing the point of the whole post. THERE IS NO INDIVIDUAL INCOME TAX! According to the figures in this chart, almost ONE TRILLION DOLLARS were paid into the IRS, that almost all of was not owed (according to the law). That's one massive DONATION, though on a technical level, once you fill out and sign a 1040 form saying that you are liable to pay a tax, you ARE liable to pay that tax - which is also another BIG reason for the post. If people had the information that there is no law requiring you to fill out and sign a 1040, then they wouldn't be forced to pay a tax they don't owe.

quote:

Originally posted by wolverine16 Assuming you were to consider all that falls under "other" as Constitutional tax collection, you'd have a whopping 8% - 10% of current government revenue to pay for everything outside of what is collected from payroll taxes. So even if social security and medicare were somehow fully funded by payroll taxes, we'd be completely out of money to pay for anything else after reducing the military to 1/5 of it's current size.

It's actually 18%, as the corporate income taxes are legit. It's stated that excise taxes (4%) go "to support certain activities-including highways and airports and airways-and deposits others in the general fund." That should take care of most of the constitutional activities the government has. Military spending would obviously decrease, and we would have to close bases in other countries (a good thing, as we don't need to be the world's police force), saving a ton of money. The military would then have to be kept to what it was supposed to do, defend our borders.

Social security taxes may well be legitimate in the tax code somewhere, that is not something I have done the research on (neither have I done so with state taxes, which I do pay). It should be noted that excess fund are and have been spent from Social Security revenues. I'll have to dig up my sources on that, but I've read that that's been the case since day one and FDR knew it.

So the total budget if everyone woke up to the scam that's been pulled for almost 100 years, would then be reduced to about HALF of what it is now, which I think is completely feasible given some proper cuts in spending.

quote:

Originally posted by DJMaytag Again, you're missing the point of the whole post. THERE IS NO INDIVIDUAL INCOME TAX! According to the figures in this chart, almost ONE TRILLION DOLLARS were paid into the IRS, that almost all of was not owed (according to the law). That's one massive DONATION, though on a technical level, once you fill out and sign a 1040 form saying that you are liable to pay a tax, you ARE liable to pay that tax - which is also another BIG reason for the post. If people had the information that there is no law requiring you to fill out and sign a 1040, then they wouldn't be forced to pay a tax they don't owe. It's actually 18%, as the corporate income taxes are legit. It's stated that excise taxes (4%) go "to support certain activities-including highways and airports and airways-and deposits others in the general fund." That should take care of most of the constitutional activities the government has. Military spending would obviously decrease, and we would have to close bases in other countries (a good thing, as we don't need to be the world's police force), saving a ton of money. The military would then have to be kept to what it was supposed to do, defend our borders. Social security taxes may well be legitimate in the tax code somewhere, that is not something I have done the research on (neither have I done so with state taxes, which I do pay). It should be noted that excess fund are and have been spent from Social Security revenues. I'll have to dig up my sources on that, but I've read that that's been the case since day one and FDR knew it. So the total budget if everyone woke up to the scam that's been pulled for almost 100 years, would then be reduced to about HALF of what it is now, which I think is completely feasible given some proper cuts in spending.

Didn't realize you considered corporate income taxes to be legit. Anyway, if you could somehow reduce government expenditures to fit 18% of the current budget and still maintain functionality, please send a resume to the White House ASAP. Although a lot of cuts should be made in spending, 18% just doesn't seem feasable, unless you eliminate almost all defense spending and just about every program that most Americans want, like the VA, EPA, FDA, FBI and highways. All I'm saying is if income taxes do not exist, what alternative will pay for such things that actually provide vital services that people want in their democracy?

Wolverine16 is very misguided by using that pie chart. It is part right in showing 8%, but not right in not showing the previous levels from previous years.

How fortunate for leaders that men do not think.
Adolph Hitler

The great masses of the people will more easily fall victims to a big lie than to a small one
Adolph Hitler

quote:

Originally posted by ogvh5150 Read Title 26. Good file to read which has that same table: THE DECLINE OF CORPORATE INCOME TAX REVENUES By Joel Friedman (PDF) Found this looking for something else. EDIT: Loophole Inc. A special report on Florida's corporate income tax The state loses more than $1-billion a year in exceptions to its corporate income tax. Ninety-eight percent of businesses pay nothing. SYDNEY P. FREEDBERG Published October 26, 2003 Carnival Corp., Florida's 10th-largest public company with 4,220 South Florida employees and a $136-million state payroll, posted more than $1-billion in profits last year. It also paid nothing in Florida corporate income tax. Neither did Verizon Communications Inc., the phone giant that employs 12,500 people in Florida, or Saddlebrook Resorts Inc., the elite retreat in Wesley Chapel that is home to a famous tennis training center. In fact, 98 percent of the estimated 1.5-million businesses in Florida paid nothing. And many of those that did pay found ways to reduce their tax bills. Now if these companies don't pay their fair share and their employees do, how is it again fair for fairness' sake?

