IRS Humbug by Frank Kowalik

IRS HUMBUG

IRS WEAPONS OF ENSLAVEMENT

Frank Kowalik

Wntber~ali~tic jublt~ber~ Q&aklanb jark, jflortba

DISCLAIMER

The author and publisher disclaims any responsibility for any liability or loss which may occur as a consequence of the use and application, either directly or indirectly, of any information presented in this book titled "IRS HUMBUG."

This personal study is intended to provide findings and personal conclusions based upon research, analysis of the subject matter, and my personal experience with lawyers in and out of the Federal Government. This information is not provided with intent to render legal advice or provide legal professional services.

Expressing personal sovereignty over your life, liberty and property has the element of risk that Internal Revenue Service employees will make attempts to have you change your mind. How they attempted to do this with regard to me is documented in this book, illegal conduct on their part notwithstanding.

I know that I am not a transferee or a taxpayer under the Internal Revenue Code (Title 26 of the United States Codes), and have made that record by declaring that I am not a person subject to the Internal Revenue Service control. Whether or not you are such a person requires a personal determination through study or by obtaining legal advice from a knowledgeable attorney on this subject matter.

ACKNOWLEDGMENTS A special expression of love and gratitude to my wife who stood by me

throughout my ordeals and was my right hand in putting this book together. Additionally, acknowledgment to Deborah Shell for her guidance in

editing this material.

IRS HUMBUG. Copyright© 1991 by Frank Kowalik. Printed and bound in the United States of America. All rights reserved. No part of this book may be reproduced in any form or by any electronic or mechanical means including information storage and retrieval systems without permission in writing from the publisher, except by a reviewer, who may quote brief passages in a review. Published by Universalistic Publishers, P.O. Box 70486, Oakland Park, Florida 33307-0486

Library of Congress Cataloging in Publication Data ISBN 0-9626552-0-1 Library of Congress Catalog Card Number 90-090256

TABLE OF CONTENTS

PREFACE 1

INTRODUCTION ms HUMBUG SAYS IT ALL 3

CHAPTER 1 "INCOME TAX" OR "KICKBACK" IN A NUTSHELL 5

Voluntary compliance--self assessment • Federal income tax is a false belief; it is a kickback • Legal kickback became illegal• IRS forces illegal kickback • Kickback is not a direct or an indirect tax • When the kickback is illegal • Debt instrument in the name of an IRS return • Illegal kickback by undue influence • Recap and conclusions • Controlled by false belief • False convictions • Illegal kickback is involuntary servitude • Need for knowledge

CHAPTER2 FEDERAL JUDGES CONCEALED THE KICKBACK SCHEME 16

U.S. Judges, The original IRS Tax Protestors • Employment agreements are controlling • Federal Government employee kickback started in 1862 • Kickback rejected by U.S. judges • "Gross income" first defined in 1919 • U.S. judges again refuse kickback in 1919 • New judges cooperate after June 6, 1932 • What is "gross income" • U.S. judges' record of concealment • Recap & statements • Judge's conduct conceals criminal conduct

CHAPTER3 UNITED STATES TAXING POWER IS LIMITED

IRS Kickback is not taxation • Direct Tax [Art. 1, Sec. 2, Cl. 3; Art. 1, Sec. 9, Cl. 4] • Indirect Tax [Art. 1, Sec. 8, Cl. 1] • The Sixteenth Amendment • F.I.C.A. example • Home example • Sixteenth Amendment power is basic to all of us • A child's taxing authority • A church's taxing authority • A labor union's taxing power • Choice vs. necessity controls taxing power • Sales tax on necessities is prohibited • United States Government named kickback power "tax" • Rebates are kickbacks • Kickback of income by employment agreement • U.S. Government "gross income" includes kickback • Gross income not includible creates illegal kickbacks • Income from private sector employment not includible • Illegal kickback in the name of voluntary compliance-self assessment • IRS forms are voluntary • IRS duty is not to include gross

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IRS HUMBUG

income that is not includible

CHAPTER4 IDENTIFYING LEGAL & ILLEGAL KICKBACKS

Legal kickback generally • Illegal kickback generally • Eradication of illegal kickback is duty of U.S. Congress • Legal Federal Government employee kickback program • Illegal kickback results in being a "tax debtor'' • The "taxpayer" cannot be you • I.R. Code vague laws must have lawful results • IRS instrument that makes you a "Tax Debtor'' • Examples of tax debts created • Example #1: Changes in employment conditions that prejudice the Federal Government employee • Example #2 When a Federal Government employee includes income from investment that is not includible • Example #3 When Federal Government employee includes income from winnings that is not includible • 26 U.S.C. Sec. 3402(q) shows how vagueness controls • Illegal kickback or tax debt is prohibited by peonage law

CHAPTERS

56

PEONAGE IS PROHIBITED BY LAW 78

What is peonage • Controlling labor by debt is peonage • U.S. Government's duty is to eradicate involuntary servitude • I refused to be a peon • Being held, arrested, or returned to a condition of peonage • Peonage is compulsory service

CHAPTER6 ONLY I.R. CODE "WAGES" ARE SUBJECT TO KICKBACK 90

Not everyone receives I.R. Code "wages" • Federal income taxation is a legal kickback on wages. • Who receives I.R. Code "wages" • Who are I.R. Code State employees • Private sector employees are not part of I.R. Code • Voluntary Withholding Agreements • Voluntary W-4 form is humbug • I.R. Code non-wages controlled by regulations • IRS authority is limited to asking • United States Government withholding it's own income by W-4 form

CHAPTER7 DILEMMA OF PRIVATE SECTOR EMPLOYERS 107

I.R. Code does not include private sector employers • Last statement in section 3403 • Dilemma forced upon private sector employees • Dilemma becomes quad-lemma for private sector employers • I.R. Code provides terms of Federal Government employees employment agreement • As to Federal Government employees, the "taxpayer'' is the U.S. Government • Burden for Survival

CHAPTERS IRS CONTROL POSSIBLE BY FEAR 116

Debt instrument in the name of a "U.S. Individual Income Tax Return" • The law requires only the Secretary to file • "U.S. Individual Income

TABLE OF CONTENTS

Tax Return" is for Federal Government employees • The word "return" used to deceive • "Individual" is identified as a Federal Government employee • Privacy Act Notice shows limited IRS authority • By planned duplicity-the word "return" results in malicious prosecutions • Fear of the IRS used to exert illegal authority • False charges and malicious prosecutions establish fear of the IRS •

CHAPTER9 VAGUE LAW IS INSUFFICIENT NOTICE 137

Clear, direct, positive notice is required • Vague law- tool used for cooperation between branches of government • Examples of I.R. Code vague laws • Example 1. Gross income made vague by redesigning the law • Long range "gross income" humbug • Example 2. I.R. Code section 931• Example 3: Food and Drug Administration story • Vague laws intend to chain you to IRS control

CHAPTER 10 U.S. TAX COURT 155

U.S. Government is the "taxpayer'' in the I.R. Code • Identifying I.R. Code "Transferee" and "Taxpayer'' • Other Ways To Be a "Transferee" in the I.R. Code • IRS controlled by administrative collection procedure • Notice of Deficiency needed for due process of law • IRS has remedy regarding Federal Government employees only • Added proof that "individual" in the I.R. Code is a Federal Government employee • "Individual" works within the U.S. Government • Burden not to enforce illegal kickback is on the IRS

CHAPTER 11 I.R. CODE CRIMINAL CHARGES APPLY ONLY TO TRANSFEREES WHOSE CONDUCT IS FRAUDULENT 172

Criminal conduct with regard to U.S. Government property • Transferee by agreement • Private sector employees are not I.R. Code Transferees • "Person" to whom I.R. Code criminal statutes apply • Sections 7201 and 7203 do not state tax evasion is fraudulent conduct • ''Willfulness" linked to larceny and fraud • Link between Title 18 and other U.S. Code Titles • Under I.R. Code Law- who can be guilty of fraud and larceny? • Fraud against the U.S. Government • Fraud with intent to evade tax • Judgment debts in illegal Federal Court actions • IRS humbug on estate taxes •IRS humbug as to gifttaxes • IRS humbug with regard to Federal Government employee kickback • IRS humbug with regard to private sector employees • IRS humbug with regard to private sector employers • Points to keep in mind • Fraud by Federal Government employees • Duplicity of subject matter •

IRS HUMBUG

CHAPTER 12 IRS HUMBUG PROVEN BY MY STORY 198

The charge against me proves IRS humbug • IRS humbug creates malicious prosecutions • The humbug "charge" • Humbug "Summons" • Humbug of Private Sector Lawyers • Humbug arraignment • U.S. courtroom humbug • Humbug used to seat 12 persons in the jury box • First Federal Government employee witness humbug • Second IRS witness humbug • Humbug after being declared guilty • Judgment Order identifies the humbug • Sentencing humbug • The record that proves humbug • Are these violations appealable?

CHAPTER 13 RELATIONSHIP BETWEEN A FIXED JURY, MALICIOUS PROSECUTION AND A BILL OF PAINS AND PENALTIES 215

Fixed Jury-a weapon of enslavement • Biased Persons Do Not Make a Jury Trial• Section 7203 Hoax • Section 7203 becomes a "bill of pains and penalties" • Sham rules used in section 7203 actions • First sham rule: Establish a phantom law • Second sham rule: Establish false belief that all income is includible • Sham rules get Federal Government employee desired result • Sham facts supported opinions, not law • Misuse of section 7203 is growing • False trust of Federal Government employees makes IRS humbug possible • Obligation of jurors

CHAPTER 14 HUMBUG IS NOT APPEALABLE 231

Roots of eliminating appeal process • Denial of bail pending appeal • Purpose of the appeal process • Due process of humbug imposed • A new trial by more humbug • Appellate court judges lose objectivity • I refused to willingly appear for a new trial • More Appellate Court humbug • Supreme Court humbug • Conclusion about the new bail pending appeal condition • Probation humbug • Federal Government employees violate their own procedures • Humbug used by Parole Commission for false arrest • Due process of humbug for payment of the fine • U.S. judges supported such Federal Government employee humbug • More proof that Federal Government employees use the U.S. Courts for their humbug

CHAPTER 15 SOVEREIGNTY EXPLOITED 254

Due Process-Not judges' opinion control • Federal Register is notice of controlling law • Positive law is controlling law • Location of positive laws • Discretion circumvents positive law • Only judicial and legal discretion is permitted • Rules of court-basis for personal discretion • W-2 Form pinch hits for the 1040 Form • Kickback is from within the property, not from within the person • Need to exercise personal sovereignty

TABLE OF CONTENTS

CHAPTER 16 EXORCISING THE IRS 274

Personal sovereignty • Law does not make you a "taxpayer," you do • Owners of the Federal Reserve System arranged to have notice of their sovereignty expressed in law • Perils of penalty of perjury • Penalties of Perjury as to a Federal Government employee • Penalties of perjury as to non-Federal Government employees • Alteration of a W-4 Form for Non-Federal Government employees • Non-Federal Government employees cannot perjure themselves • Imperfect obligation-legal impossibility • Dues and don'ts for a sovereign • Declaration of sovereignty on checks

CHAPTER 17 CODE OF ETHICS FOR FEDERAL GOVERNMENT EMPLOYEES 304

Force Code of Ethics upon Federal Government employees • My declaration of personal sovereignty

APPENDIX

A. CONSTITUTION OF THE UNITED STATES OF AMERICA-1787 307

B. IRS PRIVACY ACT & PAPERWORK REDUCTION ACT NOTICE 326

C • TITLES OF UNITED STATES CODE 327

D. 26 U.S.C. SEC. 3402(q) 328

E. PUBLIC SALARY TAX ACT OF 1939 329

F. 5 U.S.C. SEC. 552a(e) 332

G. U.S. v. CARDIFF 334

H. INFORMATION 338

I. SUMMONS 340

J. 4340 FORM (period ending 1975) 341

K. 4340 FORM (period ending 1978) 342

L. JUDGMENT ORDER 343

M. PAROLE CERTIFICATE AND CONDITIONS 344

N. FRANK KOWALIK's PAROLE CONDITION CHANGES 346

0 . FIRST PAGE OF TITLE I 347

P. FIRST PAGE OF TITLE 26 348

PREFACE

The liberty of a circus elephant is restrained to a confined area by a chain that binds him. Though this chain is but a thread compared to his massive bulk it provides control because the elephant falsely believes the chain cannot be broken. This false belief is ingrained into the elephants mind by the trainers at infancy by chaining the elephant to a stake when the chain was strong enough to bind him. Once this hoax is established it is all that is needed to control the adult elephant to act the way the trainer wants it to act. The elephant is controlled by the trainer's humbug.

Likewise, WE, THE PEOPLE of the United States of America, are controlled by the taxing authorities humbug, particularly the Internal Revenue Service employees have acted as trainers. We have been trained to falsely believe that we are subject to their humbug by their established false belief. That false belief is that you are required to pay federal income taxes. This is a false belief since when you file a ''U.S. Individual Income Tax Return" you are not paying federal income taxes, you are participating in a kickback scheme that is either legal or illegal depending upon whose property is involved.

The requirement to make a "return of income" does not exist when the scheme is an illegal kickback. The false belief is based upon the misunderstanding that a "U.S. Individual Income Tax Return" is to be delivered to the Internal Revenue Service (IRS) by April 15th of each year. This misunderstanding was and continues to be enforced by stories in the newspapers, magazines, in the radio and television media, and the movie industry. By their misled cooperation in establishing the false belief they have become trainers for employees of the IRS. They aided in binding us to the Federal Government employees control over our life, liberty, and property (which includes labor). In doing so they unwittingly created control over themselves and their family as well.

The initial link in the chain is the phrase return of income is required by law. If the enforcement of this requirement is limited to the return of U.S. Government income in the possession of specific persons then the

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IRS HUMBUG

IRS is performing a lawful function. But, by opinions of U.S. judges in the cases before them, this vague phrase was extended to mean that a "U.S. Individual Income Tax Return" is required to be delivered to the IRS. The purpose was to impose a hoax upon us. These opinions have become another link in the chain that binds us to the IRS.

Requiring the making and delivery of a ''U.S. Individual Income Tax Return" is a legal impossibility since it becomes a debt instrument upon which collection is enforced. This goes to controlling your labor against your will, which is violative of the Thirteenth Amendment and specific laws of our country. IRS employees justify their false belief control program by the label voluntary compliance--self assessment. But, the lawful fact is that there is no such condition as a voluntary slave.

This book is intending to provide the knowledge upon which you can break the Federal Government employee's chain that binds you to their control. You are controlled by false belief when you believe you are a "taxpayer'' under the Internal Revenue Code. You are also controlled by false belief when you believe that the IRS employees have authority to control you and your income. Their authority extends only to the return of the U.S. Government income in the possession of persons who are effectively connected with it. Only a "transferee" under the Internal Revenue Code can have U.S. Government income in his possession that is subject to being returned or kicked back.

To maintain personal control over your affairs you need to know your legal status. Reading this book will provide you with information needed to determine whether you are a "transferee" under the Internal Revenue Code or not. With knowledge you can have control over your personal income.

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INTRODUCTION

IRS HUMBUG SAYS IT ALL

The title of this book says it all. The Federal Government agency called the Internal Revenue Service (hereafter IRS) has used humbug in implementing what is called "income tax" for generations.

Humbug is one of the very few English words that has a singular meaning. In part, it is defined in Webster's New Collegiate Dictionary as:

humbug n. 1. something designed to deceive and mislead 2. an attitude or spirit of pretense and deception humbug vt: DECEIVE, HOAX vi: to engage in a hoax or deception.

For decades many generations have been deceived and misled about what is commonly known as "individual income taxation." Such deception is possible because of vagueness of the laws in the Internal Revenue Code (hereafter I.R. Code). As an example, did you know that in all of the I.R. Code there is no definition of the term "income tax." This makes possible the false belief that it means a tax on all income a person receives when it is not a tax at all, but a kickback arrangement that was first implemented in the year 1862 between the United States Government (hereafter U.S. Government) and the people it employs. So the need to define income tax is not required, but it takes more than 1,000 pages to conceal the fact that it is a kickback arrangement.

Humbug was used to create the false belief, and humbug is used to perpetuate it. This book reveals how and why both a legal kickback and an illegal kickback exist today, and how U.S. judges aid Federal Government employees of other branches of government in fulfillment of illegal conduct that result in a form of involuntary servitude called peonage. Also explained is why tax evasion is not possible when the program is a kickback.

Once the limitation of power placed upon our public servants is understood by a sufficient number of people then WE, THE PEOPLE, can keep them within those limits. Until then each person must exert

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IRS HUMBUG

their own personal sovereignty to protect their life, liberty and property from abuses.

Though some suggestions of what is needed in order to establish sovereignty over our personal property and exercise control over our own destiny are provided, it can only be accomplished by understanding what is humbug and what is legal administration of the law with regard to U.S. Government income (the only subject and matter concerning the IRS). This book provides information that surrendering control over ones personal wealth is being done because of false belief, the basis for IRS humbug.

The foundation for the information in this book is extensive personal study, but the experience of being harassed and maliciously prosecuted and imprisoned is what really enabled me to see how deception (humbug), not law, controls the lives and property of people. Though I am sure it was unintentional, Federal Government employees taught me a great deal.

The truth between these covers can be the ammunition you need to defend your life, liberty and property against enforcement of a false belief. Though I cannot promise you a utopia I can share what I have learned and my experience with you. Only with truth and understanding can the fear and frustration everyone seems to have with regard to the IRS and "individual income taxation" be overcome, and personal outrage eliminated. For peace to be ever present in the world, we must experience peace on a personal basis. May it be initiated with the study of IRS HUMBUG.

4

CHAPTERl

"INCOME TAX" OR 11KICKBACK" IN A NUTSHELL

Voluntary compliance-self assessment

Most people1 respond with feelings of outrage when they come to understand that the "U.S. Individual Income Tax Return" they submit to the Secretary of the Treasury each year is part of a VOLUNTARY COMPLIANCE-SELF ASSESSMENT program.2 Yet that is what the Federal Government employees have called their annual gathering of what is commonly known as income taxes into Federal coffers. The conduct of Federal Government employees never left me, or millions of other Americans, with the impression that submitting the instrument called a "U.S. individual Income Tax Return" to the IRS is a voluntary act on the part of any natural person. And I certainly never thought of

1

2

The words "people" or "person" will be used through out this book rather than "citizen" or "U:S. citizen" because the laws of the United States of America apply to people effectively connected with the law whether they are citizens or not. Th1s is evidenced in the U.S. Constitution. As examples, the Fourth Amendment says "The right of the people to be secure .... against unreasonable searches and seizures, .... " and the Fifth Amendment starts out "No person shall .... be deprived of life, liberty, or property, without due process of law .... "

"Each year American taxpayers VOLUNTARILY file their tax returns and make a special effort to pay the taxes they owe." -1971 Internal Revenue 1040 bookletJofumie M. Walters, Commissioner "Our tax system is based upon VOLUNTARY ASSESSMENT and payment, not upon distraint." Flora v. U.S, 362 U.S. 145 "Our tax system is based on individual self assessment and VOLUNTARY COMPLIANCE." -1975 Internal Revenue Audit Manual- Mortimer Caplin, Commissioner "The mission of the Service is to encourage and achieve the highest possible degree of VOLUNTARY COMPLIANCE." -Section 1111.1 of the Federal RegisterMarch 25, 1974 Donald C. Alexander, Commissioner ''The IRS's primary task is to collect taxes under a VOLUNTARY COMPLIANCE system." -1980 Internal Revenue Annual Report- Jerome Kurtz, Commissioner

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IRS HUMBUG

it as self assessment. Nor can it be deemed to be voluntary compliance--self assessment when Federal Government employees have a procedure to send those who choose not to comply to prison for inferred tax evasion. Their actions are not authorized by law, but accomplished because of opinions based upon traditions Federal Government employees have established. To demonstrate this, do you not feel a person who does not deliver such an instrument is guilty of tax evasion?

The intent of this book is to establish what so called "individual Federal income tax" is all about. After more than fifteen years of studying the Internal Revenue Code (hereafter I.R. Code) and the personal experience of being maliciously convicted and imprisoned, I feel compelled and competent to provide the true facts and background on this subject and matter along with my personal analysis. But, first understand that this book will only deal with what is commonly thought of as "income tax" as it relates to natural persons and the income received through employment agreements.

Federal income tax is a false belief; it is a kickback

The truth is "Federal income tax" is not a tax at all but a program devised to return income back to the U.S. Government that under their employment agreement is theirs all along. In fact, the phrase frequently used in the I.R. Code and in Federal Government publications with reference to "income tax" is "return of income."

What is the "return of income" arranged for by the I.R. Code? Since the U.S. Supreme Court has declared that laws are identified by their effect, not their wording3 the laws in the I.R. Code fit the definition of a kickback. Hence, it is actually a kickback program being implemented under the title "income tax." This Federal Government kickback program is legal as long as it is limited to returning property belonging to the U.S. Government. However, by use of deceit and misinformation, an illegal kickback program has been established that brings monies into the Federal Treasury based upon property not includible by law or employment agreement in the legal kickback program.

3 The U.S. Supreme Court said in Henderson et al v. Mayor of N.Y. et al, 92 U.S. 258, 268, "In whatever language a statute may be framed, its purpose must be determined by its natural and reasonable effect."

6

"'NCOME TAX" OR .. KICKBACK" IN A NUTSHELL CHAPTER1

Legal kickback became illegal

A legal kickback program between the Federal Government and Federal Government employees does exist, however it only applies to income placed into the hands of Federal Government employees by the Federal Government as a consequence of an employment agreement between them. Under their employment agreement the "wages" paid to Federal Government employees is also classified as "gross income".

It is illegal to compel Federal Government employees to kickback income on property that is not includible in "gross income" under the I.R. Code, and it is illegal to compel persons working in the private sector to kickback ANY part of their remuneration for personal services performed since such gross income is not includible in "gross income" under the I.R. Code. To put it another way, if your income for personal services performed is not from the U.S. Government as your employer there is no kickback due to the U.S. Government. Thus no "return of income" is due and owing.

Even the definition of "return," which is "to turn back" or "redeliver," indicates that the making of any return of income is a kickback. Any income sent to the U.S. Government which is not required to be sent under the legal kickback law is an illegal kickback. Yet an IRS illegal kickback program that is modeled upon the legal kickback program does exist, and Federal Government employees have taken it upon themselves to compel both Federal Government employees and the balance of society to participate in it. Participation in the illegal kickback program manifests itself with the delivery of a ''U.S. Individual Income Tax Return" when income not includible is included.

The "U.S. Individual Income Tax Return" was devised as an administrative method for Federal Government employees to account for the "return of income" due to the U.S. Government as a result of their employment agreement. It is the submission of a declaration that states the amount a Federal Government employee is obligated to return to the U.S. Government under their kickback program. When you are a Federal Government employee the kickback is part of the "gross income" paid to you. If your deduction benefits claimed upon a ''U.S. Individual Income Tax Return" do not have the effect of reducing your legal kickback to zero, then you have property that belongs to the U.S. Government and you are liable for its return.

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IRS HUMBUG

IRS forces illegal kickback

When any person who works in the private sector refuses to be subjected to terms of the Federal Government employee employment agreement that do not apply to them, he/she is first intimidated by IRS employees through threats of punitive sanctions. If that does not coerce cooperation, IRS employees arrange to have inapplicable criminal sanctions imposed by soliciting the aid of employees in the Justice Department, the Federal Court system, and 12 misguided persons seated in a jury box. The I.R. Code itself will provide the proof that we have been, and still are, controlled by false beliefs and not by laws of the United States of America in such actions. Also, court decisions will show how Federal judges have assisted in establishing and supporting the illegal kickback program. Details of all of this will follow, but first here is the story in a nutshell.

Kickback is not a direct or an indirect tax

The Supreme Court has described the difference between a direct and indirect tax. 4 A tax placed on the compensation that a natural person receives in exchange for his time and talent would fall under the classification of a direct tax. Under the U.S. Constitution a direct tax requires apportionmentS A direct tax results in each person living under the laws and Constitution of the United States being taxed identically, which equates to a head tax (capitation tax) that is also controlled by apportionmentS

Though commonly thought of as a tax on compensation, the Federal individual income tax that is implemented through the I.R. Code cannot be deemed a direct tax since it is not equal upon all persons living under the laws and Constitution of the United States. Nor is it an indirect tax

4

s

The Supreme Court in Pollock v. Farmers' Loan & Trust Co., 1S7 U.S. 429, 1S S.Ct. 673, aff. reh., 1S8 U.S. 601, 1S S. Ct. 912 (189S) said at pageSS8: "Ordinarily, all taxes paid primarily by persons who can shift the burden upon someone else, or who are under no legal compulsion to pay them, are considered indirect taxes; but a tax upon property holders in respect of their estates, whether real or personal, or of the income y1elded bJ such estates, and the payment of which cannot be avoided, are direct taxes.

The U.S. Constitution is provided in its entirety as Appendix A. The provision regarding direct taxes is found in Article 1, Section 2, Clause 3 and Article 1, Section 9, Clause4.

"INCOME TAX" OR "KICKBACK" IN A NUTSHELL CHAPTER I

since the burden is not shifted to someone else. The truth is, the I.R. Code does not contain a formula for a tax on compensation at all. What it does provide is notice of the formulas for the kickback of property belonging to the U.S. Government under their employment agreements. The kickback represents monies over and above the compensation paid to Federal Government employees. When a person voluntarily decides to be an employee of the Federal Government the compensation agreed to in exchange for their time and talent is whatever is left of the "wages" (deemed to be gross income under subtitle A of the I.R. Code) after the kickback. As an example: if the kickback on a "wage" of $10 per hour is $2, the compensation a Federal Government employee has actually agreed to for his labor is $8 per hour. This way his labor is not being taxed, instead, his compensation for labor is the net result of "wages" less kickback. Verification of this comes from the Federal courts, and will be detailed later.

What can make this confusing is that the maximum kickback can be reduced by claiming various lawful deduction benefits. This results in a different kickback for every Federal Government employee. In the example given above, for some Federal Government employees the kickback may be the full $2 while for others it could be zero. The majority would be somewhere in between zero and the maximum.

When the kickback is illegal

Only monies from the U.S. Treasury provided under employment agreements with the Federal Government can lawfully be subject to being returned to it under what is called "Federal income tax." Monies collected by the IRS on property that ANY person receives from ANY source other than the Federal Government creates the IRS illegal kickback program. This is true whether the person works for the Federal Government, any other government entity, or in the private sector. In essence, what is subject or liable to being returned to the U.S. Government belongs to the U.S. Government.

The Secretary of the Treasury has provided a maximum kickback schedule with regard to the "wages" of Federal Government employees in section 1 of the I.R. Code. This maximum kickback can be reduced by a number of deduction benefits that Congress has provided in other sections of subtitle "A" (titled "Income Tax") of the I.R. Code. If a Federal Government employee wishes to take advantage of and claim

IRS HUMBUG

deduction benefits, the paperwork upon which to do this is the IRS form called a ''U.S. Individual Income Tax Return." This act places the Federal Government employee into a lower kickback schedule by lowering the "wages" (also called "gross income") by the deducted amount.

The fact that the document is titled ''U.S. Individual Income Tax Return" has no significance in law. It is the body of an instrument, not its heading, which conveys legally-binding statements. Review of a ''U.S. Individual Income Tax Return" will prove that the word "tax" is only used in it's title, and that the controlling line says "AMOUNT YOU OWE."

For Federal Government employees the amount owed shown on a ''U.S. Individual Income Tax Return" is required by law only to reflect the amount of the kickback due under their employment agreement. If the ''U.S. Individual Income Tax Return" only reflects figures based upon the Federal Government employee's "wages" and lawful deduction benefits it is a legal kickback. The Federal Government employee is obligated to return such Federal Government income. If the ''U.S. Individual Income Tax Return" includes more than the "wages" the Federal Government employee received for his personal services to the Federal Government it is partly a legal kickback and partly an illegal kickback. But any ''U.S. Individual Income Tax Return" submitted by a person who is NOT employed by the Federal Government constitutes an illegal kickback in its entirety. Enforced collection of an illegal kickback violates peonage laws of the United States of America (discussed later in this chapter and in chapter 5).

Debt instrument in the name of an IRS return

The fact is that you do not pay an "income tax" when you make a ''U.S. Individual Income Tax Return," nor do you create a lawful debt. Still, it is considered a debt in the name of a ''U.S. Individual Income Tax Return," and Federal Government employees have learned how to force its collection through the administrative procedure provided by Congress to settle any internal dispute between Federal Government employees and the IRS about the amount of the legal kickback that is due to the U.S. Government. If it were a legal debt, the IRS would be required to collect it through the State Court of the state in which you live.

Persons who are not Federal Government employees are usually forced by their private sector employer to execute an IRS form titled

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"INCOME TAX" OR "KICKBACK" IN A NUTSHELL CHAPTER I

"Employee Withholding Allowance Certificate" (hereafter W-4 form). Based upon this W-4 form the private sector employer withholds monies due to their employee and sends it to the IRS. Federal Government employees plan such monies withheld and sent to the IRS as prepayment of a debt taken as validated by that person when a "U.S. Individual Income Tax Return" is delivered to the IRS. The W-4 form and the "U.S. Individual Income Tax Return" have become IRS weapons of enslavement since the forced debt becomes the vehicle upon which ones labor is controlled to ones prejudice.

Illegal kickback by undue influence

The entire procedure is called voluntary compliance-self assessment. However, neither making and delivery of a W-4 form or a "U.S. Individual Income Tax Return" can be considered voluntary under existing undue Federal Government employee influence. The only way the IRS could prove voluntary compliance-self assessment and keep legal the collection of monies not includible in "gross income" under the I.R. Code laws is by NOT practicing undue influence to force delivery of these documents and by NOT enforcing collection of debts falsely created by the delivery of a "U.S. Individual Income Tax Return." Undue influence is present when the IRS does not provide you with a clear, direct and positive choice of whether or not you wish to include your personal property into the Federal Government employee kickback program.

Recap and conclusions

(1) The so called Federal income tax is nothing more than a kickback program.

(2) Being a kickback, the making and delivery of a "U.S. Individual Income Tax Return" is not part of a direct tax program, it is not part of an indirect tax program, and it is not part of a tax under the Sixteenth Amendment to the U.S. Constitution.

(3) Only property which belongs to the U.S. Government is subject to being returned, or kicked back.

(4) The laws in the I.R. Code only apply to compensation for labor in the U.S. Government sector.

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IRS HUMBUG

(5) This kickback cannot be lawfully extended to property that does not originate from the U.S. Treasury as payment under an employment contract within the Federal Government.

(6) The only natural persons subject to the Federal Government's kickback program on "wages" are Federal Government employees, hence the term "individual" in the I.R. Code and on all IRS forms is synonymous with Federal Government employee.

(7) The only purpose for making and delivering a ''U.S. Individual Income Tax Return" with regard to "wages" is for Federal Government employees to lawfully reduce the kickback by claiming deduction benefits available to them.

(8) Federal Government employees have taken it upon themselves personally to act outside their lawful duty by forcing a kickback on property that is not includible in "gross income" under subtitle A of the I.R. Code.

Controlled by false belief The I.R. Code is not positive law, it is special law. It applies to specific

persons in the United States who choose to make themselves subject to the requirements of the special laws in the I.R. Code by entering into an employment agreement within the U.S. Government.

If you are not a Federal Government employee and you made a ''U.S. Individual Income Tax Return," or if you are a Federal Government employee who declares property other than that received from the U.S. Treasury as "wages" on a "U.S. Individual Income Tax Return," then you were controlled by IRS false belief, and not law. The law is that income from sources NOT effectively connected with the conduct of a trade or business within the U.S. Government (meaning not under an employment agreement with the U.S. Government) is NOT subject to any kickback under subtitle A of the I.R. Code.

This brief foundation on the I.R. Code law raises questions about the undue influence used by IRS employees to reach property not lawfully returnable to the U.S. Treasury by the forced delivery of a "U.S. Individual Income Tax Return." Over 150 million persons in the United States filed such "returns" in the year 1987. They certainly did not all work for the Federal Government.

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False convictions

"INCOME TAX" OR "KICKBACK" IN A NUTSHELL CHAYTERl

U.S. courtrooms are illegally used to achieve malicious convictions if persons who are not subject to the Federal kickback program do not submit to the will of IRS employees when threatened with punitive sanctions. I know this from personal experience. I was supposedly convicted of willful failure to file ''U.S. Individual Income Tax Returns/' a charge that cannot lawfully be made. My story will reveal how this unlawful conviction was accomplished. It will reveal that I was convicted of one subject matter while charged with another, that I was NOT actually accused of a crime, and that those involved in the action knew it. It will reveal why the judge could not mandate that I make a ''U.S. Individual Income Tax Return" even after 12 persons seated in a jury box supposedly found me guilty twice of willful failure to make and deliver such documents; and it will reveal how the United States judge attempted to bribe me with the promise of shorter prison sentence IF I would cooperate with the IRS. When judges and courts show a person's cooperation is needed in making a ''U.S. Individual Income Tax Return," they prove making of this document is a matter of personal choice and not a requirement of the law. This book will reveal that the purpose of the action against me was to force me back into a condition of peonage and to aid the IRS in keeping control over other sovereign natural persons who might refuse to be IRS peons. This proves that only by use of undue influence by Federal Government employees is a "U.S. Individual Income Tax Return" made and delivered to the IRS.

Illegal kickback is involuntary servitude

Natural persons are forced to serve the IRS and other Federal Government employees on an involuntary basis when their liberty and property are controlled by false beliefs established by IRS employees and not by laws of the United States of America. Enforcement procedures used to create and pay a kickback on the compensation received for one's labor or on other personal property that is not includible in the kickback prescribed by the I.R. Code is illegal and results in a form of involuntary servitude called peonage.

Peonage is a condition where a person is forced to labor to extinguish a debt. Debt is the thread that holds a sovereign natural person to the service of the IRS when deception and undue influence are used by Federal Government employees to have that person create a false debt

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IRS HUMBUG

on a ''U.S. Individual Income Tax Return" and collection of that false debt is enforced. Involuntary servitude is specifically forbidden by the Thirteenth Amendment of the U.S. Constitution, and conduct forcing conditions of peonage upon persons is punishable under laws of the United States.

Despite the fact that the U.S. Government has the duty under the Thirteenth Amendment of the U.S. Constitution to eradicate any form of involuntary servitude that exists in this country, including those created by Federal Government agencies, all persons living under the laws of the United States of America have unwittingly been forced to be IRS peons. The masters of these peons are Federal Government employees. Under the Republic form of government in this country you can exercise personal sovereignty (control) over your life, liberty, and property. Since we cannot now expect Federal Government employees to willingly discontinue their illegal procedure of enforcing collection of property not part of the IRS legal kickback scheme it is left to each of us to act on a personal basis. After you learn the limitations of IRS authority you will then be in a possition to learn how to have Federal Government employees honor your personal sovereignty. If you do not accept the option to protect your property from any outsider undue influence then you accept conditions as they are.

Need for knowledge

The information contained in this book was gathered through diligent study of I.R. Code statutes and their regulations, through research of court decisions and law, and, most importantly, through personal experience that, by the will of God, provided me with wisdom. The facts presented are based on the law in the I.R. Code, with some Federal court decisions used to demonstrate how laws are interpreted and how vague laws are used by the courts to establish beliefs in the name of case law (opinions of the case), as if they were statutory law. Keep in mind that under the U.S. Constitution only Congress can create positive law (laws applicable to any person).

I have stated often when reciting the Lord's prayer, "Thy will be done on earth as it is in heaven." My God provides me a choice to accept and express His will. I believe that the Lord's will is for me to share with you things that are not in heaven, but the unlawful things IRS employees impose upon us here on earth, like punishment for refusing to express their personal will.

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"INCOME TAX" OR "KICKBACK" IN A NUTSHELL CHAPTER!

When our Republic was created, it was intended that WE THE PEOPLE remain in control of our own destiny and that the government serve us, not the other way around.6 Our rights are being alienated through our forced permission, which has been labeled as acquiescence. Our ignorance has permitted this to occur. Only by removing the ignorance on a personal basis can we reverse the course. Study the U.S. Constitution. Be certain your children study it. Only then can your sovereignty as an individual be exercised and the expression of your will be considered voluntary.

I pray that God will aid me in conveying the truth to you so that you will have the confidence and ammunition needed to claim your right of sovereignty over your life, liberty, and property. Such sovereignty is included in the unalienable rights our forefathers sacrificed so much to secure for us under the Constitution of the United States.

6 The primary function of government " .... is to render security to its subjects. And any mischief menacing that security demands a remedy commensurate with the evil." This was a quote from State v. Gaynor, 119 N.J.L. 582; 198 A. 837, used by the U.S. Supreme Court in Lanzetta v. New Jersey, 306 U.S. 451, 455 (1938). It is in tune with what John Locke (1632-1704) said was the only ~urpose of establishing governments: "If a man in the state of Nature is so free, as has been said; if he be absolute Lord of his own Person and Possessions, equal to the greatest and subject to no Body, why will he part with his Freedom? Why will he give up his Empire, and subject h1mself to the Dominion the Control of any other Power? To which 'tis obvious to answer, that though in the state of Nature he hath such a Right, yet the Enjoyment of it is verr uncertain, and constantly exposed to the Invasion of others .... The great and chief end therefore, of Men's uniting into Commonwealths, and putting themselves under Government, is the preservation of their property."

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CHAPTER2

FEDERAL JUDGES CONCEALED THE KICKBACK SCHEME

U.S. Judges, The original IRS Tax Protestors

Contrary to the constitutional mandate of separation of powers} Federal judges chose more than a century ago to cooperate with the other branches of the U.S. Government in instituting the false beliefs that exist today about the kickback scheme that is inappropriately called "income tax." In 1863, U.S. Supreme Court Justices concealed effects the kickback Congress called a "tax" had on all Federal Government employees by willfully choosing to ignore their duty to provide the public with legal information that was of public importance.

In 1862, Congress passed a law that arranged for a 3 percent kickback on all compensation paid to persons employed by the U.S. Government. U.S. judges fought impairment of their employment contracts on a personal basis using the provision in the U.S. Constitution [Art. III, Sec. 1] which prohibits diminishment of the salaries of U.S. judges during their term of office. By fighting this Act on a personal basis they concealed the true nature of these I.R. Code Laws from prospective Federal Government employees and provided the executive and legislative branch of government with the implied power to prejudice all other Federal Government employees with unilateral changes in their employment contracts.

1 At the time the Constitution of the United States of America was being framed, James Madison said on the subject of separation of powers "It is agreed on all sides that the powers properly belonging to one of the departments ought not to be directly and completely administered by either of the other departments. It is equally evident that none of them ought to possess, directly or indirectly, an overruling influence over the others in the administration of their respective powers."

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FEDERAL JUDGES CONCEALED THE KICKBACK SCHEME CHAPTER2

The implied power that exists today with regard to property outside of Federal Government control is only possible because of the actions of U.S. judges. Implied power led to false belief, and the combination of the two has, and does, control the liberty and property (which includes labor) of natural persons in the United States of America.

The conduct of these U.S. judges was a personal protest against an illegal kickback to the IRS in the name of "tax." As a result, they became the first IRS "tax" protestors. Protecting their own property by protesting an illegal kickback in the name of "tax" was legal and justified. Yet today IRS employees would label them "illegal tax protestors," thereby inferring the U.S. judges were acting illegally.

Employment agreements are controlling

Employment agreements are limited to two persons, the employer and the employee. No other party can lawfully impair the agreement between these two persons.

The U.S. Government has had the status of "employer'' since its creation. Like any employer, the Federal Government must, of necessity, enter into employment agreements (contracts) with its employees.

For an agreement to be lawful, all parties to the agreement must enter into it willingly and with full knowledge of the rights and obligations created by that agreement. A written contract is actual evidence of an agreement. Any change in an existing agreement, actual or implied, cannot be forced by either party, but must be done with the full knowledge and consent of all parties to that agreement. Also, a person cannot be forced to accept the terms of an agreement (contract) to which he is not a party.

There are five essentials to any contract:

(1) competentparties,

(2) subject matter,

{3) legal consideration,

(4) mutuality of agreement, and

(5) mutuality of obligation.

The employee and employer must mutually agree on the consideration to be paid for the performance of a specific job and, of course, the job must be lawful. Also, all parties to an agreement must

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IRS HUMBUG

fully understand the obligations they each accept when they enter into the agreement. The employee has the right to know everything that the employer knows about the agreement, and cannot be deemed a competent party to the agreement if he/she accepted employment without fully understanding his /her rights and obligations because the employer failed to make the terms of the employment agreement clear, positive, and direct.

Mandatory to a legal change in an existing employment agreement is that the proposed change be discussed by all parties to the agreement and mutually accepted. In larger firms this is usually accomplished through union negotiations, but the procedure is just as necessary on an individual basis.

With this basic information on the law of contracts it is intended that you will begin to understand that, even though the Federal Government employee compensation arrangement today does include a legal kickback, an employment agreement cannot be open ended.

Federal Government employee kickback started in 1862

The impairment of the Federal Government employee employment contracts began with the kickback program that Congress promulgated as law in the year 1862. Once the Federal Government kickback program was well established by forced acceptance, employees and employers in the private sector were forced to believe that the terms of Federal Government employment agreements applied to them. Here is how it all happened.

Up until the year 1862, Federal Government employees worked under the same kind of employment agreement as anyone who agrees to an exchange of their time and talent for the personal property of an employer. Then, in 1862, the Thirty-seventh Congress passed Ch. 119, 12 Stat. 472. Section 86 of that Public Law reads as follows:

SALARIES AND PAY OF OFFICERS AND PERSONS IN THE SERVICE OF THE UNITED STATES, AND PASSPORTS.

Sec. 86. And be it further enacted, That on and after the first day of August, eighteen hundred and sixty-two, there shall be levied, collected, and paid on all salaries of officers, or payments to persons in the civil, military, naval, or other employment or service of the United States, including senators and representatives and delegates in Congress, when exceeding the rate of six hundred dollars per annum, a duty of three per centum on the excess above the said six hundred

18


dollars; and it shall be the duty of all paymasters, and all disbursing officers, under the government of the United States, or in the employ thereof, when making any payments to officers and persons as aforesaid, or upon settling and adjusting the accounts of such officers and persons, to deduct and withhold the aforesaid duty of three per centum, and shall, at the same time, make a certificate stating the name of the officer or person from whom such deduction was made, and the amount thereof, which shall be transmitted to the office of the Commissioner of Internal Revenue, and entered as part of the internal duties; and the pay-roll, receipts, or account of officers or persons paying such duty, as aforesaid, shall be made to exhibit the fact of such payment. .... [Balance of section 86 applied to passports]

First, you will note that it only applied to persons who received compensation for their services as an employee of the United States. Secondly, although Congress placed this into a Tax Act, and implies it is an indirect tax by the use of the word "duty," it cannot be a tax. A tax on labor would necessarily fall into the class of a direct tax that needs apportionment to be constitutional.

Note also that the only persons required to make an accounting of the kickback in section 86 were the officers who made the deductions and the Commissioner of Internal Revenue, not the Federal Government employee. As you continue to read this book you will see that this is also true today.

The effect of section 86 identifies what it really is-a kickback of part of the property agreed under contract to be paid for labor of Federal Government employees [see chapter 1, footnote 3]. With this Act, the amount of compensation agreed to be paid was diminished by one party to the agreement (Congress) without the consent of the other (the Federal Government employee). A unilateral change in the employment contract of all persons then employed by the Federal Government was not legal just because Congress promulgated it as a law, and the conduct of U.S. judges proved this. The result of arranging for the withholding of 3 percent of the compensation due Federal Government employees under existing contracts was deprivation of liberty and property without due process of law, which is violative of the Fifth Amendment to the U.S. Constitution.

The facts presented above were expressed by the Supreme Court in Pollock v. Farmers' Loan & Trust Co., 157 US 429 (1895), where they said:

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IRS HUMBUG

Subsequently, in 1869, and during the administration of President Grant, when Mr. Boutwell was Secretary of the Treasury and Mr. Hoar, of Massachusetts, was Attorney General, there were in several of the statutes of the United States, for the assessment and collection of internal revenue, provisions for taxing the salaries of all civil officers of the United States, which included, in their literal application, the salaries of the President and of the judges of the United States. The question arose whether the law which imposes such a tax upon them was constitutional. The opinion of the Attorney General thereon was requested by the Secretary of the Treasury. The Attorney General, in reply, gave an elaborate opinion advising the Secretary of the Treasury that no income tax could be lawfully assessed and collected upon the salaries of those officers who where in office at the time the statute imposing the tax was passed, holding on this subject the views expressed by Chief Justice Taney. His opinion is published in volume XIII of the Opinions of the Attorneys General, at page 161. I am informed that it has been followed ever since without question by the department supervising or directing the collection of the public revenue. (emphasis added)

This "kickback" program illegally forced a 3 percent debt obligation upon Federal Government employees working under an existing employment agreement in 1862. However, the "kickback program" established by section 86 was legal when applied to the salary of persons who took employment with the Federal Government after that Act was passed because they were on notice that a 3 percent kickback was part of their employment agreement. Thus illegal and legal kickbacks existed then and, though they have changed in form, they exist today.

"Kickback" is defined in Webster's Dictionary as "a return of a part of a sum received often because of confidential agreement or coercion." Was not a "kickback" coerced from Federal Government employees when Congress promulgated a change in their employment agreement as if it were a tax when, in essence, it was, and is, a kickback program?

By presenting the "kickback" program in the form of "law," Congress (the legislative branch of government) provided the implied authority of law needed to get Federal Government employees in the executive branch of government (the IRS) to act illegally in depriving other Federal Government employees of property rightfully due them under existing contracts.

U.S. Supreme Court Judges understood this, and were legally and morally obligated to correct any illegal action of Congress or the IRS for all Federal Government employees. The primary function of the

20


Supreme Court is to provide opinions of public importance. Instead they chose, by misdirection and silence, to cooperate with Congress in the implementation of this kickback which forced a debt obligation upon all Federal Government employees except U.S. judges and the U.S. President. This was accomplished when Federal judges allowed the contracts of fellow Federal Government employees to be illegally impaired while seeing to it that their employment contracts remained intact. Does not such conduct demonstrate that the U.S. judges were partial to assuring that the illegal kickback scheme was implemented? Does not such indifference and cooperation violate their duty? Does their conduct not raise the question of concealment?2

Kickback rejected by U.S. judges

In 1863, Supreme Court Chief Justice Taney sent a letter to the Secretary of the Treasury attacking implementation of section 86 on the compensation of Federal Judges as being unconstitutional based upon special status, when obviously it was unconstitutional for all Federal Government employees under the Fifth Amendment. This letter was also published as if it were a Supreme Court decision (157 U.S. 701). In it Justice Taney said:

"The act in question, as you interpret it, diminishes the compensation of every judge three percent, and if it can be diminished to that extent by the name of a tax, it may in the same way be reduced from time to time at the pleasure of the legislature."