See second picture:

quote:

Originally posted by Trancer-X

quote:

Originally posted by ogvh5150 Wolverine16 is very misguided by using that pie chart. It is part right in showing 8%, but not right in not showing the previous levels from previous years. How fortunate for leaders that men do not think. Adolph Hitler The great masses of the people will more easily fall victims to a big lie than to a small one Adolph Hitler

Gee, sorry I chose to show a recent example when talking about the current context if no one paid income taxes, but nice to see you brought out the Hitler quotes again. I'm really not even sure of what your point is supposed to be, since I've actually posted several times that corporate tax revenues have decreased over the years and that I thought defense spending was too high, including the other thread where you started posting Hitler and Marx quotes in reference to me as well as this example.

As for your 2nd graph, originally posted by Trancer X, I seem to recall posting in support of that graph, meanwhile you posted articles suggesting I was a communist because I thought more should be done to insure the poor. But thank you greatly for posting that I don't think because I said it seems difficult for me to believe that funding such things and others like maintaining a sufficient defense force (though much less than the current level), foreign aid, EPA, CIA, federal employee wages, etc. would be covered without some other source of income. OH, maybe I should have posted a chart with 1908's federal government revenues, since it would have absolutely no relevence to what my point was

quote:

Originally posted by wolverine16 Didn't realize you considered corporate income taxes to be legit.

Yup, they are... and their percentage would be MUCH higher if they weren't avoiding them and moving offshore.

quote:

Anyway, if you could somehow reduce government expenditures to fit 18% of the current budget and still maintain functionality, please send a resume to the White House ASAP.

LOL! It'd be thrown out in a SECOND!

They DON'T WANT THOSE CUTS! They want to keep people sending in $$$ so they can keep spending and keep growing the size of our government. So long as they can keep the ruse up, then they will continue collecting about a TRILLION dollars in "donations" every year.

quote:

Although a lot of cuts should be made in spending, 18% just doesn't seem feasable, unless you eliminate almost all defense spending

If you eliminate OFFENSE spending, you've just shrunk the military spending by about 90% (or more when you think about how much the Iraq and Afghanistan invasions are costing us).

You may find this hard to believe, but the Federal government existed on that "18%" from it's inception up until 1913 when the Fed and Bureau of Revenue (now IRS) were started (coincidence? I think not...). The government was small and limited, yet we still managed to go from a 3rd world nation to a global power in that time.

quote:

and just about every program that most Americans want, like the VA, EPA, FDA, FBI and highways.

WANT? Few would say they WANT them, as it's akin to saying a drug addict WANTS crack. The system has been set up such that people are "hooked" on a service and will vote against anyone trying to get rid of it (FDR knew this, hence why he called Social Security an "entitlement system", and knew that it would be a death trap for any politican who tried to get rid of it).

What have been the results of the services by the agencies you listed?

We still have pollution (ironically, the Federal government is the nation's #1 polluter!) and forests are being chopped down, killing off endangered species (or bringing some close to being endangered) thanks to special interests.

The VA is ineffective and will try to screw you at any opportunity (my ex was in the military, got disabled, and had to put a HUGE amount of effort to get ANYTHING done there).

The FDA hasn't stopped food poisoning from happening, has it? The testing process is driving up prescription costs to dizzying levels, as well as kept new drugs from those who will die before they get certified before release to the public (if you're terminal, wouldn't you at least want the CHANCE to try a new drug that might help? What does a terminally ill patient have to lose?).

If a company puts out bad food, then people WILL be affected, and the word will be out with a quickness in this era of communication. A business wants to suceed and grow, therefore it's in it's own interests to put out a safe product for consumption (this may not be true for non-food/drug companies).

I can't think of a soul who is not employed or related to someone employed by the FBI that would want to keep it around (same goes for the CIA). If the FBI/CIA was truly a bumbling bunch of fools that had no idea about what was going to happen on 9/11, then they DESERVE to be cut. Hell, more than likely the FBI is more apt to be spying on YOU OR I than anything else!

I think I addressed highways as being paid for out of excise taxes, as they always have been.

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All I'm saying is if income taxes do not exist, what alternative will pay for such things that actually provide vital services that people want in their democracy?

The problem with the Federal government providing these services is that our country no longer becomes a democracy. We're heading down the path of socialism with all this stuff. You might remember this quote in a recent thread:

quote:

"The Fabians were an elite group of intellectuals who formed a semi-secret society for the purpose of bringing socialism to the world. Whereas Communists wanted to establish socialism quickly through violence and revolution, the Fabians preferred to do it slowly through propaganda and legislation. The word socialism was not to be used. Instead, they would speak of benefits for the people such as welfare, medical care, higher wages, and better working conditions. In this way, they planned to accomplish their objectives without bloodshed and even without serious opposition. They scorned the communists, not because they disliked their goals, but because they disagreed with their methods. To emphasize the importance of gradualism, they adopted the turtle as the symbol of their methods (...). Thumbing his nose at the docile masses is H.G. Wells who, after quitting the Fabians, denounced them as "the new Machiavellian." The most revealing component, however, is the Fabian crest which appears between Shaw and Web (prominent leaders). It's a wolf in sheep's clothing." - G. Edward Griffin, The Creature from Jekyll Island

The power of the government to control our lives has grown ever since 1913 with the creation of the Fed and IRS. It most certainly grown leaps and bounds since FDR's New Deal. At what point does it stop? Where do we draw the line when it comes to a new social program "for the greater good"? It's pretty easy for me, it's all or nothing. We can't have just a little bit of socialsim, because it will become full blown socialism eventually (as i has been growin over the last 80 years).

Re: Re: For anyone interested in my country's banking system and the IRS

quote:

Originally posted by wolverine16 Uh oh! A section of that book is the reason why my job gets so complicated, as people falsely believe that their mortgages are repaid just by signing the promissory note. I've actually seen answers filed that specifically cite Jekyll as a source. A lot of it is based on conspiracy theory and clouds what are otherwise some valid points.

Correction, the reason your job gets so complicated is because of the ignorance displayed by said individuals. While there is a vein of conspiracy theory running through that book, much of it is well-founded - but hardly a source of professional financial advice or guidance.

You also have to keep in mind that at one time in the not too distant past, there were all sorts of widely acknowledged 'conspiracies' such as the Earth being flat, our solar system revolving around the earth as opposed to the sun (geocentric vs heliocentric), etc. If it weren't for such conspiracy theorists such as Copernicus, Giordano Bruno (who was put to death for his heretical beliefs), Galileo, Isaac Newton, etc., we might still be living in relatively dark times.

quote:

Originally posted by DJMaytag quote: "The Fabians were an elite group of intellectuals who formed a semi-secret society for the purpose of bringing socialism to the world. Whereas Communists wanted to establish socialism quickly through violence and revolution, the Fabians preferred to do it slowly through propaganda and legislation. The word socialism was not to be used. Instead, they would speak of benefits for the people such as welfare, medical care, higher wages, and better working conditions. In this way, they planned to accomplish their objectives without bloodshed and even without serious opposition. They scorned the communists, not because they disliked their goals, but because they disagreed with their methods. To emphasize the importance of gradualism, they adopted the turtle as the symbol of their methods (...). Thumbing his nose at the docile masses is H.G. Wells who, after quitting the Fabians, denounced them as "the new Machiavellian." The most revealing component, however, is the Fabian crest which appears between Shaw and Web (prominent leaders). It's a wolf in sheep's clothing." - G. Edward Griffin, The Creature from Jekyll Island

http://www.tranceaddict.com/forums/...329#post4509329

quote:

Originally posted by DJMaytag Have a read over on http://taxableincome.net/articles/constitution.html to see a good explanation of the Constitutional limitations that the government has in regards to taxes.

The argument the author makes there is flawed.

Amendment 16 reads

quote:

source: http://www.law.cornell.edu/constitu...endmentxvi.html Amendment XVI The Congress shall have power to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several states, and without regard to any census or enumeration.

There you have it, what's an income?
definition:

quote:

source: dictionary.com Income. The amount of money or its equivalent received during a period of time in exchange for labor or services, from the sale of goods or property, or as profit from financial investments.

Who makes income?
People do.