Here you can see that the judges understood the effect of this law was a diminishment "by the name of a tax." They knew it was not an actual tax, but a forced debt obligation. In this country, there exists no circumstance under which a person lawfully can be forced to accept a debt against their will. The judges chose to exercise their right to refuse to accept this debt. However, when the judges chose to use Art. Ill, Sec. 1, they provided evidence of impairing the rights of all other Federal Government employees. The Fifth Amendment to the U.S. Constitution says no person shall be deprived of his life, liberty or property without

2 The U.S. Supreme Court said in Boyd v. U.S., 116 U.S. 616,635 (1885) " .... it is the duty of the courts to be watchful for the constitutional rights of the citizens, and agamst stealthy encroachment thereon."

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IRSHID.mUG

due process of law. The function of U.S. judges is to assure justice for all, not justice for themselves only. They had the duty to consider the legal issue for all of society. Their conduct not only violated that duty but demonstrates intent to conceal the plan to impose upon all of society the kickback scheme as well.

The judges also understood that section 86 would allow Congress to get a foothold in establishing the belief that Federal labor contracts can be subject to change "from time to time at the pleasure of the legislature." This false belief exists to this day.

For a period of 70 years (1862-1932), Federal judges were successful in defending their compensation from diminishment under the claim of a special constitutional privilege status. By claiming that the U.S. Constitution provided a special privilege as to their employment agreement, they ignored their oath to uphold justice for all. By not bringing the true issue to light in 1862 or in subsequent years, Federal judges prejudiced the independence of the Federal Courts, the very position they claimed was the basis for the clause in the U.S. Constitution which prohibits the diminishment of their compensation as judges. Being men of law, these judges knew the law. To demonstrate the independence of the judiciary, these Justices were morally and legally obligated to defend their property on the basic civil rights issue which is common to all people in the United States rather than to imply that only they have a defense with regard to a forced debt obligation.

"Gross income" first defined in 1919

The Revenue Act of 1918, c. 18, 40 Stat. 1057, enacted by Congress on February 24, 1919, specifically placed the compensation for personal services of Federal judges and the U.S. President under the definition of "gross income" in an attempt to bring them into the existing kickback program. That statute reads:

Sec. 213. That for the purposes of this title ... the term "gross income"-(a) Includes gains, profits, and income derived from salaries,

wages, or compensation for personal service (including in the case of the President of the United States, the judges of the Supreme and inferior courts of the United States, and all other officers and employees, whether elected or appointed, of the United States, Alaska, Hawaii, or any political subdivision thereof, or the District of Columbia, the compensation received as such), of whatever kind and in whatever form paid, or from professions, vocations, trades,

22


businesses, commerce, or sales, or dealings in property, whether real or personal, growing out of the ownership or use of or interest in such property; also from interest, rent, dividends, securities, or the transaction of any business carried on for gain or profit, or gains or profits and income derived from any source whatever. .... (emphasis added)

You will note that Congress is making reference to the gross income where the U.S. Government is the source of that income. Again making it clear that ONLY the compensation for personal service for the labor of Federal Government employees is includible in "gross income." The compensation of a person working in the private sector or for a state or local government, which includes state judges, is not included. Therefore, the subject matter "gross income" in the I.R. Code only applies to Federal Government employees. Income not derived from the U.S. Government is not subject to I.R. Code Laws. The sections of the current I.R. Code that provide this notice will be discussed in detail later.

The U.S. Government, like any other employer, can only establish the terms of its own employment agreement. Legally the U.S. Government cannot unilaterally impose new conditions or terms to existing employment agreements with Federal Government employees, which is confirmed by the stand the judges have taken and expressed in court opinions. Also, Congress cannot legally establish the terms of an employment agreement in the private sector or make the U.S. Government a party to such agreements.

U.S. judges again refuse kickback in 1919

When Congress passed section 213 of the Revenue Act of 1918, Federal judges were not willing to be made a party to the Federal Government's kickback schemes and avoided impairment of their employment contracts by using their judicial power,3 expressed in opinions. In the Miles v. Graham, at page 509, the Justices said of the 1918 Act:

... No judge is required to pay a definite percentage of his salary, but all are commanded to return, as a part of "gross income", "the compensation received as such" from the United States. From the

3 Evans v. Gore, 253 U.S. 245 (1920) and Miles v. Graham, 268 U.S. 501 (1924)

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IRS HUMBUG

"gross income" various deductions and credits are allowed, as for interest paid, contributions or gifts made, personal exemptions varying with family relations, etc., and upon the net result assessment is made. The plain purpose was to require all judges to return their compensation as an item of "gross income," and to tax this as other salaries. This is forbidden by the Constitution. (emphasis added)

In this opinion, the Justices were describing the return of income, or kickback, and its enforcement with regard to existing employment agreements. The statement made that this is forbidden by the Constitution was certainly correct, the Justices just neglected to say in positive, direct and clear language that it actually applied to all Federal Government employees. Treating all salaries in this manner, including that of the judges, is "forbidden by the Constitution."

The Justices again claimed only the exemption of their salaries from this statute because of special status during their term of office. In stating the kickback is not a fixed amount, but an amount that depends upon the deductions and credits allowed, they confirmed the prediction of Justice Taney in his letter of 1863 that the compensation agreed to "may in the same way'' [under the pretence of law] "be reduced from time to time at the pleasure of the legislature .... "

New judges cooperate after June 6,1932

Congress knew from past court actions that Federal judges already in office would not permit impairment of their existing contracts. By changes in the wording in the Revenue Act of 1932, c. 209, to read:

Sec. 22 ..... In the case of Presidents of the United States and judges of courts of the United States taking office after June 6, 1932, the compensation received as such shall be included in gross income; and all Acts fixing the compensation of such Presidents and judges are hereby amended accordingly. (emphasis added)

Congress managed to get the cooperation of Federal judges taking office after June 6, 1932. Cooperation is evidenced by acceptance of the job.

Note that this change in wording accomplished two things. First, by specifying that it applied to judges taking office after June 6, 1932 it did not affect existing contracts. Hence existing judges could not say it diminished their compensation. Secondly, the wording "all Acts are hereby amended accordingly" means that new judges are informed up front that their employment contract includes a kickback in the compensation. Just like other Federal Government employees, their

24


compensation for labor was the amount arranged for under law by Congress less the kickback, which varies depending on the deduction benefits available to each judge.4 Judges could have challenged the lawfulness based on unequal pay for like work, but then that argument would hold true for all other Federal Government employees as well.

The effect of this Act upon the compensation of judges who enter into a new employment agreement is brought out by the court cases after 1932. For example, in O'Malley v. Woodrough, 307 U.S. 277 (1938), Judge Woodrough brought action when his compensation as an Appeals Court judge was assessed. He had been a U.S. District Court judge prior to accepting his new position with the Appellate Court in 1933. The Supreme Court Justices decided that judges of courts of the United States taking office after June 6, 1932, had agreed to allow their salary to be deemed "gross income" and subject to a legal kickback. In other words, they agreed that, as a condition of employment, the salary of judges as set by Congress-as with all other Federal Government employees-includes their remuneration for fersonal service (income) and a kickback (gain) to the U.S. Government. In essence, the Supreme Court said to Judge Woodrough-tough cookies, when you accepted a higher position, you agreed to a new employment contract and accepted the employment condition of kickback that all judges taking office after June 6, 1932 accepted.

As for periodic changes, it is not known if U.S. judges actually do agree and permit Congressional unilateral changes in their employment contracts through the varying rates and deduction benefits. If they do, it certainly is contrary to their tradition. To prove whether or not U.S. judges use current rates and deduction benefits or that which was in existence when they first took office would require review of their ''U.S. Individual Income Tax Returns," which is in violation of their personal

4

5

The Fourth Circuit Court of Appeals clarified this issue in Baker et al v. Commissioner of Internal Revenue, 149F.2d 342, 344 (1945) with the statement ''The necessary effect of the Woodrough case seems to us to be that a judge who takes office under an established Congressional policy of taxing his salary become entitled only to the salary prescribed by statute less income taxes, and that in consequence his salary is not diminisheaby the tax ...

The kickback is some part of the gain portion of "gross income" or "wages." The amount depends upon tile deduction benefits claimed by the Federal Government employee upon a "U.S. Individual Income Tax Return."

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IRS HUMBUG

rights to privacy. So, it is something the public will never know, but the question is there.

What is 11 gross income"

A cursory explanation of" gross income" will be provided now even though specific examples of the term "gross income" will be given in chapter 6 along the I.R. Code descriptions of exactly what is includible in "gross income."

By looking back at section 213 of the Revenue Act of 1918, we see the term "gross income" includes gains, profits, and income derived from salaries, wages, or compensation for personal service of .... officers and employees .... of the United States, Alaska, Hawaii, or any political subdivision thereof, or the District of Columbia (Alaska and Hawaii were not States at that time and so operated under the Federal Government as did the District of Columbia).6 In this section, we see that the kickback on compensation was restricted to persons who entered into an employment agreement with the Federal Government, just as in section 86 of the 1862 Act.

All Acts of Congress regarding "compensation for employment'' and "gross income" have been exclusively for Federal Government employees. The statutes which affect "gross income" cannot, and do not, reach compensation paid for personal services in the private sector or other government entities. Congress only has authority with regard to the terms of an employment agreement where the U.S. Government is a party. They can only lawfully arrange for a return (kickback) of property that is paid out of the U.S. Treasury to persons under an employment agreement with the Federal Government. Just how employees in the private sector and other governments came to believe their compensation for personal service was part of the Federal Government employee kickback will be dealt with later. Right now it is important to understand that only by cooperation between Federal judges and employees of the Justice Department have IRS employees been able to force the inclusion of income that is not includible in "gross

6 Essentially the same verbiage in section 213 of the 1918 Revenue Act was placed into Section 22 of the 1939 I:R. Code. However, the essence of this law was completely disguised when recodified in 1954. These changes are covered in Chapter9.

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income" under laws passed by Congress for Federal Government employees.

U.S. judges' record of concealment

The judges' actions with regard to their own salaries provide the evidence that they cooperated with those in the legislative and executive branches of government. Their conduct is evidence of concealing the illegal kickback program. The executive and legislative branches of government must now depend on Federal judges to keep the illegal kickback programs as a source of income to the U.S. Treasury.

Had the Federal judges fought the legal issue of their basic rights as an employee the Act of 1862 would have fallen and the "individual income tax" as enforced today would not exist. There is no lawful way it can be deemed that a Federal Government employee agrees in ad vance to an employment agreement where the conditions of the kickback changes at the discretion of Congress or anyone else. Treaties cannot be broken. This results in the kickback being legal in part, and in part illegal. The kickback a Federal Government employee agrees to when he/she first takes a job with the Federal Government is legal, but, when changes unilaterally made by Congress create a higher kickback the portion which constitutes the change is illegal. The illegal portion is a debt obligation which the Federal Government employee is forced to discharge. Being forced to pay a debt obligation constitutes involuntary servitude (subject matter of chapter 5). You cannot agree in advance to involuntarily serve the Federal Government (or anyone else). To force someone to do so is to ignore the laws under the First, Fifth and Thirteenth Amendments to the U.S. Constitution.

To show that the Federal Supreme Court Justices actually cooperated with the legislative and executive branches of government in bringing the President and judges taking office after June 6, 1932, under the Federal kickback program, even though they avoided impairment of their own employment contracts, let's look at what they said in 1938 when they used Supreme Court Chief Justice Taney's 1863letter to the Secretary of the Treasury. Following are several excerpts from the Taney letter as used in O'Malley v. Woodrough, 307 U.S. 277 (1938).

At page 288. The Act in question, as you interpret it, diminishes the compensation of every judge three percent, and if it can be diminished

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IRS HUMBUG

to that extent by the name of a tax, it may in the same way be reduced from time to time at the pleasure of the legislature.

The justices know the law requires equal treatment. They know the U.S. Constitution prohibits the diminishment of everyone's compensation for services by any means other than an agreement entered into on a voluntary basis prior to employment. They also know Art. III, Sec. 1, which prohibits the diminishment of compensation of Federal judges, was placed into the Constitution of the United States to keep the employment agreements of Federal judges separate from other Federal Government employment agreements so that all Federal judges could answer any legal question regarding labor contracts other than their own with objectivity in mind. They are no longer capable of reviewing violations of Federal employment agreements or any issue with regard to the Federal kickback program as a disinterested third party, making their participation devisive and their opinions, extended as case law, oppressive upon persons who are not Federal Government employees.

Though those who constructed the U.S. Constitution probably did not anticipate a Federal kickback program. The Supreme Court Justices in 1862 understood section 86 for what it was and chose to act only to prevent their own employment agreement from being impaired. They understood allowing Congress to act unilaterally once with regard to their employment contract would imply continued unilateral changes could be made to their contracts "from time to time at the pleasure of the legislature." By the statement of Justice Taney in 1863, it also can be assumed justifiably that the Justices knew of the plan of Congress to force it on the balance of society by belief. For this belief to be established and sustained, the cooperation of Federal judges was required and gained. This is documented by their conduct and recorded opinions.

The "income" kickback program changes at the pleasure of Congress. And, as we now know, all persons (whether working in the private sector or for a government entity) have been forced into the Federal Government's illegal kickback program.

O'Malley opinion at pg. 288: The Judiciary is one of the three great departments of the government, created and established by the Constitution. Its duties and powers are specifically set forth, and are of a character that requires it to be perfectly independent of the two other departments, and in order to place it beyond the reach and above even the suspicion of any such

28


influence, the power to reduce their compensation is expressly withheld from Congress, and excepted from their powers of legislation.

Note that they avoided using the term "powers of taxation." The justices knew the legislation they were discussing was not a "tax" (direct or indirect).

The Judiciary's independence would have been secured had they objected to the law on the legal issue of civil rights that apply to all in society, namely the violation of the Fifth Amendment by illegal, unilateral impairment of existing employment contracts through a forced debt obligation which results in the deprivation of property without due process of law. Also, the First Amendment to the U.S. Constitution is violated when no choice is provided-when a person is deprived of freedom of expression as to the changes in his employment agreement.

Congressmen, most being lawyers, knew they had no lawful right to use the power of their elected position to arrange for the deprivation of property under the pretense of law; and IRS and all other Federal Government employees are on notice as to what is includible and what is not includible in "gross income" by the I.R. Code and Regulations. To control the property of natural persons not includible in "gross income" through the force of undue influence not only violates the Constitution and laws of the United States but those of the states as well. The enforcement of the debt obligation created in this fashion is prohibited by civil rights laws and brings up questions of conspiracy with intent to defraud (subjects that will be discussed later). For now, back to Justice Taney's letter discussed in the 0' Malley opinion.

At pg. 288. Language could not be more plain than that used in the Constitution. It is moreover one of its most important and essential provisions. For the articles which limit the powers of the legislative and executive branches of the government, and those which provide safeguards for the protection of the citizen in his person and property, would be of little value without a judiciary to uphold and maintain them, which was free from every influence, direct or indirect, that might by possibility in times of political excitement warp their judgments."

Here the Chief Justice Taney admitted, and subsequent Justices concur, that they knew their duty was to protect the citizen in his person and property. Still, they chose to ignore that duty and protect only their own person and property. By choice, they indirectly stated that the

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person and property of all other Federal Government employees was not entitled to protection from such deprivation.

When the Justices did not fight the 1862 law on the primary civil rights legal issue, they permitted illegal impairment of all other Federal Government employment contracts and permitted debt obligations to be forced upon all Federal Government employees but themselves. These Supreme Court Justices proved their judgment could be influenced and controlled by people in the other branches of government, and they paved the way for the cooperation between all Federal judges and employees of the IRS, the Justice Department, and members of Congress. By the continued conduct of cooperation in concealing the illegal nature of the kickback program, U.S. judges provide evidence that they choose NOT to uphold their duty as the branch of government created as a check and balance on the executive and legislative branches of government. Their duty is to assure that government under the law exists.

Getting back to the O'Malley opinion, pages 288-289, we see Justice Taney's letter said:

Having been honored with the highest judicial station under the Constitution, I feel it to be more especially my duty to uphold and maintain the constitutional rights of that department of the government, and not by any act or word of mine, leave it to be supposed that I acquiesce in a measure that displaces it from the independent position assigned it by the statesmen who framed the Constitution; and in order to guard against any such inference, I present to you this respectful but firm and decided remonstrance against the authority you have exercised under this act of Congress, and request you to place this protest upon the public files of your office as the evidence that I have done everything in my power to preserve and maintain the Judicial Department in the position and rank in the government which the Constitution has assigned to it. (emphasis added)

Here the Federal Judges state they are concerned with upholding the Constitutional"rights" of the Judicial Department. A government entity does not have rights-it has duties. Hence, to protect such rights is a subjective position which violates the judges' duty to be objective.

Those who accept jobs with the government have the duty to uphold the rights of all persons under the laws and Constitution of the United States. Federal judges would have complied with their duty if they had fought for their contractual rights on the general civil rights that all persons have, rather than claim a special privilege status, they would

30


have upheld their personal rights and secured the rights of all others at the same time. Hence, they did not do everything in their power to maintain the independence of the Judicial branch of government. Indeed, they did everything in their power to ultimately make the other branches of government dependent on them.

These Justices set the standard for all Federal judges. To this day Federal judges compromise their independence when they permit the use of U.S. courtrooms for the illegal enforcement of the IRS service (the imposition of illegal kickback programs upon persons in society).

Continuing with what the O'Malley Court said at pg. 289:

The letter of the Chief Justice was not answered and, at his request, the Court, May 10, 1863, ordered the letter entered on its records. In 1869, the Secretary of the Treasury requested the opinion of Attorney General Ebenezer Rockwood Hoar as to the constitutionality of the Act construed to extend to judges' salaries. He rendered an opinion in substantial accord with the views expressed in Chief Justice Taney's protest. 13 Op. A.G. 161. Accordingly, the tax on the compensation of the President and of judges was discontinued and the amounts theretofore collected from them were refunded-some through administrative channels; others through action of the court of claims and ensuing appropriations by Congress. See Wayne v. U.S., 26 C. Cls. 274, 290; 27 Stat. 306.

The U.S. judges' compensation for the performance of personal services, just like all other employees, is not subject to a law which impairs the obligation of the agreement of employment. However, as a result of Justice Taney's letter, you can see that the U.S. judges were placed in a class, among citizens, above all others. Their right not to be forced to accept an obligation that does not exist in law, or by employment agreement, was observed. Violation of the civil rights of all other Federal Government employees was permitted to stand, and the U.S. judges actively participated in these violations by concealment.

By claiming and receiving special status, Federal judges provided power that was implied and used by the IRS that does not exist under law. The limit of IRS power is to administer to the return of income disbursed to Federal Government employees as a result of their employment agreement.

Only through false belief can IRS employees continue to force their will upon all natural persons (Federal Government employees as well as persons working in the private sector and for other governmental

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IRS HUMBUG

entities) by imposing conditions based upon vague laws passed by Congress. Vague laws are enacted because lawyers in our society permit their use by not challenging them.

At pages 289, 290 the O'Malley court went on to say:

In 1889, Mr. Justice Miller, a member of the Court since 1862, said: "The constitution of the United States has placed several

limitations upon the general power [of taxation], and ... some of them are implied. One of its provisions is that neither the President of the United States (Art. II, sec. 1), nor a judge of the Supreme or inferior courts (Art. III, Sec. 1), shall have his salary diminished during the period for which he shall have been elected, or during his continuance in office. It is very clear that when Congress, during the late [Civil] war, levied an income tax, and placed it as well upon the salaries of the President and the judges of the courts as those of other people, that it was a diminution of them to just that extent." (emphasis added)

These judges had a duty to declare the law unconstitutional instead of arranging for special privileges. Constitutional restrictions made it equally unlawful for the compensation of all Federal Government employees to be diminished under the pretense of law when it was in fact a unilateral employment agreement change. The conduct of the Federal judges was taken by Congress and the IRS to imply they had power to pave the way for the illegal Federal kickback programs manifested through the filing of a "U.S. Individual Income Tax Returns." The O'Malley case was decided by the Supreme Court in 1938, four years before the enactment of the Victory Tax (discussed later) which was used to infer that an "income tax" had been imposed upon the compensation everyone receives in exchange for their labor.

The intent of the Federal judges to cooperate with the legislative and executive branches of government in 1862 to start the Federal kickback programs was just as clear by their conduct as is the conduct of Federal judges today. Today, the intent of Federal judges is to cooperate in perpetuating the false belief that the IRS has uninhibited power over a person's liberty and property. Though maliciously unlawful, the results of that power is real. The evidence is in the fear of the IRS which exists among the U.S. public.

The I.R. Code provides the full extent of IRS power. It is notice to IRS employees and judges of just what is and what is not includible in "gross income" under subtitle A of the I.R. Code, and will be revealed to you in this book. While most IRS employees hold jobs so limited in scope they would probably not be cognizant of their illegal activities,

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Federal judges and lawyers have no excuse. U.S. judges have placed themselves in a "Catch 22" situation. If they allow a Federal Court to be misused in order to force an illegal kickback on property not includible in "gross income" or aid in depriving persons of their liberty by misuse oflaws, they are acting illegally. If they claim ignorance of who is subject to the I.R. Code laws and what property is includible in "gross income," they are admitting they do not know the law. Either way they confess they are not competent to retain their jobs.

Recap & statements

False information about what is known as "income tax" on all income has established common beliefs that are contrary to most of what has been presented to you thus far in this book. For that reason, I will give you a quick recap of what has been said and what will be proven.

(1) Congress has no authority to unilaterally change the employment contracts of Federal Government employees or infringe upon any employment agreement to which the U.S. Government is not a party.

(2) The law enacted in 1862 that called for 3 percent of the compensation due Federal Government employees that was over and above $600 to be retained in the U.S. Treasury was not a tax law but a unilateral change in Federal Government employee employment agreements. By their conduct, U.S. judges inferred it was a lawful tax on the salary of all Federal Government employees except themselves. This inference did not make it so. Since a kickback was not part of their employment agreement, Federal Government employees were actually forced to accept an employment agreement to which they were not a party and forced to illegally kickback 3 percent of their compensation. The 3 percent actually constituted a forced debt.

{3) Using the pretence of law to force a kickback and withhold monies rightfully agreed to and due under an employment contract is use of undue influence to coerce cooperation that results in deprivation of property without due process of law.

{4) People who took employment with the Federal Government after 1862 accepted the 3 percent kickback as part of their employment agreement, thereby making it a legal kickback for

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IRS HUMBUG

those Federal Government employees, varying pay for equal work notwithstanding.

(5) Federal judges knowingly allowed the illegal kickback programs to get a foothold and become legal kickback programs for people employed after notice was provided to them. This conduct of judges implied that the legislative and executive branches of the Federal Government have power that was not given them by the U.S. Constitution. Federal judges were legally and morally obligated to defeat the illegal kickbacks through the general civil rights issue. Had they done so, the legal contractual rights of all Federal Government employees would not have been violated by forcing them into debt obligations that control their liberty and property.

(6) The final demonstration of the willingness of Federal judges to permit impairment of the independence of the Judiciary by the legislative and executive branches of government was their willingness to have the compensation of Federal judges who took office after June 6, 1932, included into "gross income." Federal judges who took office after June 6, 1932 became a party to an employment agreement where subsequent changes made unilaterally by the other party imply permission for illegal kickbacks to exist as to their compensation for personal services. The past and present conduct of U.S. judges raises the question of their actively taking part in concealing the illegal kickback scheme. With no U.S. judge who is independent of the kickback scheme, there is no third party in the U.S. Court system to review any legal question that arises with regard to the kickback scheme.

(7) Only property belonging to the Federal Government can legally be included in the kickback program. The Federal Government only has authority over its own income in such a scheme. Congress has chosen to ask for a return of U.S. income (kickback) with regard to employment agreements with the Federal Government. Any income from sources without the employment agreement of a Federal Government employee is not lawfully includible in" gross income" and therefore not includible in the Federal Government employee legal kickback program.

(8) To force the submission of property not includible in the legal kickback programs forces an illegal debt obligation upon the person in the amount of the portion not includible.

34


(9) Federal Government employees are subject to a legal kickback program and are forced into an illegal kickback program. Federal judges have permitted both programs to be enforced by the IRS.

(10) Property received in exchange for services performed in the private sector has never been a part of the Federal Government's lawful kickback program. False belief has caused a portion of the compensation due to employees in exchange for their services in the private sector to be withheld and sent to the IRS under the pretense that it was to pay an "income tax."

(11) The kickback scheme is imposed unlawfully on the balance of society with the help of U.S. Judges and attorneys (in and out of the Federal Government) who have deliberately caused people to be deprived of liberty and property when no cause of action existed. Their only purpose is to aid Congress and the IRS in perpetuating the kickback program beyond any lawful authority through false belief.

(12) Use of the undue influence provides implied authority of law to deprive a person of property through the subject matter of a "return of income" to the U.S. Treasury on any property not includible in the kickback. This is not only deprivation of property without due process oflaw (violative of the Fifth Amendment) but causes that person to serve the Federal Government on an involuntary basis (prohibited by the Thirteenth Amendment).

(13) Federal Government employees act illegally, and therefore outside the protection of sovereign immunity, when they include property in the kickback program that is not includible.

(14) U.S. judges and attorneys know this yet they use Federal Government employees who are lay people and a group of 12 persons in a jury box to control the life and liberty of targeted persons through malicious prosecutions. These malicious prosecutions are successful because Federal Government employee lay people and those sitting in a jury box have been forced for decades to believe the Federal Government kickback scheme applies to everyone and everything.

(15) The Federal Government's illegal kickback program could not survive if U.S. judges and attorneys did not place themselves above the law by cooperating with the other branches of government in the enforcement of a false belief.

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(16) It is false belief that controls your conduct. It is not legally possible for Congress to pass a law that requires you to subject yourself to the conditions of being controlled by debt where the discharge of the debt is enforced. Such a condition is prohibited by the Thirteenth Amendment to the U.S. Constitution and enforced by peonage laws of the United States, which are part of the civil rights law dating back to 1867?

Judge's conduct conceals criminal conduct

When the U.S. judges chose to defend their civil rights based upon Art. Ill, Sec. 1 of the U.S. Constitution, they inferred that the balance of society did not have the same civil rights. The Fifth Amendment has provided such civil rights protections to everyone and, since December 18, 1865, the Thirteenth Amendment directly provided Congress with the power and duty not only to prohibit but to punish those who will violate such civil rights of the persons subject to the laws and Constitution of the United States.

U.S. judges intentionally violate their duty when they choose to remain silent on legal issues of civil rights which are of public importance. Such conduct is prohibited by laws of the United States of America. Specifically, the Supreme Court has the duty to surface the legal matter of all Constitutional rights of public importance.

Notwithstanding the fact that ignorance of the law, or a claim that "I was just doing my job," might be an excuse for some Federal Government employees in this instance, it is no excuse for knowledgeable Federal Government employees who violate the "peonage" laws of the United States. Knowledgeable Federal judges become party to the implementation of the illegal Federal Government kickback program by not addressing the issue of forcing a debt obligation upon Federal Government employees over and above the legal Federal Government kickback program and by forcing persons who work in the private sector to be subject to agreements to which they

7 The first peonage law was passed March 2, 1867, c. 187, 14 Stat. 546. Its provisions were later placed into sections 1990 and 5526 of the Revised Statutes and are currently found in Title 42, section 1994 and Title 18, section 1581.

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are not a party. In doing so, all knowledgeable Federal Government employees are subject to punishment under peonage laws.

CHAPTER3

UNITED STATES TAXING POWER IS LIMITED

IRS Kickback is not taxation

The making and delivering of a "U.S. Individual Income Tax Return" by any person subject to the laws and Constitution of the United States does not represent payment of a direct tax, an indirect tax or a tax under the Sixteenth Amendment. This document is an instrument exclusively for Federal Government employees and used by them for the sole purpose of claiming deduction benefits in order to reduce the kickback due to the Federal Government under their employment agreement.

Any property declared as "owed" on a "U.S. Individual Income Tax Return" which did not emanate from the U.S. Treasury pursuant to an employment agreement results in an illegal kickback. Forced collection of such an illegal kickback results in controlling the labor of the person by debt, which is prohibited and punishable under the peonage laws of the United States.

Direct Tax [Art. 1, Sec. 2, Cl. 3; Art. 1, Sec. 9, Cl. 4]

All property you own and income you receive result from an exchange of your time and talent. Regardless of whether property you receive is a direct or indirect result of your time, to tax such personal property is to tax you directly.1

1 The U.S. Supreme Court said in Pollock v. Farmers' Loan and Trust Company, 158 U.S. 601 (1895): At page625: ... A tax upon one's whole income is a tax upon the annual receipts from his whole property, and as such falls within the same class as a tax upon tnat property, and is a duect tax, in the meaning of the Constitution. Atpage630:

We nave unanimously held in this case that, so far as this law operates on the

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UNITED STATES TAXING POWER IS LIMITED CHAPTER3

The Supreme Court in Pollock v. Farmers' Loan & Trust Co., 157 U.S. 429, 15 S.Ct. 673, aff. reh., 158 U.S. 601, 15 S. Ct. 912 (1895) said at page 558:

"Ordinarily, all taxes paid primarily by persons who can shift the burden upon someone else, or who are under no legal compulsion to pay them, are considered indirect taxes; but a tax upon property holders in respect of their estates, whether real or personal, or of the income yielded by such estates, and the payment of which cannot be avoided, are direct taxes." (emphasis added)

Indirect Tax [Art. 1, Sec. 8, Cl. 1]

Indirect taxes are duties upon imports, exports, taxes upon tobacco, alcohol, firearms, etc. These taxes are usually thought of when connected with consumable products and you are taxed indirectly through the purchase of these products. Your choice not to be taxed is exercised when you refuse to purchase a product.

The U.S. Constitution provides Congress with the power to lay and collect taxes indirectly, providing the tax is uniform geographically, meaning it must be the same no matter where in the United States of America you live. Indirect tax is imposed without apportionment and

receipts from municipal bonds, it cannot be sustained, because it is a tax on the power of the States, and on their instrumentalities to borrow money, and consequently repugnant to the Constitution ..... it follows that, if the revenue derived from municipal bonds cannot be taxed because the source cannot be, the same rule applies to revenue from any other source not subjectto the tax; and the lack of power to levy any but an apportioned tax on real and personal property equally exists as to the revenue therefrom.

Admitting that this act taxes the income of property irrespective of its source, still we cannot aoubt that such a tax is necessarily a direct tax in the meaning of the constitution.

In England, we do not understand that an income tax has ever been regarded as other tftan a direct tax. In Dowell;s History of Taxation and Taxes in ~ngland, admitted to be the leadin~ authority, the evolution of taxation in that country is given, and an income tax ts invariably classified as a direct tax. At page. 653, [in a dissenting opinion] referring to an examination made by Chief Justice Chase of numerous acts of Congress imposing taxes, the Court said:

.... that personal property, contracts, occupations, and the like, have never been regaraded by Congress as proper subjects ofdirect tax.

The United States Constitution provides Congress the power to lay and collect taxes directly only as long as it is apportioned with regard to the census or enumeration. (emphasis adaed)

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without regard to any census or enumeration, very much like the Sixteenth Amendment.

The Sixteenth Amendment 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.

Though the Sixteenth Amendment is credited as the basis for the misunderstanding about what is commonly called "personal income tax," the U.S. Supreme Court has stated in numerous opinions that the Sixteenth Amendment provided no new taxing power to the U.S. Government. 2

Obliquely the Sixteenth Amendment is saying that a person is not taxed directly, but indirectly, when the U.S. Government taxes his income from whatever source derived by imposing the tax on the only other possible thing that can be taxed, which is property to which the person becomes associated by making a purchase, by inheritance, by gift, or by certain winnings. When you are on notice that a tax is part of the product or deal, and you willingly choose to associate yourself with the property by purchase, inheritance, gift, or certain winnings, then the presumption is that you willingly pay the tax that is within it. As long as the element of choice is present, a tax on such income can remain in the class of indirect tax. Here are some examples of the power implied by both indirect taxation and the Sixteenth Amendment.

2 Example: Evans v. Gore, 253 U.S. 246, 263. "Thus the genesis and words of the Amendment unite in showing that it does

not extend the taxing power to new or excepted subjects, .... " (Emphasis added)

Author's note: Unlike the 13th, 14th, 15th, 18th, 19th, 23rd, 24th, and 26th Amendments to the U.S. Constitution, the 16th Amendment does not contain an enforcement clause. An enforcement clause usually reads "Congress shall have the power to enforce this article by appropriate legislation."

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F.I.C.A. example


A company's portion of the F.I.C.A. tax3 becomes a part of the price of any product you purchase. For example, when you purchase a car, you pay all of the expenses that are built into the price of producing and selling it, including the F.I.C.A. tax. The control you have over how much of your income you expose to this tax is based upon your personal choice as to:

(A) the price of the car (a $10,000 car has less total taxes imposed upon it than a $30,000 car) or (B) using public transportation, in which case none of your income is taxed in this manner.

It is the property that is taxed, and not you. Your free choice to make the purchase results in a tax on your own income directly without regard to a census and enumeration of one person and it is apportioned upon one person-YOU; but the government taxed you indirectly by placing the burden on the product, and you accept the burden by the purchase you make.

Home example

This same Sixteenth Amendment constitutional power is used by the local taxing authority in the tax imposed upon your house. It is the house that is taxed according to a county formula. The horne is taxed, not the horne owner. The horne owner taxes his income directly when he makes the free choice to buy the house; but the county government taxes him indirectly because of his free choice to become associated with the property.

Sixteenth Amendment power is basic to all of us

The Sixteenth Amendment added no new taxing power. It did not alter the constitutional restrictions of direct or indirect taxation. Nor is it in conflict with the constitutional restrictions on taxation even though it appears to remove the need for apportionment with regard to the

3 F.I.C.A. is the abbreviation for Federal Insurance Contributions Act. The way th~s program is being implemented, the words "insurance" and "contributions" are mtsnomers.

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IRS HUMBUG

census or enumeration when applied to a tax on income. The reason there is no conflict is because the power in the Sixteenth Amendment is not related to either direct or indirect taxation. It is a power the Federal Government already possessed. In fact, it is a power common to all persons in society (natural and artificial) that manifests itself by choice. Only with your permission is the control of your income in the hands of others. The following demonstrate this.

A child's taxing authority

Your child has the power to lay and collect taxes on your income. He does so in the name of child support, without apportionment among the several family members and without regard to any census or enumeration of the family. The power is limited only by the agreement within the family. You make your income subject to your children's taxing powers by free choice when you bring them into your life within the power of your marriage agreement. The cost of a child's support is not a forced debt. You even have the choice to offer your child for adoption.

A church's taxing authority

Your religious group has the power to lay and collect taxes on your income in the name of a pledge. It requires no apportionment or enumeration among the parishioners. The power is limited to that which you determine is within your means and stated in your pledge agreement. You made yourself subject to that taxing power by your free choice to belong to that religious organization.

If you were forced to pay the pledge, it would no longer be a document showing voluntary intent, but a debt obligation upon which collection is forced. Then you are controlled by the debt. Your labor is then controlled against your will in the discharge of the debt. This would constitute involuntary servitude, specifically peonage since debt is the controlling factor.

A labor union's taxing power

Labor unions have the power to lay and collect taxes on your income in the name of union dues. The power is limited to the conditions within the labor contract that exists in that union shop. Though everyone pays monthly dues with consideration to apportionment or enumeration

42


among its members, it is not a direct tax because you made yourself subject to this power by the free choice to take employment within that union shop. You had the choice to seek employment with a non-union shop. However, if your state does not permit non-union shops, a legal question arises as to whether or not the state has indirectly provided unlawful power to the union to lay and collect a direct tax upon its members, which goes to a controlling debt that is prohibited by the peonage laws of the United States.

Choice vs. necessity controls taxing power

The above examples demonstrate that the power to lay and collect taxes on income is possible when it is within your power NOT to become effectively connected with the taxing power. You permit the power of the authorities to indirectly tax your income when you choose to become effectively connected with property that is taxed. In this instance the need for apportionment or enumeration is not a factor. The power to tax is between you and the taxing authority.

The same holds true for governments within the United States of America. It is choice that provides governments the power to tax indirectly. Where the choice is removed, the taxing power is limited by constitutional restrictions imposed on direct taxes. This is the reason cities have public transportation authorities which are not profitable. Public transportation provides you with a choice. This means the purchase of a car can legally be considered voluntary, thus the taxes on the car are paid voluntarily. But what if you have no choice?

Taxing power on property is exceeded and is subject to the constitutional restriction of apportionment when the property that is taxed is not open to a personal choice. Food and clothing (except luxuries such as fur coats) are not a question of choice, they are necessary for survival.

Sales tax on necessities is prohibited

Suppose there is a sales tax of 6 percent on any retail sale. Let's review its affect upon a person's time when the product is not a purchase of choice such as food. Suppose the family conditions of Mr. Jones and Mr. Smith are identical. Each family consists of four members and each needs, and spends, $100 per week for food to sustain the life of his family. However, Mr. Jones earns $36 per hour and Mr. Smith earns $6 per hour.

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IRS HUMBUG

Though they both paid $6 sales tax on the $100 worth of food purchased, Mr. Smith, who earns $6 per hour, had to spend a full hour of his time to pay the tax, whereas Mr. Jones, who earns $36 per hour, spent only 10 minutes of his time to pay the tax. This is a ratio of 6 to 1. Such tax is uniform because it is 6 percent for everyone anywhere in the state, but that does not make it an indirect tax since there is no element of choice. When survival is at stake, you have no choice--unless you consider starvation a choice.

The fact that one's time is controlled in meeting survival needs is the factor to be considered. From the standpoint of time, the sales tax is not uniform because the taxing authorities are not taxing the time (which is also property) of each person equally. It is the time of the person that is of essence with regard to uniformity on necessities. Taxing food at 6 percent, though equal, results in a direct tax on their time. For it to be a lawful direct tax, each person would have to work the same amount of time to pay it. To do otherwise imposes a condition of involuntary servitude upon Mr. Smith for 50 minutes each week. A condition Congress has the duty to eradicate. Yet, perhaps half of the States in the United States of America have such taxes on food.

For a tax on necessities to be constitutional, there must be apportionment as to time spent laboring to pay it. Using the example herein stated, as a lawful tax each family man would be required to work exactly the same amount of time. The $36 per hour man would work 10 minutes and pay $6 for the tax on his food. The $6 per hour man would also work 10 minutes, making the tax he pays on the food only $1. It is no longer uniform as to the tax, but it is uniform as to the time spent. Such tax would be impossible to administer lawfully, which might be the reason some states have no tax on clothing and food. Now you may argue that this is a state or local tax, not federal, but the Constitution of the United States is the law of the land and all governments within the United States of America are also bound by such restrictions.

United States Government named kickback power utax"

The Federal Government has the power by employment agreement to lay and collect a kickback in the name of "income tax" as to their own property. Congress has made anyone who chooses to become effectively connected by employment agreement with the U.S. Government subject to this kickback power. The restrictions in the U.S. Constitution regarding taxation, apportionment, and enumeration, do not apply to


such an arrangement as long as you exercised your volition in deciding to work for the U.S. Government. I provide the following to demonstrate and prove the need for choice.

In 1942 Congress passed what was called the Victory Tax. The press releases sent to the media implied that it was applicable to all income received for labor even though it was limited to Federal Government employees and was an addition, or surcharge, to the kickback already in existence. The amount to be exempted from the so called "tax" on the "wages" of Federal Government employees was raised from $600 to $624. The reason for this was that the base pay for persons entering the military service was $624 per year. Since a number of persons at that time were entering the military service not of their own volition (drafted), Congress had to recognize the fact that a kickback on any part of their base pay would be illegal. Hence they had to provide for the full $624 to be exempt from the kickback of all Federal Government employees. Making different provisions for those who volunteered and those who were drafted would have exposed the kickback scheme to the general public. Of course, just like the story in chapter 2 of Judge Woodrough, a change in the employment agreement because of promotion caused the military person to accept new employment conditions, which included a kickback.

The kickback is the process of returning to Caesar that which is Caesar's. The kickback of income is to return to the U.S. Government property that belongs to that entity. Such a program has nothing to do with the taxing power granted to the U.S. Government by the U.S. Constitution and so is not bound by its taxing restrictions. The kickback is lawful when both the Federal Government employee and the U.S. Government receive what they are entitled to under their agreement. The kickback is unlawful when by some means the U.S. Government controls property derived from sources other than the U.S. Government. In other words, income that is not effectively connected with a trade or business within the U.S. Government is not subject to being kicked back.

Rebates are kickbacks

A kickback in a purchase agreement is usually called a rebate. Within the purchase price is a specific sum paid by the purchaser that is to be returned. That portion technically belongs to the purchaser during the time it is in the hands of the seller. As a transferee (a person to whom

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property is transferred) the seller has a legal responsibility to the buyer to see that it is returned. Putting it in IRS terms, the seller is required to make a "return of income."

Among other terms used for kickbacks are sales incentive, cash back, coupon sales, commissions, and discounts.

Kickback of income by employment agreement

When it comes to employment, you have the choice to work for anyone. Any employer can, by the name of tax, rebate, kickback or any other term, require that a portion of the income (property) he gives you be returned to him as part of your employment agreement. In such a kickback arrangement, the employer retains ownership of the property that he supplied that is to be returned. You are a transferee of his property, a person to whom property was transferred.

When a "return of income" is part of the employment agreement, and you willingly become effectively connected with the employer who is the source of that income, then the income to be returned is included in the salary, wages, or compensation you receive. The salary, wages, or compensation, is not what you actually accept in exchange for your personal services. What you agree to accept as your remuneration for services is the income that remains after the kickback. The fact that Congress recognizes kickbacks will be detailed in the next chapter.

The U.S. Government, like any other legal entity or natural person, has the authority to dictate the terms of their own employment agreements. The Federal Government employee has, by personal choice, become party to that employment agreement and is subject to returning the income that belongs to the U.S. Government as expressed in their employment agreement. Such return of income is a kickback program and remains legal when the following conditions are met.

(A) The Federal Government employee receives what he/she is entitled to pursuant to the employment agreement.

(B) That which is exclusively includible in "gross income" by the employment agreement within the U.S. Government are the "wages" (deemed to be "gross income" under subtitle A of the I.R. Code) received for the performance of personal services.

Whereas, Any income from sources without an employment agreement within the U.S. Government is not includible in "gross income"

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under subtitle A of the I.R. Code. This statement is made by Congress in section 7701 (a)(31) of the I.R. Code and is covered later in this chapter.

(C) When any kickback is made, respect for the conditions that existed the day that person entered into his employment agreement must be honored by both parties. Any changes in the conditions produce a kickback that is in part legal (the part that is based upon the original employment agreement) and in part illegal (the part that is based upon the change in the conditions). Just as we are obligated to respect the terms of any contract we enter into, the U.S. Government must respect the terms of the original contract they enter into with their employees.

Congress placed the terms of the employment agreements within the U.S. Government in the I.R. Code.4 One willingly accepts the terms of the employment agreement in the I.R. Code when he or she makes the decision to become a Federal Government employee. As long as the Federal Government employee receives the amount of income he or she is entitled to under the terms of the employment agreement, the kickback is legal and the arrangement between the government and the Federal Government employee is fair and properly applied and collected by IRS administrative means. If, however, the Federal Government employee is kicking back income to the IRS that is over and above that which is agreed to by the employment agreement, that portion is an illegal kickback-laws and the U.S. Constitution are violated.

U.S. Government "gross income" includes kickback

When one takes a job with the U.S. government, he or she becomes effectively connected with their "gross income" or "wages." Congress has NO power to arrange for a kickback on property that is not effectively connected with the conduct of a trade or business within the

4 The terms of Federal Government employee agreements are mainly in subtitle A and chapter 24 of the I.R. Code. The administrat10n and collection of such return of income to the U.S. Government, however, is subject to other parts of the I.R. Code, including criminal sanctions with regard to the administration and collection of the U.S. Government's income.

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U.S. Government. Such property is not includible in "gross income" under subtitle A of the I.R. Code (discussed in chapter 6).

Though covered in more detail in chapter 6, the substance of all of the laws passed by Congress expressed the kickback in the following manner:

That for the purposes of this title ... the term "gross income"(a) Includes gains, profits, and income derived from salaries,

wages, or compensation for personal service (including the compensation received as such by all officers and employees, whether elected or appointed, of the United States or any political subdivision thereof, or the District of Columbia), of whatever kind and in whatever form paid, or from professions, vocations, trades, businesses, commerce, or sales, or dealings in property, .... (emphasis added)

In these laws, the formula for the kickback program for Federal Government employees is disguised in the following:

Gross income includes gains and income derived from salaries, wages, or compensation for the performance of personal service.

meaning: Gross income =gain + income = wages.

In such an arrangement the kickback has been supplied by the U.S. Government (the employer) as part of the compensation. The "wages" include gain, part or all of which is to be kicked back to the U.S. Government (the employer), and income for the Federal Government employee. The portion of the gain that is not kicked back to the U.S. Government, because of the deduction benefits allowed, becomes property of the Federal Government employee. Hence, when the Federal Government employee receives salary, wages, or compensation, he or she has also received property that belongs to the U.S. Government. The Federal Government employee is a transferee of U.S. Government property. Such property is subject to being returned to the U.S. Government under the kickback agreement. The question is merely how much. This contrasts with the other kickback or rebate programs which are specific amounts.

The "U.S. Individual Income Tax Return" is a document designed for a Federal Government employee to make a verifieds claim for

5 Federal Government employees make their verifications "under penalty of perjury" under their employment agreement within the U.S. Government as


available deductions benefits and to validate the reduction of the maximum gain that is subject to being returned. By filing a "U.S. Individual Income Tax Return" the Federal Government employee intends to reduce the kickback to the U.S. Government. If the Federal Government employee elects not to make a "U.S. Individual Income Tax Return" the presumption is that such an employee has made a personal choice not to take advantage of any deduction benefits and the Secretary, since he cannot verify deduction benefits for the Federal Government employee, will ask for the maximum amount to be returned to the U.S. Government. The administrative process for this will be discussed in a later chapter.

Gross income not includible creates illegal kickbacks

Illegal kickbacks occur when the Federal Government employee believes that he or she must add to the "gross income" on a "U.S. Individual Income Tax Return" property received from a source that is not covered by the employment agreement with the U.S. Government. For example, interest on savings is an accretion to one's personal estate or personal wealth)see ll The source of such income is not the U.S. Government but some local bank. Because the Federal Government employee's conduct in obtaining the interest was not effectively connected with the performance of personal service or a trade or business within the U.S. Government, it is not includible in gross income under subtitle A of the I.R. Code. Such interest, such property, is not within the employment agreement between the Federal Government employee and the U.S. Government; therefore, no part of it is subject to being kicked back to the U.S. Government. The same holds true for dividends. Such income is not, under the law or employment agreement, subject to any U.S. Government kickback arrangement. If there were a kickback arrangement on such income, it could only be made with the source of the income. To help keep this in prospective, just keep in mind it is the U.S. Government's estate that is kicked back, not the Federal Government employee's. An individual's personal estate is foreign to the U.S. Government.

opposed to being done under the laws of the United States of America. This subject is detailed in a later chapter.