Why can Congress do this?
Article VI, Claus 2, US Constitution:

quote:

source:http://www.house.gov/Constitution/Constitution.html Article. VI. Clause 2: This Constitution, and the Laws of the United States which shall be made in Pursuance thereof; and all Treaties made, or which shall be made, under the Authority of the United States, shall be the supreme Law of the Land; and the Judges in every State shall be bound thereby, any Thing in the Constitution or Laws of any State to the Contrary notwithstanding.

That's why the US can not tax the Chinese, as they are not "of the Land". You however, as long as you are living in the USA are "of the Land" and therefore must pay your income tax if you make an income.


Not paying your income tax just because some website you read says you don't have to is by far one of the stupidist things I've ever heard a person do. If you want expert advice on the tax code, go to an accountant. They have spent the majority of their sad sad lives studying tax law and the tax code and can recommend to you your proper course of action in regard to taxes.

Of course nobody wants to pay taxes! I don't even like giving money to bums, why should I give it to bums in suits who threaten me? But just because I read something on the internet that agrees with what I feel does not make it true.

The arguments made in your link, although as much as I wish they weren't, are fallacious, they suppose that the US Congress does not have "jurisdiction" over US citizens and therefore they don't have right over US citizen's money. The US congress does not have any jurisdiction on US citizen's (aside from who can become one) but it does have jurisdiction on every income made in the USA.


Here are some links:
http://www.treas.gov/education/fact...xes/ustax.shtml
http://caselaw.lp.findlaw.com/data/...on/amendment16/

Don't let your philosophical desires control over rational realities.

Oh and as for reducing the size of the US government, don't forget what the founding fathers put at the front of the US constitution:

quote:

We the people of the United States, in order to form a more perfect union, establish justice, insure domestic tranquility, provide for the common defense, promote the general welfare, and secure the blessings of liberty to ourselves and our posterity, do ordain and establish this Constitution for the United States of America.

To "promote the general welfare" you sometimes need big government programs, this does not make the USA a socialist nation, nor is it counter to the American way, it is the American way.

quote:

Originally posted by Yoepus The argument the author makes there is flawed. Amendment 16 reads quote: source: http://www.law.cornell.edu/constitu...endmentxvi.html Amendment XVI The Congress shall have power to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several states, and without regard to any census or enumeration. There you have it, what's an income? definition: quote: source: dictionary.com Income. The amount of money or its equivalent received during a period of time in exchange for labor or services, from the sale of goods or property, or as profit from financial investments. Who makes income? People do. Why can Congress do this? Article VI, Claus 2, US Constitution: quote: source:http://www.house.gov/Constitution/Constitution.html Article. VI. Clause 2: This Constitution, and the Laws of the United States which shall be made in Pursuance thereof; and all Treaties made, or which shall be made, under the Authority of the United States, shall be the supreme Law of the Land; and the Judges in every State shall be bound thereby, any Thing in the Constitution or Laws of any State to the Contrary notwithstanding. That's why the US can not tax the Chinese, as they are not "of the Land". You however, as long as you are living in the USA are "of the Land" and therefore must pay your income tax if you make an income.

wow, they've got you hook line and sinker... let me try to educate you.

The Supreme Court has repeatedly stated in their rulings that the 16th amendment DID NOT extend Congress ANY NEW powers of taxation:

quote:

The reason the 16th Amendment was passed was to tell the courts that the income tax is and has always been an indirect tax, making it impossible for the courts to conclude otherwise. This was in response to a Supreme Court error made in 1895 in a case known as Pollock, but by the time the 16th Amendment was passed, the Supreme Court had corrected itself. Both the Supreme Court and the Secretary of the Treasury have specifically stated that the 16th Amendment DID NOT change the constitutional limits on Congress� power to tax. According to the Supreme Court in Stanton v. Baltic Mining (240 U.S. 103) and Brushaber v. Union Pacific (240 U.S. 1) the purpose of this Amendment was to make it clear that the income tax is and has always been an indirect �excise� tax, which never required �apportionment� (but that must be geographically uniform). The Secretary of the Treasury formally agreed with the Supreme Court in Treasury Decision 2303: �The provisions of the sixteenth amendment conferred no new power of taxation, but simply prohibited[/b [Congress� original power to tax incomes] [b]from being taken out of the category of indirect taxation, to which it inherently belonged, and being placed in the category of direct taxation subject to apportionment.� [Treasury Decision 2303]