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Congress has authority over property belonging to the U.S. Government, but has no power to arrange for a kickback of income when the source of the income is not the U.S. Government. This is expressed in section 7701(a)(31) of the I.R. Code (detailed later). However, because of dishonesty and the false belief arranged for by the IRS through congressional vague laws, Federal Government employees do add income received from sources outside their employment agreement with the U.S. Government to the "gross income" figure on their ''U.S. Individual Income Tax Return." This results in placing the additional income into a higher bracket. When this occurs, the Federal Government employee not only pays an illegal kickback on income not includible in gross income under subtitle A of the I.R. Code, but also pays a larger percentage on all the income because of the higher bracket. The Federal Government employee is entitled to this income which is not part of the kickback agreed to in the employment agreement with the U.S. Government. An illegal kickback always deprives the Federal Government employee of his or her own income.

Congress has jurisdiction only over U.S. Government income, not over the person. Therefore the IRS enforces illegal control over the person when they deprive a person of personal income.

Income from private sector employment not includible

What about an Federal Government employee's part-time job in the private sector? The U.S. Government is not a party to that agreement. What an Federal Government employee receives under an employment agreement with an employer in the private sector is not subject to the U.S. Government's kickback program because the income is from sources without an employment agreement within the U.S. Government. The only one who has the power to lay and collect a kickback on such income is the employer in the private sector for his own purpose and use. Further, it is not possible for the Federal Government employee's conduct or the conduct of his or her private sector employer to change the income that he or she receives for personal services in the private sector into income that is effectively connected with the U.S. Government and thereby subject it to the U.S. Government's kickback power. It is only the terms within the employment agreement that exists between the parties that provides the power of kickback.

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Illegal kickback in the name of voluntary compliance-self assessment

The "U.S. Individual Income Tax Return" is part of the administrative procedure used by Federal Government employees for the lawful purpose of taking advantage of available deduction benefits and thereby reduce the kickback to the U.S. Government. However, submission of such a "return" dishonestly serves the IRS. They use it as evidence of a Federal Government employee's voluntary compliance-self assessment with regard to the illegal kickback portion since it is the Federal Government employee who declares on the ''U.S. Individual Income Tax Return" an amount due and owing on income not otherwise includible in "gross income" under the I.R. Code law. The Federal Government employee's conduct of making and filing a ''U.S. Individual Income Tax Return" which contains income from sources other than the U.S. Government is used to demonstrate the Federal Government employee's voluntary compliance to having such property kicked back as though it were part of the employment agreement and includible in "gross income" under subtitle A of the I.R. Code. The IRS deems the illegal kickback to be legal because of the Federal Government employee's cooperation. However, making a declaration of income not includible in "gross income" cannot be considered voluntary when one is not aware of the involuntary servitude condition that is forced upon him or her. Such condition is forced since there is no doubt that the IRS does enforce the collection of income not includible in "gross income" under subtitle A. It cannot be considered that one volunteers to be a peon merely by making a "U.S. Individual Income Tax Return." And, the U.S. Government, by the Thirteenth Amendment is duty bound to eradicate all forms of slavery, including their own.

The same holds true when one works exclusively in the private sector and receives income for personal services from sources without the U.S. Government. The Federal Government is not a party to any employment agreement between a natural person and a private sector employer. Thus, the power for the U.S. Government to arrange for a kickback to a third party (themselves) on such property is not within that employment agreement, and it is not lawfully within the power of Congress to make it so. Any process used to arrange for a kickback to the U.S. Government is dishonest and illegal. Whatever form is used to make the Federal Government a party to an employment agreement in

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the private sector becomes evidence of enforcement of an unlawful kickback.

Can one volunteer to have any income received taxed by including the Federal Government in an employment agreement? Yes, but it must be done with the employee's full knowledge that such an agreement is not required, and the employee must understand that his or her consent is needed for this reduction in income. If it is not done with full knowledge and consent, the agreement constitutes an illegal kickback. The employee is being controlled by forced debt since the collection is enforced. The evidence of enforcing the collection of such illegal debt, under the name of a tax, is evidence of enforcement of the service that creates the condition of involuntary servitude, specifically peonage. This is the reason making and delivering a ''U.S. Individual Income Tax Return" cannot be mandatory for anyone. This fact is vaguely stated in the I.R. Code.

IRS force is evident when people are forced into prison for refusing to cooperate by making a ''U.S. Individual Income Tax Return," as I was, for refusing to create a debt upon which collection would be enforced. Mine is not an isolated incident, thousands of people are so persecuted yearly. Yet, violation of laws is not possible where one's cooperation is needed in the making of the ''U.S. Individual Income Tax Return." My story proves cooperation is needed.

IRS forms are voluntary

Publications and forms used by the IRS demonstrate the limited power of Congress to lay and collect a kickback on income in the name of taxes. Look at the Privacy Act Notice in the 1040 Instruction Booklet (Appendix B) the IRS provides for processing a "U.S. Individual Income Tax Return." It says they have a right to "ask" for the information on a "return." The same holds true for W-4 forms and all other forms that call for people to surrender control over their property. When the IRS has only the right to ask, it is because the person has the right to say no. However, since one is on notice that the IRS has only the power to ask for it, the enforcers, which includes U.S. Judges, decide the person is in agreement with voluntary compliance--self assessment when he or she delivers a ''U.S. Individual Income Tax Return." But the enforcement of IRS service on income not includible in gross income under subtitle "A" of the I.R. Code destroys the voluntary nature of the scheme and puts this practice into the category of a crime (violation of U.S. peonage laws).

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Making a surrender of personal property (income not includible in "gross income" under subtitle "A" of the I.R. Code) declared as owed cannot be considered voluntary when collection is enforced.

IRS duty is not to include gross income that is not includible

The power of the IRS is restricted to the U.S. Government's income that is from within the employment agreement between the Federal Government and its employee. People NOT employed by the Federal Government are not required to include the gross income they earn for personal services in "gross income" under the I.R. Code. Doing so on a "U.S. Individual Income Tax Return" does not make income not includible in gross income under subtitle A of the I.R. Code includible in the legal kickback program. The U.S. Government is powerless to lawfully lay and collect a kickback on such income in the name of "tax." You have the right to surrender control of your personal income, but no IRS scheme can lawfully collect it without your cooperation.

By section 7701 (a)(31), Congress placed the burden upon the IRS, the Justice Department, and U.S. judges not to include income that is not includible in gross income under subtitle" A." All Federal Government employees are on notice that property which is foreign to the U.S. Government is not includible in "gross income" under the I.R. Code. This notice places a duty on Federal Government employees to be certain only income belonging to the U.S. Government is returned.

Sec. 7701 (a)(31 ). Foreign estate or trust. The terms "foreign estate" and "foreign trust" mean an estate or trust, as the case may be, the income of which from sources without the United States which is not effectively connected with the conduct of a trade or business within the United States, is not includible in gross income under subtitle A. (emphasis added)

One's conduct produces income when employed with a source of income. The material element is the identity of the employer. In the U.S. Codes the term, "without the United States" means without the U.S. Government, and "within the United States" means within the U.S. Government. One's conduct cannot be effectively connected with the performance of personal services with a place, only a source of income can pay one. The place or geography is immaterial. The U.S. Codes identify geographical boundaries with the term "outside" or "inside" the United States. Congress shows intent to control us by use of

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vagueness when such similar phrases are used to express entirely different meanings.

By virtue of the definition of "foreign estate or trust," the burden, the duty, is upon Federal Government employees not to include income that is not includible. However, the conduct of the Federal Government employees causes the burden to be switched to each person to defend life, liberty, and property (including labor). Only with knowledge can one place the burden where it belongs-on the Federal Government employees.

The sections of the I.R. Code and Regulations regarding this will be discussed in chapter 6. The point being made now is that only when one has entered into an employment agreement within the U.S. Government is remuneration for personal services "effectively connected with the conduct of a trade or business within the United States."

Any income not effectively connected with a trade or business within the U.S. Government contains no kickback due to the U.S. Government because it is not includible in" gross income" under subtitle A of the I.R. Code. To force a kickback on income that is not includible in "gross income" is to tax such income directly, making it mandatory for the U.S. Government to observe the constitutional restrictions on direct taxation.

In 1915 the Supreme Court recognized the effect enforcement would have in converting what is called "income tax" into a direct tax when they said:

Brushaber v. Union Pacific Railroad Co., 240 U.S. 1, 16,17 (1915)

Moreover, in addition, the conclusion reached in the Pollock Case did not in any degree involve holding that income taxes generically and necessarily came within the class of direct taxes on property, but, on the contrary, recognized the fact that taxation on income was in its nature an excise entitled to be enforced as such unless and until it was concluded that to enforce it would amount to accomplishing the result which the requirement as to apportionment of direct taxation was adopted to prevent, in which case the duty would arise to disregard form and consider substance alone, .... " (emphasis added)

The justices in this Brushaber case basically agreed with the justices in the 1895 Pollock case that generically the "taxation on income was in it's nature an excise," meaning all excise taxes are in their nature a tax on income. This is exactly what I was getting at earlier in this chapter when describing the power of everyone to tax income and that a tax is

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only direct when there is no choice with regard to becoming effected by it. The justices of both the Pollock and Brusharber cases knew taxation was not the true issue of the "income tax" enacted by Congress. The true issue being the effect on a person's labor when to enforce income tax on property "would amount to accomplishing the result which the requirement as to apportionment of direct taxation was adopted to prevent, in which case the duty would arise to disregard form and consider substance." This statement indicates that if the issue were properly presented, the U.S. Courts would have to acknowledge that the kickback in the name of Federal"income tax" is legally enforceable only on income received as a result of an employment agreement within the U.S. Government as the U.S. Government has the right to enforce the return of its own income. All other income is NOT INCLUDffiLE IN GROSS INCOME UNDER SUBTITLE A OF THE I.R. CODE and the IRS has no jurisdiction over such property. With the IRS jurisdiction restricted to U.S. Government property it is legally impossible for them to sustain any action in court (civil or criminal) with regard to any other property.

CHAPTER4

IDENTIFYING LEGAL & ILLEGAL KICKBACKS

Legal kickback generally In general, kickback programs are legal when the employee

voluntarily accepts it as a term of the employment agreement. The terms of an employment contract are established the day one starts working. The agreement always includes the compensation (commonly called income or wages) to be paid to the employee. If a portion of the compensation is to be returned to the employer, it is established as part of the original agreement.

Any change which affects both parties to an employment agreement after that agreement is consummated must be mutually agreed upon by both the employee and the employer to be legally enforceable, otherwise one party is trying to force the other party into an unauthorized agreement. However, if one party to an employment agreement makes a change that alters the agreement but does not prejudice the other party it is not illegal because no damage results. As an example, Federal Government employees cannot be expected to agree to future conditions not spelled out the day they entered into an employment agreement with the Federal Government, yet the U.S. Congress periodically changes the employment agreement of Federal Government employees by changing the kickback schedule and/or the deduction benefits offered without receiving the Federal Government employee's consent. If the Federal Government employee is not prejudiced by the change, no damage is done. Examples are provided later in this chapter.

Illegal kickback generally

It is illegal for an employee or employer to enter into an agreement with a third party and make that third party part of an employment agreement without the voluntary consent of the other party. Consent cannot be deemed voluntary unless full knowledge and understanding

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IDENTIFYING LEGAL & ILLEGAL KICKBACKS CHAPTER4

exists. For example, people working in the private sector have not been informed that they are not required by law to fill out an IRS Form W-4 or make and file with the IRS a ''U.S. Individual Income Tax Return." Employers in the private sector act in concert with IRS employees to make the Federal Government a party to the employment agreements between private sector employers and their employees. Private sector employers prejudice their employees when they insist on the execution of a W-4 form as a condition of employment without disclosing the fact that this is not required by law, and without disclosing the fact that they are entering into an agreement to have part of the compensation, which is due exclusively to the employees in exchange for their labor, sent to the IRS. Ultimately, any party that impairs the obligations of one's employment agreement must accept the legal consequences of doing so. This subject matter is covered in depth later.

Now let's examine the Federal Government's responsibility with regard to illegal kickbacks, why the Federal Government employee kickback program is partially legal and partially illegal, and why the kickback program when forced on persons working in the private sector is totally illegal.

Eradication of illegal kickback is duty of U.S. Congress

Congress has jurisdiction (authority) under the Thirteenth Amendment of the U.S. Constitution to pass laws that punish persons who force illegal kickbacks. Laws have been passed by Congress for this purpose. Included among them is the following, which originated in 1934 and is currently known as:1

1 All of the laws of the United States have been codified into what is called the U.S. Codes. There are 50 in all. A list of all 50 Titles of the U.S. Codes has been provided as Appendix C. The Titles which are positive law are marked with an asterisk. All persons living under the laws of the United States are bound by the positive laws in the U.S. Codes, whereas those Titles that are not positive law are lif!tited to specific classes of persons. Note, Title 26, the I.R. Code, is not marked With an asterisk, meaning it is not positive law and limited in its application.

The kickback law was placed into Title 18 (also referred to as the Criminal Code) as positive law.

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18 USC Sec. 874: KICKBACKS FROM PUBLIC WORKS EMPLOYEES.

Whoever, by force, intimidation, or threat of procuring dismissal from employment, or by any other manner whatsoever induces any person employed in the construction, prosecution, completion or repair of any public building in whole or in part by loans or grants from the United States, to give up any part of the compensation to which he is entitled under his contract of employment, shall be fined not more than $5,000 or imprisoned not more than five years, or both.

The purpose of quoting this law is to demonstrate that Congress can, and will, punish an employer for illegal kickback employment schemes. When punishment is possible for illegal kickbacks, it establishes the lawful fact that legal kickback schemes are in practice.2

With 18 U.S.C. Sec. 874, Congress may have created the impression that the issue of illegal kickbacks is limited to U.S. Government income used on public buildings, but, it is not the use of U.S. Govrnment income for a public project that causes a kickback to be illegal. Illegal kickbacks are created when any employer forces a new kickback agreement upon the employee without his consent. Which is to say, an employee who had agreed to a certain kickback is forced to give more than originally agreed upon. The unlawful effect is to be forced to be made a party to an agreement to which one is not a concenting party. In such instance the employee is not receiving the compensation to which he is entitled. The difference between his entitlement and the amount he is receiving is a forced debt on which his labor is controlled to his prejudice. Deprivation of property without due process of law results. This constitutes a condition of peonage which the U.S. Government is duty-bound under the Thirteenth Amendment to the U.S. Constitution to eradicate regardless of who the employer may be. Thus it is not U.S. Government income that provided the U.S. Government authority to inflict this punishment for illegal kickbacks, but the Thirteenth Amendment to the U.S. Constitution.

2 In U.S. v. Charlick, 26 F.Supp.203, 205 (1939) the court addressed whether the words "give up" in this statute could be susceptible to a broader meaning than "pay back" or "return" by construing it to be synonymous with 'forego.' They concluaea it could not. Meaning that it was only intended to punish for depriving employees of something to which they were entitled and not a mere breach of the contract of employment.

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Legal Federal Government employee kickback program When one enters into an employment agreement with the Federal

Government he or she agrees to a specific amount of "gross income" which includes gain plus income derived from "wages." Under the employment agreement, to some extent, the gain portion is subject to being kicked back to the U.S. Government. After the kickback to the U.S. Government, the remainder of the gain portion plus the income is the full amount the Federal Government employee agreed to receive in exchange for his or her time and talent (labor).

The Federal Government employee agrees to return the income in the name of "tax" within the gain portion of his "gross income" that belongs to the U.S. Government. He agrees that this kickback to the U.S. Government will be in accord with a table prescribed by the Secretary of the Treasury in section 1 of the I.R. Code, which is the "tax" (kickback) derived from the gain portion of the "gross income," not derived from the person. Section 1 could be described as notice of what part of the gross income constitutes the gain portion, or maximum kickback. Federal Government employees can reduce the amount of that maximum kickback through various deduction benefits that are available and stated as law under subtitle A of the I.R. Code (Sec. 1 -1564) by making a claim for them on "a U.S. Individual Income Tax Return." Hence, the amount of the legal kickback is the amount prescribed by the tables in existence when one becomes a Federal Government employee less the legal deduction benefits, also of record the first day of employment. The amount which remains is what the Federal Government employee willingly accepts in exchange for his or her personal services. Any changes in the tables or benefit deductions authorized by Congress that results in the Federal Government employee sending more money to the U.S. Government than the kickback called for on the first day of employment is partly an illegal kickback. Illegal kickback also occurs when a Federal Government employee kicks back income from sources without the employment agreement within the U.S. Government. Any income collected that is not Part of the original employment agreement represents collection of an unlawful debt, unlawful because its collection is enforced. Any person who creates a debt upon income not returnable to the U.S. Government becomes a "tax debtor." Such person is not a "taxpayer'' under the I.R. Code.

IRS HUMBUG

Illegal kickback results in being a "tax debtor''

Because Congress chose to call the kickback "tax" the Federal Government employee who volunteered to return to the U.S. Government that which belongs to the U.S. Government is the returner of tax (give unto Caesar that which is Caesar's). In addition to being a returner of federal income (tax) the IRS wants to make Federal Government employees believe they are a "taxpayer." Actually the legal status of a Federal Government employee under the I.R. Code is a "transferee," a person to whom (income) tax was transferred. As such they cannot be the "taxpayer'' who Congress defined in the I.R. Code in:

Sec. 7701(a) When used in the Title, where not otherwise distinctly expressed or manifestly incompatible with the intent thereof-(14) Taxpayer. The term "taxpayer'' means any person subject to any internal revenue tax.

Nor can the term "taxpayer'' be deemed the same as any person who creates any internal revenue debt. It does not say that. Besides, it would be manifestly incompatible with the intent of Congress for any person to be subject to conditions that are not expressed in subtitle A and chapter 24 of the I.R. Code, or for a person not employed by the U.S. Government to be treated either as a "tax debtor'' or as a returner of tax (transferee) when the I.R. Code laws are not applicable to what he or she receives in exchange for time and talent (labor). The condition that keeps the federal kickback legal is that the person who has U.S. Government income is only liable for its return and cannot be prejudiced in the process by subjecting his own property to being included in the kickback scheme. If the later is accomplished then the person is deprived of property without due process of law. When that person is a Federal Government employee he or she is not getting their entitlement under their employment agreement when the IRS collects that which under the law of the Federal Government employment agreement is not collectable. The result is the IRS is imposing an illegal debt upon such person. This controlling debt manifests itself upon the IRS instrument called a "U.S. Individual income Tax Return."

The IRS form called a ''U.S. Individual Income Tax Return" calls for a person to declare an "amount due" or "amount you owe" (depending upon the year printed) under penalty of perjury. When one makes such a statement with regard to income that is not returnable to the U.S. Government it is taken by Federal Government employees that he is making a personal declaration of a debt. In this instance the person has


made himself a "debtor" in the name of "tax" and the IRS considers such a person one who is subject to any internal revenue tax, or a "taxpayer." So, to directly or indirectly declare yourself a "taxpayer" is to be deemed by IRS employees to be subject to an IRS condition of being controlled by debt. You will learn from the next chapter that this condition is prohibited by specific laws of the United States of America.

Taxes are not debts. Black's Law Dictionary, Fifth Edition, defines the word "tax" as follows:

Tax. To impose a tax; to exact or declare that a pecuniary contribution shall be made by the persons liable, for the support of government. Spoken of an individual, to be taxed is to be included in an assessment made for purposes of taxation.

A pecuniary burden laid upon individuals or property to support the government, and is a payment exacted by legislative authority. In re Mytinger, D.C. Tex., 31 F.Supp. 977, 978,979. Essential characteristics of a tax are that it is not a voluntary payment or donation, but an enforced contribution, exacted pursuant to legislative authority. Michigan Employment Sec. Commission v. Patt, 4 Mich.App. 228, 144 N.W. 2d 663,665. Annual compensation paid to government for annual protection and for current support of government. Alabama Power Co. v. Federal Power Commission, C.C.A.5, 134 F.2d 602, 608, A ratable portion of the produce of the property and labor of the individual citizens, taken by the nation, in the exercise of its sovereign rights, for the support of government, for the administration of the laws, and as the means for continuing in operation the various legitimate functions of the state. An enforced contribution of money or other property, assessed in accordance with some reasonable rule or apportionment by authority of a sovereign state on persons or property within its jurisdiction for the purpose of defraying the public expenses.

In a general sense, any contribution imposed by government upon individuals, for the use and service of the state, whether under the name of toll, tribute, tallage, gabel, impost, duty, custom, excise, subsidy, aid, supply, or other name. And in its essential characteristics is nota debt. CityofNewarkv. fos. Hollander,Inc. 136N.J.Eq. 539,42 A.2d 872,875. (emphasis added)

Reviewing this definition of the term "tax" with the understanding that an individual in the I.R. Code is someone who has accepted a condition by agreement indicates that:

(a) If there were taxes due by one to the U.S. Government the IRS would have authorization to send that person an assessment of the taxes due,

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much the same as the practice of collecting taxes due on real estate. A tax is not due until an assessment is made, whereas the assessment of the personal debt declared on "a U.S. Individual Income Tax Return" is placed on the books after a debt is declared and collected.

(b) A tax is not a voluntary payment or donation, it is exacted pursuant to legislative authority. The kickback with regard to employment agreements within the U.S. Government is a return of the U.S. Government's income and is not taxation of one's personal income. The voluntary nature of a kickback program is that Federal Government employees cooperate in "return of income" because it belongs to the U.S. Government by employment agreement. It is a kickback, or a rebate, the U.S. Government has arranged for itself.

(c) Any person who does not have income in his possession which belongs to the U.S. Government because that person's conduct is not effectively connected with a trade or business3 within the U.S. Government does not have income in question of being kicked back to the U.S. Government. There is no agreement upon which it can be deemed that such a condition exists under the laws of the United States of America (laws applicable to all persons in the United States of America). Forcing one to deliver a "U.S. Individual Income Tax Return" makes that person a "tax debtor" and not a "taxpayer."

The essential characteristic of a tax is the fact that it is not a debt. Black's Law Dictionary confirms this in it's definition of "debt'' -"a sum of money due by certain and express agreement." A tax is not something done by agreement, but an "enforced contribution, exacted pursuant to legislative authority." So, making and delivering a "U.S. Individual Income Tax Return" reflecting property received where the U.S. Government is NOT the source constitutes making an illegal kickback. To be forced to pay the amount declared as owed forces one to be a tax debtor if: (a) he or she is not a Federal Government employee, or (b) if he or she is a Federal Government employee and is kicking back

3 26 U.S.C. Sec. 7701 Definitions. (a) When used in this title, where not otherwise distinctly expressed or manifestly incompatible with the intent thereof-(26) Trade or business. The term "trade or business" includes the performance of the functions of a public office.

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income from sources without the employment agreement within the U.S. Government.

The "taxpayer'' cannot be you

Understanding that under employment agreements in the I.R. Code a "taxpayer'' is not a person who has "tax" in his possession that belongs to the U.S. Government and that the owner of the (income) tax is the U.S. Government it follows that the U.S. Government is actually the "taxpayer," the person that is subject to pay or liable for the tax that is made part of the "gross income." The transferee is only liable for its return to the U.S. Government.

The U.S. Government, being an artificial entity, must transfer its responsibility as a "taxpayer'' to a human being. That natural person is the paymaster of each federal department or agency. In the I.R. Code that natural person is identified as an "individual" who has been made liable for any (kickback) tax imposed by the I.R. Code and whose duty is to account for the kickback included in the "wages" of Federal Government employees that is determined by deduction benefits available to the Federal Government employee when claimed on a "U.S. Individual Income Tax Return" and makes the amount of returned income different in every case. With this it can be seen that although the "taxpayer'' is technically the U.S. Government it is also the (individual) paymaster hired by the U.S. Government to act in its behalf. Thereby the paymaster becomes a "taxpayer'' defined in section 7701(a)(14) as "any person subject to any internal revenue tax" and is an individual within the definition of the term person in section 7701(a)(l). The Federal Government employee who receives "wages" paid by the paymaster (taxpayer) is required to cooperate in its return, but is not liable as to any punishment for failure in the return of the tax since Congress provided the IRS with administrative remedy that represents due process of law for its recovery. The mandate that Federal Government employees not be prejudiced in the return of U.S. Government income because of the source of the pay being the U.S. Government is found in 4 U.S.C. Sec. 111, (chapter 15, footnote 10 ).

Details of the above is all covered in later chapters. It was given here as a foundation for understanding that the illegal IRS enforcement programs of collecting on income that is not within the IRS' authority is manifested because of the false belief firmly entrenched that all persons

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under the laws of the United States of America are "taxpayers" subject to the I.R. Code laws, when under the laws of the United States of America we are not.

I.R. Code vague laws must have lawful results

The I.R. Code is lawfully written and enacted by Congress, but its vague sections make possible two subject matters. Unlawful enforcement and illegal conduct on the part of Federal Government employees results when income not subject to being returned is forced to be turned over the the IRS. The limited scope of the I.R. Code is extended because of its vagueness. Still, the U.S. Government is duty bound to respect due process of law with regard to one's life, liberty, and property by enforcing the I.R. Code laws along constitutional standards.

The little known fact is that the I.R. Code is limited in its scope with regard to natural persons. It applies only to the U.S. Government and those in society who choose to become party to the Federal Government kickback program by taking direct employment within the U.S. Government and to those persons who choose to become affected with the I.R. Code by making their career in the the field of tobacco, liquor, drugs, firearms, and any other tangible product that is currently being taxed by the U.S. Government.

Those persons whose careers are in the fields of tobacco, liquor, drugs and firearms are on notice that "taxes" are due to be paid on the product. Such person is not subject to "any internal revenue tax" but a specific tax due on the product and often paid in advance through stamps placed upon the product and then passed on to the customer as part of its cost. Not being items of necessity and being uniform throughout all of the states in the United States of America, it fits the restriction placed upon the Federal Government by the U.S. Constitution with regard to indirect taxation.

It is clear that this type of tax is on the product, not on personal property of the person who manufactures the product. If it were on the person who manufactures the product, it would be an unlawful direct tax, and he would be a tax debtor.

Likewise the Federal Government employee does not tum over his own personal property by assessment to the U.S. Government, but returns U.S. Government property to the U.S. Government. The Federal Government employee makes his declaration of the amount of income, or U.S. Government tax, to be returned by stating an amount on line 67

IDENTIFYING LEGAL&: ILLEGAL KICKBACKS CHAPTER4

of "a U.S. Individual Income Tax Return" (1989 IRS 1040 form) as "Amount you owe." If the determination of the amount owed is limited to gross income (wages) received from the U.S. Government, the person is a "transferee" or returner of tax that belongs to the U.S. Government. If the "Amount you owe" is based upon gross income received from sources other than from within the U.S. Government, the person unwittingly declared himself a tax debtor.

What controls persons in the United States of America is the false belief that the dual subject matters are one and the same. The public has not been informed of the difference between being a voluntary returner of U.S. Government income and a forced "tax debtor"; nor have they been informed that the required "income tax return" to the U.S. Government is not the same subject matter as the IRS form called a "U.S. Individual Income Tax Return." Because of false belief, the illegal IRS kickback flourishes in the United States of Arnerica.4

IRS instrument that makes you a "Tax Debtor''

IRS employees must be made to accept the legal consequences of forcing a debt upon a person through the false belief that taxes are due when they enforce collection of the declared "amount owed" on a ''U.S. Individual Income Tax Return" (the instrument) by any person who is not employed within the U.S. Government, or when they enforce collection from Federal Government employees on income that is not includible. To enforce the collection of such a debt, which is an imperfect obligation, is to enforce the service. This goes to controlling the labor of the person who delivers such a ''U.S. Individual Income Tax Return" to

4 Author's note: In my opinion we have been made forced "tax debtors" in other areas as well. As an example, the U.S. Government's f>lan to bail the banking industry out of its woes created by bad loans and hi~h leverageing forces upon society (us) a debt to the extent of the bailout. The bankmg industry snould bear the legal consequences of making bad business judsments just as other persons in our society must bear the legal consequences of the1r acts. Where is the law that states you and I must bear the legal consequences of bad decisions of bankers by the debts forced upon us? Where is the law that states the principal owners ofbanks are relieved of the legal consequences of their conduct and that society must pay their obligations? Is tnis not prohibited by the peonage laws of the United States of America since the bail out is a forced debt upon society? The persons to whom the bad loans were made must be answerable for the recovery of the principal sums borrowed.

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his prejudice. The enforcement of such service is in violation of the peonage laws of the United States of America. If the IRS and other Federal Government employees say an individual agreed to be controlled by debt, they can be proven wrong by the peonage law (next chapter). One cannot agree to conditions that are prohibited by laws of the United States of America. Under no circumstances do people voluntarily agree to be tax debtors when IRS personnel have falsely made them believe they are "taxpayers" subject to any Internal Revenue tax as inferred in the I.R. Code law. No legal defense exists for being forced into involuntary servitude.

The same holds true with regard to Federal Government employees who have been led to believe that when they file a ''U.S. Individual Income Tax Return," they must use new terms of employment promulgated by Congress each year. When a Federal Government employee files a ''U.S. Individual Income Tax Return" using the new terms, that person's acquiescence is considered received. However, acquiescence is not legally considered voluntary unless a person is fully aware that he or she has a choice and unless that person has been given the opportunity to exercise that choice. Just as the U.S. judges did not accept the illegal kickback program, other persons are not required to do so. A legal contract is not open to unilateral change by any party to the agreement. The fact that one party in this case is the U.S. Government does not alter this long-standing law of contracts. Also, when the Secretary of the Treasury accepts monies not includible in the legal kickback program, he acts without legal authority and violates his duty under section 7701(a)(31). His duty is not to include that which is not includible in "gross income." Including income received from sources other than the U.S. Government provides for enforcement of an illegal kickback, since that which is not includible in "gross income" is not includible under any condition.

The following examples will demonstrate how changes in the I.R. Code and the inclusion of income not includible in "gross income" for kickback purposes affect the net result of the income Federal Government employees are entitled to under their employment agreements. Each example represents Federal Government employees who have the same exemptions and deductions so that a proper comparison and conclusion can be made. These examples demonstrate legal and illegal kickbacks.


Examples of tax debts created

Example#l: Changes in employment conditions that prejudice the Federal Government employee

Mr. Jones, married with two children, entered into an employment agreement with the Federal Government and started to work on January 1, 1987. His employment contract called for his compensation (wages) to be $25,000 per year. Neither he or his wife have any other income. Mr. Jones chose to take advantage of the deduction benefits available to him in order to reduce the "gross income" amount by declaring them on a "U.S. Individual Income Tax Return" as follows:

Gross income = $25,000 [wages]

Exemptions = 7,600 [4 dependents at $1,900 each]

Standard deduction = 3?60 [married, filing jointly]

Taxable income = $13,640 [term used in Title 26]

Based upon what is referred to as taxable income of $13,640, his maximum kickback in the name of tax is $1,564.60 ($1,234 on $11,900 + $330.60; $330.60 is 19 percent on $1,740).

Mr. Jones continues working the same job for the U.S. Government in 1988; however, because of the tax reform that went into effect in 1988, Mr. Jones reported the following on a "return":


Exemptions = 7,800 [4 dependents at $1,950 each]

Standard deduction = 5,000 [married, filing jointly]

Taxable income = $12,200

Based upon the new rate of 15 percent, Mr. Jones paid the IRS $1,830. With no change in his employment contract since he began working in 1987, $1,564.60 was all Mr. Jones was lawfully bound to pay. The additional $265.40 was an illegal kickback. The amount of $265.40 is a debt that was forced upon Mr. Jones.

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Example#2 When a Federal Government employee includes income from investment that is not includible

Mr. Smith, married with two children, entered into an employment agreement with the Federal Government and started to work on January 1, 1987. His employment contract called for his compensation (wages) to be $25,000 per year. His wife does not work, but he had put part of his estate into speculative investments that reflected a gross increase to his estate of $14,000. The expenses incurred in creating this gross increase amounted to $4,000. Believing this to be taxable income, he reflected it on his ''U.S. Individual Income Tax Return" as follows: Gross income = $25,000 [wages] Gross income = $14,000 [investments] Total income stated = $39,000 Exemptions = - 7,600 Standard deduction = - 3,760 Expense deduction = Taxable income =

- 4,000 $23,640

[ 4 dependents at $1,900 each] [married, filing jointly] [on investments]

With a supposed "taxable income" of $23,640, his kickback became $3,797 ($2,937 on $20,200 + $860; which is 25 percent on $3,440). Just as in example #1, $1,564.60 of the $3,797 represented the "return of income" (legal kickback) due to the Federal Government under his employment agreement for "wages" of $25,000. Mr. Smith included that which is not part of his employment agreement. This resulted in a $2,232.40 illegal kickback being extracted from his estate because of the false belief that it was includible in "gross income." A debt of $2,232.40 is forced upon Mr. Smith.

Example#3 When Federal Government employee includes income from winnings that is not includible

Mr. Wright, married with two children, entered into an employment agreement with the Federal Government and started to work on January 1, 1987. His employment contract called for his compensation (wages) to be $25,000 per year. Neither he nor his wife have any other income, but he was lucky enough to be a winner in a lottery operated in the state in which he lives. The gross amount of the winnings is said to be $50,000,


however, the person working for the state who handled the disbursement of the winnings did what he thinks is his job and sent $10,000 (20 percent) to the Federal Government and gave Mr. Wright $40,000. Mr. Wright thought the law required him to increase the "gross income" shown on his "return" by the $50,000 and take $10,000 as a credit. The result looks like this:


Gross winnings

Stated total income

Exemptions

Standard deduction

Taxable income

= = = = =

50,000 [State lottery]

$75,000

- 7,600 [ 4 dependents at $1,900 each]

- 3,760 [married, filing jointly]

$63,640

The result was that Mr. Wright showed $19,488.60 as being due on the $63,640, and then credited himself the $10,000 withheld by the state employee and already sent to the IRS.

Since the lottery was not run by the U.S. Government then, of the $19,488.60, $1,564.60 represented the legal "tax" (return of income) due under Mr. Wright's employment contract for his "wages" of $25,000 and $17,924 was a kickback illegally accepted by the IRS because the $50,000 was not includible in "gross income" yet Mr. Wright paid $17,924 on the $50,000 by adding the winnings, upon which no kickback was due to the Federal Government, to his "gross income" from the Federal Government.

If the lottery was run by the U.S. Government a kickback of 20% would be lawfully collectable by the IRS as "tax" (kickback) on wagering under section 3402(q) of the I.R. Code. Instead, Mr. Wright paid 35.85 percent. The additional $7,924 constitutes a debt to the extent of that amount. This amount was over and above the 20% required by the agreement between them.

The winnings, whether $40,000 (80% of the $50,000) or the full $50,000, constitute an accretion to Mr. Wright's wealth (estate) and to force an illegal debt upon it is to control his labor to his prejudice.

Sec. 3402(q) is elaborated on below to demonstrate how a vague law creates a false belief which allows undue influence to be used to control and make tax debtors out of people.

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26 U.S.C. Sec. 3402(q) shows how vagueness controls

For proof of the scenario in Example 3lets review I.R. Code section 3402(q) (Appendix D). The first paragraph of section 3402(q) does three things, (1) it places a 20 percent "tax" on winnings from specific sources, (2) subjects the 20 percent to being withheld, and (3) places the responsibility for collecting the 20 percent and turning it over to the U.S. Government upon persons who make the payment of the winnings. Paragraph 1 reads:

Sec. 3402(q)(l) GENERAL RULE. - Every person, including the Government of the United States, a State, or a political subdivision thereof, or any instrumentalities of the foregoing, making any payment of winnings which are subject to withholding shall deduct and withhold from such payment a tax in an amount equal to 20 percent of such payment. (emphasis added)

This states that the subject matter of withholding this "tax" is limited to specific winnings. This produces the question of identifying the source (the payer) of the winnings.

Using the phrase "every person" in conjunction with "making any payment of winnings" makes it appear as though any type of winnings are included under the provisions of this section of the I.R. Code. However, Congress restricted its application specifically by use of the word "including" after "every person" and then going on to establish the identity of the "person" who pays the winnings, and therefore conducts the wagering game, as U.S. Government entities.

In the I.R. Code, the words "includes" and "including" indicate a restriction to what is identified. Hence, the only winnings which are subject to withholding pursuant to section 3402(q) are those where the "United States, a State, or a political subdivision thereof or any instrumentalities of the foregoing" is a party to the winnings, the other party being the winner. If Congress had intended to expand section 3402(q) to reach property or include persons not includible within the jurisdiction of the U.S. Government, a phrase such as "but not limited to"S is needed.

5 For example, to expand the definition of gross income found in section 61 of the I.R. Code, Congress added after the word "including" the phrase "but not limited to."

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Next, the word "State" in section 3402(q) must be understood. Congress limited the meaning of the word "State" in the I.R. Code by providing the following definition.

Section 7701. Definitions (a)When used in this title, where not otherwise distinctly expressed or manifestly incompatible with the intent thereof-(10) State. The term "State" shall be construed to include the District of Columbia, where such construction is necessary to carry out provisions of this title.

It was necessary for Congress to limit the term "State" to mean only the District of Columbia in the I.R. Code6 because they have the right to control property only where the U.S. Government is the source. However, Congress expanded section 3402(q) beyond the District of Columbia to all States under the sovereign authority of the U.S. Government, i.e. Guam, Virgin Islands, etc., by distinctly expressing "the Government of the United States, a State, or a political subdivision thereof, or any instrumentalities of the foregoing" in section 3402(q)(1). The U.S. Government was given no power to interfere with a lottery of any of the 50 states by section 3402(q). That is exactly what a state lottery is all about, deriving revenue (property) for the state. The Federal Government only has jurisdiction to arrange for a kickback in the name of "tax" from their own state (Washington, D.C.) lottery. This means that section 3402(q) is notice that the lottery referred to is nothing more than a kickback because it is returning U.S. Government property to the U.S. Government by agreement. You would make yourself party to such a U.S. Government kickback scheme if you purchased a lottery ticket from them.

6 Proof of this limitation is found in the need to exrand the definition of the term "State" in section6103(b)(5) ofthei.R. Code to mean' anyoftheSOStates, the District of Columbia, the Commonwealth of Puerto Rico, the Virgin Islands, the Canal zone, Guam, American Samoa, and the Commonwealth of the Norther Miarina Islands, and .... any municipality .... which impose a tax on income or wages with which the Secretary (in his sole discretion) bas entered into an agreement regarding disclosure." Section 6103 is titled "Confidentiality and Disclosure of Returns ana Return Information." It is used by disclosure officers of the Federal Government when they wish to avoid providing information under the Freedom of Information Act (AOA) found in 5 U:S.C. Sec. 552a (discussed in chapter 8 of this book). The ~lOA places the duty upon Federal Government agencies to surrender any mformation they have in tfi.eir records upon request of a natural person with regard to that person.

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In the example above, if Mr. Wright's winnings were from a Washington, D.C.,lottery, he did not win $50,000 because his entitlement under misunderstood statute rules was $40,000 and the U.S. Government's entitlement was $10,000. The Federal Government made themselves co-winners. The fact that the U.S. Government's portion is called "tax" is not material. However, by calling it "tax" Mr. Wright was a tax debtor on anything he paid over and above the $10,000. If Mr. Wright's winnings were from some lottery other than Washington, D.C., he was forced to be a tax debtor on the full amount he declared on his winnings when his payment was accepted by the IRS.

Congress also made this clear by using the word "include" in their definition of "State" for the I.R. Code. "Include" is always a word of restriction, and the term "State," when used anywhere in the I.R. Code, is always the District of Columbia.

Hence, because the term "State" in the I.R. Code is Congress' indirect way of identifying Washington, D.C., and the only entity identified in section 3402(q) is the U.S. Government itself, section 3402(q) is only applicable if a lottery is conducted by the U.S. Government.

The U.S. Government cannot, and does not, claim to tax the winnings of lotteries in any of the 50 states of the United States, nor can they lawfully do so because it then makes itself party to agreements where it is not a party. The U.S. Government would be guilty of impairing the obligations of an agreement between the state lottery commission and the citizens of that state by insisting that a 20 percent kickback be executed to the U.S. Government. If this occurs in your state it is an illegal kickback.

Note also that in the first paragraph of section 3402(q) the U.S. Government labels itself as the only "person" within the term "taxpayer'' (section 7701(a)(14)). They confess they are the supplier of the 20% that is to be kicked back, just as they are the supplier of the kickback as to "wages" paid to Federal Government employees. Section 3402(q) identifies the U.S. Government as the "taxpayer'' when they are the source of the income that is to be returned in the name of tax.

With section 3402(q) Congress is providing notice that if anyone chooses to become effectively connected with a U.S. Government "chance for winnings program," 20 percent of such winnings is the U.S. Government's property and is to be kicked back in the name of a tax. One is told up front that 20 percent of such winnings is property that belongs to the U.S. Government. When one places himself, by choice,

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into a position to receive the winning, he accepts the planned kickback. This is another example of the use of Sixteenth Amendment power by the U.S. Government, but it does not extend to any place except where the U.S. Government would conduct the lottery. The property is taxed, not the winner. Still, by the built in vagueness, the effect of section 3402(q) accomplishes indirectly what Congress is not able to do directly by law without impairing the obligation of contracts between the winner and the State conducting the lottery. The U.S. Government cannot, by law, arrange for a kickback from winnings from any of the 50 state lotteries, but it is being done by false belief that this law provides the authority when, as explained, it does not. Congress does not have the power to make people tax debtors. Such a condition is prohibited by the peonage laws of the United States of America.

A brief rundown of the other paragraphs in section 3402(q) finds:

Paragraph (2) of section 3402(q) covers the possibility of withholding the "tax imposed by paragraph (1)" falling under different I.R. Code laws when the payment of winnings under a Federal Government lottery is made to a nonresident alien individual or a foreign corporation.

Paragraph (3) tells what winnings within Federal jurisdiction are subject to the tax. From the wording, "proceeds of more than $1,000 from a wagering transaction, if the amount of such proceeds is at least 300 times as large as the amount wagered," it is clear there must be a "wager." A wager requires some investment by the winner, hence winnings where no investment was made, such as in game shows, etc., are not included.

Paragraph (4) provides certain rules.

Paragraph (5) states, "The tax imposed under paragraph (1) shall not apply to winnings from a slot machine, keno, and bingo." Customarily these are privately-operated games of chance to which the Federal Government is not a party.

Use of the word "shall" in paragraph (6) of section 3402(q) places people on notice that a statement, under penalty of perjury, is requested of the person receiving the payment, but is not mandatory. The use of the word "shall" in statutes is permissive when needed to retain the constitutionality of the law, a subject that will be covered in Chapter 6. Also, the statement requested from a Federal Government game of chance winner is not made under any law of the United States of

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America, but by agreement when one enters into a kickback program under I.R Code laws.

Paragraph (7), reveals the party who is liable for the "tax." It is the person paying out the winnings. It says:

"For purposes of sections 3403 and for purposes of so much of subtitle F (except section 7205) as relates to this chapter, payments to any person of winnings which are subject to withholding shall be treated as if they were wages paid by an employer to an employee."

The "employer'' who pays "wages" under the I.R Code is only the Federal Government, and the "employee" who receives "wages" is a Federal Government employee (details in Chapter 7).

Section 3403 explains that: ''The employer shall be liable for the payment of the tax required to be deducted and withheld under this chapter, and shall not be liable to any person for the amount of any such payment."

Hence, just as the employer, the U.S. Government, is liable for the tax that is required to be deducted and withheld from wages, so is the payer of the winnings in section 3402(q), the U.S. Government, liable for the tax that is required to be deducted and withheld from the winnings. The net result is, whenever a person voluntarily invests in a wager that is effectively connected with the Federal Government all that he or she is agreeing to receive because of the kickback in section 3402(q) is 80 percent. The U.S. Government is liable to pay the winner 80 percent and liable to pay themselves 20 percent. But, the kickback is limited to 20 percent and the U.S. Government was liable to include this in the winnings and not liable to the winner for it because the winner was only promised 80 cents on the dollar provided as winnings.

In example #3, if Mr. Wright's lottery winnings were effectively connected with the Federal Government the $50,000 winnings would have included the $10,000 "tax" (kickback) on the property. Only the U.S. Government agency that would conduct the lottery was liable to pay Mr. Wright $40,000 as his share of the winnings and pay $10,000 to the U.S. Government to cover the 20 percent kickback. No additional monies would have been due and the only reporting requirement is upon the Federal Government employee who disbursed the winnings.

This "tax" on such winnings is another example of a kickback to the U.S. Government on income from sources within the U.S. Government in order to establish a practice and false belief upon which winnings from sources outside the U.S. Government can be tapped. This practice

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results in illegal kickback to the U.S. Government through the IRS with the cooperation of employees in the State governments in which you live and cooperation of various game shows where no wager was actually made.

What does all this mean to the natural person? It means, liability for a legal kickback does exists when one makes the Federal Government the source of his or her income either by voluntarily becoming a Federal Government employee, or voluntarily entering into a trade or business within the U.S. Government, or voluntarily becoming associated with a wagering scheme of the Federal Government. It is the government's property being returned to them in their legal kickback scheme. It is the person's property being wrongfully transferred to the Federal Government when the kickback is illegal. The amount of the illegal kickback makes the person a tax debtor.

By willingly placing oneself into these possible income producing activities within the U.S. Government, one willingly accepts any legal Federal kickback program. Does the Federal Government have the power to do this? Of course it does, because a person has the power not to become so involved. It is legal as long as one's participation in activities associated with a Federal kickback program is left to his or her own volition. The "income" or "gross income" one receives as such includes a kickback to the Federal Government. What is left after the kickback is what the person actually agreed to receive for his or her services or winnings.

Any changes Congress unilaterally makes in employment agreements can only effect the employment agreement of a new Federal Government employee. The U.S. Government is bound by law to only accept the kickback from a Federal Government employee that existed when he entered into an employment agreement with them. Any changes in the kickback formula after that date cannot legally be applied to the remuneration the Federal Government employee receives. The fact that a Federal Government employee sends more than is legally due by his act of making a ''U.S. Individual Income Tax Return" cannot make legal what is not lawful. The making of such a "return" for the additional kickback cannot be considered voluntary. What cannot be done directly, cannot be done indirectly. Nor can Congress, the IRS, and judges change the fact that the legal kickback on compensation for personal services applies only to Federal Government employees because of their employment agreement. Trying to justify the illegal kickback of monies

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from natural persons by calling it "voluntary compliance-self assessment," when it is nothing but a forced debt achieved through undue influence, makes it a forced assessment, not voluntary compliance-self assessment. There is nothing voluntary about being made a tax debtor.

By false belief (not law), the Federal Government's legal kickback scheme on employment agreements with persons working for the Federal Government has also been illegally extended to reach personal property of both Federal Government employees and persons working in the private sector. The kickback is limited to Federal Government income used to buy services and products. Undue influence to include any other income is evidence of the enforcement of the IRS illegal kickback.

Illegal kickback or tax debt is prohibited by peonage law

Section 874, the Kickback Law, and the U.S. judges' opinions regarding it establish the fact that both the Congressmen and the U.S. judges understood the evils of illegal kickback programs. They also recognize the limitations of using this statute to inflict punishment. As an example: U.S. vs. Golder, et al, 11 Fed. Supp. 870 (1935), was a case in which an employer had entered into an employment agreement with his employees to pay compensation at a rate lower than the amount called for in his contract with the Federal Government. Technically the employees had agreed to a kickback to Golder of the difference. The case was dismissed based on a motion to quash. The judges said the employer was not indictable for violating section 874 since the employee received exactly what he was entitled to receive under his employment agreement (meaning there was no federal criminal cause of action against this employer). Though the amount the employer received for each employee from the Federal Government exceeded the amount he paid to his employee, it could only be considered a legal kickback by the court since the employee got what he agreed to for his labor. Hence, the conduct of the employer did not constitute involuntary servitude. The Golder Court also said that even though it might be construed as a breach of contract with the government the criminal punishment prescribed by section 874 is not applicable.

In essence, an illegal kickback causes peonage because one is controlled by debt. The amount of an illegal kickback constitutes deprivation of compensation one is entitled to for his or her labor. It

76


results in a forced debt obligation that illegally controls one's property-his labor. Congress did not need to pass section 87 4 since laws prohibiting and punishing persons for causing another to be held or returned to a condition of peonage were already on the books under civil rights peonage laws.

Peonage was prohibited and punishable under Congressional laws passed in the year 1867 known as section 1990 and section 5526, Revised Statutes. Section 1990 prohibited peonage (a form of involuntary servitude where debt is used to bind the servant to the master) and section 5526 provided the punishment to be applied for those who violated section 1990.8 However, Congress elected not to use them with regard to kickback since it most probably would provide people with general civil rights information that is applicable to every man, woman, and child under the laws and Constitution of the United States of America with regard to his employment agreements. These laws are the subject matter in the next chapter.

8 When the laws were codified, section 1990 was placed in Title 42 as section 1994 and section 5526 was placed into 18 U.S.C. Sec. 1581.

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CHAPTERS

PEONAGE IS PROHIBITED BY LAW

What is peonage

Both legal and illegal kickbacks to the U.S. Government via the IRS exist today, and Federal judges know the difference. To understand how the illegal kickback (involuntary debt) relates to peonage one needs to know what peonage is.

The Thirteenth Amendment, which was added to the the U.S. Constitution in 1864, prohibits involuntary servitude. Laws on peonage were passed by Congress shortly thereafter. They are founded upon long-standing principles that are based upon the Constitutional Fifth Amendment mandate that no person shall be deprived of life,liberty, or property without due process of law.

The best explanation of peonage, and the laws concerning peonage, is in the Supreme Court decision of Clyatt vs. U.S., 197 U.S. 207 (1904). In arriving at their decision, the Justices of that court relied upon the original positive laws on the subject matter of peonage-sections 1990 and 5526, Revised Statutes,1 which read:

Sec. 1990. The holding of any person to service or labor under the system known as peonage is abolished and forever prohibited in the TerritoryofNew Mexico, orinanyotherTerritoryorStateof the United States; and all acts, laws, resolutions, orders, regulations, or usages of the Territory of New Mexico, or of any other Territory or State, which have heretofore established, maintained, or enforced, or by virtue of

1 Sections 1990 and 5526, Revised Statutes, were preceded by the Peonage Laws of New Mexico (1850-1860) and Northwest Territory Ordinance of 1787. When codified, section 1990 was placed into Title 42 (Public Health and Welfare--civil rights) as section 1994 "Peonage abolished" and section 5526 was put into Title 18 (Federal criminal laws) as sechon 1581 "Peonage; obstructing enforcement."

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which any attempt shall hereafter be made to establish, maintain, or enforce, directly or indirectly, the voluntary or involuntary service or labor of any persons as peons, in liquidation of any debt or obligation, or otherwise, are declared null and void." Sec. 5526. Every person who holds, arrests, returns, or causes to be held, arrested, or returned, or in any manner aids in the arrest or return of any person to a condition of peonage, shall be punished by a fine of not less than one thousand nor more than five thousand dollars, or by imprisonment not less than one year nor more than five years, or by both.

Controlling labor by debt is peonage

Mr. Justice Brewer, who delivered the opinion of the Supreme Court in Clyatt case, said at pages 215 and 216:

The constitutionality and scope of sections 1990 and 5526 present the first questions for our consideration. They prohibit peonage. What is peonage? It may be defined as a status or condition of compulsory service, based upon the indebtedness of the peon to the master. The basal fact is indebtedness. As said by Judge Benedict, delivering the opinion in Jaremillo v. Romero, 1 N.Mex. 190, 194: "One fact existed universally; all were indebted to their masters. This was the cord by which they seemed bound to their masters' service." Upon this is based a condition of compulsory service. Peonage is sometimes classified as voluntary or involuntary, but this implies simply a difference in the mode of origin, but none in the character of the servitude. The one exists where the debtor voluntarily contracts to enter the service of his creditor. The other is forced upon the debtor by some provision of law. But peonage, however created, is compulsory service, involuntary servitude. The peon can release himself therefrom, it is true, by the payment of the debt, but otherwise the service is enforced. A clear distinction exists between peonage and the voluntary performance of labor or rendering of services in payment of a debt. In the latter case the debtor, though contracting to pay his indebtedness by labor or service, and subject like any other contractor to an action for damages for breach of that contract, can elect at any time to break it, and no law or force compels performance or a continuance of the service.2 (emphasis added)

2 Service to the IRS is evidenced when a debt on a "U.S. Individual Income Tax Return" is delivered to them on property not includible in "gross income" under

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By this Supreme Court explanation it can be seen that the controlling factor in peonage is debt. Whether that debt is created voluntarily or involuntarily is immaterial. It is the result that counts. When the person is forced to create and discharge the debt, the amount of labor (time) needed to discharge the debt goes for the benefit of another and not for his own support. This results in the debt controlling the person by controlling his labor.3

How is a debt created in the making of a ''U.S. Individual Income Tax Return"? Though Congress has labeled the legal kickback on property an income tax, the IRS does not use the term "tax" on the ''U.S. Individual Income Tax Return" needed to complete their administrative duties for the legal Federal kickback program. Since at least a portion, if not all, of the debt declared on every ''U.S. Individual Income Tax Return" submitted to the IRS is linked to the voluntary compliance-self assessment program, the term "tax due" is not, and can not be, used. Review of any ''U.S. Individual Income Tax Returns" finds that the bottom line does not say that one is paying a tax, it says "Amount You Owe."

A tax cannot be placed on a person without the constitutional restrictions for a direct tax coming into play. For a "return of income" to be due or derived from the property received for labor it must be part of a kickback agreement between the employee and the employer. The amount declared as owed on any piece of paper, including a ''U.S. Individual Income Tax Return," is taken as a promissory note to pay the amount shown as due. A promissory note is legally enforceable if no undue influence coerced its production.

When one makes and files a ''U.S. Individual Income Tax Return," it is taken by the IRS to mean that person cooperated with them and voluntarily complied to self assess himself. However, violation of peonage laws is manifested when voluntary compliance-self assessment is enforced upon income that does not belong to the U.S.

subtitle A of the I.R. Code, whether done on a voluntary or involuntary basis, and the payment of that debt is enforced. It is the enforcement of such a debt that controls a person's labor to his prejudice.

3 As shown in chapter 2, the U.S. judges were defending their compensation on the same basis.

PEONAGE IS PROIDBITED BYLAW CHAPTERS

Government. Evidence of enforcement is present when one is punished for refusing to assess himself, as I was.

Though I, Frank Kowalik, had not entered into any employment agreement with the Federal Government, IRS employees accused me of willful failure to make a return of income4 to the U.S. Government for the years 1978 and 1979. In a U.S. courtroom IRS forms 4340 were introduced as evidence that I had delivered ''U.S. Individual Income Tax Returns" to the IRS in previous years, but not for the years in question. What these IRS 4340 forms actually prove is that when I made ''U.S. Individual Income Tax Returns," I created liability-! created self assessment to an exact amount, thereby it is taken that I willingly taxed my time. When I made no ''U.S. Individual Income Tax Return," the form 4340 (Appendix K) reflected zero as due, and stated "not liable this period." Hence, when I made no such "return," I created no liability. The ''U.S. Individaul Income Tax Return" was the instrument used by the IRS to control and force me to create a personal debt upon which they would force payment. When I refused to continue to obey their will, they solicited and received the aid of a U.S. judge, who permitted the use of a U.S. courtroom, in an attempt to coerce me into making the debt so that the IRS could continue to control my person by controlling my labor. This action was an attempt to return me to a former condition of peonage which is to control my labor by debt.

Whether IRS employees use direct or indirect methods, the making of a ''U.S. Individual Income Tax Return" based upon income that is not includible in the legal federal kickback program results in a debt that provides IRS control over persons in the United States of America and causes them to labor against their will by depriving them of the use of their property for their own support.S Any person under the laws and the Constitution of the United States of America has the right to make

4

5

The phrase "return of income" means to return U.S. Government income to the U.S. Government. IRS undue influence has caused it to maliciously mean that the requirement to make and deliver a "U.S. Individual Income Tax Return" exists. Up coming chapters carry the full story on this.

Reflecting again upon chapter 2, U.S. judges appointed before June 6, 1932 did not permit tb.is to occur as to their own compensat10n. Even though the Sixteenth !\mendment was passed in 1913, they knew it did not provide taxmg power upon Income that was not part of their employment agreement.

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the choice as to the disposition of their own personal property, which includes their labor. The amount declared as owed on a "U.S. Individual Income Tax Return" is regarded by the IRS as a debt upon which collection is enforced. Debt is the cord by which one is bound to the master-the IRS. If the IRS forces discharge of any portion of a debt that is based upon income not includible in the Federal Government's legal kickback program, they are forcing one to labor to discharge it. It is the IRS control of one's labor that is illegal and in violation of peonage laws.

U.S. Government's duty is to eradicate involuntary servitude

Peonage laws do not involve the ordinary relations of individual to individual which are subject to the control of the states, but forbids slavery and involuntary servitude by any party or authority. Going back to the Clyatt case, at pages 216 and 217, the Court goes on to explain why peonage is properly brought into the Federal Court.

"That which is contemplated by the statute is compulsory service to secure the payment of a debt. Is this legislation within the power of Congress? It may be conceded as a general proposition that the ordinary relations of individual to individual are subject to the control of the states and are not entrusted to the general government, but the Thirteenth Amendment, adopted as an outcome of the ci vii war, reads:

"Sec. 1. Neither slavery nor involuntary servitude, except as a punishment for crime whereof the party shall have been duly convicted, shall exist within the United States, or any place subject to their jurisdiction.

"Sec. 2. Congress shall have power to enforce this article by appropriate legislation."

This amendment denounces a status or condition, irrespective of the manner or authority by which it is created .... the Thirteenth Amendment names no party or authority, but simply forbids slavery and involuntary servitude, grants to Congress power to enforce this prohibition by appropriate legislation.

This Amendment .... is undoubtedly self-executing without any ancillary legislation, so far as its terms are applicable to any existing state of circumstances. By its own unaided force and effect it abolished slavery, and established universal freedom. Still, legislation may be necessary and proper to meet all the various cases and circumstances to be affected by it, and to prescribe proper modes of redress for its violation in letter or spirit. And such legislation may be primary and direct in its character; for the amendment is not a mere prohibition of

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PEONAGE IS PROIDBITED BY LAW CHAPTERS

state laws establishing or upholding slavery, but an absolute declaration that slavery or involuntary servitude shall not exist in any part of the United States." (emphasis added)

The Clyatt Court opinion had stated earlier that "no law or force compels performance or a continuance of the service." Even if the amount to be returned is valid as part of the Federal Government's legal kickback, no law can be passed and no force can be used that compels the Federal Government employee who owes some amount of the kickback to labor to discharge it. This is why the IRS has established an administrative solution for themselves through withholding on wages. If a Federal Government employee terminates his employment agreement owing the U.S. Government money on their legal kickback program, administrative remedy through Notice of Deficiency is available for the IRS. The IRS has administrative remedy to make the collection of the amount due if a person is a transferee of U.S. Government property, so no force is required.6 But, the IRS uses unlawful force when any attempt is made to gain control over one's income that is not part of a Federal Government employee's employment agreement.

6

At page 217 the Clyatt Court said:

'We must not forget that the province and scope of the Thirteenth and Fourteenth Amendments are different; the former simply abolished slavery; the latter prohibited the states from abridging the privileges or immunities of citizens of the United States; from depriving them of life, liberty or property without due process of law, and from denying to any the equal protection of the laws. The amendments are different, and the powers of Congress under them are different. What Congress has power to do under one, it may not have power to do under the other. Under the Thirteenth Amendment, it has only to do with slavery and its incidents. Under the Fourteenth Amendment, it has power to counteract and render negatory all state laws and proceedings which have the effect to abridge any of the privileges or immunities of citizens of the United States, or to deprive them of life, liberty or property without due process of law, or to deny

The U.S. Tax Court rules require that the parties in Tax Court make a good faith effort in the determination of the amount of U.S. Government's income that is subject to being returned. Any force by the IRS constitutes undue influence and not a good faith effort.

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to any of them the equal protection of the laws. Under the Thirteenth Amendment, the legislation, so far as necessary or proper to eradicate all forms and incidents of slavery and involuntary servitude, may be direct and primary, operating upon the acts of individuals, whether sanctioned by state legislation or not; .... " (emphasis added)

With this the Clyatt Court explains that it is the Thirteenth Amendment that is properly used to eradicate all forms and incidents of slavery and involuntary servitude and that the Federal Government's duty extends to all violations.?

IRSs' duty does not include creation of peonage

The function of the IRS is to effectuate the return of property belonging to the U.S. Government pursuant to employment agreements and not to force inclusion of income into the Federal Government's kickback program over which they have no authority. Federal judges cannot lawfully close their eyes, and provide aid in the enforcement of a debt created by a ''U.S. Individual Income Tax Return" resulting from an illegal kickback scheme, nor can they ignore the force used to collect the illegal kickback. Yet the U.S. judges permit themselves to be used as part of the final force. Ignoring such force provides evidence that U.S. judges have decided to cooperate with Congress and the executive branch, and join in the enforcement of the Federal Government's illegal kickback program. It is of public importance that U.S. judges not be part of the IRS enforcement procedure to create and collect such illegal debt; and the Thirteenth Amendment created the duty for all U.S. employees to eradicate involuntary servitude. When they initiate and support involuntary servitude, they violate their duty. To violate such a duty is an example of conduct that shocks the consciences of all decent men.

At page 218, the Clyatt Court, used a quote from another court case when they said:

In Pressy v. Ferguson, 163 U.S. 537, 542, Mr. Justice Brown, delivering the opinion of the court, said:

7 A prominent example of involuntary servitude is enslavement by drugs. The authority for the Federal Government's war on drugs is the Thirteenth Amendment. Among other forms of involuntary servitude tnat gives the U.S. Government authonty to act is kidnapping.


"That it does not conflict with the Thirteenth Amendment, which abolished slavery and involuntary servitude, except as a punishment for crime, is too clear for argument. Slavery implies involuntary servitude-a state of bondage; the ownership of mankind as a chattel, or at least the control of the labor and services of one man for the benefit of another, and the absence of a legal right to the disposal of his own person, property and services. This amendment was said in the Slaughter House Cases, 16 Wall, 36, to have been intended primarily to abolish slavery, as it had been previously known in this country, and that it equally forbade Mexican peonage or the Chinese coolie trade, when they amounted to slavery or involuntary servitude, and that the use of the word 'servitude' was intended to prohibit the use of all forms of involuntary slavery, of whatever class or name."

Other authorities to the same effect might be cited. It is not open to doubt that Congress may enforce the Thirteenth Amendment by direct legislation, punishing the holding of a person in slavery or in involuntary servitude except as a punishment for crime. In the exercise of that power Congress has enacted these sections denouncing peonage, and punishing one who holds another in that condition of involuntary servitude. This legislation is not limited to the territories or other parts of the strictly national domain, but is operative in the states and wherever the sovereignty of the United States extends. We entertain no doubt of the validity of this legislation, or of its applicability to the case of any person holding another in a state of peonage, and this whether there be municipal ordinance or state law sanctioning such holding. It operates directly on every citizen of the Republic, wherever his residence may be. (emphasis added)

Here the court explains that it does not matter under what name peonage flourishes, it is "the control of the labor and services of one man for the benefit of another, and the absence of a legal right to the disposal of his own person, property and services" that is prohibited. This is true whether the bondage is caused by any person for his own benefit or claiming to act in the name of government. Which is what Federal Government employees do when they enforce illegal kickback.

I refused to be a peon

My person was held captive in an attempt to force my return to a condition of peonage, which violates the peonage laws. The ransom the Justice Department wanted from me was to create a "U.S. Individual Income Tax Return," a debt instrument they consider as providing the IRs control over my liberty and property, which includes my labor. With

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my past delivery of "U.S. Individual Income Tax Returns" -Federal Government employees regarded that I voluntarily complied to assessing myself. However, it is enforcement of the service which constitutes peonage, and violates the peonage laws. Being sent to prison for refusing to create the debt is evidence of the IRS enforcement of the service to create and discharge a debt. In the Clyatt case, the Justices said at pages 215 and 216:

.... But peonage, however created, is compulsory service, involuntary servitude. The peon can release himself therefrom, it is true, by the payment of the debt, but otherwise the service is enforced. A clear distinction exists between peonage and the voluntary performance of labor or rendering of services in payment of a debt. In the latter case the debtor, though contracting to pay his indebtedness by labor or service, and subject like any other contractor to an action for damages for breach of that contract, can elect at any time to break it, and no law or force compels performance or a continuance of the service. (emphasis added)

In my case, every "U.S. Individual Income Tax Return" I made was an illegal kickback because my income was from sources which did not include the U.S. Government as my employer. None of my employment agreements included a lawful kickback to the U.S. Government. The "U.S. Individual Income Tax Returns" I made in the past, however, were regarded by the IRS as debt instruments upon which collection was enforced with the aid of the Justice Department and the U.S. judges. By virtue of the Clyatt case there is no condition under which the government employees involved in my case can established that I agreed to their involuntary servitude program.8

The action brought against me by misapplication of the I.R. Code statute known as section 7203 (Willful failure to file returns) was not unique, it has been used to unduly convict thousands of persons through the years. The conduct of Federal Government employees revealed later in my personal story supplies much evidence that substantiates what is said in this book.

8 Clyatt v. U.S.; at pg. 215. "Peonage is sometimes classified as voluntary or involuntary, but this implies simr,ly a difference in the mode of the origin, but none in the character of the servitude.'


Being held, arrested, or returned to a condition of peonage

No matter what the IRS defenses are--the peonage laws operate on every person subject to the laws of this Republic, wherever his or her residence may be. Legal consequences are accepted by persons who participate in any way to make it possible for a condition of peonage to exist. At pages 218,219 of the Clyatt case the Court addresses who falls under the punishment described in section 5526.

Section 5526 punishes "every person who holds, arrests, returns, or causes to be held, arrested, or returned." Three distinct acts are here mentioned-holding, arresting, returning. The disjunctive "or'' indicates the separation between them, and shows that either one may be the subject of indictment and punishment. A party may hold another in a state of peonage without ever having arrested him for that purpose. He may come by inheritance into the possession of an estate in which the peon is held, and he simply continues the condition which was existing before he came into possession. He may also arrest an individual for the purpose of placing him in a condition of peonage, and this whether he be the one to whom the involuntary service is to be rendered or simply employed for the purpose of making the arrest. Or he may, after one has fled from a state of peonage, return him to it, and this whether he himself claims the service or is acting simply as an agent of another to enforce the return. (emphasis added)

Whether a person actually holds another in a condition of peonage or contributes to the return of someone to a condition of peonage is immaterial. The punishment applies to either situation.

Any employer in the private sector holds a person in a state of peonage when he forces the employee to execute a form that purports to call for a portion of the monies his contract calls for as remuneration for his services to be withheld as prepayment of a debt made certain by filing a "U.S. Individual Income Tax Return."

Ignorance of the law is no excuse for the IRS employee who, whether by direct employment or on a contract basis, holds a person in a condition of peonage. By simply continuing to force a person to serve the IRS initiated by others he is subject to this law. All Federal Government employees who enforce the service are on notice by the I.R. Code of what income is includible and subject to being returned to the U.S. Government, which is "gross income" received under employment

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agreement with the Federal Government. All other income is not includible in "gross income" under subtitle A of the I.R. Code.

Even the U.S. marshals who act to arrest a person (though perhaps unwittingly) for the purpose of returning him to a former condition of peonage are subject to the punishment of the peonage statute by virtue of their conduct in aiding in enforcement procedures. It is their obligation to be certain their job is conducted lawfully and legally. They cannot permit themselves to be used for illegal IRS enforcement. Likewise, the warden of the prison or the city, county, and state law enforcement officers who come in touch with this process make themselves subject to this punishment since the intended result is to return the person to a condition of peonage, as was my case. In most such situations, the attorney for the defendant is also included.9 The enforcement procedure contributes to the false belief which sustains the undue IRS influence which makes it possible to coerce a surrender of income from persons in the general public through the filing of a "U.S. Individual Income Tax Return" which includes income that is not includible in the "gross income" under subtitle A of the I.R. Code.

Peonage is compulsory service

Any force used to control a person's life,liberty and property by debt manifested by the delivery of a "U.S. Individual Income Tax Return" based upon property not includible in the "gross income" under the I.R. Code laws constitutes peonage since it results in the person being forced to labor against his will to discharge the debt obligation so created. Peonage, however created, is compulsory service, involuntary servitude. The debt is the means by which one is bound to the master. This is true whether IRS force is directly or indirectly used to control one's labor. It is immaterial whether the force used manifests itself as

9 I base this statement on the fact that practicing attorneys only promise to represent you and not defend you. The Sixth Amen<fment right to have assistance of council for your defence has been violated when the attorneys only promise to represent you. Yet today, for adequate representation in a defence, you must have knowledge of the law in order to make a proper choice as to representation. Without such knowledge you cannot make an informed choice. Without proper representation it is mtended by the legal profession that you will be found gmlty. With such a standard we are forced to accept the legal consequences men will force upon us, instead of only being subject to accepting the lega1 consequences of the law by our conduct.

PEONAGE IS PROillBITED BYLAW CHAPTERS

t}u"eat or actual use of a U.S. courtroom to gain an undue conviction. Both are equally punishable under the peonage laws since the law applies to any person who places another into a condition of peonage, or causes another to be returned to a condition of peonage, or arrests someone for the purpose of being returned or placed into a condition of peonage. Simply stated, by their conduct, Federal Government employees are in violation of the peonage laws of the United States, a civil rights issue of major proportions.

"If ye love wealth better than liberty, the tranquility of servitude better than the animating contact of freedom .... go home from us in peace. We ask not your counsels of arms .... couch down and lick the hands that feed you .... May your chains set lightly upon you .... May posterity forget that ye are our countrymen."

Samuel Adams

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CHAPTER6

ONLY I.R. CODE "WAGES" ARE SUBJECT TO KICKBACK

Not everyone receives I.R. Code "wages"

Just as every sovereign person can control how he arranges for the disposal of his property, the U.S. Government has the same power and privilege as long as it meets the standard needed for public trust and it is used for the general welfare of the United States of America. Congress has the power to establish the terms of the employment agreements for the U.S. Government and arrange for a kickback by those terms. Notwithstanding that the initial kickback program was illegal, Congress chose to arrange for a kickback on employment agreements with the U.S. Government more than a century ago.

The administration and collection of the Federal Government kickback was delegated by Congress to the IRS in 1862, the year the IRS was formed. However, the IRS cannot legally exercise control over property one receives as income from sources without an employment agreement within the U.S. Government. Such property is not includible in gross income under subtitle A of the I.R. Code. Just as one has no right to control property that belongs to someone else against their will, the IRS cannot, under any circumstances, legally use undue influence to control a person's personal property. In fact, the IRS employees have a duty to be certain that income that does not belong in the Federal Government's kickback program is not included in the "return of income."

As already established, only income that is paid to those who have effectively connected their profession, vocation, trade, business, commerce, sales, or dealings in property (whether real or personal) with the U.S. Government is deemed to be "gross income" under subtitle A of the I.R. Code laws. Being the source of "gross income," the U.S. Government can dictate the terms of an agreement they have with such persons. The power to arrange for a kickback is within the agreement

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ONLY I.R. CODE "WAGES" ARE SUBJECT TO KICKBACK CHAPTER6

between the government and the employee and not under the general laWS of the United States of America. Such a kickback is not subject to the constitutional restrictions of a direct tax or indirect tax, but it is subject to the terms of the employment agreement spelled out in the I.R. Code. The terms of such an agreement is that the "gross income" paid for the services rendered or the products delivered includes gain, profit and income, and that the gain or profit received under an employment agreement within the U.S. Government is subject to being returned to the U.S. Treasury. Thus the phrase "return of income" is being defined.

As to Federal Government employees, "gross income" was expressed in section 22 of the 1939 I.R. Code as including a gain portion and an income portion derived from "wages." The formula breaks down to:

Gross income= gain plus income derived from wages.

Originally the Federal Government kickback was a straight 3 percent on salary received over and above a fixed exempted amount. However, for several decades now, Congress has provided the formal expression of a variable kickback schedule for Federal Government employees. It was the introduction of a varying kickback that caused the need for the instrument called a ''U.S. Individual Income Tax Return" to be provided upon which Federal Government employees could claim the deduction benefits intended to reduce the gain portion (the maximum kickback). In 1942, this was introduced by implication to the general public as part of the Victory Tax (discussed in Chapter 3). But, the instrument, a ''U.S. Individual Income Tax Return," is not to be interchanged with "return of income."

When a person makes the free choice to enter into an employment agreement within the U.S. Government, the U.S. Government is the ~ource of the income paid and has a pecuniary interest in the "gross ~come" they pay their employees because of the kickback that is lllcluded in it. Since 1954 Congress has dictated the terms of that agreement under subtitle A and chapter 24 of the I.R. Code.

As demonstrated earlier, that employment agreement calls for a ~tum of anywhere from none to all of the gain portion of the "gross income" (kickback) to the employer, the U.S. Government. The gain ..,ortion is returnable to the extend of 100 percent unless an election is t'nade by the Federal Government employee to lower the kickback ~iunount by claiming the deduction benefits on a ''U.S. Individual Income

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Tax Return." Whether the deduction benefits are claimed or not does not alter the fact that the Federal Government employee receives that to which he is entitled, and the U.S. Government, the employer, receives the kickback to which it is entitled. Nor does it change the fact that it is Congress which places the U.S. Government's income in jeopardy of being returned.

What is left after this kickback is an even exchange for the Federal Government employee's time and talent. If these terms are not acceptable, a person's only choice is to take employment in the private sector.l Only then will compensation for personal services not be lawfully under the control of the IRS through the I.R. Code.

Those who have made the personal choice not to enter into an employment agreement within the U.S. Government receive remuneration for services performed which is an even exchange of property (time and talent) for property-usually money. No U.S. Government gain portion exists in gross income of those who choose to become effectively connected with a trade or business that is NOT within the U.S. Government.

It cannot be emphasized too strongly that a tax on what a person receives as income in exchange for personal services is subject to the constitutional restrictions of apportionment with regard to the census or enumeration, and a legal kickback to the IRS is not possible when the U.S. Government is not the source of such income. These facts cannot be altered. Only by entering into a U.S. Government employment agreement is the I.R. Code kickback in effect. Whatever one receives in exchange for personal services performed in the private sector is not includible in the term "gross income" or "wages" in the I.R. Code, and is not subject to the Federal Government's kickback program that is misleadingly called "income tax." The IRS is without jurisdiction to force a "return of income" in one's possession unless it is income received by employment agreement that belongs to the U.S. Government. In other words you must be a transferee under the I.R. Code for IRS Employees to have cause to effectuate a "Return of Income."

1 When reference is made to the private sector it means personal serviceS performed for employers other than the U.S. Government. Working for a state or city government, etc., is here deemed working in the private sector.

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Federal income taxation is a legal kickback on wages.

The subject matter is not federal taxation on all income, it is a kickback of the U.S. Government's income. It is a matter of returning to Caesar that which is Caesar's. The IRS can legally collect a kickback only from Federal Government employees who have agreed to it by taking the job; and by the nature of the term "kickback'' the U.S. Government is recovering its own income (property). It is upon this fact that the vague statement "return of income is required" is used to control income not required to be returned. Persons living in the United States thereby have been falsely led to believe that all employees are subject to this kickback program.

Though the administrative procedure for all internal revenue taxes, including the return of income, is found in subtitle F in the I.R. Code, the terms relating to the Federal Government employee employment ~greement are in subtitle A (sections 1-1564), and chapter 24 (sections 3401-3405).

The first subject to address is the definitions for the so called "income tax" on "wages." The definitions are written in a manner that almost requires a person to be a Rhodes Scholar in order to comprehend them. Comprehension is possible, however, by keeping in mind that Congress can only dictate terms of an employment agreement when the U.S. Government is the employer.

Who receives I.R. Code "wages"

The definition in the I.R. Code for "wages" reads as follows: Sec. 3401(a) Wages. For purposes of this chapter, the term "wages" means all remuneration (other than fees paid to a public official) for services performed by an employee for his employer, including the cash value of all remunerations paid in any medium other than cash; (emphasis added)

. This definition eludes to the existence of an employment agreement !>etween two parties. It states that wages are only what is received for J>ersonal services performed by an employee for his employer. Hence,

~: term "wages" does not extend beyond that. This fact brings out the portance of knowing who is an "employee" and who is his

• employer" within the I.R. Code. The definitions provided by Congress . the I.R. Code for the terms "employer'' and "employee" state:

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Sec. 3401(d) Employer. For purposes of this chapter, the term "employer" means the person for whom an individual performs or performed any service, of whatever nature, as the employee of such person, ...

Before one possibly can identify the employer, one must pinpoint the identity of the "employee."

Sec. 3401(c) Employee. For purposes of this chapter, the term "employee" includes an officer, employee, or elected official of the United States, a State, or any political subdivision thereof, or the District of Columbia, or any agency or instrumentality of any one or more of the foregoing. The term "employee" also includes an officer of a corporation.

Here is a classic example of how easy it is to be misled. Though it appears this definition of "employee" also includes an officer of a corporation, the actual definition of "employee" ends with the period at the end of the first sentence. For an officer of a corporation to be included in the term "employee," it would have to either be included in the first sentence or the second sentence must also start with the phrase "for purposes of this chapter." Corporations run by the U.S. Government have appointed officers. Such officers are included in the first sentence of the definition of "employee," but Congress cannot legally embrace officers of all corporations into the definition. The only conclusion possible is that the second sentence in the definition of "employee" was intended to establish vagueness and make it difficult to understand the limited application of the I.R. Code, thus aiding in the continuance of the false belief that it includes persons not includible within the definition of the term "employee." But, what Congress and/ or Federal Government employees cannot lawfully do directly they cannot legally accomplish by indirect means.2 This is evidence of concealment of the limited application of the I.R. Code that results in malicious control over freedom of choice, thus controlling conduct of persons in this country.

2 In Cummings v. The State of Missouri, 71 U.S. 277; 4 Wall 277 (1866) the U.S. Supreme Court was asked to make a ruling on the validity of a State law enacted after the Civil War that required clergymen to take an oath that they had not committed certain acts in order to contmue in their orofession. Some of the acts, which carries heavy penalties, were innocent prior to the legislation. With regard to this the U.S. Supreme Court said at page 325: "The legal result must be the same, for what cannot be done directly cannot be done inClirectly.''


These facts presented from the I.R. Code eliminate the pay of an officer of a corporation who is not employed by the U.S. Government. For purposes of this chapter (chapter 24, Collection of Income Tax at Source on Wages), only persons working for the Federal Government are "employees" who receive "wages" includible in "gross income" under subtitle A of the I.R. Code. To verify this, the confusion and vagueness-added to the definition of "employee" by the use of the word "State" will again be addressed.

Who are I.R. Code State employees

By mentioning the term "State" and the "District of Columbia" separately in section 3401 (c) Congress implies the term "State" is any one of the 50 states of the union and that the "employee" in the I.R. Code is also one who works for the governments within any one of the 50 states. However, if the term "employee" was meant to embrace employees of the 50 States the words "any State" or "the States" would have been used rather that "a State."

In chapter 4, it was concluded that the word "State" in the I.R. Code is restricted to the District of Columbia unless otherwise expressed. However, the U.S. Government is the paymaster in more areas than the District of Columbia and so Congress had to expand on the definition of "employee" for purposes of withholding of tax (kickback) on "wages" in this chapter (chapter 24 of the I.R. Code) to reach all persons paid by the U.S. Government. To keep it vague and confusing they used the term State and the District of Columbia, the State in this instance being any of the possessions, called States in other Titles, that are under the direct sovereignty of the United States, i.e. Puerto Rico, the Virgin Islands, etc. The officers, employees, and elected officials of these States are paid out of the U.S. Treasury and fit under the definition of "employee" in section 3401(c) of the I.R. Code. The employees of the 50 states of the United States of America, or any political subdivision thereof, do not. Congress cannot make the terms of employment agreements for employers except Where the U.S. Government is the employer.

The I.R. Code is kept a lawful document with the dubious tactics of -duplicity of subject matters by using special restrictive definitions of

f !en~ric terms. Did Congress provide a definition of the word "State" i. ~t lS other than the normal understanding of that word just to keep the l kickback laws in the I.R. Code legal and yet introduce enough vagueness

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to implement and enforce an illegal kickback on property outside their lawful jurisdiction? The results show that they did.

The IRS and Congress knew the reader would interpret the word "State" generically. They knew that a person who is paid by a state government could be encouraged to make the mistake of including himself in the definition of "employee" in section 3401(c). But, the definition of the term "State" restricts the definition of the term "employee" to the employee as a person who receives "wages" (gross income) from the U.S. Government, the source of the income. This play on the word "State," coupled with the Public Salary Tax Act of 1939, provided the undue influence over the income of employees of the various states of the United States where no actual authority exists.

Because Congress passed what is called "The Public Salary Tax Act of 1939," persons who have been studying the I.R. Code have the misconception that state employees are subject to the provisions of chapter 24 of the I.R. Code. The understanding seems to be that this Act permitted the Federal Government to tax state government employees and vice versa.3 Actually, this law only provided that state governments could apply whatever lawful taxing power they already had to the property of persons within federal areas (regarded as United States possessions) that lay within the state's boundaries. This law does not extend federal power when it tells the states they have the permission of the U.S. Government to use power they already possess.

Various states of the United States have the same option to have a legal kickback with their employees by making it a part of their employment agreements as the Federal Government did. But, using the guise of law to exert undue influence that coerces the employees of one entity to create a debt payable to the other entity would result in a conspiracy to commit involuntary servitude. Peonage results when a labor controlling debt is forced upon any person.

3 Employees of one of the 50 States of the United States may want to analyze the Pubiic Salary Tax Act of 1939." It has been provided in its entirety as Appendix E of this book.


private sector employees are not part of I.R. Code

Significantly, nowhere in the definition of "employee" (section 3401 (c)) is a person working in the private sector directly or indirectly mentioned. Armed with this fact, the fact that the I.R. Code construes the term "State" to be only the District of Columbia (where the U.S. Government resides), and the fact that the second sentence is not part of the definition (but controls the reader by implying it expands the meaning), it can be seen that the definition of the "employee" who receives "wages" is restricted to an individual4 who works for and/or is paid by the Federal Government. It remains that the "employer" is the Federal Government for whom the "individual" performed any service, and that chapter 24 of the I.R. Code is NOT applicable to the property that any person receives for his labor in the private sector. If what one receives for his labor is not within the definitions in chapter 24, subtitle A does not apply either, meaning that income received for personal services performed in the private sector is not "wages" as defined in the I.R. Code and is not includible in "gross income" under subtitle A.

Voluntary Withholding Agreements

With this information about the restricted application of chapter 24 and subtitle A, how does the IRS justify accepting monies withheld from the remuneration for services performed in the private sector? In section 3402(p), 171 words are designed to cover this by implication.

Sec. 3402(p) Voluntary withholding agreements.

The Secretary is authorized by regulations to provide for withholding-

(1) from remuneration for services performed by an employee for his employer which (without regard to this subsection) does not constitute wages, and

Note that the person who works for the "employer" in the I.R. Code (defined in Sec. 3401(d)) is specifically identified as "an individual." The "employee" is also called "an individual" throughout the I.R. Code; and a Federal Government ~mployee is ~he individual in fhe "U.S. Individual Income Tax Return." Also, the Words "an individual" is included in the definition of the word "person" for the entire I.R. Code in section 7701(a)(l). The only conclusion possible 1s that the word "individual" in the I.R. Code means a Federal Government employee.

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(2) from any other type of payment with respect to which the Secretary finds that withholding would be appropriate under the provisions of this chapter,

if the employer and the employee, or in the case of any other type of payment the person making and the person receiving the payment, agree to such withholding. Such agreement shall be made in such form and manner as the Secretary may by regulations provide. For purposes of this chapter (and so much of subtitle F as relates to this chapter) remuneration or other payments with respect to which such agreement is made shall be treated as if they were wages paid by an employer to an employee to the extent that such remuneration is paid or other payments are made during the period for which the agreement is in effect. (emphasis added)

Again, at first reading, this might seem to refer to employee and employer in the generic sense, however, this is still in chapter 24 of the I.R. Code making the term "employee" restricted to the Federal Government employee and "employer" to the Federal Government.

Actually the words in sec;.ion 3402(p) are the only words within the I.R. Code designed specifically for the remuneration received by Federal Government employees from sources without their employment agreement within the U.S. Government. Though such Federal Government employees are maliciously deceived to include income from without his employment agreement within the U.S. Government on a "U.S. Individual Income Tax Return" made and delivered, section 3402(p) wasn't placed into the code until the year 1969 to make it appear that the Federal Government employee volunteered to call "wages" what is not wages, and thus make includible what is not includible in gross income. But, the property received as such cannot be, and is not, included in the definition of the term "wages" in the I.R. Code. If it is not "wages," it is not "gross income" under subtitle A of the I.R. Code. Not being "gross income" from the U.S. Government, there is no lawful kickback due to be sent to the I.R. Code.

Section 3402(p), just as all of chapter 24 of the I.R. Code, is restricted to Federal Government employees, yet it maliciously implies that both private sector employees and Federal Government employees may make includible what is not includible under law merely by agreeing to it. This implies that if a voluntary agreement exists, property that is not includible in "gross income" is made subject to I.R. Code laws. In this, Congress, for the IRS, is stating that it will be deemed that the person has agreed to a condition of involuntary servitude even though


Congress has the duty and the power in the Thirteenth Amendment of the U.S. Constitution to eradicate involuntary servitude anywhere it may exist. Peonage is involuntary servitude whether done with knowledge or ignorance. A condition of peonage exists as long as the IRS enforces collection of the amount one declares owed on income that is not subject to being returned to the U.S. Government.

Making it appear that one volunteered to be placed into a condition of involuntary servitude is evidence that those IRS employees who composed this law are controlling Congress. It also proves Congress does not read the laws they are enacting, they just pass them. Since most Congressmen are lawyers, they should know better than to enact the vague laws that have the result of controlling persons, when Congress only has the power to control the property that belongs to the U.S. Government.

Though the tradition of gaining control over remuneration for services performed in the private sector began in 1942 with the law termed Victory Tax, section 3402(p) was not introduced by the IRS and passed by Congress until the year 1969. Between the years 1942 and 1969, persons in the private sector were not provided this indirect false notice that their participation in the U.S. Government kickback program was voluntary. It wasn't until the false belief that all income received by persons is property that is subject to kickback in the name of a "tax on wages" was well established that the IRS had Congress connote voluntariness by adding section 3402(p) to the I.R. Code. Section 3402(p) expresses the impossible fact that to become part of such tradition, one's volition-one's free choice--must be expressed when he or she enters into this voluntary agreement with the Secretary of Treasury.

With section 3402(p), the IRS implies that one is on notice that when he or she executes and submits a so-called "voluntary agreement" to an employer in the private sector, he or she acquiesces to having the payments receive for labor to be "treated as if it were wages." This means that, as far as the I.R. Code is concerned, there is one class of workers in our society which receives "wages" and another class which receives something other than "wages." The first is referred to in the I.R. Code as "employee" or "individual," whereas the latter is not identified by name, but actually is a peon since his labor is controlled by debt, thus he is controlled. A Federal Government employee is also made a peon When he kicks back income from sources without his employment agreement with the U.S. Government.

IRS HUMBUG

Voluntary W -4 form is humbug

The implied "voluntary agreement" just discussed is the IRS W-4 form.S The word "agreement" or "voluntary'' is noticeably absent from the W-4 form itself. Also, by titling it "Enaployee's Withholding Allowance Certificate," the IRS admits its purpose is for" employees" of the Federal Government to claim the number of their dependents so that they can reduce the kickback due to the Federal Government and retain part of the gain within that "gross income" for themselves on a regular basis. This is in accord with their employment agreement.

Examination of the W-4 form reveals it is notice by a Federal Government employee to the IRS that such employee is claiming a certain number of deductions. This is to place the IRS on notice and provide a guideline as to the approximate amount of the final kickback. The IRS has authority to withhold the maximum kickback unless notified to the contrary.

For a person working in the private sector, the W-4 form is used as authorization for the private sector employer to withhold monies for the IRS, yet it does not state this agreement or authorization. Instead the employer in the private sector operates on an agreement between himself and the IRS. This produces a condition where a private sector employee is forced into agreements to which he is not a party. Supplying the W-4 form leads to illegal withholding intended to prepay a debt made certain when one delivers a "U.S. Individual Income Tax Return" on which full collection is enforced. All of this is evidence of enforcement. In this practice IRS employees impair the obligation of contracts between the private sector employer and employee.

5 It should be noted that section 3402(£) and its regulations, which are r,art of chapter 24 of the I.R. Code, call a W-4 form a ''Withhofding Exemption Certificate" with regard to the Federal Government employee and the Federal Government as the employer. However, the W-4 form provided in the private sector is titled "Employee's Withholding Allowance Certificate" and is taken as one's allowing that emploxer to withhold for the IRS. Also, the declaration is made under penalties of perjury (28 U.S.C. Sec. 1746), but not under penalty of perjury under the laws of the United States of America. The significance of this will be revealed in a later chapter.

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ONLY I.R. CODE "WAGES" ARE SUBJECT TO KICKBACK CHAYI'ER6

I.R. Code non-wages controlled by regulations

It appears as though section 3402(p) has a flaw fatal to its legal enforcement. This statute says "the Secretary is authorized by regulations to provide for withholding ... on remuneration for services performed .... which .... does not constitute wages .... " and that "remuneration or other payments with respect to which such agreement .... shall be treated as if they were wages .... " as long as a voluntary "agreement is in effect." Though the Secretary can be authorized to make regulations in accord with law, Congress does not make regulations. Regulations are made by the heads of government agencies. Does this mean section 3402(p) was added to the I.R. Code by the IRS or even the Secretary himself? If that is the case then he was giving himself authority to act outside the law. Or was it Congress that implied the Secretary's authority to enforce section 3402(p) exists by regulation to accomplish that purpose? Actually the answer is immaterial because income which belongs to a natural person is only subject to deprivation by due process of law, and Congress can only pass authority to the Secretary by law. Therefore no authority exists by section 3402(p) anyway.

What Federal Government employees cannot lawfully accomplish directly cannot be accomplished indirectly. This means that the Secretary cannot lawfully subject income received by anyone from a source other than the Federal Government to withholding even if a so-called voluntary agreement exists. The debt that controls one as a result of the illegal kickback violates the peonage laws of the United States of America, and those attempting to return one to or keep one in such a condition accept the legal consequences of 18 U.S.C. Sec. 1581 (covered in chapter 5).

Sec. 3402(p) attempts to include employees and employers who are NOT effectively connected with the conduct of a trade or business within the U.S. Government by using the phrase "in the case of any other type of payment the person making and the person receiving the payment, agree to such withholding; and that 'for purposes of this chapter and subtitle F' [administrative statutes] the remuneration or other type of payment is to be 'treated as if it were wages paid by an employer to an employee' as long as the voluntary agreement is in effect. In this, Congress implies the private sector employee has the choice to ~ithdraw his agreement, but in practice, it does not work since Withholding is forced by private sector employers and IRS employees.

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Few understand that the execution of a W-4 form with regard to remuneration for labor in the private sector is forced upon them. It is falsely believed that a law requires it. A person cannot lawfully be forced to be a slave for the IRS, yet most employers in the private sector will not allow a person to start working without having an executed W-4 form in hand. The economic compulsion of being in need of the job offered removes the making of a W-4 form at the insistence of a private sector employer from the category of being a voluntarily agreement and places it into the category of being forced. The same is true for W-4 forms executed by Federal Government employees working part time in the private sector since the IRS enforces the collection on income without their employment agreement within the U.S. Government and such income is not includible in "gross income" under subtitle A of the I.R. Code. The making of a document cannot be considered voluntary when the party is not aware of the legal obligations and consequences he accepts by his act. A question of fraud exists when Federal Government employees disguise and conceal the illegal kickback program as a required Federal income tax.

IRS authority is limited to asking

Notice of the voluntary nature of the W-4 form is also stated in the Privacy Act Notice on the W-4 Form.

PRIVACY ACT AND PAPERWORK REDUCTION ACT NOTICE.-We ask for this information to carry out the Internal Revenue laws of the United States. We may give the information to the Department of Justice for ci vii or criminalli tigation and to cities, states, and the District of Columbia for use in administering their tax laws. You are required to give this information to your employer.

Here the IRS confesses that their authority is limited to asking. With this the IRS attempts to establish this act as voluntary. Since their power is limited to asking, it must be concluded that the execution of a W-4 form is not mandatory. The threat in the Notice is a form of Miranda warning6 that is intended to contain undertones of implied authority

6 The Miranda Warning was designed after the Supreme Court in Miranda v. Arizona, 384 U.S. 436 (1965), reversed the lower court decision because the authorities had not sufficiently apprized Miranda of his rights under the First, Fourth and Fifth Amendments to tile U.S. Constitution and the legal consequence that any statement he made could be used against him, which specifically v10lated

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through implied law where there is only authority for the administration of a kickback, a "return of income" that belongs to the U.S. Government as a result of employment agreements with them. Also notice that the phrase "administering their tax laws" is used and not enforcing their tax laws.