Your statement that "you must pay your income tax if you make an income" shows your lack of knowledge on this matter (I am by no means an expert, but I've been doing research on the matter for years and have read quite a bit of Title 26). Income by itself is NOT taxable. "Taxable Income" is by all means taxable, but do you have any "taxable income" is the key question? It's a bit of legalese thrown in there to appear one way while meaning another That language is a hallmark of the US Code - and the reason why there are TONS of definitions in every section. Plain old proper english won't get you by when trying to read it, and using dictionary.com to look things up WILL give you completely different meanings for words you think mean what they mean.

quote:

Not paying your income tax just because some website you read says you don't have to is by far one of the stupidist things I've ever heard a person do. If you want expert advice on the tax code, go to an accountant. They have spent the majority of their sad sad lives studying tax law and the tax code and can recommend to you your proper course of action in regard to taxes.

That's like going to an auto mechanic and asking for the instructions for fixing your car! They make a pretty decent amount of money off filing taxes for people, so why would want to look into what the truth is? If everyone found out, then there would be a TON of unemployed accountants out there on the streets!

quote:

Originally posted by Yoepus Of course nobody wants to pay taxes! I don't even like giving money to bums, why should I give it to bums in suits who threaten me? But just because I read something on the internet that agrees with what I feel does not make it true. The arguments made in your link, although as much as I wish they weren't, are fallacious, they suppose that the US Congress does not have "jurisdiction" over US citizens and therefore they don't have right over US citizen's money. The US congress does not have any jurisdiction on US citizen's (aside from who can become one) but it does have jurisdiction on every income made in the USA. Here are some links: http://www.treas.gov/education/fact...xes/ustax.shtml http://caselaw.lp.findlaw.com/data/...on/amendment16/

Yeah, nobody in the government has ever lied.

Fact sheets are NOT legally binding, so the IRS can say whatever they want to in them. It's propaganda to promote their cause, which is to keep people from asking questions.

BTW, if the government had jurisdiction over "every income made in the USA", what would prevent them from taking 100% of your income?

A couple other key questions to ask:

What statutue shows that you are required to pay taxes? Where is it in the tax code, Title 26 of the US Code? I see you know how to use a search engine to find things in the Constitution, maybe you can find it in Title 26 for me, because I've been looking, and I can't find it. BTW, don't trip over those pesky words that mean completely different things that what they do in plain English - check your definitions!!!

Why does the government dodge this simple question at EVERY opportunity? (actions sometimes speak louder than words) If it's such a cut and dry issue, theny why won't they point it out? If I asked the local or state law enforcement officer what law says I can steal your car, he would look it up and tell you what statutue I would be breaking if I did so, and would be able to tell me the penalty as well. Why doesn't the IRS do this when asked?

Why did the IRS drop it's case against a convicted tax offender that was refusing to comply with his probation terms (ie fill out his 1040 forms and let him walk away a completely free man (no more probation either)? Could it have been that they were scared that a legal precedent would be set if he were allowed to present the documetation he wanted to use as evidence? Could it be that the IRS would rather let one guy go to ensure they keep everyone else fooled into filling out 1040 forms and sending in a TRILLION DOLLAR GIFT every year?

This finally piqued my curiosity to do some constitutional research which I'm always fond of doing. Anyway, let's bust out the constitutional law with context:

Several court rulings, including two Supreme Court rulings from 1916 (Brushaber v. Union Pacific (240 U.S. 1) and Stanton v. Baltic Mining (240 U.S. 103)), have been misinterpreted in a way that some might claim negates the 861/"source" issue. Before addressing the mistake involved in such a conclusion, it should be mentioned that court commentary on a law, even Supreme Court commentary, cannot expand the scope of that law beyond what the statutes and regulations describe. In addition, theorizing about what Congress could have taxed cannot change what they did tax.

Some will argue that the federal courts have in effect stated that because of the 16th Amendment, the "source" of income is irrelevant for purposes of the income tax. In one sense this is entirely true, and in another it is entirely false. The problem is that the matter of "sources" discussed by the courts is entirely separate from what the federal statutes and regulations mean by "sources" of income.

In 1895, the Supreme Court threw out the federal income tax as unconstitutional (Pollock v. Farmers� Loan & Trust Co., 158 U.S. 601). The problem was that a tax on property ownership is a "direct" tax, which requires apportionment, and the court ruled that a tax on the income generated from property ownership amounted to a tax on the property itself.

The court therefore threw out the income tax on the basis that, as applied to income from property ownership, it was an unconstitutional unapportioned "direct" tax. (Though the court said that this problem related only to income from property ownership, and not income from labor or doing business, the court said it was not at liberty to throw out pieces of the law and leave the rest intact, so the entire income tax was thrown out.)