The Privacy Act Notice finally says that ''You are required to give this information to your employer." Once you know that the "employer'' in chapter 24 of the I.R. Code is the Federal Government, this statement in and of itself shows that the W-4 form is only to be executed by Federal Government employees who plan to reduce the amount of their kickback to the U.S. Government. The W-4 form is notice that the Federal Government employee does not wish to have an excessive amount of kickback withheld by the paymaster and sent to the IRS. It is a means provided for the Federal Government employee to bring the amount withheld from his "wages" in line with the actual notice of his claims for deduction benefits on a ''U.S. Individual Income Tax Return."

United States Government withholding it's own income by W-4 form

The U.S. Government arranged to control the kickback of their income by not transferring it to their employee in the first place. The procedure for this is in chapter 24 of the I.R. Code. Knowing that the "employer'' is the Federal Government one can see how sections 3402(a) and (f) of the I.R. Code fit into the lawful deduction benefits offered to Federal Government employees.

his Fifth Amendment right not to be compelled to be a witness against himself. The warnings in the Privacy Act Notices in all IRS publications and forms are basically the same. They warn that if you give them the information they "ask" for it can and will be used it against you in any civil or criminal litigation. However, this goes to the enforcement of the IRS service when they enforce the creating and discharging of a debt. This is peonage. In this process they participate in the crime. So, it must be concluded that the warning in the Privacy Act Notice is for the purpose of employing undue influence wifh intent to coerce one into agreeing witn the will of IRS employees. The refusal to cooperate in the IRS illegal kickback program cannot be obviated by a Miranda warning. It is not applicable. Since the IRS nas complete remedy there is no criminal or civil violation possible in the subject matter of returnmg income that is property that belongs to the U.S.Govemment.

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Sec. 3402(a) Requirement of withholding. (1) In general. Except as otherwise provided in this section,

every employer making payment of wages shall deduct and withhold upon such wages a tax determined in accordance with tables or computational procedures prescribed by the Secretary. (emphasis added)

This section states that only the Federal Government is responsible for withholding from "wages" a tax "in accordance with the tables" prescribed by the Secretary. These tables are found in section 1 of subtitle A [also in a shortened form in bulletin form 245-085, Instructions for IRS Form 1040]. The tables provide for 100 percent return of the gain portion of "gross income" to the U.S. Government. Any reduction in the amount of the gain portion returned is a benefit or gain to the Federal Government employee since it is added to his income portion. One way for a Federal Government employee to reduce the amount of the return (kickback) is through a claim regarding the number of dependents he or she has. This entitlement is reflected in section 3402(0, which reads:

Sec. 3402(f) Withholding exemptions. (1) An employee receiving wages shall on any day be entitled

to the following withholding exemptions: (emphasis added)

To claim this entitlement the Federal Government employee must execute the "exemption certificate" called for in section 3402(f)(2), and later verify it upon a ''U.S. Individual Income Tax Return" when the balance of the deduction benefits are claimed.

Sec. 3402(0(2) Exemption certificates. (A) On or before the date of the commencement of

employment with an employer, the employee shall furnish the employer with a signed withholding exemption certificate relating to the number of withholding exemptions which he claims, .... (emphasis added)

The exemption certificate referred to here is strictly with regard to "wages" received by the "employee" referred to in section 3402(f)(l). "Wages" is only what a Federal Government employee receives from the U.S. Government for the performance of personal services, which explains why the W-4 form is titled "Employee's Withholding Allowance Certificate."

The I.R. Code laws do not provide for "wages" to include anything a person receives in the private sector in exchange for his labor or what a Federal Government employee receives as some "other type of payment." Any so-called agreement executed so that the IRS can "treat"

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such income as if it were "wages" would have to be identified differently upon a W-4 form. However, even if a form did indicate that it is a "voluntary withholding agreement" (as directly suggested by section 34Q2(p)), thereby placing persons on notice of the voluntary nature of the agreement, it would still result in peonage because the service is enforced? The foregoing is proof of the enforcement. It is IRS undue influence that creates the coercion and produces the results they plan, which is involuntary servitude.

Section 3402(a) says a tax shall be withheld upon such wages. With this, Congress provided the Secretary definite power over the Federal Government's income placed in the possession of the Federal Government employee as part of "gross income." Such income, or tax, is derived from Federal Government employees "wages" only. This placed a duty on the person (paymaster) who handles the payment of "wages" to United States "employees" to withhold the kickback in the name of tax from the "wages." This is part of the employment agreement of every person who works for the Federal Government. The withholding is not a matter of an agreement or choice for the person who receives "wages," it is mandatory since it is the U.S. Government's property that is being withheld. This is property they have a right to control and have returned to them. The only question is how much, and the exemption certificate is designed to establish the "how much" factor.

It is the I.R. Code which establishes the fact that the terms "employee," "employer" and "wages" are not to be used in their generic sense with regard to the so-called "income tax" (which is really a kickback program). The only class of persons affected by I.R. Code laws is the "employee" who works for the Federal Government.

Placing section 3402(p), "voluntary withholding agreements," into the I.R. Code in 1969 goes to prove the cooperation between the

7

(;

It is of no consequence whether one volunteers or not. In the Clyatt case (used in Chapter 5), the Supreme Court says it is the enforcement of the service that constitutes involuntary servitude. All this goes to provide evidence against the IRS of the enforcement of the collection of income where the U.S. Government was not its source.

Power for the Secretary to withhold does not exist with regard to the property received by private sector employees. It is the U.S. Government that has the authority to force the return of their own income. Such power does not include the forceful surrender of income that is foreign to the U.S. Government.

IRS HUMBUG

legislative and executive branches of the U.S. Government in using humbug when it comes to deceiving persons in order to gain control over property to which the U.S. Government has no power or right unless accomplished through direct taxation made with regard to apportionment and with regard to the census or enumeration.

Though lawful, the definitions provided in chapter 24 of the I.R. Code are designed with malice and forethought to mislead. This produces a question of unlawfulness since they have maliciously entrapped8 persons who are not Federal Government employees into including themselves within the I.R. Code definitions, thereby causing those who work in the private sector to include their property in the kickback scheme or to be forced to include their property through the economic compulsion exerted by their private sector employer. It is the misuse of the vague laws by Federal Government employees that allows false belief to control the person, which is in violation of the laws of the United States of America.

With the false belief that private sector employers and employees are subject to the laws in the I.R. Code being so strongly entrenched, it is easy to see how the IRS maintains unlawful malicious control over property and persons that do not fall within their duty and therefore not within their jurisdiction.9 The next chapter will deal with IRS control of private sector employers.

8 The U.S. Courts have said that entrapment is not present when one is J>redisposed to do whatever was done. With regard to making a "U.S. Individual Income Tax Return," it is considered that one is predisposed to reflect property not includible in the Federal Government's kickback scheme when one makes such a document and willingly makes an IRS W-4 form. However, when one's predisposition was arranged for by Federal Government employees, one's conduct 1s not of a voluntary nature. It is then the Federal Government employees who are predisposed to control one through the control of one's property. This m turn controls labor through debt, a condition called peonage.

9 Remember, the IRSs' duty is upon that income that belongs to the U.S. Government. The IRS does not have JUrisdiction over a person unless that person has U.S. Government income in his possession, and then it's authority is limited to administrative functions unless a person has U.S. Government property in his possession by fraudulent means. Even if fraud is involved, the Federal Government employee has the burden to prove their claim in a State Court, which would be an independent court.

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CHAPTER7

DILEMMA OF PRIVATE SECTOR EMPLOYERS

I.R. Code does not include private sector employers

Private sector employers are controlled by the same fear of the IRS that controls the balance of society. These employers have been controlled by Federal Government employees, either directly or through their accountant or attorney, to believe that they are obeying the law when they deduct property due their employees under an employment agreement and send it to the IRS. Outside influence, however, does not relieve a private sector employer from the legal consequence of their illegal acts. Like any person, private sector employers must accept the legal consequences for misconduct under the law or under agreements. They are responsible for the personal study of the legal position they placed themselves into when they tamper with property they owe to the persons who work for them.

If a private sector employer insists he is an employer under the laws in the I.R. Code he accepts the responsibility for the payment of the "tax." This is stated in section 3403 of the I.R. Code, which reads:

Sec. 3403. Liability for tax. The employer shall be liable for the payment of the tax required to

be deducted and withheld under this chapter, and shall not be liable to any person for the amount of any such payment.

In practice the interpretation of section 3403 that prevails in the private sector is that the employer shall be liable to collect income in the name of tax from the employee under the W-4 form. But, section 3403 does not state that at all. Any attorney or accountant that reads section 3403 with this interpretation is guilty of misreading the section and misguiding the client to the prejudice of the employee. These experts are permitting someone else to do their thinking for them. What section 3403 clearly says is that "the employer'' is "liable for the payment of the tax". How can a private sector employer legally transfer that liability to

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IRS HUMBUG

the private sector employee by interpreting it to say the employer is liable for the collection of the tax required to be deducted and withheld from his employee under a W-4 form. Neither the law nor the W-4 form provide such authorization.

Employers in the private sector have to make up their minds. If they feel this law in the I.R. Code applies to them then they must pay the "tax". If they do otherwise they face the consequences for illegally confiscating property that is due to their employees and sending it to the IRS, a third party who is not part of their employment agreement. It is proof of permitting the IRS to impair the obligation of their contracts.

Section 3403 is used as a coercive tool by the IRS to get the employer in the private sector to collect from his employee by inference. However, the IRS can only hold the "employer'' defined in the I.R. Code liable for the payment of the tax required to be deducted and withheld under this chapter, not the employee. As established in the last chapter, the "employer'' in the I.R. Code is only the Federal Government.

This is not easy to comprehend because of the long standing indoctrination to which America people have been subjected. Be patient. If necessary, read chapter 6 again to insure understanding of the facts and limitations of the jurisdiction of the IRS, which is only over the Federal Government's income that is subject to being returned. Only by understanding that the "gross income" or "wages" includes a gain portion that includes the tax the "employer'' (the U.S. Government) is liable to pay can one see that in section 3403 it is the U.S. Government who is liable for the "payment of the tax required to be deducted". With that revelation you will be able to see how Federal Government employees illegally enforce the IRS false belief.

Last statement in section 3403

The final statement of section 3403 is that the employer "shall not be liable to any person for the amount of any such payment." As practiced today, the private sector employer is liable to his employee for the amounts deducted and withheld since it is taken that the W-4 form provides that employer authority to deduct and withhold pay due to his employees even though section 3402 of the I.R. Code only provides authority to deduct and withhold from the "wages" of Federal Government employees. Whatever the private sector employer withholds from his employee remains the property of the employee. Hence, when that employer withholds any part of the pay he agreed to

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DILEMMA OF PRIVATE SECTOR EMPLOYERS CHAPTER7

give in exchange for the labor of his employee he remains liable to the employee for it.

The opposite is true when the Federal Government is the employer. The U.S. Government is not liable to the Federal Government employee for the amount that is deducted and withheld. It is property that belongs to the United States, not its employee, because of the kickback arrangement in the employment agreement with Federal Government employees. This is the reason for the wording in section 3403 that the employer "shall not be liable to any person for the amount of any such payment" even though the employer (the U.S. Government) is liable for the payment of the "tax" required to be deducted and withheld under chapter 24 of the I.R. Code. This is just like a person who purchases a car for $15,000 with the agreement that $1,000 will be returned (rebated). The purchaser is liable for the $1,000 (rebate) to be returned to him that is included in the $15,000 price of the car. It remains his property though transferred to the manufacturer for a short period of time. He cannot also be liable to the manufacturer for that $1,000. Likewise, the U.S. Government is liable for the amount to be kicked back (or rebated) that is called "tax." Just like the purchaser supplies the $1,000 to be kicked back, the U.S. Government supplies the "return of income" or "tax" that is to be rebated to themselves. The U.S. Government is liable for the "tax" that is included in the "gross income" derived from the "wages" and is not liable to their employee for the amount of the "tax."

Dilemma forced upon private sector employees

When private sector employers practice the IRS false religion (false belief) they force their employees into the following dilemma.

(1) Either the employee will have the maximum amount of withholding deducted from the compensation due for services performed because he or she refuses to execute a W -4 form and the employer falsely believes the allowance for dependents must be considered zero because of section 3401 (e)1 which only applies to Federal Government employees; or

1 Sec. 3401(e) NUMBER OF WITHHOLDING EXEMPTIONS CLAIMED.-For purposes of this chapter, the term "number of withholding exemptions claimed" means the number of withholding exemptions claimed in a withhofding exemption

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IRS HUMBUG

(2) the threat of withholding a maximum amount will provide sufficient undue influence to coerce the employee to execute a W -4 form, which is falsely taken as authorization to withhold and deduct in accord with the number of dependents shown on the form.

Dilemma becomes quad-lemma for private sector employers

No matter how it is accomplished, making the W-4 form cannot be legally considered a voluntary act when the private sector employer uses economic compulsion to get the prospective employee to execute this document, and, a W-4 does not provide authorization to deduct and withhold any of the employees property. Hence, the private sector employer is not in a favorable position either by the W-4 form or under the law. The private sector employer must rely upon the IRS false religion to support this conduct, but the IRS will desert a private sector employer in any civil rights legal battle they might have with their employees over this issue because employers in the private sector have the responsibility of conducting their business in a lawful manner and must accept the legal consequences if they do not.

In this scenario the employer who is not the U.S. Government accepts the following a quad-lemma.2

(1) If private sector employers believe they are the employer in section 3403, they accept the liability to pay the tax that is required to be deducted and withheld under chapter 24 of the I.R. Code; or

(2) If they believe they are the employer in the I.R. Code and do not accept the liability for the payment of the tax, to stay on legal ground they must obtain explicit instructions from their employee which gives them authorization to deduct and withhold from his or her pay according to the IRS schedules and tum it over to the

certificate in effect under section 3402(£), or in effect under the cooresponding section of prior Jaw, except that if no such certificate is in effect, the number of withholding exemptions daimed shall be considered to be zero.

2 Quad-lemma is a word not found in the dictionary. But, since tri-lemma is used in law reviews, and it is not a word in dictionaries either, I am taking the liberty to expand dilemma times two.

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third party (the IRS) since neither the I.R. Code laws nor the W-4 form provide such authorization.

Making explicit instructions to deduct and withhold income and deliver it to the U.S. Government cannot be considered voluntary unless the private sector employee has full knowledge that he has surrendered control over his personal income willingly. Also, understandable written permission for withholding cannot be a condition of employment.

Without an explicit voluntary agreement, the private sector employer is forcing a debt upon the employee by forcing him into the IRS illegal kickback program. When the IRS enforces collection, it violates the peonage laws of the United States. A private sector employer faces legal consequences prejudicial to himself when he makes himself a party to the IRS illegal kickback scheme; or

(3) If the private sector employer wants to accept a statement made by some IRS employee as providing the authority to withhold property due to the private sector employee upon receipt of a W -4 form, it would be prudent for the private sector employer to ask the IRS to provide complete immunity from any civil rights action their employee might institute against them because of the advice of IRS employees. If any statement, instruction and/or advice given by IRS employees is legally correct, the IRS should not only be able to specifically state the laws in subtitle A and chapter 24 of the I.R. Code that apply to private sector employees, but also should be able to supply such immunity in writing with the signatures of two of top managers. If a private sector employer ~~~~~~~~~IRS~oo~&~~ because Congress does not have the power to interfere with the terms of employment between employees and employers in the private sector and it is impossible for them to provide immunity fromsuitwhena lawdoesnotexistupon which to grant immunity. Congress cannot pass such laws, their power is limited to setting conditions of employment between Federal Government employees and the Federal Government;

If a private sector employer prefers the advice of his attorney and/ or CPA he should ask that such advice be provided in writing. If damage by such ad vice occurs he will probably recover nothing

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IRS HUMBUG

since most attorneys and certified public accountants are professional corporations; or

(4) The private sector employer must personally study section 3403 and all other sections of chapter 24 in the I.R. Code and come to understand that the "wages" as defined in section 3401(a) are the remuneration for services performed by an employee [defined in section 3401 (c)] who is employed by the U.S. Government ["employer'' is defined in section 3401(ci)]; and that such "wages" or "gross income" is comprised of both a gain and income for which the employer (the U.S. Government) is liable (subtitle A and chapter 24 of the I.R. Code). The failure of a private sector employer to understand their legal position with regard to the I.R. Code does not excuse them from culpability in violating peonage laws.

The lawful fact is, every employer is liable for the full amount of the payment due to his employees pursuant to the employment agreement between them. Since the "tax" required to be deducted and withheld under chapter 24 of the I.R. Code is only upon "wages" of Federal Government employees, the U.S. Government is the "employer in section 3403 who is liable for the "tax". The Federal Government is liable for the gross income, which includes the gain and the income portions. It is the gain portion that contains the tax (kickback) that is subject to being returned.

I.R. Code provides terms of Federal Government employees employment agreement

The U.S. Government can and does establish the terms of its own employment agreements, but cannot do so for any employee in a sector where the U.S. Government is not the employer. If they did the Federal Government would be dictating the terms of employment agreements to which they are not a party. No third party can be a party to an employment agreement without forcing the employee to be a party to agreements to which they were not a party. If this results in a condition where the employee does not receive his entitlement, then the plan was to prejudice the employee against his will. To do so is to violate one's freedom of expression (First Amendment). If it results in a condition where you are controlled by debt, the unlawful condition of peonage exists.

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DILEMMA OF PRIVATE SECfOR EMPLOYERS CHAPTER7

The employer that is not the U.S. Government is not liable for the 'tax required to be deducted and withheld in chapter 24 of the I.R. Code beCause he is not the employer under the I.R. Code for whom the elllployee (section3401(c)) is employed. When one works in the private sector (which also includes any government entity other than the Federal Government) and executes an IRS W-4 form, it can only be construed as a coerced arrangement between that person and the IRS. Delivery of a W-4 form does not change the limitation of the I.R. Code Jaws. This fact is concealed.

By false belief a private sector employer regards a W-4 form executed by his employee as permission to deduct and withhold income due his employee and instruction to send it to the IRS. Such employer is liable to his employee if the IRS does not give proper credit for it, and they are liable to the IRS to account for it and hand it over because the IRS says it is intended to be theirs. The private sector employer acts in a fiduciary capacity between their employee and the internal Revenue Service. Since the employer transfers property from employee to the IRS they can be regarded as a transferee of such property and, as such, has made .himself liable under some I.R. Code laws. This same private sector employer is also liable to their employees for the amount deducted since they have violated the terms of their employment agreement. Being someone liable to both his employee and the IRS, the private sector ,employer cannot be the employer that is within section 3403 who is not .liable to any person (employee) for the amount deducted and withheld. This leaves only one other employer in society. That other employer is the one that composed and passed these terms of employment in the I.R. <f:ode for its employees. It remains that the employer in section 3403 must be the Federal Government; only the U.S. Government is not liable , to any person for the amount of any such payment because it is already ,Part of the "wages" or "gross income" given to a Federal Government employee. Included within such "wages" is the kickback (tax) that is to -be returned to the U.S. Treasury.

;:As to Federal Government employees, 1~e 11taxpayer'' is the U.S. Government

l: From the definition of wages in section 3401 (a) it is established that ;;remuneration for services performed between the employee and ~~Ioyer is called "wages," so gross income includes gain and income ~denved from "wages" for which the employer, the U.S. Government, is

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IRS HUMBUG

liable. If the U.S. Government is liable for all of it, they are liable for any part of it, including the kickback which is referred as tax in section 3402(a). This means the U.S. Government is the "taxpayer'' in subtitle A and chapter 24 of the I.R. Code.3 They are the payer of the tax that is to be returned.

This is confirmed by section 6331 (a) and (e) of the I.R. Code.

Sec. 6331(a) AU1HORITY OF SECRETARY.-If any person liable to pay any tax neglects or refuses to pay the same within 10 days after notice and demand, it shall be lawful for the Secretary to collect such tax (and such further sum as shall be sufficient to cover the expenses of the levy) by levy upon all property and rights to property (except such property exempt under section 6334) belonging to such person or on which there is a lien provided in this chapter for the payment of such tax. Levy may be made upon the accrued salary or wages of any officer, employee, or elected official, of the United States, the District of Columbia, or any agency or instrumentality of the United States or the District of Columbia, by seroing a notice of levy on the employer (as defined in section 3401 (d) of such officer, employee, or elected official. If the Secretary makes a finding that the collection of such tax is in jeopardy, notice and demand for immediate payment of such tax may be made by the Secretary, and, upon failure or refusal to pay such tax, collection thereof by levy shall be lawful without regard to the lO~ay period provided in this section. (emphasis added)

By telling us that a levy on "salary'' or "wages" is restricted to employees of the U.S. Government or the District of Columbia (which is also the U.S. Government), Congress confirms that the term "wages" in the I.R. Code is restricted to what is paid to Federal Government employees and that the definition of "employer'' in section 3401(d) is the U.S. Government.

3

Sec. 6331(e) CONTINUING LEVY ON SALARY AND WAGES.-The effect of a levy on salary or wages payable to or received by a taxpayer

In the generic sense the term "taxpayer" is every man, woman, and child in our country. However, the "taxpayer" in subtitle A and chapter 24 of the l.R. Code is the U.S. Government who supplied the "wages" (the remuneration for services performed that contains the I<ickback called tax) that is required to be returned aepending upon the deduction benefits claimed. Those who protest being forced to participate in the Federal Government kickback scheme are not "tax protestors", they are protesting deprivation of J?roperty without due process of Ia w. Those who protest illegal kicl<back are protestmg enslavement. This does not constitute being a "tax protestor".

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shall be continuous from the date such levy is first made until such levy is released under section 6343.

Without a careful scrutiny of the phrasing in this subsection the "taxpayer'' would seem to be the person receiving the salary or wages (the employee), however the subject matter here is the "effect of a levy." The "effect" (according to Webster's New Collegiate Dictionary which shows synonyms to be result, consequence, outcome) of the levy is that the property is to be seized from the recipient of the salary or wages and made "payable to or received by a taxpayer'' (the U.S. Government), confirming that the U.S. Government is the "taxpayer'' in the I.R. Code with regard to "salary" or "wages."

Burden for Survival

The burden for survival forces upon private sector employers and employees the need to learn how to defend themselves and their property against IRS false belief (religion)4 and the implementation of IRS weapons of enslavement (the W-4 form and the "U.S. Individual Income Tax Return"). The use of these documents by IRS employees to force surrender of personal income is undeniable even though their duty is limited to assuring the return of U.S. Government income in the possession of a "transferee" (Federal Government employee). By false belief, the phrase "return of income" has come to mean to make and deliver a debt instrument in the name of a ''U.S. Individual Income Tax Return." That instrument becomes a weapon of enslavement when collection of the amount declared as "owed" is enforced. The IRS W-4 form arranges for the prepayment of that personal debt, making it a weapon of enslavement as well. Perhaps the most misunderstood facit of the I.R. Code is who must make and deliver a ''U.S. Individual Income Tax Return." Only by understanding this can a person avoid the form of slavery called peonage. The next chapter of this book should make this subject matter clear.

,4 When Federal Government employees do not have the law to provide authority, and use false belief to enforce thetr collection procedure, they establish their own brand of religion (belieO.

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CHAPTERS

IRS CONTROL POSSIBLE BY FEAR

Debt instrument in the name of a "U.S. Individual Income Tax Return"

Persons who make and file a "U.S. Individual Income Tax Return" every year believe they are required by law to do so. Before such an instrument in the name of a "return" can be required to be made there must be a law that creates that duty as well as a remedy provided if it is not made. Because of the U.S. Constitution (the supreme law of the land)l the l.R. Code can not, and does not, mandate natural persons to make a "U.S. Individual Income Tax Return" regarding his own personal property. It cannot because Congress cannot mandate a person to create a debt obligation under any name. Such a mandate would violate a persons First, Fourth and Fifth Amendment rights. The l.R. Code is an expression of that limited authority. It contains both duty and remedy only with regard to the return of the U.S. Government's income through the making of a "U.S. Individual Income Tax Return". It is the U.S. Government's income that provides the IRS jurisdiction. Therefore, such jurisdiction is limited to the return of that income.

The law requires only the Secretary to file

Under the I.R. Code law the obligation to make any required "U.S. Individual Income Tax Return" falls upon the Secretary (or his delegate)2 by section 6020(b), which reads:

1

2

Article 6, Sec. 2, of the U.S. Constitution declares it is the law of the land, meaning that the laws at all government levels must be made in accordance with it to remain legally enforceable.

26 U.S. C. Sec. 7701(a)(11) Secretary of the Treasury and Secretary. (A) Secretary of the Treasury. The term "Secretary of the Treasury" means the Secretary of the Treasury, personally, and shall not include any delegate of his. (B) Secretary. The term "Secretary" means the Secretary ofthe Treasury or his delegate.

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IRS CONTROL POSSIBLE BY FEAR CHAPTERS

Sec. 6020. RETURNS PREPARED FOR OR EXECUTED BY SECRETARY. (b) EXECUTION OF RETURN BY SECRETARY-

(1) AUTHORITY OF SECRETARY TO EXECUTE RETURN.-If any person fails to make any return required by any internal revenue law or regulation made thereunder at the time prescribed therefor, or makes, willfully or otherwise, a false or fraudulent return, the Secretary shall make such return from his own knowledge and from such information as he can obtain through testimony or otherwise.

(2) STATUS OF RETURNs-Any return so made and subscribed by the Secretary shall be prima facie good and sufficient for all legal purposes. (emphasis added)

First note that this statute expresses the duty the Secretary has with regard to the making of REQUIRED "returns," hence the word "shall" is used here in a mandatory sense.3 By use of the phrase "made and subscribed" subparagraph (2) demonstrates that the word "return" in subparagraph (1) and (2) means a document. As to the performance of personal services, the document or instrument required to be made by the Secretary, when none is received from the individual, is a "U.S. Individual Income Tax Return."

Obviously the Secretary is not authorized to make a document reflecting income that is not includible in "gross income" under I.R. Code laws. Income that is not includible is not includible under any condition. This places the burden upon the Secretary to know what is and what is not includible, and to exercise care in seeing that persons who submit a "U.S. Individual Income Tax Return" to him do not include property that is not includible. Enforcing the collection of income not includible in gross income under subtitle A of the I.R. Code

3 The word "shall" is normally considered a word that indicates compulsion. However, U.S. Courts have declared the word is to be deemed permissive, rather than mandatory, when needed to sustain the constitutionality of a statute. In doing so, U.S. judges have placed the burden upon everyone to know and understand the U.S. Constitution ana the limitations it places on governments.

Fort Howard Paper Co. v. Fox River Heights Samtary Dist., 26 N.W. 2d 661: "The word 'shall' in a statute may be construed to mean 'may', particularly in order to avoid a constitutional doubt."

George Williams Collegev. Village of Williams Bay, 7 N.W. 2d 891 (1943): "'Shall' in a statute may be construed to mean 'may' in order to avoid constitutional doubt."

Gow v. Consolidated Coppermines Corp., 165 Atl. 136: "If necessary, to avoid unconstitutionality of a statute, 'shall' will be deemed equivalent to 'may'."

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IRS HUMBUG

is prohibited by the peonage laws of the United States of America.

From "his own knowledge" the Secretary must know that only when the U.S. Government is the source of the income is it includible in "gross income" under subtitle A of the I.R. Code. The Secretary can compile "such information" with ease because of his access to Federal Government records or the testimony of Federal Government employees as to the disbursement of funds from the U.S. Treasury. Once the Secretary makes a "return" (the instrument), section 6020(b)(2) requires him to sign it before it can be considered "good and sufficient for all legal purposes." The legal purpose is to make an accounting of all income that is returnable to its source, the U.S. Government, with regard to the employment agreement between the U.S. Government and its employees.

~~u.s. Individual Income Tax Return" is for Federal Government employees

Congress offers Federal Government employees various deductions to reduce their "gross income" and arrive at what is termed "taxable income." This, along with various credits, reduces the amount of the kickback (called "tax") to be returned that was included in the gain portion derived from their "wages."

The ''U.S. Individual Income Tax Return" is the legal instrument provided for Federal Government employees to make their claim for the various deduction benefits offered. The only reason for Federal Government employees to file such a "return" is to reduce the kickback sent to the IRS. If they do not file such a "return" the Secretary can lawfully claim that the full amount of their "gross income" is "taxable income," and base the kickback upon that "gross income" figure. Even then, an administrative procedure has been provided for the Federal Government employee to state his claim for deduction benefits or challenge an excessive kickback in the U.S. Tax Court (covered in chapter 10).

Since the Secretary has the burden to account to the U.S. Government for 100 percent of the legal kickback, the Secretary also has the responsibility of checking the claims a Federal Government employee makes that reduce the kickback.

The claim for deduction benefits by a Federal Government employee on a ''U.S. Individual Income Tax Return" is made under penalties of

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perjury. This accomplishes two things for the IRS. It switches the burden to the Federal Government employee if any question of verifying the accuracy of the claim arises, and it allows the ''U.S. Individual Income Tax Return" to be considered "prima facie" evidence that it is "good and sufficient for all legal purposes"-just as it is when the Secretary makes and subscribes such a "return." It should be noted, however, that a ''U.S. Individual Income Tax Return" is not signed under penalty of perjury under the laws of the United States of America, meaning it is signed under penalty of perjury as to the employment agreement that exists between the U.S. Government and its employees (a subject matter detailed later).

The only thing a Federal Government employee needs to verify under penalties of perjury is the claim for deduction benefits, i.e., the number of dependents, the deductible expenses incurred, etc. Verification of "gross income" is not necessary since only the "wages" received from the U.S. Government is includible in "gross income" under subtitle A of the I.R. Code and the record of that is readily available to the Secretary. Of course, there is no need for verification of any income that is not lawfully includible in "gross income" under subtitle A of the · I.R. Code since there is no condition under which income not includible can be considered includible.

The word "return" used to deceive

The intended misunderstanding that the word "return" in the I.R. Code means the document called a "U.S. Individual Income Tax Return" has been carefully nurtured throughout the years. This misunderstanding allows Federal Government employees to control persons and property solely through belief, not law. Examine section 6012(a) of the I.R. Code to dispel this myth. This section of the I.R. Code is thought to mandate the making of a ''U.S. Individual Income Tax Return."

. . The heading of section 6012 is "Persons required to make returns of , mcome." Though the heading of the section is not la w,4 use of the phrase

4 26 U.S.C. Sec. 7806. Construction of title. (b) Arrangement and classification. No inference, implication, or presumption of legislative construction shall be drawn or made by reason of the location or

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IRS HUMBUG

"return of income" indicates this is the true subject matter of this section rather than the making and filing of a document called a ''U.S. Individual Income Tax Return." The lawful subject matter of "return of income" is the return of the U.S. Government's "income" which is its property by employment agreement and subject to being returned under specified conditions. In essence, the lawful subject matter is to return to Caesar that income which is Caesar's. Only a person who received "gross income" from Caesar for the performance of personal services is a person who has income that may be subject to being returned to Caesar.

Section 6012(a)of the 19861.R. CodeS begins: Sec. 6012. PERSONS REQUIRED TO MAKE RETURNS OF INCOME.

(a) General Rule.-Returns with respect to income taxes under subtitle A shall be made by the following:

(1) (A) Every individual having for the taxable year gross income which equals or exceeds the exemption amount, except that a return shall not be required of an individual-

(i) who is not married ....

Then subparagraphs (i), (ii), (iii),and (iv)inforrn "every individual" who received "gross income" (which includes gain plusincomederivedfrom "wages" for the performance of personal services for the U.S. Government) under what exemption condition they are not required to make a return (kickback) of the U.S. Government's income taxes.

The phrase "return of income" used in the title of section 6012 was shortened to "returns" in the body of section 6012(a). Since a ''U.S. Individual Income Tax Return" is commonly referred to as a "return," using the word "return" in the body of section 6012(a), rather than the phrase "return of income" used in the heading, makes it possible for Federal Government employees to expand its meaning and infer that it encompasses a ''U.S. Individual Income Tax Return." This is IRS humbug. The word "return" means to redeliver. It cannot go toward meaning the instrument.

grouping of any particular section or provision or portion of this title, nor shall any table of contents, table of cross references, or similar outline, analysis, or descriptive matter relating to the contents of this title be given any legal effect ....

5 Each major re-codification of the internal revenue laws was identified with a date. The first one was the Internal Revenue Code of 1939, then 1954, and now 1986.

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Section 6012 is in the I.R. Code to inform Federal Government employees of the threshold of "wages" needed to trigger the need for any return (kickback) of income. With this the U.S. Government is making certain that which is returnable in its kickback program is returned. If Congress intended the word "returns" in section 6012(a) to mean the document, the word "returns" would have to be replaced by the word "document" or "instrument," or actually say "a U.S. Individual Income Tax Return with respect to income taxes under subtitle A shall be made by the following."

To further emphasize that the subject matter of section 6012(a)(1)(A) is the "return of income" and not the making of a ''U.S. Individual Income Tax Return," one must analyze exactly what subparagraphs section 6012(a)(1)(A)(i), (ii), (iii) and (iv) say.

(l)(A) Every individual having for the taxable year a gross income which equals or exceeds the exemption amount, except that a return shall not be required of an individual-

(i) who is not married ... .is not a surviving spouse ... .is not a head of a household .... and for the taxable year has a gross income of less than the sum of the exemption amount plus the basic standard deduction applicable to such an individual, (ii) who is a head of a household .... and for the taxable year has a gross income of less than the sum of the exemption amount plus the basic standard deduction applicable to such an individual, (iii) who is a surviving spouse .... and for the taxable year has a gross income of less than the sum of the exemption amount plus the basic standard deduction applicable to such an individual, or (iv) who is entitled to make a joint return and whose gross income .... is less than the sum of twice exemption amount plus the basic standard deduction applicable to a joint return.... (emphasis added)

This must be construed to mean a "return of income" is not required of an individual whose gross income is less than the formula prescribed. If the word "return" meant the document and that a ''U.S. Individual

~, lncome Tax Return" was not be required of an individual .... who .... has a ·· fross income of less than .... , this statute could not be enforced. Think in

terms of a traffic law that said anyone driving under the speed limit ~ould not be ticketed. Written that way there is no court that could Eorce a ticket issued to anyone driving over that limit. The same holds

e here with regard to section 6012(a) being interpreted as meaning e document called a ''U.S. Individual Income Tax Return." In that case

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it says the document is not required of an individual who has a gross income of less than, but could not be enforced with regard to an individual who has a gross income of more than.

Humbug by the construction of section 6012 can only be taken as a deliberate intent to deceive by making the law sufficiently vague to force persons to place themselves and their property falsely under the control of IRS administrative process through the making and filing of a "U.S. Individual Income Tax Return." Use of a governmental administrative process cannot alter this fact. Vague laws violate our common law rights secured to us in the Constitution of the United States.6 Making a "U.S. Individual Income Tax Return" and reflecting income that is not includible in "gross income" under subtitle A of the I.R. Code allows one to be controlled by belief, not by law.

"Individual" is identified as a Federal Government employee

I emphasized that section 6012(a) applies to "every individual" who received "gross income." The word "individual" is not directly defined in the I.R. Code. Still, Congress indirectly, but distinctly, limited the meaning of the term "individual" by use of the word "an" rather than "any'' in the general definition of the word "person"7 for the I.R. Code. When a section of law applies to all persons living under the laws of the United States of America, the words "any person" are used. When limited to specific classes of persons, the phrase "a person" or "an individual" are used. Hence, Congress distinctly made only those

6 Schreveport v. Brewer, 225 La. 93, 72 So.2d 308 (1954): "Charging a person in a language of an unconstitutionally vague statute or ordinance is violation of his Constitutional~· hts." Oregon Box & Mg. Co. v. Jones Lumber Co., 117 OR. 441, 224 P. 313 (1926): "Vague laws give pub ic servants opportunities to apply the law arbitrarily, with favoritism, and with invidious discrimination, as they please." Bouie v. Columbia, 379 U.S. 347 (1964): "Courts will set aside conviction under statutes and ordinances which are unduly vague and which did not adequately warn the defendants that their conduct would he criminal."

7 26 U.S.C. Sec. 7701 (a) When used in this Title, where not otherwise distinctly expressed or manifestly incompatible with the intent thereof-(1) Person. The term "person" shall be construed to mean and include an individual, a trust, estate, partnership, association, company or corporation.

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"individuals"8 who perform personal services for the U.S. Government fall within the class of individuals (natural persons) subject to the I.R. Code laws by the definition of "person" in section 7701 (a)(l ). All other individuals are excluded.

Even though section 6012(a) contains the word "every" (usually meaning without exception) in conjunction with the term "individual," Congress limited this statute to Federal Government employees. The restriction was accomplished by adding ''having .... gross income." Only Federal Government employees receive "gross income" subject to I.R. Code laws because of their "wages." Private sector employees do not.

Congressmen must have intended the term "every individual" to be misunderstood and interpreted broadly rather than restrictively. Yet, it would be manifestly incompatible with the intent of the law of the United States of America for Congress to expand the word "individual" to all persons considering the fact that compelling anyone to make private information public on a document would be a violation of their First, Fourth, and Fifth Amendment rights. This is why there can be no l.R. Code law mandating the making of a ''U.S. Individual Income Tax Return."

The only conclusion possible is that under the I.R. Code laws, Congress only made a Federal Government employee "an individual" required to "make a return of income" to the IRS because the source of the Federal Government employee's "income" (wages) is the U.S. Government; and the subject matter of section 6012(a) is when the "return of income" (kickback of income) is required of "an individual" <Federal Government employee) and not the requirement for "an individual" (Federal Government employee) to make a ''U.S. Individual Tax Return." The ''U.S. Individual Income Tax Return" is used for the Purpose of fulfilling the administrative function of communicating the amount owed (kickback due) after claiming deduction benefits and credits upon such instrument, and not to compel anyone to be a witness against himself.

~ Chapter 6 of this book also addressed the fact that the word "individual" in the I.R. CoCI.e means a Federal Government employee.

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Privacy Act Notice shows limited IRS authority

Pursuant to the U.S. Constitution, any disclosure by an individual of his pusonal affairs must be voluntary. The limited power of the IRS as to one's property and the making of a "U.S. Individual Income Tax Return" is confe .... sed in Privacy Act Notices.9

Though changes in verbiage has occurred through the years, a Privacy Act Notice has been part of the instruction booklet provided for preparing IRS Form 1040 (U.S. Individual Income Tax Return) since 1974. In 1974, the IRS made no effort to comply with 5 U.S. C. Sec. 552a(e) [Appendix F) in its 1040 Instruction Booklet Privacy Act Notice. Section 552a(e)(3)(A) requires the IRS to state "the authority (whether granted by statute, or by executive order of the President)10 which authorizes the solicitation of the information and whether disclosure of such information is mandatory or voluntary." A few years later they made reference to sections 6001 and 6011. Section 6012(a) was not added until 1986. Here is the full text of the paragraph in the Privacy Act Notice in the 1040 Booklet for 1989 that references these sections of the I.R. Code.

"Our legal right to ask for information is Internal Revenue Code sections 6001, 6011 and 6012(a) and their regulations. They say that you must file a return or statement with us for any tax you are liable for. Your response is mandatory under these sections. This is so we know who you are, and can process your return and papers." (emphasis added)

With this the IRS stipulates that IRS authority is limited to asking for information, and not to force a declaration of an amount owed. When their authority is limited to asking, the individual's right to directly or

9

10

In 1974Congresspassed a law that wasgiventhename"Privacy Act," and placed it in Title 5 as Secf1on 552a. Though Title 5 basically applies only to Federal Government employees and their duties, section 552a does provide for administrative procedures regarding governmental records maintained on all Eersons living under United States laws by specifically defining "individual" for that section as "a citizen or an alien lawfully admitted for permanent residence." Because of the length of section 552a only subsection (e) is provided as Appendix F.

The President of the United States is the chief executive officer of the Federal Government employees only. Congress makes the general laws for the United States of America. Under the laws and Constitution oflhe United States of America an executive order from the President is limited to enforcement upon Federal Government employees who accepted the U.S. President as their top ooss.

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indirectly say "NO" is intact.


This Privacy Act Notice states that Sections 6001, 6011 and 6012(a) say "you must file a return or statement with us for any tax you are liable for." By using the word "must" it appears the "filing'' (meaning submission of some document to the IRS) of either a "return" or "statement'' is mandatory. Since this is in an instruction booklet for the IRS 1040 Form, the IRS must be referring to a "U.S. Individual Income Tax Return," but these I.R. Code laws say that not every person is liable. Section 6001 reads in part:

Sec. 6001. NOTICE OR REGULATIONS REQUIRING RECORDS, STATEMENTS, AND SPECIAL RETURNS.

Every person liable for any tax imposed by this title, or for the collection thereof, shall keep such records, render such statements, make such returns, and comply with such rules and regulations as the Secretary may from time to time prescribe.

This section specifically addresses the need for "every person liable for any tax imposed by this title" (Title 26-the I.R. Code) to keep records and render statements and make returns. This reflects three separate and distinct subject matters (1) the keeping of records (such as those needed on taxed items such as liquor, tobacco, etc.), (2) the rendering of statements (such as a "U.S. Individual Income Tax Return"), and (3) the making of a return (meaning a return of U.S. Government income). If the word "returns" meant a document, this section would have read "render a statement or return."11

When a Federal Government employee has U.S. Government income in his possession, he is liable for its return, but cannot be mandated to render a statement (a "U.S. Individual Income Tax Return"). This is where the U.S. Court's permissive interpretation of the word "shall" comes into play in section 6001. If it meant "must'' (as inaccurately stated in the Privacy Act Notice provided by the IRS in the 1040 Instruction Booklet) section 6001 would be unconstitutional.

Webster defines the word "render'' in part as: to give back; to give; to transmit ~o another (deliver); to give up (yield); to furnish for consideration, approval or mf<?rm~tion; to give back (restore); to give in acknowledgment of dependence or obligation.

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Section 6011 reads in part: Sec. 6011. GENERAL REQUIREMENT OF RETURN, STATEMENT, OR LIST. (a) General rule.-When required by regulations prescribed by the Secretary any person made liable for any tax imposed by this title, or with respect to the collection thereof, shall make a return or statement according to the forms and regulations prescribed by the Secretary. Every person required to make a return or statement shall include the information required by such forms or regulations.

Since a person cannot be "made liable for any tax" by regulations, this section must be construed as supplemental to the instructions in section 6001 to "comply with such rules and regulations as the Secretary may from time to time prescribe."

Note that section 6011 (a) says a person made liable "shall make a return or statement." From my comment with regard to section 6001 it would appear that the word "return" in section 6011 (a) is a document. Not so! "Shall make a return" is placed first, indicating it means a "return of income." Section 6011 (a) does nothing more than direct that a "return of income" is to be made by any person made liable for any tax imposed by this title and the "statement" with respect to the collection thereof is to be made according to the forms and regulations prescribed by the Secretary. Only U.S. Government income is subject to and returnable by regulations. Personal income is subject to deprivation by Due Process of Law.

Section 6011 (a) also refers to a "person made liable." Such a person is a Federal Government employee who has income in his possession that is subject to being returned because it belongs to the U.S. Government, or a person who associated their activities with a taxed product, i.e. alcohol, tobacco, etc.

Section 6011 (f) says there are special requirements with regard to returns of income, estate, and gift taxes.

Sec. 6011 (f) Income, estate, and gift taxes. For requirement that returns of income, estate, and gift taxes

be made whether or not there is tax liability, see subparts B and C.

Subpart B starts with section 6012. As proven earlier in this chapter, the subject matter of section 6012 is not the requirement for anyone to make a document called a ''U.S. Individual Income Tax Return," but provides a formula for triggering the requirement for a "return of

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income" from the "wages" paid to Federal Government employees. If documentation regarding the "return of income" to the Federal Government is needed, section 6020(b) makes it mandatory for the Secretary to make it because it is the Federal Government that is liable for the "tax" (kickback) on "wages," and the I.R. Code places the responsibility for its collection and accounting upon the Secretary. This is the reason the statement "whether or not there is tax liability'' had to appear in section 6011 (f). The Federal Government employee has no "tax liability'' but might be made liable for a "return of income" that belongs to the U.S. Government if his deduction benefits are insufficient to reduce the kickback to zero.

A tax is not a liability, it is a responsibility-a duty. We are all responsible for paying taxes under the laws of the United States of America, but not at the cost of being enslaved. Only when this legal duty is properly imposed by law or a kickback arrangement in an employment agreement (such as exists between the U.S. Government and its employees in the Federal Government employee kickback program) can it be legally enforced by administrative process. The IRS has remedy to receive all that is to be lawfully returned by withholding on "wages" (details in chapter 10). To enforce an illegal kickback is involuntary servitude.

Since it is not mandatory for anyone on a personal basis to render a 1040 document to the IRS, what does the statement in the IRS 1040 Instruction Booklet Privacy Act Notice that "your response is mandatory under these sections" mean? Note that it does not state what kind of a response is mandatory, or that the making of an IRS 1040 document is mandatory. The truth is you cannot be mandated to provide the IRS with personal information (Fourth Amendment) that they plan to use against you. The IRS confesses this by stating it only has the right to "as](' for information. This provides individuals with the choice to say "no" in any manner desired. Therefore, giving no response at all must be acceptable as a mandatory response.

. Another sentence in the Privacy Act Notice says the IRS needs this Information "so we know who you are, and can process your return and papers." There is no truth in this sentence for these reasons:

(1) the IRS knows who you are-they mailed the booklet to your home; they also know if you are a Federal Government employee or not.

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(2) the IRS can process any document required to assure a "return of income" on any income that is includible in "gross income" because such income emanates from the U.S. Treasury and those records are available to the IRS. However, IRS employees want individuals to render a "U.S. Individual Income Tax Return" to the IRS that contains income not includible in gross income under I.R. Code laws12 thereby implying they have provided the IRS with their voluntary self-assessment, which is regarded by IRS employees as a personal debt. With that self proclaimed personal debt in hand, the IRS forces collection if the individual does not discharge it when he renders the document.

(3) Even though no one can lawfully be compelled to be a witness against himself (Fifth Amendment) all papers submitted to the IRS are misused against natural persons in a U.S. courtroom or in Tax Court as evidence when they refuse to participate in the IRS's illegal kickback program. Cooperation is forced. In law forced cooperation is deemed to be coercion not cooperation.

The limitation of IRS power is understood by those who composed the Privacy Act Notice. Except for vagueness (humbug), they were clever enough to stay within lawful bounds by using the word "ask'' with regard to providing information to the IRS on their 1040 form, and they will lean on the presumption that any information provided them was voluntarily submitted, but they maliciously mislead you by implying certain sections of the I.R. Code that deal with the requirements for making a "return of income" make it mandatory for you to make a ''U.S. Individual Income Tax Return." Neither Congress nor the IRS can mandate any person to make such documents. Your property is not subject to deprivation by administrative process or a process of acquiescence. Any deprivation of property can only be lawfully accomplished by due process oflaw (Fifth Amendment), meaning a Law must be in place that establishes the requirement to make and deliver a ''U.S. Individual Income Tax Return." Such a requirement is prohibited by peonage laws.

The deception or humbug used in the Privacy Act Notice in the IRS'

12 Remember that this fact also holds true for Federal Government employees wh.o add income to the "gross income" that is derived from sources outside therr employment agreement with the U.S. Government.

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IRS CONTROL POSSIBLE BY FEAR CHAYI'ER8

t040 Instruction Booklet proves undue influence is used to establish the false belief that forces the making and delivery of a ''U.S. Individual Income Tax Return," and provides more evidence of enforcement of involuntary servitude to the IRS.

By planned duplicity-the word "return" results in malicious prosecutions

Section 6012(a) is the only section in the I.R. Code that even indirectly implies the requirement of the making and filing of the IRS document called a ''U.S. Individual Income Tax Return." Since the subject matter of section 6012(a) is the "return of income" by an "individual" (Federal Government employee) and not the actual making of a document, the malicious prosecution of targeted persons for not making and filing a "U.S. Individual Income Tax Return" under section 7203 can be understood.

26 U .S.C. SEC. 7203. WILLFUL FAILURE TO FILE RETURN, SUPPLY INFORMATION, OR PAY TAX.

Any person required under this title to pay any estimated tax or tax, or required by this title or by regulations made under authority thereof to make a return, keep any records, or supply any information, who willfully fails to .... at the time or times required by law or regulations, shall, in addition to other penalties provided by law, be guilty of a misdemeanor and, upon conviction thereof, shall be fined .... or imprisoned .... or both ....

Again the words "to make a return" in section 7203 means a "return of income." The making of a document called a ''U.S. Individual Income Tax Return" would have to fall under the phrase "or supply any information." If section 6012, or any other I.R. Code statute, required the rendering of a "U.S. Individual Income Tax Return" (a debt instrument) to the IRS then a U.S. judge could order a person to make the instrument and pay the debt after Federal Government employees receive a guilty declaration from 12 persons in a jury box in a section 7203 action in a courtroom. The fact is, only if a person stipulates to being a "person required" to file "a" "U.S. Individual Income Tax Return" will the U.S. judge make it part of their Judgement Order.13 If

13 Notwithstanding the lack of jurisdiction over a person who has no income in his

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IRS HUMBUG

they did make such an order without stipulation from the targeted person the U.S. judge would be ordering the making and paying of a forced debt. The fact that the U.S. judges understand this, and details of such court actions, will be covered later.

For now, this was provided to further prove the subject matter of section 6012(a) is for the Federal Government employee who has U.S. Government income (taxes) in his possession by virtue of an employment agreement that is to be returned (kicked back). Still, section 6012(a) is used to perpetuate the false belief that all working persons must render a ''U.S. Individual Income Tax Return" with regard to his own property to the IRS when actions in a U.S. Court are limited to the return of U.S. Government's income.

Even though a Federal Government employee does use the IRS instrument, a ''U.S. Individual Income Tax Return," to claim lawful deduction benefits and thereby reduce the kickback to the U.S. Government, and is an "individual" who is required to "return" income that belongs to the U.S. Government, such person cannot be lawfully punished under section 7203 for willful failure to make a "return of income" that belongs to the U.S. Government since the U.S. Government has remedy through withholding (Sec. 3402), Notice of Deficiency (Sec. 6212) and Levy on "Wages" (Sec. 6331). Nor can the Federal Government employee be lawfully punished under section 7203 for willful failure to make a ''U.S. Individual Income Tax Return" because the Secretary of Treasury has the duty to make one in the event that none is made (Sec. 6020(b)). Complete administrative remedy (which does not include criminal sanctions) is intact, and the Secretary is lawfully obligated to employ it.

Though the making of a voluntary debt on a ''U.S. Individual Income Tax Return" with regard to income that is not includible in "gross income" under I.R. Code laws might be deemed legal, it becomes an illegal kickback when such a personal debt is not voluntarily created. And, it constitutes peonage when collection is enforced on an illegal debt.

possession that is subject to being returned to the U.S., Government, I have aocumentation that proves a U.S. juage included the making of a "U.S. Individual Income Tax Return" on a Judgment Order directed to a person who has stipulated to being a "person required" to make such an instrument.

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Fear of the IRS used to exert illegal authority

Status as an employee, whether in the private sector or as a Federal Government employee, does not place upon one the burden to transfer his personal property to the U.S. Government. One's personal property is foreign to the U.S. Government. IRS authority to collect income does not extend beyond the return of U.S. Government property. The IRS does, however, force a claim upon property after one makes a "U.S. Individual Income Tax Return" that states a certain amount owed to the IRS. They regard such a "return" as a personal debt upon which collection is enforced. If one stops making a personal debt on the IRS 1040 form, and standard IRS humbug scare tactics do not work, the IRS, the Justice Department and the U.S. judges cooperate to try to force the targeted person to make a "U.S. Individual Income Tax Return" by the undue influence of sending him to prison. This is accomplished with the misapplication of laws and court procedures. It demonstrates the maximum undue influence upon the person targeted with the purpose to control the balance of society.

One hundred percent of the gain portion of Federal Government employees "wages" is subject to being kicked back, but can be reduced by claiming the lawful deduction benefits offered. The sole purpose of making a ''U.S. Individual Income Tax Return" is to place the IRS on notice of the Federal Government employees claim to part of the gain portion included in their "wages." By making such an instrument the Federal Government employee says that they claim and can verify the deduction benefits stated thereon. So, such an instrument does not control the Federal Government employee. All it does is account for the amount of gain to be kicked back to the IRS and the amount of the gain to be retained by the Federal Government employee. Since the Federal Government employee is the one making a claim to reduce the kickback, the Federal Government employee must verify the claim by making it under penalties of perjury. However, Federal Government employees are only obligated to verify under penalties of perjury the claims that reduce the kickback. The penalties of perjury declaration is made to the best of ones knowledge and belief, and not under any laws of the United States of America.

The purpose of IRS using undue influence on all persons in the 'United States of America is to have them create a personal debt in favor of the IRS by making a "U.S. Individual Income Tax Return" declaring

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an amount owed based upon property that is not includible in "gross income" under the I.R. Code laws. The IRS then enforces collection of that personal debt. Any debt upon income that is not includible in gross income under subtitle A of the I.R. Code is an illegal kickback. Since its collection is enforced, it manifests itself as a debt by which one's labor is controlled. This constitutes peonage.

It is the making and delivery of a ''U.S. Individual Income Tax Return" that creates implied liability as to personal property. This was proven by the IRS, the Justice Department, and a U.S. judge in the malicious court actions against me that resulted in my being forced into prison for not cooperating with them.

In the action against me the IRS provided their forms 4340 as evidence that I had not made a "U.S. Individual Income Tax Return" for the years 1978 and 1979, but had done so in prior years. The judge and my attorney permitted the 4340 forms to be used against me even though these forms actually proved that when I made "returns" I assessed myself a stated amount, and when I did not make such a "return" I was "not liable this period" (see Appendix J and K).

It is IRS humbug-a myth-a false belief-that compensation for time that is not effectively connected with the U.S. Government is income to be included in "gross income" under the I.R. Code laws. The IRS can lawfully enforce the return of a portion of the "wages" (the gain portion) paid to Federal Government employees because of the kickback arrangement in their employment agreement, but that is the lawful limit of the IRS and Justice Department's jurisdiction.

Individual choice, individual will, is being controlled as to the requirement to make a "U.S. Individual Income Tax Return" when one falsely believes that the IRS' duty extends beyond the Federal Government's legal kickback program. The individual is forced to act contrary to the legal rights he has with regard to his liberty and property. The person is responding to the undue influence of implied IRS power, which coerces him to act the way IRS employees will have him act. The person is expressing the will of Federal Government employees, not his own. Yet the IRS will claim that a rendered "U.S. Individual Income Tax Return" is a result of voluntary compliance-self assessment. They will claim that the "U.S. Individual Income Tax Return" is filed with the individual's permission as a result of his own volition.

It was important to explain the limited power of the IRS, and to show that they are aware of their limitation. Not only does this dispel the false

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belief established about the making of a ''U.S. Individual Income Tax Return/' but also can be used to halt the false and malicious criminal prosecution under section 7203 and section 7201 for failure to file a ''U.S. Individual Income Tax Return."

False charges and malicious prosecutions establish fear of the IRS

As stated by the U.S. Supreme Court in U.S. v. Eaton, 144 U.S. 677, 687-688 (1892).

It is a principle of criminal law that an offense which may be the subject of criminal procedure is an act committed or omitted 'in violation of a public law, either forbidding or commanding it. 4 American & English Encyclopedia of Law, 642; Bl. Com. 5.

When the issue of a law requiring the rendering of a ''U.S. Individual Income Tax Return" to the IRS is pressed, it is section 6012 of the I.R. Code that Federal Government employees will say establishes that requirement and gives them the power to prosecute under section 7203 for not doing so. As shown earlier in this chapter, section 6012 does not deal with the filing of the document called a ''U.S. Individual Income Tax Return," but the formula that triggers the requirement for a "return of income." Also, the U.S. Supreme Court notified us by their Eaton decision that only public laws are subject to criminal procedure. Public Laws are those applicable to ALL persons in our society. Section 6012 (as well as ALL statutes of the I.R. Code dealing with U.S. Government income in the name of tax) is not a public law, it is a special law applicable only to persons who chose to become effectively connected with it through an employment agreement. In addition, section 6012 does not provide notice that a violation of it is punishable under section 7203. If section 6012 did establish the requirement for a "U.S. Individual Income Tax Return" to be made and filed on a personal basis then the duty ~ould fall to the Secretary under section 6020(b) to do it. This makes it unpossible to lawfully charge any person except the Secretary with Willful failure to make such a "return" (document) under section 7203.

For section 6012 to be used as the basis to validly administer Punishment for failure to file a ''U.S. Individual Income Tax Return" l!nder either section 7203 or section 7201 (implied in connection with a Charge of attempt to evade or defeat any tax imposed by Title 26) the lJ.S. Supreme Court requires it "distinctly make the neglect in question

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a criminal offense."14 Since section 6012 does not state any requirement to make and file such "returns" Congress could not, and did not, apply criminal sanctions to it. To prove this point, compare it to the construction of the liquor laws. These are statutes copied from the I.R. Code of 1954 since, for unknown reasons, these internal revenue laws are not provided in the 1986 I.R. Code.

Sec. 5005. Persons liable for tax.

(a} General.

The distiller or importer of distilled spirits shall be liable for the taxes imposed thereon by section SOOl(a)(l}.

(b) Domestic distilled spirits.

(1) Liability of person interested in distilling. Every proprietor or possessor of, and every person in any manner interested in the use of, any still, distilling apparatus, or distillery, shall be jointly and severally liable for the taxes imposed by law on the distilled spirits produced therefrom ...

(c) Proprietors of distilling spirits plants.

(1) Every person operating bonded premises of a distilled spirits plant shall be liable for the internal revenue tax on all distilled spirits .... (emphasis added)

Reading section 5005, there can be no doubt that a person dealing in distilled spirits is controlled by law and liable15 for a tax. Also, the word "shall" could be constitutionally interpreted by the the courts in its mandatory sense since this is definitely an excise tax (indirect tax) and not a tax on the personal property of the person himself. Such tax is included in the price of the distilled spirits and so it is really paid by the consumer even though it was paid in advance by the distiller or importer.

14 U.S. v. Eaton, 144 U.S. 677,688 (1892). "Regulations prescribed by the President and by the heads of departments, under autnority granted by Congress, may be regulations prescribed by law, so as lawfully to support acts done under them and in accordance with them, and may thus have, in a proper sense, the force of law; but it does not follow that a thing required by them is a thing so required by law as to make the neglect to do the thmg a criminal offense in a citiZen, wnere a statute does not distinctly make the neglect in question a criminal offense."

15 It is a fact that Section 5005 has some form of the word "liable" used more than 20 times in connection with tax, yet not a single reference is made to "tax liability" in all of subtitle A, Income Tax (Sections 1 through 1564; approx. 1,100 pages).

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Section 5061 clearly extends that liability to the filing of a document16 with regard to distilled spirits, etc., and section 5603 prescribes the following penalty for failure to fullfil that duty by stating:

"Any person required by this chapter .... or regulations issued pursuant thereto to keep or file any record, return, report, summary, transcript, or other document, who, with intent to defraud the United States shall .... be fined not more than $10,000, or imprisoned not more than five years, or both, for each such offense."

In addition to there being a whole subchapter in the I.R. Code specifically covering penalties under liquor laws, section 5684(c)(6) says "For penalty for willful failure to file return, supply information, or pay tax, see section 7203." Section 7203 is part of the penalty chapter applicable to all of the I.R. Code. Significantly, not a single reference is made to Section 7203 (or any criminal penalty section for that matter) in the entire "Income Tax" subtitle (subtitle A) which covers more than 10 times the space in the I.R. Code as the liquor laws. Why not? The answer is, the U.S. Government placed its income in jeopardy of being returned by its employees and its return is made by administrative means. If there is a disagreement between the Federal Government employee and IRS as to the amount of the Federal Government employees "return of income" it is to be resolved in a U.S. Tax Court, which was specifically established as the administrative body for resolving internal disputes of this sort.

A further interesting bit of information is the fact that section 5690 provides a definition of the term "person" applicable to "Penalties, Seizures, and Forfeitures Relating to Liquors" that is identical to that found in Section 7343, the section for the chapter on "Crimes, Other Offenses and Forfeitures" said to apply to the entire I.R. Code.17

16 26 U.S.C. Sec. 5061. Method of collecting tax. (a) Collection by return.

The taxes on distilled spirits, wines, and beer shall be collected on the basis of a return. The Secretary snail, by regulations, prescribe the period or event for which such return shall be filed, the ttme lor filing such return, the information to be shown in such return, and the time for payment of such tax.

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All this can hardly be construed as oversignt on the part of Congress. With the criminal sanctions in the I.R. Code only applicable to a person who acts in a fiduciary capacity with regard to income that is intended to belong, or does belong, to the U.S. Government, Congress had to override the general definition of the term "person" in section 7701 (a)(l) by distinctly expressing that criminal penalties can only apply to a "person" under a duty to perform the act in respect of which the violation occurs" (Sec. 7343). As an example, the person who chases to deal in liquor is under a duty to make certain information and/ or tax reports, but these are not done on a "U.S. Individual Income Tax Return."

The truth is, if a requirement to make a ''U.S. Individual Income Tax Return" existed it would not be necessary for the IRS to perpetuate it by their false propaganda of voluntary compliance--self assessment or through malicious charges and prosecutions for willful failure to make and deliver a ''U.S. Individual Income Tax return," or attempts to evade or defeat any tax imposed by the I.R. Code.

Under common law, the U.S. Constitution, or the I.R. Code, a person cannot lawfully be charged with willful failure to make and deliver a ''U.S. Individual Income Tax Return" with regard to his property, yet thousands of people are maliciously accused of just that every year. Many of them go to prison though they violated no laws of the United States. They only violated a false belief. All of this is proven in chapter 12 by the documents generated in the action against me.

17 26 U.S.C. Sec. 7343. Definition of term "person." The tenn "person" as used in this chapter includes an officer or employee of a corporation, or a member or employee of a partnership, who as such officer, e~ployee, or member is under a duty to perfonn the act in respect of which the vro1ation occurs.

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Clear, direct, positive notice is required

The standard set by the U.S. Supreme Court is that all laws must be clear, direct, and positively stated so that a person can be fairly and reasonably expected to understand any restrictions placed on his conduct. Only then can it be proven that he willingly accepts the legal consequences prescribed if he violates it. Vagueness in a law is present when it is possible to interpret it in more than one way and thereby control a person with implied authority where authority does not exist. Such control causes a person's happiness and citizenship to be impaired.

The U.S. Supreme Court has the power to void laws that are vague, and has done so on numerous occasions. Vague laws, however, will continue to be in existence as long as government agencies maliciously need them and lawyers in the private sector fail to challenge them.

New laws are passed containing a degree of clarity even when an ulterior motive of control exists that could violate the common law rights of all natural persons (rights that have been secured to us by the U.S. Constitution). When such a law is not resisted, Congress makes changes through the years to decrease the clarity.

Without clarity in the law, it is not lawfully possible to prove a violation occurred. This does not prevent U.S. judges from providing vague opinions that are used by U.S. prosecutors as if they represent law.l

'1 The summons issued by the clerk of the U.S. District Court of Colorado in my case had the folio win~ mandate printed at the bottom: "Clerk may sign a summons on an indictment or rnformation supported by a showin~ of probable cause under oath. Federal Rules of_ Criminal Procedure, Procedure Rule 9.' One issue in my appeal to the Tenth Circuit Court of Appeals was that the summons sent to me was fatally

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Vagueness in the law is intended to control people or to disguise the duties or limitations of those who created the vague law. When a law is vague, freedom of expression is controlled. This leads to deprivation of life, liberty and property without due process of law.

Due process of law is only possible under certain conditions. First there must be a law upon which lawful process is due. The law gives notice of how society is expected to control itself. If self control is not exercised, then such person made the personal choice to accept the legal consequence of the punishment prescribed in the law for his or her conduct. Only when a law is clear, direct and positive can it be lawfully regarded that a person made the personal choice to become effectively connected with the punishment of that law.

Vague law is not lawful notice. 2 When a conviction is obtained under vague law, the person is not convicted by the law, but by Federal

defective because the U.S. attorney failed to attest to the charge under oath as required by Rule 9 of the Federal Rules of Criminal Procedure. In response, the U.S. attorneys relied upon the judges opinion in U.S. vs. Hughes, 311 F.2a 845 (3rd Cir. 1962), and U.S. vs. Grady, 185F.2d 273 (7th Cir. 1950). In the Hughes opinion, the judges tried to override Rule 9 with Rule 7 by stating that since Rule 7 requires the government attomer to sign an indictment or information that the "Jetter and spirit" of Rule 7 means a 'defendant may be charged and tried for misdemeanor on an information not verified or supported by affiaavit" (required by Rule 9). Rule 7 says nothing to that affect. Rule 7 mandates that a charge, whether by indictment or information, be signed by the U.S. attorney. Rule 9 mandates that a charge be made under oath before a summons can be issued. Two entirely different subject matters. The Court is obligated to obey all of the Rules of the Court. Judges have no authority to say one rule can obviate the requirement made in another rule.

The Grady opinion stated" " ... it seems plain by rule 7(a) that an information need not be verified by affiant, and it 'may be filed without leave of the court.' And by Rule 9(a), it seems equally plain that an information need be supported by an oath only when there is a request by the government attorney for the issuance of a warrant, and in the absence of such oath only a summons will issue ... " (emphasis added). Rule 9(a) does not restrict the need for an information to be made under oath only when a warrant is requested. It "seems" these judges were attempting to set a precedent that does not comply with the "Jetter and spirit" of the Court Rules.

2 The U.S. Supreme Court in Lanzetta v. New Jersey, 306 U.S. 451,453 (1938) said: It is the statute, not the accusation under it, that prescribes the rule to govern conduct and warns against transgression. .. .. No one may be required at peril of life, liberty or property to speculate as to the meaning of penal statutes. All are entitled to be informed as to what the State commands or forbids. The applicable rule is stated in Connally v. General Construction Co., 269 U.S. 385, 391: "That the terms of a penal statute creating a new offense must be sufficiently explicit to inform those who are subject to it what conduct on their part will render them liable to its penalties, is a well-recognized requirement, consonant alike with ordinary notions of fair play and the settled rules of law. And a statute which either forbids

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Government employees personally. Such person is punished for failing to express the will of Federal Government employees.

Clear, direct, and positive laws are also necessary so that the Federal Government employees' duty and standard of conduct would be understood and provide no cause or reason for them to depart from it.

Vague law- tool used for cooperation between branches of government

To assure that the constitutional rights of persons are preserved, our government was designed so that the four branches of government3 would provide a check upon one another. The balance of power is not to favor Federal Government agencies, but to uphold justice for all. Justice is served only when U.S. Government employees, Congress, the Justice Department, and United States judges obey their duty to uphold the constitutional rights of all persons.

Evidence indicates a cooperation between powers, rather than a separation of powers, exists when Congress passes a vague law which was composed by an agency of the Federal Government and which is permitted to be processed with the use of U.S. courts. This cooperation leads to enforcement of vague laws that are intentionally enacted to control natural persons in our society and results in deprivation of property (including labor) without due process of law. This is precisely what is done under the so-called Federal personal income tax.

Examples of I.R. Code vague laws

The vague laws in the I.R. Code impair the citizenship and rights of all persons who live under the U.S. Constitution. The IRS could argue, and perhaps successfully so, that Federal Government employees agree to the vagueness in their employment agreement with the U.S.

3

or requires the doing of an act in tenns so va8!le that men of common intelligence must necessarily guess at its meanin~ and diJter as to its application, violates the first essential of due process of law.' (emphasis added)

Though only three branches of government are publicized (legislative, executive, and judicial branches), there ts a fourth branch. Persons living under the U.S. Constitution make up that fourth branch, and all have a duty to see that the three other branches conduct themselves lawfully.

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Government since the agreement in the I.R. Code laws is between those parties only. But, the vagueness in the I.R. Code is used to force the collection of income from Federal Government employees that is not included in the employment agreement between them. Further, vagueness has caused the I.R. Code to be illegally used by Federal Government employees for collection of income of persons working in the private sector.

The entire I.R. Code could be classified as vague based upon reports that IRS employees arrive at different conclusions when presented the same set of facts and figures. This demonstrates that control of persons by Federal Government agencies, rather than law, is intended and established when Congress does not pass legislation providing clear notice upon which the person must control himself. When vague standards exist, and one does not understand his rights under the laws of the United States of America, his freedom of choice can be controlled by Federal Government employees. A couple of I.R. Code sections will be singled out to demonstrate how natural persons in the United States of America have been controlled by vague laws.

Example 1. Gross income made vague by redesigning the law

Although codification is not supposed to change the meaning of the law, let's see what Congress did to the term "gross income" through the years. In the Revenue Act of 1918 it reads:

Sec. 213 . That for the purposes of this title .... the term "gross income"-

"(a) Includes gains, profits, and income derived from salaries, wages, or compensation for personal service (including in the case of the President of the United States, the judges of the Supreme and inferior courts of the United States, and all other officers and employees, whether elected or appointed, of the United States, Alaska, Hawaii, or any political subdivision thereof, or the District of Columbia, the compensation received as such), of whatever kind and in whatever form paid, or from professions, vocations, trades, businesses, commerce, or sales, or dealings in property, whether real or personal, growing out of the ownership or use of or interest in such property; also from interest, rent, dividends, securities, or the transaction of any business carried on for gain or profit, or gains or profits and income derived from any source whatever ..... "

This was changed in the 1939 I.R. Code to read:

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Sec. 22. Gross income.

VAGUELAWISINSUFFICIENTNOTICE CHAPTER9

(a) General Definition. "Gross income" includes gains, profits, and income derived from salaries, wages, or compensation for personal service, of whatever kind and in whatever form paid, or from professions, vocations, trades, businesses, commerce, or sales, or dealings in property, whether real or personal, growing out of the ownership or use of or interest in such property; also from interest, rent, dividends, securities, or the transactions of any business carried on for gain or profit, or gains or profits and income derived from any source whatever. In the case of Presidents of the United States and judges of courts of the United States taking office after June 6, 1932, the compensation received as such shall be included in gross income; and all Acts fixing the compensation of such Presidents and judges are hereby amended accordingly.4

This restructuring of the definition of "gross income" was needed as a prelude to the plan to entrap persons into participating in the illegal kickback. Note first that in section 22 reference to the compensation received by "Presidents of the United States and judges of courts of the pnited States ... "was removed from the first sentence and placed at the end of the paragraph. Also, reference to "all other officers and employees, whether elected or appointed, of the United States, Alaska, Hawaii, or any political subdivision thereof, or the District of Columbia," was eliminated all together. This did not mean that the term "gross income" was no longer restricted to what was paid to Federal Government employees, but it did make the first sentence appear as though "salaries, wages, or compensation for personal service" encompassed what everyone received for their labor.

When the I.R. Code of 1939 was recodified in 1954, the term "gross income" was changed to read:

Sec. 61. Gross income defined. (a) General definition. Except as otherwise provided in this subtitle, gross income means all income from whatever source derived, including (but not limited to) the following items: ....

Note that in the last sentence the word "included" is used. The word "included" means that all other income is excluded. Hence, statin~ that compensation of the President and judges shall be included in gross income 1s to say tnat gross income contains nothing l::iut the compensation received for services performoo. This is not a special privilege, it just states the limit of the kickback agreement.

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It goes on to list possible classes of income.s The first is "Compensation for services, including fees, compensation, and similar items." Note that now all reference to Federal Government employees is nonexistent in this definition of "gross income," but the false belief that compensation paid to employees in the private sector is included in "gross income" was firmly entrenched by 1954. The intention here was to make this section of law appear as if it were not restrictive at all so that property that was not includible in "gross income" would continue to be included because of the false belief already established. But remember, codification and recodification has not changed the limitations of the law, Congress is still making a statement that what the U.S. Government pays to Federal Government employees is "gross income."

Vagueness is the condition that made this false belief possible. Each time vagueness is expanded in the statutes of the I.R. Code through recodification, it becomes more difficult for future generations to uncover and understand the truth. The truth is further buried with the use of U.S. judges providing opinions that are misused as case law.

Section 61 is no longer a definition of" gross income," it is a statement of classes of income. Section 61 does not detail that the class of persons referred to is Federal Government employees (as it does in section 213 of the 1918 Revenue Act), nor does it define that "gross income" includes gain and income derived from "wages." The result is that persons in the United States of America are controlled by belief and opinions, and not the law.

By altering the definition of "gross income" to connote that it is a general generic term that applies to all income received by anyone, it was necessary to state the restriction of "gross income" to specific property elsewhere within the I.R. Code, and it does (Sec. 931 provided and discussed later). Fragmenting the law into several sections arranges for greater vagueness and still keeps the I.R. Code legal though deceptive. It also provides opportunity for the bias opinions of U.S. judges to prevail with regard to property that is not includible in "gross

5 Sec. 61 refers to sources of income, however the Code of Federal Regulations calls them "classes" of income.

Sec. 61 also demonstrates how Congress can make the various forms of the word "include" nonrestrictive. In section 61 they did so by following the word "including" with the phrase "(but not limited to)."

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income" and thereby establish and perpetuate the false belief that exists regarding the so-called "income tax." All of this leads to increased control over property (including labor) of persons living under the laws of the United States of America. This results in control over the person that cannot be done under law. As stated before, a law is notice of how one is to control himself. Vague law is not sufficient notice, it is evidence of intended deception that results in humbug.

Long range "gross income" humbug

A look at the history of the kickback that is called "income tax" reveals that this was the long-range plan. With regard to "individuals" (Federal Government employees), the kickback has gone from a very clear, direct, and positive form in section 86 of the 1862 Tax Act (copy in chapter 2); to hiding its clarity by making it a type of "gross income" in subsequent Tax Acts; to further disquising the persons for whom it was intended when codified into section 22 of the 1939 I.R. Code; to indirect disclosure of whom the law applies to under section 61 and Chapter 24 of the 1954 and 1986 I.R. Codes. In a period of 92 years (1862-1954), it went from a high degree of clarity to no clarity and no notice whatsoever.

Though the record shows that this kickback was originally intended to help defray the expense of the civil war and, with a $600 exemption, only affected those in the upper ranks of government, its continued 'existence now makes it obvious that there was another underlying motive. After all, would it not be easier and less costly to just reduce the pay scale across the board for Federal Government employees if the Intent were to reduce the cost of running the government? Would it be necessary to deceive Federal Government employees into believing their "wages" are subject to a tax when it is a legal kickback of the Federal Government's income, a condition which the Federal Government ~mployee accepted as part of their employment agreement? The ~idence is clear by the results. 6 It can only be concluded that the original ~tent was to use it as a vehicle to implement the current false belief that :~e employment agreement between the Federal Government and its

".... in whatever language a statute may be framed, its purpose must be determined by its natural and reasonable effect," Henderson et al v. Mayor of N.Y. et al, 92 U.S. 259, 268.

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employees extends to any income received in exchange for labor, as well as the false belief that it is a "tax" even though a tax on labor is a direct tax that requires apportionment to be constitutional (meaning that ultimately each person would pay exactly the same amount).

The kickback scheme implemented in 1862 (section 86 of that Tax Act) was placed under Income Tax in 1864. Though income tax was declared unconstitutional by the Supreme Court in 1895,7 there is evidence that the kickback program on what the Federal Government paid to its employees continued after that and was again placed under "income tax" after the Sixteenth Amendment was declared as ratified in 1913. The Sixteenth Amendment was presumed to override and eliminate the corrective Pollock Court decision.

It wasn't until the passage of the "Victory Tax" in 1942 that the false belief that labor could be taxed as income was established and enforced. This false belief impairs the obligation of all labor agreements.

Though the Victory Tax was a temporary 5 percent increase in what was known as income tax (which is also only a return of part of the income disbursed from the U.S. Treasury on any business connected with the Federal Government), it was extended to reach the kickback program on "wages" of Federal Government employees. The 5 percent was a surtax, meaning that the kickback on the gain portion of "wages" was increased by 5 percent. In this, the U.S. Government unilaterally changed the employment agreement of every Federal Government employee then on their payroll, making it an illegal kickback from those Federal Government employees just as the original kickback law in 1862 did.

When the Victory Tax was presented to the public, it was implied that compensation received for labor in the private sector was included, and it was implied that employers in the private sector were required to collect certain amounts from all of their employees and tum it over to the IRS. This was accomplished by using the terms "employer" and "employee" without providing notice that those terms are restricted to the Federal Government and their employees. 8 By using the mass media, the Federal Government enforced a false belief that stands to this day.

7 Pollock v. Farmers Loan & Trust Co., 158 U.S. 601 (1895).

8 The 1954 I.R. Code was not available to provide notice of the definitions of the

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The publicity about the "Victory Tax" also said forms for deducting and withholding from "employees" were available upon request. After being misled to accept a false belief, employers in the private sector requested and received W-4 forms from the IRS. This led to private sector employees filling out W-4 forms. Thus the Internal Revenue Services' involuntary servitude program was initiated. To this day most private sector employers insist on the execution of this IRS weapon of enslavement (W-4 form) before they will allow a person to start working for them. When private sector employers have lawyers on their staff, such compulsion causes them to be equally culpable of placing their employees into the involuntary service of the IRS. Such employers are now answerable to a charge of peonage since notice is available that their employees are not included in the Federal Government's legal kickback program.

As pointed out in chapter 3, the only difference in the implementation of the Victory Tax and that of the legal Federal Government employee kickback was that the exemption was increased :from $600 to $624. This was necessary since the base pay for persons entering the armed service was $624 a year. A kickback on any part of the base pay of a person who was drafted could not be considered voluntary and would constitute a violation of peonage laws. If an pdditional $24 exemption had been allowed only to persons drafted, it would have caused people to question the intent, so $624 had to be the exemption amount for all Federal Government employees. When a draftee accepted a promotion, it was considered that he made himself ~bject to the Federal Government legal kickback program. In essence, )he was the one who changed his employment agreement with the U.S. ,Government. Vague laws made it possible to have a person make himself subject to conditions of which he is not aware.

. The history on changing the structure of the definition of "gross -:Jncome," as well as the $24 story, go to prove the intent to make it ;~fficiently vague to have persons submit to an illegal IRS kickback iProgram. This was not done by accident, it is deliberate manipulation,

~erms "wages," "employee" and "employer" when the Victory Tax was tmplementea in 1942.

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by use of vague laws, to create a false belief with intent to control property not otherwise controllable.9

Example 2. I.R. Code section 931

As mentioned in Example 1, since section 61 does not indicate the fact that "gross income" is restricted to specific property10 the I.R. Code had to detail this fact elsewhere. This is accomplished in section 931.

Prior to 1986, section 931 of the 1954 I.R. Code provided the exact terms as to what income is deemed to be "gross income" in the I.R. Code in this manner:

Sec. 931. INCOME FROM SOURCES WITHIN POSSESSIONS OF THE UNITED STATES. [provided in part] (a) General rule.

In the case of individual citizens of the United States, gross income means only gross income from sources within the United States if the conditions of both paragraph (1) and paragraph (2) are satisfied:

(1) 3-year period. If 80 percent or more of the gross income of such citizen ... was derived from sources within a possession of the United States; and (2) Trade or business. If 50 percent or more of his gross income .... was derived from the active conduct of a trade or business within a possession of the United States either on his own account or as an employee or agent of another.

(h) Employees of the United States. For purposes of this section, amounts paid for services

performed by a citizen of the United States as an employee of the United States or any agency thereof shall be deemed to be derived from sources within the United States. (emphasis added)

Chapter 3 laid the foundation for understanding that "within" and "without" in conjunction with ''United States" means within or without the United States Government. This section 931 confirms this by saying

9 "It is an established principle that the attainment of a prohibited end may no£ be accomplished under the pretext of the exertion of powers which are granted. U.S. vs. Butler, 197 U.S. 1, 9 (1936).

10 This restriction is also evident by section 3403 (see chapters 7 and 10) and sections 3401(a),(c), and (d) (see chapter 6)

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that 11gross income" MEANS ONLY gross income from sources Pwithin the United States" if derived from sources within a possession of the United States and from the active conduct of a trade or business within a possession of the United States. The 50 States of the United States of America are not possessions of the United States. But, Federal areas within the 50 States are deemed to be possessions (definition in chapter 15, footnote 7). The U.S. Congress can only pass taws for United States possessions and laws with regard to income only when the U.S. Government is the source of the income within its possession. This is the reason for having to state that the pay of employees of the United States is deemed to be derived from sources within the United States.

The old section 931 is provided to demonstrate the difference between it and the current section 931. In the 1954 I.R. Code, the source was emphasized, whereas in the 1986 I.R. Code the place is emphasized and the source of one's income is concealed. By adding vagueness, the intent could only be to mislead. This is part of the IRS humbug.

The 1986 I.R. Code section 931 reads in part: Sec. 931. INCOME FROM SOURCES WITHIN GUAM, AMERICAN SAMOA, OR 1HE NOR1HERN MARIANA ISLANDS. (a) GENERAL RULE.-In the case of an individual who is a bona fide resident of a specified possession during the entire taxable year, gross income shall not include-

(1) income derived from sources within any specified possession, and (2) income effectively connected with the conduct of a trade or business by such individual within any specified possession.

(c) SPECIFIC POSSESSIONS.-For purposes of this section, the term "specific possession" means Guam, American Samoa, and the Northern Mariana Islands. (d) SPECIAL RULES.-For purposes of this section-

(1) EMPLOYEES OF THE UNITED ST ATES.-Amounts paid for services performed as an employee of the United States (or any agency thereof) shall be treated as not described in paragraph (1) or (2) of subsection (a). (emphasis added)

. Inverse construction similar to that used in section 6012 (chapter 8) iS used here. Unlike the old section 931 (which made a definate statement restricting the meaning of gross income) section 931 in the 1986 I.R. Code ·excludes certain income from "gross income" and then, pursuant to section 931(d), excludes amounts paid to Federal Government

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employees from the exclusion. This accomplished the same result as section 931(h) of the 1954 I.R. Code where amounts paid to anyone for performance of personal services as an employee of the United States was deemed to be "gross income" without regard to any formulas put forth in section 931(a) of the 1954 I.R. Code for "individuals" employeed by the U.S. Government by virtue of a trade of business effectively connected within the United States. Again showing that the tenn "within the United States" means within the U.S. Government and that income from sources other than the U.S. Treasury is foreign to the jurisdiction of the IRS.n

With section 931 (a) and (d) of the 1986 I.R. Code, Congress is saying that "gross income" does not include income received by an individual (Federal Government employee) who is a bona fide resident of a specified possession when that income was derived from sources within the specified possession or if the income was effectively connected with the conduct of a trade or business by such individual (Federal Government employee) within any specified possession unless the U.S. Government was the source of the income. Since there is equal treatment under the laws of the United States of America, this cannot be limited to persons who are bona fide residents of these specified possessions. The fact that "gross income" does not include what anyone receives from a source other than the U.S. Government applies to anyone. But, by emphasizing specified possessions, there is enough vagueness injected to cloud the fact the source of the income, not the place, is the controlling factor. The fact that the term "gross income" in the I.R. Code includes only income derived from the U.S. Government as compensation "for services performed as an employee of the United States or any agency thereof' is demonstrated here (also see section 3401 (a) in chapter 6). You cannot enter into an employment agreement with a place, the employer must be the source. Again confirming it is a legal kickback pursuant to employment agreements which control whether income is "gross income" subject to I.R. Code laws.

11 Chapter 3 of this book demonstates how this fits in with the definition given for "foreign estate and trust" in section 7701(a)(31) of the I.R. Code.

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Example 3: Food and Drug Administration story

The purpose of laws is for agencies to regulate an industry, not the person in the industry. Otherwise questions of violations of constitutional rights arise. Enactment and misuse of vague laws is common to all Federal Government agencies and their employees when the intent is to control the person. The following example is provided by the Food and Drug Administration and the U.S. Supreme Court.

In 1939, the Food and Drug Administration had Congress enact a series of statutes with regard to obtaining information to use as evidence that laws regulating the food and drug industry had been violated. Imprisonment for not more than one year or fine of not more than $1,000, or both, are provided in section 333 of Title 21 of the U.S. Codes as punishment for violating any of the acts listed in section 331. The one which relates to this story is section 331(0, which reads:

21 U.S.C. Sec. 331(f) the refusal to permit entry or inspection as authorized by section 704 [21 uses 374] (emphasis added)

Section 704, as passed by Congress in 1938, read: 21 U.S.C. Sec. 704. For the purposes of enforcement of this Act, officers or employees duly designated by the Administrator, after first making request and obtaining permission of the owner, operator, or custodian thereof, are authorized (1) to enter, at reasonable times, any factory, warehouse, or establishment in which food, drugs, devices, or cosmetics are manufactured, processed, packed, or held, for introduction into interstate commerce .... (emphasis added)

Section 704 provided fair warning to any person that the mission of the Food and Drug Administration employee was to gather information. Its construction makes clear to the targeted person and to the Food and Drug Administration employee that permission to enter is necessary. If entry were made mandatory, the information obtained could not be used as evidence in a criminal or civil action against the potential violator <Fifth Amendment: a person cannot be compelled to be a witness against himself). The evidence can be used against such person only when it was provided voluntarily. Without voluntary permission to enter being granted, the gathering of information also violates the targeted person's rirst, Fourth, and Fifth Amendment rights.

Vagueness caused by the fact that section 331 (f) [formerly section 301(0] mandates criminal and civil punishment for refusal to "permit entry or inspection as authorized by section 704" while section 704 states

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a Federal agent must ask for and receive permission was the issue brought to light in U.S. v. Cardiff.12 When Mr. Cardiff exercised the ~ption offered in section 704 and refused entry into his apple processing facility, the Justice Department, for the Food and Drug Administration, brought him up on criminal charges for violating section 301 (0 [now section 331 (f)] and asked that he be punished under section 333. A jury found him guilty, and Mr. Cardiff appealed. The Appellate Court overturned the jury's verdict and the Food and Drug Administration brought the issue to the U.S. Supreme Court, who affirmed the Appellate Court's reversal.

In that case, Justice Douglas said of the Food and Drug Administration:

"The Department of Justice .... argues that that construction is needed if the Act is to have real sanctions and if the benign purposes of the Act are to be realized. It points out that factory inspection has become the primary investigative device for enforcement of this law ... "

He went on to say the law-"makes inspection dependent on consent and makes refusal to allow inspection a crime .... We cannot sanction taking a man by the heels for refusing to grant the permission which this, on its face, apparently gave him the right to withhold. That would be making an act criminal without fair and effective notice." (emphasis added)

To enforce the regulations and prove that the prohibited acts were violated, the Food and Drug Administration said it needs to enter plants to gather information upon which either civil or criminal charges could be made. Yet, due process of law requires governmental agencies to provide probable cause to a court to establish that a crime has been committed and state precisely what evidence the agency is seeking to prove it, as well as where that evidence is specifically located, before the court can issue a summons to enter any premises to gather evidence regarding that crime (Fourth Amendment).

When a governmental agency is on a fishing expedition to establish probable cause, it would be violating the person's civil rights.

Laws like these place one in a Catch 22 position. A person provides entry and the information gathered can and will be used against him,

12 U.S. v. Cardiff, 344 U.S. 17 4 (1952). This entire court opin~on is supplied for revieW in Appendix G.

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which could result in criminal or civil sanctions being applied to him and his property; yet he is faced with the same result if he does not provide entry.

The U.S. Supreme Court recorded its decision in the Cardiff case on December 8, 1952. In the short period of eight months, the Food and l)nlg Administration changed the verbiage of section 704 to camouflage the need for permission to enter and had Congress pass it as an amendment to that law on August 7, 1953. Section 704 [now 21 U.S.C. Sec. 374] was made to read in part as follows:

Sec. 374. Inspection. (a) Right of agents to enter; scope of inspection; notice; promptness; exclusions. (1) For purposes of enforcement of this Act, officers or employees duly designated by the Secretary, upon presenting appropriate credentials and a written notice to the owner, operator, or agent in charge, are authorized (A) to enter, at reasonable times, any factory, warehouse, or establishment in which food, drugs, devices, or cosmetics are manufactured, processed, packed, or held, for introduction into interstate commerce .... (emphasis added)

The way this reads it falsely appears as though the only thing a Food and Drug Administration agent needs is an administrative note and proper credentials to gain entry. However, agents were also authorized by the Secretary to enter and search in the law as originally written. Nothing really changed with this amendment except it made the law vague enough for the reader to jeopardize his legal rights if he does not know what his legal rights are or fears implementing them. By deleting clear reference to the need for the Food and Drug Administration to request and obtain permission to enter, the burden falls on the person targeted by the Food and Drug Administration to know and exert his constitutional rights by insisting that due process of law, and not administrative process, be used when potential civil and criminal sanctions are possible.

Sufficient notice as to the need for permission to enter is no longer provided. This increases the vagueness, demonstrating the intent to control the person rather than the industry. The prima facie evidence of Undue influence resulting in coercion remains, but is disguised.

Without proper notice, one cannot be expected to express his own Will, and so he expresses the will of the Federal Government employee. Also, vague laws switch the burden of proof upon the targeted person

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to prove his innocence rather than a Federal agency having to prove his guilt. Vagueness makes it more difficult to defend oneself.

Rights, privileges and immunities are guaranteed under the laws and Constitution of the United States. Rights not enumerated in the Bill of Rights (first ten Amendments) are secured in the Ninth Amendment. One right that is not enumerated is to expect that employees of the U.S. Government will not deprive anyone of their rights; and that U.S. Judges will not permit Federal Government employees to misuse U.S. courts through vague laws.

Vague laws intend to chain you to IRS control

Vague laws are deliberately passed by Congress to aid governmental agencies control natural persons through administrative process. Forcing the making and delivery of "U.S. Individual Income Tax Returns" based on false belief occurs because of such laws. It is the duty of the judge to prevent the use of vague laws as a vehicle to deprive persons of their rights or their property. It is also the function of the court to see that separation of powers exists so justice is served.

The system to serve justice in this country is adversarial. This means that lawyers in the private sector must attack vagueness in the law. Justice Department lawyers are also duty bound not to misuse any law, vague ones notwithstanding. If they do, judges must admonish and not permit any lawyer to proceed if he or she does not vigorously take exception to the vague law.

It will be argued that the accused must shoulder the responsibility if he hires an ineffective lawyer (one who refuses to be an advocate) because he exercised his free choice in selecting that attorney. In other words, one has the right to prejudice himself by his selection of an attorney. But, the duty of a judge is to see that justice prevails overrides such a claim; and free choice is not really available when attorneys are not trained to take exception to vague laws.

Justice is not a person, but a condition. It is the duty of the judge to recognize and stop the use of the courtroom before injustice occurs. Injustice does occur when the burden to prove innocence has been forced upon the accused by the vagueness of a law which prevents the accused from implementing any possible defense.

There is intent to commit injustice in the courtroom when a U.S. Justice Department lawyer uses vague laws to control the person

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accused in what is deemed a prosecution. Injustice also manifests itself when the lawyer for the accused cooperates with the Justice Department by not defending against a prosecution under a vague law. If the U.S. judge permits such conduct to occur, the rights of the accused are not protected by the court and justice is not served. Only the Justice Department and the lawyer in the private sector are served. What results is malicious prosecution-an action in a courtroom that is not a fair trial but a trial by ordeal.

Finding a lawyer who will defend a client and not merely represent him is very difficult. The client must literally know the law himself and dictate to the lawyer what he wants done. The matter of time becomes a factor since one does get a speedy trial. The matter of cost becomes a factor since the old saying "money talks" seems to apply in the courtroom. There is also a matter of understanding what to look for in a lawyer.

The Sixth Amendment to the U.S. Constitution guarantees certain rights to the accused. It says: "In all criminal prosecutions, the accused shall .... be informed of the nature and cause of the accusation; .... and to have the assistance of counsel for his defense." One is not informed of the nature and cause of a criminal accusation, or of the requirements ~on a civil basis, when he is accused or confronted in either a criminal or ~a civil situation under laws that are vague. Proper notice is not available. Further, in any situation where the assistance of counsel for his defense h required, the U.S. Constitution guarantees that one shall have counsel Who is concerned with defending your life, liberty and property, not one ~ho is partial to vague laws which lead to malicious prosecution in ;c>rder to enhance the counsel's livelihood. When such attorneys do not attempt to destroy vague laws, they violate the Sixth Amendment rights of the accused and make a record of their ineffectiveness. The end result is to unduly convict a person. This violates the Sixth, Eighth and .Thirteenth Amendments of the U.S. Constitution.

The burden to provide an adversarial process is upon the lawyer in lhe private sector, and the judge should demand that it exist in the U.S. Courtroom.13 In the process of serving justice, a U.S. judge must be ever

The need for attorneys to be adversaries is brought out by Justice O'Connor in her opinion in Strickland vs. Washington, 104 S.Ct. 2052 (1984).

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diligent with regard to vague laws so as not to impair the rights of the accused. This is the duty of the court, not the duty of the accused. When vague laws are used, the accused is forced to defend against an unfair system and not against a violation of the law.

A U.S. judge actually cooperates in seeing that injustice is perpetrated in his or her courtroom when vague laws are permitted to be used for the purpose of enforcing the intentions of a government agency. In this process, the person and his rights are controlled to his prejudice. Such conduct impairs the integrity of the court and raises the question of whether or not the Federal Government employees involved are in contempt of the court as well as being involved in concealment of violations of due process of law.