In 1913, the 16th Amendment was ratified, and a new federal income tax was instituted. (While there is some question whether the ratification process of the 16th was actually legitimately completed, this is ultimately irrelevant to Congress� taxing power.) The 16th Amendment stated that Congress has the power to tax incomes, from whatever "source" derived, without having to go through the complicated process of "apportionment" (dividing the tax up among the states based on population), which is a Constitutional requirement for all "direct" taxes.

Many people (including federal judges) have misinterpreted the 16th Amendment to mean that the income tax, although a "direct" tax, no longer required apportionment. This is false. According to both the Supreme Court and Treasury Decision 2303, what the 16th Amendment did was to identify the income tax as an "indirect" tax, even if the income taxed was the result of property ownership. In other words, the amendment did not mean "Congress may now impose a direct income tax without apportionment"; it meant "the income tax is an indirect tax, so it does not need to be apportioned."

quote:

"The provisions of the sixteenth amendment conferred no new power of taxation, but simply prohibited [Congress� original power to tax incomes] from being taken out of the category of indirect taxation, to which it inherently belonged, and being placed in the category of direct taxation subject to apportionment." [Treasury Decision 2303 (quoting the "Stanton" decision)]

But in the process of explaining this, the Supreme Court made statements which some now misread, hoping to refute the 861/"source" issue. Basically, the claim is that the Supreme Court said that the "source" of income is irrelevant. And it did, but in the context of whether the "source" was labor, as opposed to property ownership. This is NOT the context in which the statutes and regulations address "sources" of income.

An extreme example helps to clarify the difference. There are hundreds of millions of Chinese in China who receive income, but have no connection to the U.S. Did the 16th Amendment empower the United States Congress to tax them? Obviously not. The activity and type of commerce from which their income derives (i.e. the "source" of their income) is obviously not subject to the U.S. income tax. Obviously, these Chinese could accurately say that their income is exempt from U.S. taxation because of the "source" of that income. This is a matter of taxing jurisdiction, not whether the income came from labor or from property ownership. The two are entirely separate issues.

So when the courts state that the "source" is irrelevant, it only means that whether the income came from labor OR whether it came from property ownership, is irrelevant. It says nothing at all about Congress� taxing jurisdiction.

quote:

"The Sixteenth Amendment... has no real bearing and may be put out of view. As pointed out in recent decisions, it does not extend the taxing power to new or excepted subjects." [William E. Peck & Co. v. Lowe, 247 U.S. 165 (1918)]

In fact, in one of the main Supreme Court cases dealing with the 16th Amendment, the court went out of its way to make the distinction between the two issues. After basically saying that the "source" of income is irrelevant, the court then said this:

quote:

"Mark, of course, in saying this we are not here considering a tax... entirely beyond the scope of the taxing power of Congress, and where consequently no authority to impose a burden, either direct or indirect, exists. In other words, we are here dealing solely with the restriction imposed by the 16th Amendment on the right to resort to the source whence an income is derived in a case where there is power to tax..." [Stanton v. Baltic Mining Co., 240 U.S. 103 (1916)]

And in another case:

quote:

"The legislative history merely shows that the words 'from whatever source derived' of the Sixteenth Amendment were not affirmatively intended to authorize Congress to tax state bond interest or to have any other effect on which incomes were subject to the federal taxation, and that the sole purpose of the Sixteenth Amendment was to remove the apportionment requirement for whichever incomes were otherwise taxable." [South Carolina v. Baker, 485 U.S. 505 (1988) (footnote 13)]

The Supreme Court was specifically saying that in discussing the irrelevance of the "source," they were NOT saying anything about Congress� taxing jurisdiction. When the current regulations discuss the "sources of income for purposes of the income tax" (26 CFR � 1.861-1) they are discussing the types of commerce subject to taxation, which has nothing at all to do with the discussion of "sources" by the courts, which dealt with income from labor versus income from property ownership. Conversely, when the courts talk about how the "source" is irrelevant, this has nothing at all to do with which activities and types of commerce Congress and the Secretary of the Treasury have designated as being subject to the income tax.

(The Treasury regulations, decades after the 16th Amendment was ratified, were still stating that some income not exempted by statute is nonetheless "under the Constitution, not taxable by the Federal Government," demonstrating yet again that the 16th Amendment did not remove the jurisdictional limits on Congress� taxing power.)

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