The vague laws in the I.R. Code are intended to control property of the general public that is not authorized under law. Competent attorneys would attempt to destroy these vague laws.

The story of my alleged conviction will reveal how lawyers cooperated to send me to prison, and how vague law made it possible. In place of an adversarial process, it was a malicious prosecution with intent to force me to cooperate with the lawyers and the IRS, and return me to a condition of peonage.

My story proves that cooperation is required in the making of a ''U.S. Individual Income Tax Return." When cooperation is required in the delivery of such a document, it cannot be deemed that the conduct of refusing to make and deliver the document is willful. This fact was confessed by the judge in the judgment issued in the action against me. The judgment is actually an admission that she knew my conduct was not willful and that I was not guilty of violating any laws. However, I was forced to be controlled and sent to prison for refusing to cooperate with the will of Federal Government employees.

Vague laws along with lawyers cooperating with one another make the use of the U.S. courtroom for undue convictions possible. Just as Mr. Cardiff in the 1952 Food and Drug Administration story, any person targeted by the IRS or other Federal Government agency can be unduly punished for doing what he or she has the right to do.

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U.S. TAX COURT

U.S. Government is the "taxpayer'' in the I.R. Code

The subject of the U.S. Tax Court further demonstrates how we are controlled by the vagueness in the law. Without doubt the general belief is that the term "taxpayer'' in the I.R. Code applies to just about everyone when in law under subtitle A and chapter 24 of the I.R. Code the "taxpayer'' is the U.S. Government-the employer of its employees.

When it is understood from chapters 6 and 7 that the "employer'' in chapter 24 of the I.R. Code is the U.S. Government, the statute in chapter 24 that states the liability for the "tax" becomes clear.

Sec. 3403. Liability for tax. The employer shall be liable for the payment of the tax

required to be deducted and withheld under this chapter, and shall not be liable to any person for the amount of any such payment.

This statute states two things. First that the "employer'' (U.S. Government) is liable for the payment of the tax required to be deducted and withheld. This is true since the Federal Government derives the rtaxll (kickback) from the gain portion that is included in the II gross income" paid out of the U.S. Treasury in the form of "wages"; meaning the U.S. Government is liable to pay the "tax" along with the remuneration (exchange) paid to the Federal Government employee for personal services. The U.S. Government, the author of these terms of :employment agreement between themselves and their own employees, IEannot establish and impose these terms on any employment agreement

t their own. Next, the statute says that the "employer" (U.S. , overnment) shall not be liable to any person (Federal Government

ployee) for the amount of any such payment. Since the property that transferred includes the tax within the gain portion, Congress is saying

e that the Federal Government's liability rests only with the property, , t with the person to whom it is transferred. Hence, the "employer'' · .S. Government) cannot be "liable to any person (Federal Government

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employee) for the amount of any such payment" of tax that is to be deducted and withheld.

This statute makes the liability under law rest solely on the U.S. Government for that portion of the "wages" (which is includible in "gross income" under subtitle A) subject to being returned (kicked back) to themselves. Persons cannot be liable for property transferred to them because they chose to have their conduct effectively connected with a trade or business within the U.S. Government by entering into an employment agreement within the U.S. Government. It is the U.S. Government that is liable for the payment of the property; and the responsibility to account for all payments made out of the U.S. Treasury as "gross income" and for the kickback ("tax") that is derived, or returnable, from the "wages" paid under the employment agreement spelled out in the I.R. Code rests with the Secretary, not the person to whom they transferred such property.

Section 3403 makes the return of income, or "tax," to the U.S. Government a legal kickback program. It demonstrates that it is the property of the U.S. Government that is affected, not the person to whom it is transferred. If the U.S. Government were liable to the person for the "tax" required to be deducted and withheld, that which is deemed returnable would be a direct tax that would be in need of apportionment according the the census to be lawful.

It is not the Federal Government employee but the U.S. Government that is actually the "taxpayer'' in the employment agreement between them. The Federal Government employee is an individual to whom a transfer of "tax" was made by virtue of the "wages" paid to him from which "tax" (kickback) as well as the income exchanged for his personal services is derived. This makes the Federal Government employee's legal status a "transferee" under I.R. Code law.

Identifying I.R. Code 11Transferee" and 11Taxpayer''

Black's Law Dictionary defines the term "transferee" as "he to whotn a transfer is made." To understand the term "transferee" think of an executor of an estate. The decedent transferred his property (his estate) into the care of the executor, making him a transferee (he to whom a transfer is made). In that case the executor is obligated to act in accord with the wishes of the decedent, the owner of the estate (property) in question. Unless the decedent specifically excluded the U.S. Government in his will, it is presumed that the decedent expected the

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executor to execute an instrument that transfers whatever property from his estate to the IRS that the IRS says is due. Assuming estate taxes are to be paid, the executor is regarded by the IRS as a transferee and the decedent (who is presumed to have agreed to include a "tax" pursuant to subtitle B (Estate & Gift Tax) of the I.R. Code within his personal property) made himself a payer, or sharer, of his income with the U.S. Government, thus he is considered a "taxpayer'' under subtitle B of the I.R. Code.

Just as the decedent supplied the property that is taxed, it is the U.S. Government, as the "employer'' in the I.R. Code, that supplied the gain portion of the "gross income" derived from "wages" which includes that which will be kicked back, or returned, as "tax." Hence, the U.S. Government is the "taxpayer" and the Federal Government employee is the "transferee" under the employment agreements in the I.R. Code; just as the decedent is the "taxpayer'' as to estate taxes in the I.R. Code and the executor is the "transferee."

It is the property that is liable for the "tax," not the "taxpayer'' (payer of the property) or the "transferee" (person to whom the property was transferred). Therefore, though the "taxpayer'' is liable for the payment of the tax that is within their property, the "taxpayer" is not liable to the "transferee" for the amount of any such payment.

Other Ways To Be a "Transferee" in the I.R. Code

Heirs to an estate can be transferees with respect to income tax that belongs to the U.S. Government, but only if the estate of the decedent was effectively connected with U.S. Government estate taxes by agreement and the executor of the estate did not discharge the United States estate taxes before the heirs received a share of the estate. In this case, what the heirs received contained such income, or taxes, and they became transferees of a transferee by personally choosing to accept the inheritance before the U.S. Government got its share.

If a person who presents a gift to a donee is a transferee with regard ~o income or tax subject to being returned to the U.S. Government, the ~onee becomes a transferee of a transferee of such property if the IRS cannot make the recovery from the person who made a gift of property subject to being returned to the U.S. Government. A person presenting a gift cannot make a gift of income, or tax, wh~re the rightful owner is the li.S. Government and the gift giver is an I.R. Code transferee. In this case,

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for accepting the gift from a person who is an I.R. Code transferee, one becomes an I.R. Code transferee of a transferee by choice.

Since either of these instances is predicated upon personal agreements that the property involved is subject to I.R. Code laws, the transferee might be holding property due to be collected by the ms. Hence, Congress had to provide notice regarding the recovery of such property. This does not mean that Congress has placed a tax on gifts given by one person to another. Such a tax would not be in accord with constitutional mandates for direct taxation. Nor does it mean Congress has made the U.S. Government a party to gifts from one person to another. That would constitute impairment of a personal agreement, which also violates the U.S. Constitution.

IRS controlled by administrative collection procedure

The notice to transferees regarding the collection of U.S. Government income is found in section 6901 of the I.R. Code, which reads [in part]:

Sec. 6901. TRANSFERRED ASSETS. (a) Method of collection. The amounts of the following

liabilities shall, except as hereinafter in this section provided, be assessed, paid, and collected in the same manner and subject to the same provisions and limitations as in the case of the taxes with respect to which the liabilities were incurred:

(1) income, estate, and gift taxes.-(A) TRANSFEREES.-The liability, at law or in equity, of a

transferee of property-(i) of a taxpayer in the case of a tax imposed by subtitle A (relating to income taxes), (ii) of a decedent in the case of a tax imposed by chapter 11 (relating to estate taxes), or (iii) of a donor in the case of a tax imposed by chapter 12 (relating to gift taxes),

in respect of the tax imposed by subtitle A or B. (B) FIDUCIARIES.-The liability of a fiduciary under section

3713(b) of title 31, United States Code in respect of the payment of any tax described in subparagraph (A) from the estate of the taxpayer, the decedent, or the donor, as the case may be.

(2) OTHER TAXES.-The liability, at law or in equity of a

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transferee of property of any person liable in respect of any tax imposed by this title (other than a tax imposed by subtitle A or B), but only if such liability arises on the liquidation of a partnership or corporation, or on a reorganization within the meaning of section 368(a).

(b) UABILITY.-Any liability referred to in subsection (a) may be either as to the amount of tax shown on a return or as to any deficiency or underpayment of any tax.

(c) PERIOD OF LIMITATIONS ... . (1) INITIAL TRANSFEREE ... . (2) TRANSFEREE OF TRANSFEREE .... (3) FIDUCIARY ....

(h) DEFINITION OF TRANSFEREE.-As used in this section, the term "transferee" includes donee, heir, legatee, devisee, and distributee, and with respect to estate taxes, also includes any person who, under section 6324(a)(2), 1 is personally liable for any part of such tax.

Section 6901 (b) informs us that the liability of a transferee under subsection (a) in respect of a tax imposed in the I.R. Code by subtitle A (income tax) or B (estate and gift taxes) exists only with regard to property of a "taxpayer," a "decedent," or a "donor." This shows conclusively that the property belongs to someone other than the "transferee" and that it is not the person but the property that is liable for the "tax."

Then subsection 6901 (h) informs us that the "transferee" in section 6901 is different than a "transferee" for the balance of the I.R. Code. For this section only, transferees include donees (receivers of a gift), heirs, legatees, devisees, and distributees (persons receiving property of a decedent) who have property in their possession at law or in equity.2 By

1

2

Section 6324(a)(2) basically says that any property of a decedent in the control of some person prior to the decedent's death, i.e. a trust, etc., is not included in any lien for estate taxes under section 6324(a)(l), but that a like lien will be attached to the decedent's property in the possession of such a transferee.

"Equity:" justice according to natural law or right; a body of legal doctrines and rules developed to enlarge, supplement, or override a narrow rigid system of law; a right,

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using the phrase "at law or in equity," Congress is establishing "a body of legal doctrines and rules developed to enlarge, supplement, or override a narrow rigid system of law." Since a government only has the authority and rights given it by law, what Congress is indirectly saying is that a person who accepted the responsibility of holding and acting in regard to property of a "decedent" or a "donor'' who agreed to make the U.S. Government a party to his estate or gift is liable in equity to the U.S. Government for what is referred to as estate and gift taxes in the I.R. Code. The liability at law becomes the tax shown on a return (document) or any deficiency or underpayment of the tax claimed in behalf of the U.S. Government on a Notice of Deficiency by the IRS. This is because of the presumption that the decedent or donor wished to make the laws in subtitle B of the I.R. Code part of the conditions of his estate or gift when no exception is made by the decedent or donor to having the U.S. Government become an heir to his estate or participant in his gift. In fact, lawyers will sometimes make the payment of taxes a provision in the will of their clients.

With regard to subtitle A, section 6901 gives notice that the method of collection of income, or tax, that belongs to the U.S. Government (the taxpayer) that is in the hands of such a transferee will be assessed, paid and collected in the same manner and subject to the same provisions and limitations as in the case of the taxes with respect to which the liabilities were incurred. The I.R. Code procedure actually calls for payment or collection before assessment. Before collection or an assessment can be made with regard to U.S. Government income, or tax, that is required to be returned a Notice of Deficiency must be employed to provide the transferee notice of the amounts the Secretary claims that the United States was deficient in collecting. The duty of the Secretary, or his IRS delegate, is to be certain that the Notice of Deficiency is only issued to a transferee and that the payment or collection and assessment is upon property lawfully includible in gross income under subtitle A.

The Notice of Deficiency was designed to provide a transferee of U.S. Government property notice of the statutory time they have to make the return of income, or tax, that belongs to the U.S. Government or to

claim, or interest existing or valid in equity; the money value of a property or of. an in~e~est in a property in excess of claims or liens against it; .... Webster's New Collegzate Dzcttonary.

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contest the figures shown thereon. If the tral)sferee does not contest the figures or make the proper transfer within the time limit provided (90 days), the U.S. Government's property is subject to seizure. A levy to provide authority for the seizure3 generally is made following the seizure. This is a complete reversal of normal process for a person to recover his property by a court action. But, then this is not a court action, it is an administrative process agreed to for the return of the U.S. Government's property. It only provides authority to seize its own property. Congress arranged for a kickback to the U.S. Government via the IRS by administrative collection procedures, not Justice Department procedures.

Notice of Deficiency needed for due process of law

Congress arranged for administrative remedy to resolve differences and to agree to the amount returnable, or owed, if enough "tax" (kickback) was not deducted and withheld from the Federal Government employees "wages." The administrative forum in the Executive Branch of Government established to resolve any dispute of the amount of kickback ("tax") required to be returned to the "employer'' (U.S. Government) and the amount that can be retained by the "employee" (Federal Government employee) is the U.S. Tax Court (formerly called the Board of Tax Appeals).4

3

4

26 U.S.C. Sec. 7701. Definitions. (a)(21) Levy. The term "levy'' includes the power of distraint and seizure by any means.

The history of the U.S. Tax Court as given in Black's Law Dictionary is follows: TAX COURT. The United States Tax Court is a court of record under Article 1 of the

Constitution of the United States (see I.RC. Sec. 7441). The Court was created originally as the United States Board of Tax Appeals by the Revenue Act of 1924 (43 Stat. 336), an independent agency in the executive branch, and continued by the Revenue Act of 1926 (44 Stat. 105), the Internal Revenue Code of 1939, and the Internal Revenue Code of 1954. A change in name to the Tax Court of the United States was made by the Revenue Act of 1942 (56 Stat. 957), and the Article I status and change in name to United States Tax Court was made by the Tax Reform Act of 1969 (83 Stat. 730).

The Tax Court tries and adjudicates controversies involving the existence of deficiencies or overpayments in income, estate, gift, and personal holding company surtaxes in cases where deficiencies have been detennined by the Commissioner of Internal Revenue.

The U.S. Tax Court is one of three trial courts of original jurisdiction which decides litigation involving Federal income, death, or gift taxes. It is the only trial court where the taxpayer must not first pay the deficiency assessed by the IRS. The Tax Court will

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Section 69025 spells out the need for the Secretary to prove that the petitioner in any U.S. Tax Court action is a "transferee" of property of a "taxpayer." On it's face, this statute indicates the "transferee" is not the "taxpayer." The "transferee" is a person to whom property was transferred that is subject to being returned to the "taxpayer" (U.S. Government) via the IRS. This is why section 6902 does not place the burden upon the Secretary to show that the "taxpayer'' was liable for the tax. The tax was already included in the gross income sent to the "transferee." With regard to "wages," the only person who can be proven to be a "transferee" in U.S. Tax Court is a Federal Government employee who might have U.S. Government property in his possession by virtue of an insufficient amount of "return of income" from the gain portion derived from "wages" received for personal services performed for the U.S. Government.

Congress placed a duty upon the IRS to assure the maximum return of the "tax" (kickback) from a transferee (Federal Government employee). In order to assure the maximum return of "tax" when the transferee (Federal Government employee) does not file a "U.S. Individual Income Tax Return" claiming deduction benefits, Congress placed a duty upon the Secretary to file such a "return" for the Federal Government employee based upon the information available and issue a "Notice of Deficiency'' reflecting an "amount due." The same remedy is available if the transferee (Federal Government employee) did file such a "return" and the Secretary takes exception to the "amount due" reflected on it. If the "transferee" (Federal Government employee) wishes to dispute the figures in the Notice of Deficiency, the forum to petition for a redetermination of the deficiency is the U.S. Tax Court.6

not have jurisdiction over a case unless the statutory notice of deficiency (i.e., "90-day letter'') has been issued by the IRS and the taxpayer filed the petition for hearing within the time prescribed.

Stllte tllX courts. Such courts exist in certain states, e.g. Maryland, New Jersey, Oklahoma, Oregon. Generally, court has jurisdiction to hear appeals in all tax cases and has power to modify or change any valuation, assessment, cfassification, tax or final order appealed from Certain of these tax courts (e.g. Minnesota) have small claims sessions at which citizens can argue their own cases without attorneys.

5 Sec. 6902. PROVISIONS OF SPECIAL APPLICATION TO TRANSFEREES. (a) BURDEN OF PROOF.-In proceedings before the Tax Court the burden of proof shall be upon the Secretary to show that a petitioner is liable as a transferee of property of a taxpayer, but not to show that the taxpayer was liable for the tax. (b)EVIDENCE-.... (emphasis added)

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The redetermination of a deficiency is only possible with regard to the return of U.S. Government property.

The U.S. Tax Court is not a court of law but is intended to serve as a collective bargaining forum with regard to the amount of the U.S. Government's income in the possession of the "transferee" (Federal Government employee) that is subject to being returned to the U.S. Treasury. Such income is the limit of the U.S. Tax Court jurisdiction. Tax Court jurisdiction is exceeded when the so called judge and attorney address questions regarding income that is not returnable, income that belongs to the Federal Government employee or income belonging to persons not employed by the U.S. Government.

Though it would appear as though the U.S. Tax Court would place the burden to prove allegations in a Notice of Deficiency on the Secretary, the burden of proof switches to the petitioner (transferee/Federal Government employee) because the dispute should only invol~ the Federal Government employee's claim of deduction benefits. It is immaterial whether the Federal Government employee claimed deduction benefits on a ''U.S. Individual Income Tax Return" or in U.S. Tax Court because he allowed the Secretary to make a document reflecting no deduction benefits. Either way, in U.S. Tax Court it is the petitioner (transferee/Federal Government employee) who is making a claim, not the Secretary, as to how much income in his or her possession is subject to being returned. But, the Secretary does have the burden to prove that the petitioner is a transferee of property subject to being returned [see footnote - 5] since the U.S. Tax Court jurisdiction only exists with regard redetermination of property subject to being returned

6 The limited jurisdiction of the Tax Court is best demonstrated by the issues under which they can charge a fee for filing a petition. 26 U.S.C. Sec. 7451. FEE FOR FILING PETITION.

The Tax Court is authorized to impose a fee in an amount not in excess of $60 to be fixed by the Tax Court for the filing of any petition for the redetermination of a deficienctj or for a declaratory judgment under part IV of this subchapter or under section 7428 or for judicial review under section 6226 or section 6228(a). (emphasis added)

Authors Note: Part IV deals with declaratory judgments with regard to the qualification of a retirement plan and interest on prospective obligations being excludible from gross income; section 7428 with tile status and classification of organizations; and sections 6226 and 6228 with final partnership administrative adjustments.

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under employment agreements within the U.S. Government. When the Notice of Deficiency process is used with regard to property not includible in gross income under subtitle A of the I.R. Code it becomes another IRS weapon of enslavement.

IRS has remedy regarding Federal Government employees only

The Secretary's remedy lies strictly in law. Title 5 of the Code laws of the United States of America covers "Government Organization and Employees."? It contains the laws regarding the U.S. Government and its employees, but has nothing to do with employees in the private sector.

Section 5512 of Title 58 shows that pursuant to their employment agreement the pay of an individual (Federal Government employee) is subject to a kickback. If this were not true, there could not be a reason for withholding pay since the Federal Government employee could not be in arrears as to the pay he or she receives in exchange for their labor. Only the U.S. Government could be in arrears in paying for the labor of the Federal Government employee or in collecting the amount due to be kicked back (returned) since the U.S. Government controls both. With 5 U.$.C. Sec. 5512 Congress gave the Secretary the power of the United States to withhold monies until the Federal Government employee has accounted for any differences that surface with regard to how much of it must be returned to the U.S. Treasury under its kickback program. The ''U.S. Individual Income Tax Return" was the document devised as a means for the Federal Government employee to accomplish this accounting if they wished to take advantage of any available deduction benefits. When the IRS questions credit for claimed deduction benefits,

7 The ENACTING CLAUSE-Section 1 of Act Sept. 6,1966, P.L. 89-554,80 Stat. 378, revised and enacted Title 5 into positive law. It provided in part: "That the laws relating to the organization of the Government of the United States and to its civilian officers and employees, generally, are revised, codified, and enacted as title 5 of the United States Code, entitled 'Government Organization and Employees,' and may be cited as '5 U.S.C., Sec ..... "'

8 5 U.S.C. Sec. 5512. Withholding pay; individuals in arrears. . (a) The pay of an individual in arrears to the United States shall be withheld untU he has accounted for and paid into the Treasury of the United States all sums for which he is liable.

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its remedy is to exercise the power given by section 5512 of Title 5 and withhold that property which is subject to being kicked back to the U.S. Treasury. Recourse offered the individual (Federal Government employee) is the administrative remedy of petitioning the Tax Court to establish the deduction benefits claimed as valid. This proves the tie between Title 5 and Title 26 (the I.R. Code) and shows that the "individual" in both Titles is only the Federal Government employee.9

Added proof that "individual" in the I.R. Code is a Federal Government employee

Though also covered in chapter 8 of this book, the importance of understanding that the term "individual" in the I.R. Code means a Federal Government employee is critical. Since there is no definition of the term "individual" in the I.R. Code, this understanding can be accomplished only indirectly through other statutes. Title 5 of the U.S. Codes corroborates this fact.

As stated before, Title 5 (Government Organization and Employees) covers laws which establish and guide duties of Federal Government employees. In addition to the fact that section 5512 of Title 5 positively shows the link between Federal Government employees and the I.R. Code, section 552a of Title 5 proves the need for specific definitions when there is any deviation in how the term "individual" is to be construed. Section 552a was added to Title 5 as a result of the Privacy Act of 1974. Since the term "individual" in Title 5 is restricted to Federal Government employees, that term had to be expanded for section 552a because it applies to records government agencies keep on any person. Expansion of the term "individual" was accomplished in section 551a(2), which reads:

5 U.S.C. Sec. 551a(2) For purposes of this section the term "individual" means a citizen of the United States or an alien lawfully admitted for permanent residence."

This helps in understanding why Congress had to place a qualifying

9 Review of Section 6331 in Chapter 7 (page 114) is recommended with regard to withholding.

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statement before the general definitions in section 7701 (a) that are applicable to the I.R. Code laws. Section 7701 (a) reads in part:

Sec. 7701. Definitions (a)When used in this title, where not otherwise distinctly expressed or manifestly incompatible with the intent thereof-

(1) Person. The term "person" shall be construed to mean and include an individual, a trust, estate, partnership, association, company or corporation.

Though the qualifying introduction to section 7701 is necessary for most of the definitions contained in that section of the I.R. Code, this discussion will concentrate only on the inclusion of "individual" in the term "person." Knowing that it is manifestly incompatible with the laws and Constitution of the United States for Federal Government employees to force a return of income (kickback) from employees in the private sector whose remuneration for services performed does not include any U.S. Government's "tax" (kickback) subject to being returned to the U.S. Government, the word "individual" in section 7701 (a)(l) must be restricted to a Federal Government employee.

Additionally, it is manifestly incompatible with the intent of subtitle A and chapter 24 of the I.R. Code to force employees who are NOT Federal Government employees to be subject to I.R. Code laws since the U.S. Government was not the source of the property received for personal services. It is important to understand that one makes an employment agreement with a source, not a place. Only Federal Government employees receive "gross income" for performance of personal services subject to or includible in "gross income" under subtitle A of the I.R. Code laws. So, it must be construed that the "individual" in the term person in Title 26 section 7701 (a)(l) is a Federal Government employee.

This is corroborated by the fact that it would be manifestly incompatible with the Fifth and Thirteenth Amendments to the U.S. Constitution, and specifically the peonage laws of the United States of America, for employees NOT employed by the U.S. Government to be included in the Federal Government employee kickback program.

Further, it is manifestly incompatible with the intent of the I.R. Code laws to make a person not under a duty to perform specific acts prescribed therein to be subject to criminal or civil sanctions prescribed by the I.R. Code. This proves that even the "individual" expressed in

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section 7701 (a)(1) (Federal Government employee) is not subject to such sanctions with regard to his own property or the making of a ''U.S. Individual Income Tax Return," and the reason Congress "distinctly expressed" who the "person" is with regard to sanctions in the I.R. Code section 7343 [criminal] and section 6671(b) [civil]10.

"Individual" works within the U.S. Government

Additional elaboration of the term "individual" is found in chapter 71 of Title 5 (Labor Management Relations). In section 7101 (b) it states, "It is the purpose of this chapter to prescribe certain rights and obligations of the employees of the Federal Government . .... "Then, a definition of "person" and "employee" for Chapter 71 are provided in section 7103 as follows:

5 U.S.C. Sec. 7103. Definitions; application (a) For the purpose of this chapter

(1) "person" means an individual, labor organization, or agency; (2) "employee" means an individual-

(A) employed in an agency; or (B) ...

but does not include-(i) an alien or noncitizen of the United States who occupies a position outside the United States. (emphasis added)

Since Title 5 contains laws regarding the organization of the U.S. Government and chapter 71 of Title 5 are those for labor management relations we can understand that the "agency'' referred to in section 7103 is only a Federal Government agency. It states specifically that "person" means an "individual" and "employee" means an individual employed by a U.S. Government agency. This tells us that "Federal Government employee," "person," and "individual" are synonymous. Though less

10 Sections 7343 and 6671(b) distinctly describe the persons to whom the criminal and civil sanctions in the l.R. Code apply. See footnote 17, chapter 8 for section 7343.

Sec. 6671(b). PERSON DEFINED.-The term "person", as used in this subchapter, includes and officer or employee of a corporation, or a member or employee of a partnership who as such officer, employee, or member is under a duty to perform the act in respect of which the violation occurs.

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direct, section 3401 (c) and 7701 (a)(1) in the I.R. Code tell us the same thing.

What was the purpose of stating in 5 U.S.C. Sec. 7103 who is not included? With a quick reading section 7103(a)(2)(i) appears to exclude persons who work outside the geographical boundaries of the United States. It refers to such persons as an "alien or noncitizen of the United States." These two terms would seem the same since a noncitizen is generically called an alien. Why the need for both terms here? The description of the term "foreign country'' found in the regulations for section 911 (a) of the I.R Code will help reveal the need for this. It reads:

Reg. 1.911-2(h) Foreign country. The term '1oreign country" when used in a geographical sense includes any territory under the sovereignty of a government other than that of the United States.

When the American States united to form a central government (United States of America) they retained sovereign governmental authority over their own territory. Leaving the general government sovereign authority only over territories not confirmed as "States." The regulation above explains that each of the 50 "States" of the United States of America are deemed to be a "foreign country" with respect to special laws created by the U.S. Congress. Because of this unique form of government a person residing within any one of the 50 States might have dual citizenship by being a citizen of the State in which he lives and of the United States, while others might be deemed a citizen of the State by virtue of living there while not be a U.S. citizen because they were not born within any of the 50 States or naturalized as a U.S. citizen.

In chapter 3 it was established that "within" and "without" used in conjunction with the United States in the Codes means within and without the U.S. Government, while "inside" and "outside" are used when referring to the United States territories geographically.

Reg. 1.911-2(h) enlightens us to the fact that the geographical boundaries of the United States is restricted to territories exclusively governed by the U.S. Government. "Any territory under the sovereignty of a government other than the United States" is deemed a "foreign country."

With this background we can see that anyone who occupies a position (works) "outside the United States" (in any of the 50 States of the United States of America and any country in the world) is considered to be foreign (alien) with respect to the term "person" in 5 u.s.c. sec. 7103(a)(i). However, by virtue of dual citizenship status a citizen of the

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United States of America can be "alien" to the United States. For this reason Congress had to differentiate between an alien who is a citizen of the United States of America and one who is not by calling the first an "alien" of the United States and the other a "noncitizen" of the United States. In doing so Congress states that the special laws in the U.S. Codes only apply to persons who work for the U.S. Government and that the term "individual" means an "employee" of the U.S. Government and that "individual" and "person" in the U.S. Codes are synonymous, and that reference to the ''United States" means the U.S. Government (not geographical boundaries). Employees receive pay from a source of employment, not a place.

This same concept is carried through in section 7701 (a)(31) of the I.R. Code in the definition of foreign estate or trust.

Sec. 7701(a)(31) Foreign estate or trust.

The terms "foreign estate" and "foreign trust" mean an estate or trust, as the case may be, the income of which from sources without the United States which is not effectively connected with the conduct of a trade or business within the United States, is not includible in gross income under subtitle A. (emphasis added)

With this definition Congress is making the statement that property not received from the U.S. Treasury is deemed to be "foreign" with regard to the I.R. Code and "not includible in gross income under subtitle A." It does not contain any income that is returnable to the U.S. Government via the IRS. When the U.S. Government is not effectively connected with the income, there cannot be any income contained therein that is in question of belonging to the U.S. Government.

Burden not to enforce illegal kickback is on the IRS

When Congress provided the definition of "foreign estate or trust'' in the I.R. Code they placed all Federal Government employees on notice as to what is and what is not includible in gross income under subtitle A. From this definition it can be seen that income is deemed "foreign" to the I.R. Code when "from sources without the United States" (a source other than the U.S. Government) and "not effectively connected with the conduct of a trade or business within the United States" (not from a trade or business conducted with the U.S. Government, which includes the :Performance of personal services within the U.S. Government). Confirming that income from sources other than the U.S. Government

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is "not includible in gross income under subtitle A" of the I.R. Code. That which is not includible is not includible under any condition.

Though some of this may seem repetitious, I feel it is necessary to wash away the IRS humbug we have all been subjected to from our youth about the so called "income tax." Only by understanding that the "individual" in the I.R. Code is a Federal Government employee can the limited function of the U.S. Tax Court be understood. With the conclusion that only Federal Government employees are subject to the U.S. Government's kickback program, and only then on the "wages" received from the U.S. Government, it can be seen that IRS employees exceed their authority when they use IRS humbug and issue what appears to be a Notice of Deficiency to a person who is not a Federal Government employee. Only Federal Government employees are transferees of U.S. Government income, and only a transferee has the privilege of petitioning the U.S. Tax Court for a redetermination of a deficiency claimed by the Secretary. Hence, sections 7451 and 6902 place a duty upon the Secretary (or his delegate) to only issue a Notice of Deficiency upon transferees. To put it another way, a Notice of Deficiency is only lawful with regard to a transferee. When a Notice of Deficiency is issued to a person who is not a transferee, it becomes a document meant to enforce the service to create and collect a forced debt upon such person.

The authority of the IRS and the U.S. Tax Court is limited to gross income that is includible in "gross income" under subtitle A of the I.R. Code. Any income from sources without the U.S. Government is not includible in "gross income" under subtitle A of the I.R. Code and so is NOT within the jurisdiction of the U.S. Tax Court.ll It is illegal for Federal Government employees working for the IRS or the U.S. Tax Court to force the payment of any income not subject to the federal

11 In addition to a Federal Government em_eloyee being a transferee, a person who is guilty of "fraud with intent to evade tax" [Sec. 7 454(a) I might be a transferee liable under I.R. Code laws if such person has income in his or her possession which belongs to, or is intended to belong to, the U.S. Government because of a duty that person has to a third party who intends to transfer property to the U.S. Government {i.e. an estate executor or a person with regard to an excise tax intended to go to the U.S. Government). In this mstance the burden is also upon the Secretary to prove that such person is a transferee in possession of U.S. Government income by fraudulent methods and must prove transferee liability or the amount of such property [Sec. 7454(c)).

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government's legal kickback program. Income that is not includible in 11gross income" cannot be made includible by undue influence of Federal Government employees (including U.S. judges) acting outside their lawful authority. The labor of participants in the IRS illegal kickback program is controlled by debt to their prejudice. Those who use undue influence to place a person in that position violate the peonage laws (covered in chapter 5) of the United States of America.

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CHAPTERll

I.R. CODE CRIMINAL CHARGES APPLY ONLY TO TRANSFEREES WHOSE CONDUCT IS FRAUDULENT

Criminal conduct with regard to U.S. Government property

When can it be considered that a crime against the United States has been committed with regard to tax? Since only the income in the name of tax (or the tax in the name of income) in the possession of a transferee is subject to being returned to the U.S. Government, then only such property can become the cause of action that constitutes a crime against the United States. Once it is understood that the I.R. Code does not cover a tax on one's personal income, but a return of income that belongs to the U.S. Government, then it can be understood that only a transferee with regard to U.S. Government property can possibly be involved in such crime.

There are two conditions under which a person can make himself a transferee under the I.R. Code, one by agreement the other by fraud. If one makes oneself a transferee by agreement, the return of U.S. Government income must be handled by administrative process. If one makes oneself a transferee through fraudulent conduct, he makes himself subject to the criminal sanctions in the I.R. Code. However, that person must be charged, tried and convicted of fraud in the proper court before the Secretary can meet the burden of proof with regard to "fraud with intent to evade tax." Only when the accused person's conduct is effectively connected with U.S. Government is such fraud possible with regard to income belonging to the U.S. Government.

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I.R. CODE CRIMINAL CHARGES APPLY ONLY TO TRANSFEREES WHOSE CONDUCT IS FRAUD LENT CHAPTER 11

Transferee by agreement

To recap, a transferee by agreement is the Federal Government employee who receives "gross income," which includes gain plus income derived from "wages." Out of the gain portion is derived a tax (for which the U.S. Government is liable) that is returnable to the U.S. Government. When a legal reduction of the maximum kickback (called Federal income tax) is claimed by the Federal Government employee and accepted by the IRS that amount of the gain portion of the gross income that remains becomes part of the exchange for the Federal Government employee's labor. Thus, the income received by the Federal Government employee after the kickback is regarded as an equal exchange of property (the Federal Government employee's time) for property (U.S. Government income), allowing the kickback portion, though called Federal income tax, not to be deemed a direct tax on labor that would require apportionment to be lawful.

The U.S. Government is the party that furnished the tax as part of the gain portion that is subject to being returned depending upon the deduction benefits claimed by the Federal Government employee upon a ''U.S. Individual Income Tax Return." As already proven, the legal purpose of that document is to establish the amount due in the legal kickback program between the U.S. Government and its employees and, when made and delivered by the Federal Government employee, to claim any lawful deduction benefits offered in the l.R. Code. It was also brought out in chapter 8 of this book that there is no I.R. Code law that mandates a Federal Government employee to make and deliver this document. Only the Secretary of the Treasury, or his delegate, has that responsibility.

A dispute between the Secretary and the Federal Government employee as to the amount of the return of income due to the U.S. ~overnment in its kickback program is not a criminal matter, it is an Internal subject matter between the IRS and the Federal Government employee. When the Secretary believes that, pursuant to the employment agreement, the Federal Government employee has U.S. Government property in his possession that is lawfully due to be :teturned to the U.S. Government, via the IRS, the assertion is made through a Notice of Deficiency. Any question of that which is returnable ts based upon a good faith effort of both parties, the IRS and the Federal ~overnment employee, to reach an agreement. When an agreement

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cannot be reached, by virtue of being a transferee with regard to U.S. Government property, the Federal Government employee can seek remedy by petitioning the U.S. Government agency called the U.S. Tax Court for a redetermination of the amount the Secretary claims belongs to the U.S. Government. If not satisfactorily resolved there, the dispute can be brought into the Federal Courts by either party-all the way to the U.S. Supreme Court.

Though the Federal Government employee is a transferee of the taxpayer (U.S. Government) in its kickback program it is the U.S. Government that has placed its income in jeopardy of being returned. Because the U.S. Government has been provided all the administrative means needed to be certain its income is returned, it is not legally possible to subject a Federal Government employee to I.R. Code criminal sanctions with regard to such property in the Federal Government employees possession.

Private sector employees are not I.R. Code Transferees

A private sector employee is not a transferee under the I.R. Code. Only income effectively connected with a trade or business with the U.S. Government (including Federal Government employees) contains a "tax" that is required to be kicked back (returned) to the U.S. Government (see chapter 3 and section 7701(a)(31)). The U.S. Government is not party to a private sector employment agreement. The pay or wages received by an employee in the private sector is an equal exchange of the employee's time for the employer's money. The private sector employee is owner of 100 percent of the income in his possession by such an employment agreement. When one believes he is required to deliver a ''U.S. Individual Income Tax Return" declaring an amount he owes, he is being unlawfully deprived of part of it. Such declaration has the result of controlling one's labor to his prejudice because the IRS enforces its collection. Those who enforce the collection of such debt, or attempt to return someone to such a condition, accept the legal consequences of the peonage laws (see chapter 5). Imposing criminal sanctions upon such person is prima facie evidence of the enforcement of the IRS service of controlling one's labor by debt process. Any IRS force used is prohibited by the peonage laws. It makes no difference if the force manifests itself as undue influence in the form of harassment with intent to return one to (or keep one in) a condition of participating

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I.R. CODE CRIMINAL CHARGES APPLY ONLY TO TRANSFEREES WHOSE CONDUCT IS FRAUDLENT CHAPTER 11

in the illegal kickback or as a malicious criminal action in a U.S. courtroom.

The truth is, NO criminal sanctions are lawfully possible upon non-transferees of U.S. Government income, and NO person can }awfully be convicted for refusing (willful or otherwise) to make a ''U.S. Individual Income Tax Return." Further proof of this is the fact that when a person is not a transferee of U.S. Government income it is impossible to make them fit the description of the person in section 7343 who is the only person that can be subject to the criminal sanctions of chapter 75, subtitle F, of the I.R. Code.

"Person" to whom I.R. Code criminal statutes apply

Once you understand the conditions that make a person a "transferee" under the I.R. Code laws and that the I.R.Code only gives the IRS jurisdiction over income that belongs to the U.S. Government that is subject to being returned to the U.S. Treasury in the name of tax, you can comprehend the limited application of the criminal sanctions in chapter 75 of the I.R. Code to persons acting fraudulently with regard to the U.S. Government's income. If the IRS process has the result of gaining control over income that does not belong to the U.S. Government, a crime has been committed against the owner of the income who was forced to surrender it.

The limited application of the I.R. Code is noted when Congress had to distinctly define the "person" who could lawfully be accused under the criminal statutes in the I.R. Code.1 They did this as follows:

1

2

Sec. 7343. Definition of term "person" .2

The tenn "person" as used in this chapter includes an officer or employee of a corporation, or a member or employee of a partnership, who as such officer, employee, or member is under a duty to perform the act in respect of which the violation occurs.

See footnote 7, chapter 8 for the definition Congress provided for the term "~rson" (Sec. 7701(a)(l)) for the entire I.R. Code unless another definition is dtstinctly expressed, such as section 7343.

This same definition of "person" is supplied in Sec. 6671(b) of the I.R. Code, which is applicable to pecuniary penalties. See footnote 10, chapater 10.

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This definition tells that only someone acting in a fiduciary capacity for a corporation, a partnership or for the U.S. Government that has a duty to perform a specific act in respect of which the violation occurs is a "person" subject to the statutes in chapter 75 of the I.R. Code. Before examining just who this person is, it is necessary to discuss the statutes in chapter 75 most commonly misused against persons who do not fit the description of "person" in section 7343. They are sections 7201 and 7203.3

Sections 7201 and 7203 do not state tax evasion is fraudulent conduct

Both sections 7201 and 7203 state that the punishment they provide is "in addition to other penalties provided by law, upon conviction thereof ... " This tells us the "person" defined in section 7343 must be charged and convicted of some other offense before the punishment prescribed in sections 7201 and 7203 can be lawfully applied. Just what must such person be convicted of before the additional penalties of sections 7201 and 7203 can be applied? The only answer possible is that this person acted fraudulently with regard to U.S. Government property. Only when a person has accepted a fiduciary responsibility with respect to property belonging to the U.S. Government can their conduct be found fraudulent in failing to perform some duty with respect to such property in the name of tax under the I.R. Code, which fits the "person" defined in section 7343. It is the guilt of fraud that establishes the proof of willfulness needed with regard to applying the criminal sanctions in sections 7201 and 7203.

3 26 U.S.C. Sec. 7201. ATIEMPT TO EVADE OR DEFEAT TAX. Any person who willfully attempts in any manner to evade or defeat any tax

imposed by this title or the payment thereof shall, in addition to other penalties provided lnt Jaw, be guilty of a felony and, upon conviction thereof, shall be fined not more tnan $100,000 ($500,000 in the case of a corporation), or imprisoned not more than five years, or both, together with the costs of prosecution.

Sec. 7203. WILLFUL FAILURE TO FILE RETURN, SUPPLY INFORMATION, OR PAY TAX, (provided in chapter 8) basically says any "person required" .... who willfully fails to pay .... tax, mal<e such return .... as required by law or regulation .... is guilty of a misdemeanor.

Author's note: Though inferred through practice, sections 7201 and 7203 do not specify fraud as to either tax evasion or as to willful failure to file a "U.S. Individual Income Tax Return."

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A person cannot act fraudulently with regard to his own property, but can with regard to property of another. To understand this, look at the definition of "fraud" found in Black's Law Dictionary, Fifth Edition.

Fraud. An intentional perversion of truth for the purpose of inducing another in reliance upon it to part with some valuable thing belonging to him or to surrender a legal right. A false representation of a matter of fact, whether by words or by conduct, by false or misleading allegations, or by concealment of that which should have been disclosed, which deceives and is intended to deceive another so that he shall act upon it to his legal injury. Any kind of artifice employed by one person to deceive another, Goldstein v. Equitable Life Assur. Soc. of U.S., 160 Misc. 364, 289N.Y.S.1064, 1067. A generic term, embracing all multifarious means which human ingenuity can devise, and which are resorted to by one individual to get advantage over another by false suggestions or by suppression of truth, and includes all surprise, trick, cunning, dissembling, and any unfair way by which another is cheated. Johnson v.McDonald, 170 Okl. 117,39 P.2d 150. "Bad faith" and "fraud" are synonymous, and also synonyms of dishonesty, infidelity, faithlessness, perfidy, unfairness, etc.

Elements of a cause of action for "fraud" includes false representation of a present or past fact made by defendant, action in reliance thereupon by plaintiff, and damage resulting to plaintiff from such misrepresentation. Citizens Standard Life Ins. Co. v. Gilley, Tex. Civ. App., 521 S.W. 2d 354,356.

It consists of some deceitful practice or willful device, resorted to with intent to deprive another of his right, or in some manner to do him an injury. As distinguished from negligence, it is always positive, intentions. It comprises all acts, omissions, and concealments involving a breach of a legal or equitable duty and resulting in damage to another. And includes a act or combination of circumstance, whether the suppression of truth or the suggestion of what is false, whether it be by direct falsehood or by innuendo, by speech or by silence, by word of mouth, or by look or gesture. Fraud, as applied to contracts, is the cause of an error bearing on a material part of the contract, created or continued by artifice, with design to obtain some unjust advantage to the one party, or to cause an inconvenience or loss to the other.

If Congress could consider a person's refusal to part with his personal income fraudulent, they would have enacted a law that states Willful failure to file a "U.S. Individual Income Tax Return" is punishable by section 7203. The result of such a law is not permitted by the U.S. Constitution, and is prohibited by the peonage laws. Hence the U.S.

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Government is no different than any other person, natural or artificial. The only time the U.S. Government can charge a person with "fraud" is when the U.S. Government has been unlawfully deprived of its property, and the deprivation of property was accomplished by an intentional perversion of truth or a false representation of a matter of fact, whether by words or by conduct, by false or misleading allegations, or by concealment of that which should have been disclosed, which deceives and is intended to deceive the U.S. Government so that it acts upon it to its legal injury or to its prejudice.

"Willfulness" linked to larceny and fraud

Though the statutes in chapter 75 of the I.R Code does not provide specific, direct notice of fraud, fraud is inferred by common belief. Since a person cannot lawfully be convicted in U.S. Courts by inference or belief, only when a person who was under some duty with regard to U.S. Government property is accused and found guilty of fraud under a statute in Title 18 (called the criminal code) can the additional punishment found in sections 7201 and 7203 of the I.R Code be legally applied.

A key element in sections 7201 and 7203 of the I.R Code is willfulness. The element of willfulness can only be established by proving larceny or fraud existed with regard to the U.S. Government's property. However, only a Federal Government employee whose job is directly connected with handling the U.S. Government's income is in position to act in such a manner with regard to it.

Larceny or fraud can never exist with regard to one's own property. Hence, the equal exchange of time for money is not a subject matter of fraud regardless of who the employer is, nor is transferring property a criminal matter unless fraud or larceny are involved in its obtainment. Therefore, the sanctions prescribed by sections 7201 and 7203 can never be lawfully applied to ones personal property, or failure to declare what ms employees would regard as a sufficient amount due on a "U.S. Individual Income Tax Return," or for willful failure to deliver such an instrument. Even those filed with regard to the legal kickback due from the gain portion a Federal Government employee derived from the "wages" paid by the U.S. Government can only be classified as a disagreement or misunderstanding of the deduction benefits claimed.

The U.S. Government established an illegal kickback, patterned after the legal Federal Government employee kickback scheme, upon persons

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who are not Federal Government employees. Use of humbug opinions in place of law enables Federal Government employees to enforce the illegal kickback.

Larceny is 1: The unlawful taking and carrying away of personal property with intent to deprive the rightful owner of his property permanently: THEFT 2: any of various statutory offenses whereby property is illegally obtained (Webster's New Collegiate Dictionary).

This is confirmed by the U.S. Court when it stated in People v. Goodchild, 68 Mich. App. 226, 242 N.W. 2d 465, 468, "The essential elements of a 'larceny' are an actual or constructive taking away of the goods or property of another without the consent and against the will of the owner and with a felonious intent." Hence, larceny or fraud only occur when someone diverts property for his own use that rightfully belongs to another without the others consent.

The last sentence in section 7203 makes the point that there must be a crime to prove willfulness in order to make section 7203 applicable. That sentence reads, "In the case of a willful violation of any provision of section 6050 I, the first sentence of this section shall be applied by substituting '5 · years' for '1 year'." Section 6050 I relates to banks providing the IRS with reports on transactions of $10,000 or more. If a person who works in a bank fails to inform the IRS of a transaction of $10,000 or more is treated as a criminal under section 7203 for failing to do so then that person is being punished for failing to be a snitch on his fellow man. Congress has not made snitching a crime, so snitching is a matter of free choice and religious conviction. Hence, unless such person is guilty of a crime against the United States with regard to such transaction section 7203 cannot be lawfully applied.

There are statutes in Title 18 that can be applicable to section 6050 I under certain conditions. For example, if a bank employee is found guilty of concealing the laundering of drug money by failing to report the bank transaction to the IRS then such person is guilty of misprison of a felony, violation of section 4 of Title 18.4 This is a criminal violation

•• 18 U.S.C. Sec. 4. Misprison of felony. Whoever, having knowledge of the actual commission of a felony cognizable by

a court of the United States, conceals and does not as soon as possible make known the same to some judge or other person in civil or military authority under the

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IRS HUMBUG

under United States laws and, since such person would be under a duty to perform certain reporting acts prescribed in the I.R. Code, the additional punishment prescribed by section 7203 can be legally applied.

To apply the additional punishment of sections 7201 and 7203 without first convicting the accused of a crime becomes a criminal act on the part of the Federal Government employees involved in the malicious prosecution when they have no authority under law to initiate the action. The result is to force such person to serve the Federal Government employees involuntarily. Yet, these statutes have become a cure all for Federal Government employees. When they have no law passed by Congress that made the targeted person's conduct a crime they use these statutes as a crime for willful failure to obey the Federal Government employees.

Link between Title 18 and other U.S. Code Titles

To show how sections 7201 and 7203 must provide notice as to what law under Title 18 was violated, look at section 506 of Title 17, dealing with copyrights.

17 U.S.C. Sec. 506(a) Criminal infringement.

Any person who infringes a copyright willfully and for purposes of commercial advantage or private financial gain shall be punished as provided in section 2319 of title 18. (emphasis added)

Section 2319 of Title 18 is under Chapter 113, Stolen Property.S It states in part:

18 U.S.C. 2319, Criminal infringement of a copyright.

(a) Whoever violates section 506(a) (relating to criminal offenses) of title 17 shall be punished as provided in subsection (b) of this

United States, shall be fined not more than $500 or imprisoned not more than three years, or both.

5 Though in Title 18, this copyright law is not a crime asainst the United States of America but a crime against the holder of the copynght. For anyone to use someone' s copyrighted materials to their financial advantage would force upon the owner of the copyright a debt that controls his labor, which is involuntary servitude. Congress, under the Thirteenth Amendment, has the right to enact laws to eradicate involuntary servitude in order to fulfill their duty to see that involuntary servitude, in any form, does not exist.

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section and such penalties shall be in addition to any other provisions of title 17 or any other law. (b) Any person who commits an offense under subsection (a) of this section-

(1) shall be fined not more than $250,000 or imprisoned for not more than five years, or both, if the offense-

(A) involves the reproduction or distribution, during any one-hundred-and-eighty-day period, of at least one thousand phono-records or copies infringing the copyright in one or more sound recordings; (B) .... motion pictures or other audiovisual works; or (C) is a second or subsequent offense under either of subsection (b)(l) or (b)(2) .... (emphasis added)

The only difference between this and sections of the I.R. Code is that here it specifically states the relationship between the copyright laws in Title 17 and the criminal act that must be charged and proven in Title 18 before any additional penalties in Title 17 (spelled out in subsections (b) through (e) of Sec. 506) or any other law can be applied to the person accused. This cross reference gives everyone adequate notice of what punishment he accepts in Title 18 laws if his conduct violates the standards set under copyright laws. The reason it is missing from sections 7201 and 7203 in the I.R. Code is because Title 26 (I.R. Code) deals only with the U.S. Government's property. It does not have general applicability as does Title 17, which is positive law while Title 26 is not.

If it was a fraudulent act for anyone to refuse to tum over his personal income to the U.S. Government via the IRS, notice in Title 18 would be present because it would be required. No notice means it is not a crime to refuse to provide the IRS control over one's property by the delivery of a ''U.S. Individual Income Tax Return."

Under I.R. Code Law- who can be guilty of fraud and larceny?

Recall that the "person" to whom the criminal statutes in the I.R. Code apply is described in section 7343 as one who is under a duty to perform the act in respect of which the violation occurs. If that duty included that one is required to kickback income to the U.S. Government for which the owner exchanged his time Title 18 is the place where the notice should be provided, just as it is for copyright violation. Absent

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such notice the duty does not exist and the only other possible criminal act would be fraud or larceny with regard to U.S. Government income. The only person who can be charged with fraud or larceny as to the U.S. Government's income is a person who had, or has the duty to handle such income.

Who then is a person under a duty to perform an act with regard to the U.S. Government's income? It could be an officer or employee of a corporation or partnership that is effectively connected with a trade or business with the U.S. Government who accepted the duty to make the return of U.S. Government income called for under the agreement between such corporation or partnership and the U.S. Government, or, it could be an employee of a corporation or partnership that had the duty to collect a U.S. Government excise tax. When such officer or employee decides to intentionally and fraudulently act to keep part or all of the return (kickback) due or the excise tax due to the U.S. Government for himself he violated his duty and fits the definition of "person" in section 7343; a person under a duty to perform the act under which a violation occurred.

In order to prove such person willfully failed to make a proper return of income, in the name of tax, to the U.S. Government it must be charged and proven that such a person is a transferee liable (under a duty) and has in his possession U.S. Government income by fraudulent conduct that is subject to being returned to the U.S. Treasury. Only then can "fraud with intent to evade tax" be involved. Note, the subject matter is not fraud with intent to evade "a tax" on the person, but fraud with intent to evade tax or the return of income, in the name of tax, that belongs to the U.S. Government.

A case of fraud against the U.S. Government might also be proven against a Federal Government employee who is in management and establishes phantom employees upon the record and thereby collects the wages of such phantom employees and makes such income a part of his personal estate. Such manager makes himself a transferee guilty of many offences against the U.S. Government, including "fraud with intent to evade tax." But, it would be required that such person be charged with fraud with intent to evade tax and other offenses and, upon being proven guilty, then the additional punishment of section 7201 and/ or section 7203 is applicable.

A crime has been committed against the people of the United States when a person employed by the Defense Department responsible for

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entering into defense contracts is found guilty of taking a kickback from corporations that results in the cost to the U.S. Government under such contracts being greater than it should be. However, to my knowledge, Congress has not made such conduct a specific crime, and such a kickback is apparently not a crime in the eyes of the Justice Department who instead call this a conflict of interest. Though it is certainly a conflict of interest because such employee sweetened his employment agreement without the authority of the employer, the U.S. Government, it is also "fraud with intent to evade tax" since such a person is acting in a fiduciary capacity with regard to property belonging to the U.S. Government and is duty bound to see that the U.S. Government gets the best possible deal, which does not include a kickback to himself personally. Furthermore, diverting of property from the U.S. Treasury to ones own use through a defense contract kickback must not only be considered a crime but, upon being found guilty, the additional tax evasion punishment is applicable. Surely such illegal kickback would be used by the corporation as an expense to reduce the "tax" (legal kickback), and it most likely would not be reflected by the Federal Government employee as "gross income" from the U.S. Government from which a return (kickback) is due because the U.S. Government was the source of such income.

As to the manufacturer of alcohol and tobacco products, the taxes are paid by the manufacturer through the purchase of stamps from the U.S. Government. The stamps are placed on the bottles of liquor and the packs of cigarettes. Suppose the manufacturer extends his production abilities to the making of the stamps. When he supplies his own stamps the U.S. Government is deprived of lawful income. Such conduct on the part of the manufacturer constitutes fraud and larceny; fraud since there exists the question of depriving the U.S. Government of income in the name of a tax, and larceny since a theft of the consumer's income occurs when the price of the product includes the taxes evidenced by the bogus tax stamps. When such a person is properly charged with fraud with intent to evade tax, and it is proven that he is responsible for diverting property to himself that is lawfully due to be sent to the U.S. Government, then the additional charge of tax evasion (Sec. 7201) and/ or willful failure to file income tax returns (Sec. 7203) is applicable. Also, proof of such larceny is proof of imposing upon the CUstomer a debt that has the unlawful effect of controlling his labor, Which is prohibited and punishable under peonage laws.

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The examples given above are meant to show the need to prove a crime of fraud has occurred (either with regard to income intended to go to the United States or U.S. Government income wrongfully acquired) by a person under a duty with respect to U.S. Government income before the willfulness element of sections 7201 and 7203 can be proven and their additional punishment be legally applied.

As further proof of this, look at section 7454 of the I.R. Code. Sec. 7454. Burden of proof in fraud, foundation manager, and transferee cases.

(a) Fraud. In any proceeding involving the issue whether the petitioner has been guilty of fraud with intent to evade tax, the burden of proof in respect of such issue shall be upon the Secretary.

(b) Foundation managers ... (c) Cross reference. For provisions relating to burden of proof as to transferee liability, see section 6902(a). (emphaasis added)

The petitioner referred to in section 7 454 is a person first proven to be fraudulently in possession of U.S. Government income, in the name of tax. In some instances this can be done in a U.S. Court, in others due process of law requires it to be done in a state court. U the Secretary does not have a federal law upon which a charge is possible for litigation in a U.S. Court, he must take his cause of action to the only other court available to him-a state court. To understand this, look at the power provided to the Judicial Branch of the United States Government by Article 3, Sed ion 2, Clause 1 of the U.S. Constitution, which reads:

The judicial Power shall extend to all Cases, in Law and Equity, arising under this Constitution, the Laws of the United States and Treaties made, or which shall be made, under their Authority; -to all Cases affecting Ambassadors, other public Ministers and Consuls; -to all Cases of admiralty and maritime Jurisdiction; -to Controversies to which the United States shall be a Party; -to Controversies between two or more States; -between Citizens of different States; -between Citizens of the same State claiming Lands under Grants of different States, and between a State, or the Citizens thereof, and foreign States, Citizens or Subjects. (emphasis added)

First note, the word "all" is used with regard to cases arising under this Constitution; cases affecting ambassadors, other public ministers and consuls; and cases of admiralty and maritime jurisdiction. However, the word "all" is missing from the balance of the paragraph, including the portion dealing with "controversies to which the United States shall be a party." This means the U.S. Courts has exclusive

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jurisdiction over only those subject matters where the word "all" is used, while those subject matters where "all" is not present must be adjudicated in the court where jurisdiction over the subject matter exists. A party cannot be forced or influenced into giving jurisdiction to a court that cannot be unbiased, otherwise that court is directly interfering with that person's First Amendment right of freedom of expression.6 Such conduct demonstrates the enforcement of the IRS service of controlling the targeted person's labor by debt, and the subject matter in a U.S. courtroom is malicious prosecution by misuse of section 7201 or 7203.

Fraud against the U.S. Government

Though the laws passed by the Congress of the United States have been codified into 50 Titles, all crimes against the United States are spelled out in Title 18, Chapters 1 through 119. The violation of laws in the other U.S. Titles must be linked to a crime spelled out in Title 18 to constitute a lawful Federal Government action against anyone. The copyright law was an example of this.

With regard to fraud, the U.S. Government must accuse a person under one of the sections in chapter 47 [headed: Fraud and False Statements] in Title 18. The statutes in chapter 47 of Title 18 deal only with matters within the jurisdiction of the United States Government; ie. false, fictitious or fraudulent statements or representations made within departments or agencies of the United States or the Federal Reserve Banks or the Federal Savings and Loan Insurance Corporation or Department of Housing and Urban Development and Federal Housing Administration or Federal land bank mortgage transactions or farm loan transactions or with respect to naturalization, citizenship and alien registry or Federally funded highway projects or military purchases or the Federal Employee Retirement Income Security Act of

6 Inference exists that the act of willful failure to file a "U.S. Individual Income Tax Return" is a fraudulent act since criminal sanctions in section 7203 are enforced upon a person whose conduct is not connected with U.S. Government income. Since notice is not provided in Title 18 of the U.S. Codes that such conduct is fraudulent, the only place such a cause of action can be lawfully adjudicated is in state court. Otherwise it is a sham tribunal that is conducted in order for Federal Government employees to control the conduct of the person charged. This point is demonstrated by the record of the humbug used by Federal Government employees in their action against me (next chapter).

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1974, etc. In other words, with regard to fraud, matters within the jurisdiction of the U.S. Courts are only those where the U.S. Government's income (property) is involved or with respect to the specific duties given the Federal Government through the U.S. Constitution.

Fraud with intent to evade tax

Fraud with intent to evade tax is not specifically stated in chapter 47 of Title 18, nor was violation of I.R. code laws made a crime under any of the criminal statutes in chapters 1 through 119 of Title 18. However, laws that are in chapter 47 of Title 18 are violated when a person has freely chosen to make the U.S. Government the source of its income, either as a Federal Government employee or by becoming effectively connected with the conduct of a trade or business within the United States Government, and, by whatever means, has fraudulently dirverted U.S. Government funds into his own account. When "fraud" is linked with the subject matter of "evading tax" under Title 26, the combination is taken as providing the U.S. Courts jurisdiction over the subject matter of "fraud with intent to evade tax" (which is actually fraud with intent to evade returning the Federal Government's income).

If a person freely chose to be effectively connected with U.S. Government property, and thereby subject to the I.R. Code laws, the subject matter as to "fraud with intent to evade tax" is possible. If a violation is believed to have occurred, a person must be charged and proven to be a transferee by method of fraud of U.S. Government property (income) before any charge of fraud with regard to that property could be proven. Hence, the charge must also allege the violation of a statute in chapter 47 of Title 18 and link it with the violation of the I.R. Code statute. U.S. Courts are thought to have exclusive jurisdiction because the action involves a United States law. However, since "fraud with intent to evade tax" is not part of Title 18, only the jurisdiction as to the question of fraud between two persons exists, even with the U.S. Government being one of them. Besides, those in the Judicial Branch of the U.S. Government could not be regarded as disinterested parties to such actions in a Federal Court. This makes the only possible court with jurisdiction to determine the issue a state court.

Only when a transferee has been found guilty of fraud with regard to U.S. Government income in a state court and it is proven that such transferee was a person who is under a duty to perform some act in

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respect of which a violation of the I.R Code occurred (Sec. 7343) is the burden met to prove "fraud with intent to evade tax." Such a person is not only obligated to return the U.S. Government's property to its treasury, but that person also can become liable for any additional civil and criminal penalties applicable to fraud in the I.R Code. Themonitary liability established is not a deficiency, but a judgment debt that is only enforceable under state procedures and rules (detailed later).

Judgment debts in illegal Federal Court actions

Actions are often brought into a U.S. courtroom against persons who are not transferees under the I.R. Code. Such persons are not under any obligation to transfer their own property to the U.S. Government. This is the reason that, at the end of such actions, a judgment debt is not ordered-it is not legally enforceable.

When there is no legally enforceable procedure available to them, the IRS attempts to have the targeted person tum over property through an unofficial notice of deficiency. In such a case what is called a notice of deficiency is part of the IRS humbug and becomes an IRS weapon of enslavement along with their 1040 and W-4 forms. The humbug is that, under statutory law, a Notice of Deficiency is presumed correct if uncontested, yet if a person who is not a transferee of U.S. Government property petitions the U.S. Tax Court a so called judge of that administrative body will conceal the fact that they have no jurisdiction over the subject matter even when that issue is presented to them. By restricting the action to a redetermination of the deficiency pursuant to section 7451 (footnote 6, chapter 10), when the targeted person appears in Tax Court the presumption is made that this person acquiesced to being a person who is willing to transfer his own property to the U.S. Government (which is Federal Government employee humbug contradicted by section 6901 on page 158).

Hopefully now you can see why a legal Notice of Deficiency can only be issued to a person who is a transferee of U.S. Government property by employment agreement or by fraud, and why the I.R. Code places the burden upon the Secretary to prove a person who petitions the U.S. Tax Court is liable as a transferee (Sec. 6902) and prove fraud (Sec. 7454). ·Without proof that the petitioner is liable as a transferee the U.S. Tax Court has no jurisdiction to proceed and any determination, or redetermination, of a liability becomes a forced debt that controls such

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person's labor, which is prohibited by the peonage laws of the United States of America.

IRS humbug on estate taxes

Due process of law would require the U.S. Government to bring its claim to an unbiased third party, namely a state court, for any property that is in question of being turned over to it when it is not the source of that property. An example of this would be a claim to being a party to a will that excludes the U.S. Government as to estate taxes.7 In that instance the executor of the estate is obligated to follow the instructions in the will and exclude the U.S. Government by ignoring the so called "estate tax" outlined in subtitle B of the I.R. Code. If the Secretary wishes to contest the will it is purely a civil matter between two parties that is cognizable in a state court.

Since the decedent cannot be resurrected to provide tesitmony as to any intention, no power on earth can legally change the instructions of the decedent that is clearly expressed in a will. Stilt if it is found through a court action that the U.S. Government is a party to the will, a judgment debt is executed upon which the U.S. Government could force collection from the estate pursuant to that State's law. This would be due process of law.

If the deceased did establish that the U.S. Government was to receive part of his estate by not taking exception to the U.S. Government estate tax in subtitle B of the I.R. Code in the will and the executor deliberately conspired with other parties to the will to exclude or reduce the amount unwittingly intended by the deceased to be sent to the U.S. Government and, because of that conspiracy, received part of the estate that was to go to the U.S. Government, it becomes a matter of fraud. Such fraud falls under the heading of common law, a fraudulent act by one person against another. State laws on fraud would again apply since it has nothing to do with fraud against the U.S. Government described in the

7 Based upon the lawful fact that one's estate is foreign to the U.S. Government, the U.S. Government cannot make itself partY. to a will except by indirect mean5s. The U.S. Government must respect the will of the deceased where the U. · Government has been excluded from a will. Just like having 100 percent control over one's bodily organs at death, one also possesses 100 percent control over the estate that was established by his organs which gave him the time to establish such estate.

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statutes of chapter 47 of Title 18 and has nothing to do with violation of I.R Code criminal statutes. This is the only reason why, just as with subtitle A of the I.R. code, there is no cross reference in subtitle B of the I.R Code to the criminal statutes of the I.R. Code or to Title 18.

Hence, for a valid determination with regard to so-called estate taxes in subtitle B of the I.R. Code, whether the issue is one of fraud or simply whether the U.S. Government is an heir to the will, the U.S. Government would have to bring action into a state court. Any such action in a federal court is IRS humbug.

IRS humbug as to gift taxes

Special conditions could make a person receiving a gift (donee) liable for gift taxes under subtitle B of the I.R. Code. Suppose the person making the gift (donor) is liable as a transferee of U.S. Government income (lawfully obligated to return the U.S. Government's income) and fails to fulfill that obligation. When this condition is present the question could arise that the gift contained U.S. Government property subject to being returned, making the donee a transferee of a transferee under the I.R. Code. Since a person cannot make a gift to anyone of property belonging to someone else the IRS could make a Notice of Deficiency claim that the property transferred as a gift belongs to the U.S. Government and was wrongfully given to another. The U.S. Tax Court administrative remedy would need to be exhausted before action in any other court is considered.

IRS humbug with regard to Federal Government employee kickback

As stated before, the IRS has a duty to see that the proper amount of kickback is received from the "wages" (gross income) of every Federal Government employee. This duty extends to checking out deductions claimed on any verified ''U.S. Individual Income Tax Return" submitted to them by a Federal Government employee to be sure it is valid and correct. If the IRS deems the deductions to be invalid or incorrect they have the authority to send a Notice of Deficiency that reflects their calculations to that Federal Government employee. A Notice of Deficiency can also be lawfully sent to a Federal Government employee Who does not submit a "U.S. Individual Income Tax Return". In that instance the Secretary can make a return for the maximum kickback,

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deduct whatever was withheld, and provide notice of the balance due. The Secretary does not have the authority to verify the deductions for the Federal Government employee under penalty of perjury. If the Federal Government employee disagrees with the IRS and/ or wishes to claim the deduction benefits, he has internal administrative remedy available through a petition to the U.S. Tax Court for redetermination of the figures in the Notice of Deficiency (Sec. 7451). The issue here is not one of larceny and fraud. It is merely an internal dispute of how much of the "wages" represents the exchange for labor and how much of the U.S. Government's income is to be legally returned (kicked back or rebated are other terms that could be used) to the U.S. Treasury. Hence, both the Federal Government employee and the IRS employee are bound to make a good faith effort with regard to an agreement on how much income of the gain portion is to be returned to the U.S. Government. But, a criminal charge is not possible since the Federal Government employee is not acting in a fiduciary capacity with regard to the property that is returnable. The subject matter is simply how much is to be kicked back and how much is to be retained by the Federal Government employee as an equal exchange for the performance of personal services for the U.S. Government. This is why a "U.S. Individual Income Tax Return" is not a basis for a criminal action for violation of sections 7201 or 7203 of the I.R. Code. The fact that a "U.S. Individual Income Tax Return" is not used as evidence in U.S. courtrooms in a malicious 7203 action, even though it is inferred to be the subject matter, will be brought out and explained in the next chapter.

IRS humbug with regard to private sector employees

The IRS also has the duty to see that they only involve themselves with property that is includible in gross income under subtitle A of the I.R. Code. As shown by section 7701 (a)(31), provided in chapter 3, Congress restricted the authority of the Secretary of Treasury to income derived through a trade or business effectively connected within the U.S. Government. Income received for working in the private sector is not property upon which the IRS can make any claim in behalf of the U.S. Government. Such property is not includible in gross income under subtitle A of the I.R. Code under any condition. The person who receives such property cannot legally be a petitioner in U.S. Tax Court since there is no U.S. Government income over which the Tax Court has jurisdiction. Yet, a letter stating it is a notice of deficiency is a weapon frequently used by IRS employees to get a person to submit to having property not

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lawfully includible in the Federal kickback scheme subject to IRS administrative procedures by forced acquiescence. When IRS employees include property that is not includible in gross income in their notice of deficiency then it is they who are guilty of fraud. When Federal Government employees use humbug to institute a supposed criminal action under sections 7201 or 7203 upon such person it is NOT a legal prosecution to enforce the laws of the United States of America but a malicious prosecution with intent to enforce a false belief upon persons living under the laws of the United States of America.

IRS humbug with regard to private sector employers

It is often thought that the "person" in sections 7201 or 7203 could be an employer in the private sector that enters into a fiduciary relationship with his employee when an IRS voluntary agreement form (W-4) is executed and presented to him by his employee. Notwithstanding the undue influence that produces the W-4 form, the private sector employer takes this so-called voluntary agreement as instruction to retain part of the money agreed to as an exchange for the employee's labor and send it to the IRS. Though such employer accepted the responsibility to account for this property and forward it to the IRS the property legally belongs to his employee until the employee executes a debt instrument (called a "U.S. Individual Income Tax Return") in favor of the IRS for the U.S. Government. In this case it is a criminal act for a private sector employer to divert such property to his own use. However, a tax evasion charge cannot be added since this income is not lawfully includible in gross income under subtitle A of the l.R Code. No crime has been committed against the U.S. Government. The crime is strictly against the employee.

The private sector employee's income, though intended to be delivered to the IRS by virtue of the W-4 form executed because of undue influence, has nothing to to with U.S. Government income or the I.R. Code laws. For the IRS to charge such employer criminally under statutes of the I.R. Code is to enforce a false belief that the private sector employer is liable for the "tax" when he is only liable as a transferee to his employee. Such conduct on the part of Federal Government employees constitutes concealment of the illegal kickback program, Which is the forced inclusion of income not includible in gross income under subtitle A of the I.R. Code.

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Points to keep in mind

The points to keep in mind are that a person never acts in a fiduciary capacity with regard to his own property, and property received in exchange for one's labor is not part of the I.R. Code at all. The purpose of subtitle A and chapter 24 of the I.R. Code is the internal administrative control of the U.S. Government's property (income) that is to be kicked back to the U.S. Treasury. Only the legal kickback is lawfully under the control of the IRS. To put it another way, the U.S. Government arranged for a rebate to themselves from the wages paid to all Federal Government employees. Income which is to be rebated is in the possession of the Federal Government employees.

As already discussed, the kickback is not part of the exchange agreed to by Federal Government employees as payment for their labor. The kickback is derived from the gain portion of the "wages" paid to them. What a Federal Government employee agrees to be paid for his labor is what is left of the "wages" after the kickback. And, where the Federal Government is not the source of the income there is no income upon which the IRS can exercise lawful control.

The IRS has authority only with regard to U.S. Government property that is proven to be in a person's possession. Under such a condition his status is that of a transferee and the income in his possession is subject to I.R. Code law. But, when the facts are that he is a person whose income, or property, is not effectively connected with a trade or business within the U.S. Government because his employment was with some source that did not include the U.S. Government, the IRS and all Federal Government employees have no cause to even ask that person to make a "return of income" (which means returning the U.S. Government's income to its treasury). According to the I.R. Code law in section 7701(a)(31) such gross income is not includible in gross income under subtitle A of the I.R. Code, making the subject matter of delivering a ''U.S. Individual Income Tax Return" moot.

When any person exchanges his time (which is his personal property) for the property of his employer, it is regarded as an exchange that is equal.8 When the income in one's possession is a result of an equal

8 Taken from Black's Law Dictionary, Fifth Edition. [in part] remuneration: Reward, recompense; salary; compensation

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exchange, there is no possible question of "fraud with intent to evade tax." However, if any person diverted income to his own account that was legally intended to become U.S. Government property (i.e. through the will of a decedent) or lawfully to become U.S. property (i.e. excise tax or contract) then the question of "fraud with intent to evade tax" is a valid subject matter upon which a cause of action of fraud by the U.S. Government can be considered. Since "fraud with intent to evade tax" is not expressed in laws of the United States of America it is only a valid action against such person in a state court, the only fossible place of jurisdiction. Ru1e 69, Federal Rules of Civil Procedure, shows this to be fact. It authorizes the collection of a judgment only by obtaining a writ of execution in accordance with the practice and procedure of the state in which the district court is held.

Furthermore, it wou1d be "manifestly incompatible with the intent thereof' to place criminal sanctions with respect to one's own personal property. Hence, even if Congress had not provided a distinct definition of the "person" (Sec. 7343) for the criminal sanctions in the I.R. Code the general definition of "person" for the entire I.R. Code could not apply (Sec. 7701(a)(1) in chapter 8 of this book).

The bottom line for a valid charge of violating either section 7201 or 7203 of the I.R. Code is that the accused person: 1) must be acting in a

salary: A reward or recompense for services performed. In a more limited sense, .... a stated compensation paid periodically as by the year, month, or other fixed period, in contrast to wages which are normally based on an hourly rate.

compensation: Equivalent in money for a loss sustained; From Webster's New Collegiage Dictionary: (in part)

compensation: something that constitutes an equivalent or recompense. wage: n. a pa}'JTient usually of money for labor or services usually according to

contract .... RECOMPENSE. syn WAGE, SALARY, STIPEND, PAY, FEE, HIRE, EMOLUMENT.

9 Rule 69. Execution (a) In General. Process to enforce a judgment for the payment of money shall be a writ of execution, unless the court directs otherwise. The procedure on execution, in proceedings supplementary to and in aid of a judgment, and in proceedings on ana in aid of execution shall be in accordance with the practice and procedure of the state in which the district court is held, existing at the time the remedy is sought, except that any statute of the United States governs to the extent that it is applicable. In aid of the judgment or execution, the judgment creditor or his successor m interest ~hen that mterest appears of record, may obtain discovery from any p~rson, mcluding theJ"udgment debtor, in the manner provided in these rule;; or m the manner provi ed by the practice of the state in which the district court IS held.

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fiduciary capacity with regard to U.S. Government property in order to fit the description of the "person" defined in section 7343 who is under a duty to perform the act under which a violation of I.R. Code laws is possible, 2) must be accused and proven guilty of crime against the United States, which, with regard to the subject matter in the I.R. Code, can only be fraud or larceny with regard to U.S. Government property, 3) the U.S. Government must bring its cause of action into a state court since Title 18 of the U.S. Codes does not provide notice of these crimes. Unless the above is followed the Federal Government employees who participate in the action are not acting under the law and are committing a crime against the person they accuse as well as against the laws and Constitution of the United States.

Fraud by Federal Government employees

Income tax is not a tax on one's income, but is a kickback program where the IRS has the duty to assure that 100 percent of that kickback is returned. However, when IRS employees make any attempt to gain control over property that does not belong to the U.S. Government they commit a fraudulent act. Look back at how Black's Law Dictionary defines "fraud" (page 177) to see it is Federal Government employees' conduct that is fraudulent and not that of the targeted person. The conduct of Federal Government employees conceals the fact that a ''U.S. Individual Income Tax Return" is not required by law to be made by an "individual" (a Federal Government employee, even though they are subject to the I.R. Code) or by any person working in the private sector.

Fraud is committed by Federal Government employees when they force income that does not belong to the U.S. Government from persons who are not transferees. Still they are getting away with it because of the control they exercise over a person's thinking and conduct through intentional perversion of the truth.

The statement that "making a return of income" is required by I.R. Code laws is only true when one is an employee of the U.S. Government and one has U.S. Government income in his possession to return. Only then is the making of a return or redelivery of the U.S. Government's income a lawful subject matter. However, perversion of this truth is manifested when the Federal Government employees enforce the making and collection of an amount declared as owed on a ''U.S. Individual Income Tax Return" (document) from any person who is not

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a transferee of U.S. Government income. The fraud is committed upon such a person.

The truth is perverted when the phrase "making a return of income is required by law" is enforced by making it mean the making and delivery of a "U.S. Individual Income Tax Return" is required. The former phrase is properly used only upon a transferee while the latter phrase wrongfully causes the creation of a forced debt.

Duplicity of subject matter

It is IRS humbug that causes a person to be punished as a criminal for willful failure to create a debt in favor of the U.S. Government upon which his labor is controlled to his own prejudice. Such a condition is prohibited by the Constitution and peonage laws of the United States of America. Yet, this is exactly what occurs in most so-called trials under sections 7201 and 7203 of the I.R. Code.

If Congress provided notice in Title 18 with regard to "fraud with intent to evade tax," they would also have to provide notice of the fact that only persons who are transferees of property belonging to the U.S. Government are subject to this charge. That would not only enable those who are not subject to the I.R. Code to defend their life, liberty and property against malicious prosecutions under sections 7201 and 7203 of the I.R. Code, but destroy the false belief that exists today with regard to the requirement of filing a "U.S. Individual Income Tax Return." Still, failure to provide such notice is evidence of concealment. This concealment has permitted the IRS to force the surrender of income that is not in question of belonging to the U.S. Government and enabled malicious prosecutions to take place.

Under section 7201 the person is charged as a tax evader for failure to make a "return of income," but cannot defend against such charge when the phrase is not understood. Just as with section 7203, the failure to file a ''U.S. Individual Income Tax Return" is used to make 12 persons in a jury box believe the accused evaded a tax. Such charges and prosecutions are malicious unless these terms are clarified by the Federal Government employees because the targeted person is charged as a transferee who evaded taxes by failing to make a "return of income" to the U.S. Government, but prosecuted for willful failure to deliver a debt instrument in the name of a ''U.S. Individual Income Tax Return." If Congress or the Federal Government employees in the Justice

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Department clarified this subject matter, it would be impossible for the IRS to enforce their unlawful procedure. Thus, taking no steps to clarify this subject matter is evidence of concealment that a U.S. Individual Income Tax Return" is NOT required to be made and delivered to the IRS.

The subject matter of violating sections 7201 or 7203 has nothing to do with wilful failure to make and deliver a "U.S. Individual Income Tax Return." Yet, later I will show you through my own personal experience how the duplicity of this subject matter makes it possible to have a person charged with failure to make a "return of income" to the Director of the IRS, but prosecuted and declared guilty by 12 persons in a jury box of willful failure to make and deliver a "U.S. Individual Income Tax Return." Perversion of the law of returning to the U.S. Government it's income to one of forfeiting control over your personal income and liberty results. Here the malicious intent is to control labor against ones will, a condition prohibited by the peonage laws of the United States of America.

Federal Government employees can only demonstrate their intention to obey the law by observing the law themselves. Due process of law must be obeyed for a conviction of fraud or larceny to be sustained with regard to the U.S. Government's property. That is the constitutional obligation of Federal Government employees. To deprive a person out of his life, liberty or property without due process of law is to be unduly convicted, which is in violation of the Fifth Amendment of the U.S. Constitution and enforcement of involuntary servitude (prohibited by the Thirteenth Amendment) does take place. It is the Federal Government employees who have the Constitutional obligation and power under the Thirteenth Amendment to enforce law against the condition of such involuntary servitude. Yet, under these circumstances they create a condition of involuntary servitude.

The U.S. Government, just as a corporation or any other created entity, is deemed to be a person having rights with regard to its property. Any charge of larceny or fraud between two persons is only cognizable in state courts. Proof of this is the fact that notice is not provided in federal law. Hence, due process of law is in evidence only if the U.S. Government would seek a determination as to its property in the state courts. There the IRS would have a valid claim that one has in his possession monies that belong to the Federal Government. Lawful

1%


recovery of such property is only possible through channels when due process of law is present.

As to "fraud with intent to evade tax," due process of law is only possible when the U.S. Government claims that fraud has been committed as to its property. Such a claim is a cause of action as between any two parties in a state court. However, it is taken instead to the U.S. Courts where they have arranged to control persons in the jury box. The U.S. Court is not a disinterested third party since they have a stake in the outcome, which means that no fair trial is planned or possible.

The value of the humbug charges under sections 7201 and 7203 is to establish the false belief that the requirement to make a ''U.S. Individual Income Tax Return" exists when in law it exists only upon the Secretary. The extent of I.R. Code law is that if one possesses income that belongs to the U.S. Government, that income is returnable by agreement under specific conditions. Again, the vagueness in the laws is what makes the misuse of I.R. Code sanctions (criminal and punitive) possible.

At this point I advise IRS employees that they have no lawful authority to contact any person who is not a "transferee" under the I.R. Code. To do so you are attempting to control that person by a process of debt that is prohibited by the peonage laws of the United States of America. Whether this is done wittingly or not, you accept the Legal consequences of 18 U.S.C. 1581 (review chapter 5). To avoid such a consequence ask for a written declaration from your supervisors that the person assigned to you is a "transferee" under the I.R. Code who is required to make a "return of income" to the Federal Government. Without such a declaration your conduct of participating in an act to cause the illegal condition of peonage would be proveable.

The question that remains to be dealt with is how convictions for tax evasion or willful failure to file income tax returns are accomplished with regard to persons and their own property when it is not lawfully possible to do so and results in malicious prosecutions. The answer is, Federal Government employees are enforcing a false belief by using 12 persons in the jury box where it is made certain these persons agree 100 percent with the IRS, the Justice Department, and the U.S. judge who permitted the misuse of the U.S. Courtroom. How this was done to me personally on two occasions in a U.S. Courtroom is the subject matter of the next two chapters.

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IRS HUMBUG PROVEN BY MY STORY

The charge against me proves IRS humbug

The procedure in place for the U.S. Government to accuse a person with violating a law starts with a U.S. Attorney, through an assistant, composing a written document ("Information" or an indictment)1

showing probable cause exists to believe a specific person violated a specific law of the United States of America. For a charge to exist a law that makes clear the conduct expected of a person must exist. Only then can probable cause exist. Rule 9 of the Federal Rules of Criminal Procedure requires that the charge, whether by "Information" or indictment, be attested to under oath before the Clerk of a U.S. Court can legally issue a "Summons" requesting such person to appear before a U.S. magistrate to answer the allegation. If the allegation is not attested to under oath then a lawful prosecution is not possible. If not attested to under oath the charge is not being made by the U.S. Government pursuant to due process of law, but it is humbug used by the Federal Government employees involved to institute a malicious prosecution useful in propagating and enforcing their false belief.

1 An "Information" differs from an indictment in that it is an accusation made by a U.S. attorney without being processed through a grand jury to establish probabfe cause that a crime exists. Wnether the charge is made directly by a U.S. attornex or through a grand jury controlled by a U.S. attorney does not alter the procedure that must he followed.

An allegation not attested to under oath is humbug regardless of its form. When the accusation against me was not supported by attestation under oath it had no force of law and the '1nformation" (document) was not a legal charge by the U.S. Government, but part of the IRS humbug used to control people by establishing opinions that authority for them to do this exists.

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IRS HUMBUG PROVEN BY MY STORY CHAPTERU

IRS humbug creates malicious prosecutions

The following two definitions provide the basis for understanding the facts provided by the action against me.

humbug (n) 1) something designed to deceive and mislead. 2) an attitude or spirit of pretense and deception.

humbug (vb) DECENED, HOAX: to engage in a hoax or deception. Webster's New Collegiate Dictionary

malicious prosecution. One begun in malice without probable cause to believe the charges can be sustained .... Black's Law Dictionary, Fifth Edition:

Humbug is used by Federal Government employees when no lawful authority is available upon which the U.S. Government can prosecute. The result is that Federal Government employees are not making the charge for the U.S. Government, but for themselves. The humbug used in malicious prosecutions is proven by the documentation in the action against me.2 Here is how Federal Government employees use personal opinions to have people unduly punished humbug style.

The humbug "charge"

The malicious prosecution against me started with a U.S. Attorney, through an assistant, submitting an '1nformation" to the clerk of the court in Denver, Colorado, (Appendix H) that said:

"he was required by law .... to make an income tax return to the district director of Internal Revenue for the Internal Revenue District of Colorado .... "

and closed by saying that this is in violation of section 7203 of the I.R. Code. The pervious chapter explained that to "make an income tax return" is the same as saying to make a "return of income" that belongs to the U.S. Government. Only a "transferee" of U.S. Government income can be in possession of U.S. Government income that is in question of being returned to it. Therefore the U.S. Attorney was alleging that I was

2 Mine was not an isolated action. The PSI report (covered later in this chapter) shows thousands are prosecuted each year under section 7203, and perhaps thousands more under section 7201.

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a person who is under the legal status of a "transferee" under the I.R. Code. But, the facts presented to him by the IRS showed him that I was not, and am not, such a transferee. The IRS record revealed to him that the U.S. Government was never the source of my gross income, and so there is, and was, no legal kickback required by laws of thP. United States of America to be made from the gross income in my possession. It revealed to him that my income is, and was, not includible in gross income under subtitle A of the I.R. Code (see chapter 3, section 7701(a)(31)). With this information in hand he chose not to submit the accusation under oath. This means he knew he could not lawfully make a charge for the U.S. Government, but still chose to cooperate with other Federal Government employees to enforce IRS humbug.

The fact that I was not a "transferee" under the I.R. Code was also understood by the presiding judge. If I was a transferee (a person with U.S. Government property in my possession) the Court, upon a lawful conviction, could have ordered me to make an income tax return to the U.S. Government. Not doing so provides prima facie evidence that the allegation against me was IRS humbug and the action was for the malicious purpose of coercing me to return to a condition of peonage through delivering a debt instrument in the name of a "U.S. Individual Income Tax Return."3

Malicious prosecutions have established opinions that are used to control people in our society when Federal Government employees have no law upon which to rely. The opinions of U.S. judges (called case law) is misused as if they are law. This results in control of the person. In this subject matter Federal Government employees have no authority to control the person. They only have authority to control U.S. Government's property (income) in the possession of a person.

This is why Federal Government employees have found malicious prosecutions to be a viable way to bring monies into the U.S. Treasury

3 The word humbug is used because there is no law in Title 18, or any other Title of the United States Codes, that describes the conduct of Federal Government employees as unlawful or felonious. However, their conduct produces a hoax with intent to control the labor of the person who delivers a debt instrument called a "U.S. Individual Income Tax Return" to the IRS. The condition that is manifest4 by this IRS humbug is prohibited by the peonage laws of the United States o America. Those who tak:e part in the enforcement of, or returning a person to, a condition of peonage accept the legal consequences of Title 18, Sec. 1541 (covered in chapter 5).

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IRS HUMBUG PROVEN BY MY STORY CHAPTER12

when the IRS does not have legal authority to use their administrative process (including their Notice of Deficiency) with regard to property in one's possession, and cannot lawfully charge the person with fraud with intent to evade tax in a state court.

With the record being that my conduct was not effectively connected with U.S. Government income, the subject of diverting non-existing U.S. Government income from my estate was not possible. Furthermore, nowhere in the I.R. Code does it state that tax evasion is fraudulent conduct (covered in chapter 11). This is why no fraud was, or could be, charged by the U.S. attorney. It does not exist when the gross income comes from an equal exchange and is not part of the U.S. Government's kickback program. Since no fraud existed, then the inferred tax evasion did not exist. Since tax evasion did not exist then I was not a person who could lawfully be punished for willful failure to deliver a "U.S. Individual Income Tax Return." This made the action against me malicious and the punishment imposed undue. This condition is in violation of the Thirteenth Amendment because involuntary servitude exists when a person's undue conviction is deliberately accomplished by a malicious prosecution.

Humbug "Summons"

The U.S. Attorney initiates the malicious prosecution by presenting the humbug charge to the clerk of a U.S. District Court. However, an accusation, whether made through an "Information" or an indictment, cannot be considered done under due process of law unless it is properly attested to under oath (Rule 9 of the Federal Rules of Criminal Procedure).

Once an accusation that probable cause exists to bring a person to trial has been attested to under oath the clerk's duty is to issues a "Summons"4 for the accused to appear before a magistrate at a

4 In 1984, the Summons (Appendix I) that accompanied the charge against me by '1nformation" contained notice of this requirement. At the bottom was printed: "Clerk may sign a Summons on an Indictment or Information supported by a showing of probable cause under oath. Federal Rules of Criminal Procedure, Procedure Rule 9."

Such notice was not given on a summons issued to another person approximately three months after my appeal, which raised this issue, April 1985. Though I have wondered if my appeal was the reason it was deleted from the bottom of the summons,

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particular date and time to answer the charge. This is called an arraignment. However, the procedural defect of a summons issuing upon an accusation that was not supported by probable cause under oath makes any procedure that follows a legal nullity. In such a case the record made is not one of a trial under the laws of the United States of America, but a malicious prosecution that results in a person being deprived of his life, liberty and property without due process of law (Fifth Amendment, violation).

When I raised this issue in my appeal to the Tenth Circuit Court of Appeals the prosecuting attorney, in his rebuttal, permitted his thinking and conduct to be controlled by an opinion provided by a U.S. judge in a court case. This is hardly a defense for his action when his duty is stated so specifically and clearly in Rule 9. Further, the silence of the Appeals Court judges on this issue, and all other issues of law in my appeal, provides proof of the cooperation between Federal Government employees of all branches of the U.S. Government. Such cooperation is not permitted under the U.S. Constitution, which mandates a separation of powers. But then, malicious prosecutions would not be possible if there was no humbug used by Federal Government employees in the IRS, the Justice Department, and the Judicial Branch of the U.S. Government.

Humbug of Private Sector Lawyers

Beware! Lawyers in the private sector will limit their activities to representing their clients, not defending them. This is humbug established by lawyers of the bar associations of the different states and within the United States.

An attorney's first step should be to check and see that the charge made was attested to under oath. Notwithstanding the humbug status of the "Summons" I received, my lawyer ad vised me to appear to answer it. His advice initiated the first necessary step for me to involve myself in the malicious prosecution.

I hired and paid the fee of an out-of-state attorney that was highly recommended. This attorney became very angry when I would not

the important thing is that its deletion provides evidence of concealment since the Rule nas not been changed.

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accept his strategy of stipulating to being a person who did not file U.S. Individual Income Tax Returns for the years in question and to being a "person required" to do so. The day before the so-called trial was to begin, he threatened not to appear. His hope was that this would force me to agree with his strategy. Since I had paid his fee, he did appear but asked for a conference in the judge's chambers before things began. My attorney's purpose for this conference was succinctly stated by him after the judge suggested to me that I should accept my attorney's advice and I refused. My attorney said [transcript: Vol. I, page 58, lines 15-17]:

"If I were arguing a point in your court, I didn't want you to think that I suddenly changed my stripes from the last time I was in your courtroom."

This attorney had "represented" a person being maliciously prosecuted under section 7203 in the same courtroom before the same judge a couple of weeks earlier. That malicious prosecution had gone smoothly for the Federal Government employees since my attorney had the accused make these same stipulations even though he was not a person whose source of gross income was the U.S. Government.

The motivation of a lawyer to cooperate with the Federal Government employees in the cases of known malicious charges is simple, it sustains their livelihood. If the private sector lawyer would be an advocate,S there would be no such court cases. The two lawyers who "represented" me were paid more than $18,000. The same lawyers wanted an additional $10,000 for handling the one question they wanted to appeal, which was a jury instruction, that should not take more than 10 hours of work for their secretary to compile and submit. I point this out to establish the reason lawyers in the private sector cooperate in malicious prosecutions. It is a handsome living, dishonesty notwithstanding.

By their willing participation with Federal Government employees in malicious prosecutions private sector lawyers are not advocates in the system. Instead they cooperate to continue the riot scene against the

5 In Strickland v. Washington, 104 S.Ct. 2052 (1984), Justice O'Connor provides the standard for attorneys to be an advocate in Court on behalf of their client. It was stated by her that for a defendant to receive counsel for his defense prescribed by the Sixth Amendment, a lawyer must be an advocate and not merely walk the accused through courtroom procedure.

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targeted person. This emphasizes the need for each member of our society to be more aware of, and exercise, the rights, privileges and immunities guaranteed under the laws and Constitution of the United States of America. Not to do so places these rights, privileges and immunities in the questionable trust of lawyers who frequently exercise a person's inalienable rights to his prejudice. This trust has been violated numerous times even though Federal Government employees and lawyers in the private sector are duty bound to uphold constitutional rights. When they refuse to fight a malicious prosecution that is based upon duplicity of subject matter (covered in chapter 11) private sector lawyers are aiding in the concealment of malicious prosecutions and, of course, they have the targeted person pay for it.

Humbug arraignment

A summons directs an accused person to appear before a magistrate to answer to an allegation. If the person pleads guilty the Court, during sentencing, sets the punishment within the guidelines prescribed by the law stated in the charge. If the person pleads not guilty, the magistrate will set a time for trial. However, the magistrate would only have jurisdiction to set a date for the use of a U.S. courtroom if the charge was properly made under oath. The charge is not valid if the person employed by the Justice Department fails to attest to probable cause under oath, making the document used to bring a person into a U.S. courtroom a piece of paper with no legal force behind it. With no legal force behind this paper a judge bases jurisdiction of the Court upon a person's appearance. Such jurisdiction is not under the laws of the United States of America, but under a treaty forced through undue influence exerted by the Federal Government employees of the Justice Department in cooperation with IRS employees and private sector lawyers. Part of Federal Government employee humbug is a judge taking one's appearance as honoring such a treaty, notwithstanding the hoax getting one to appear.

When I appeared before a magistrate, at my attorneys insistence, I was not aware of the fact that the processing of the summons sent to me was defective, and so I only challenged the jurisdiction of the court because I was not a person described in section 7343. The magistrate ignored the issue. When I would not enter a plea he entered a plea of "not guilty" for me and set a date for the malicious prosecution. Setting a date to use a U.S. courtroom was additional Federal Government

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employee humbug showing the cooperation between the Judicial and Executive Branches of the Federal Government in prosecuting persons falsely under humbug charges.

Under the law of the United States of America there is a separation of powers. This was intended to prevent Federal Government employee abuses of power from occurring. But, malicious prosecutions are formidable ways for the IRS to perpetuate the false belief that exists about the making of the debt instrument, called a ''U.S. Individual Income Tax Return," that falsely controls property not subject under law to being returned to U.S. Government. Therefore Federal Government employees find it necessary to cooperate and exercise humbug.

U.S. courtroom humbug

Proof that the action against me in a U.S. courtroom was not a trial but malicious prosecution is demonstrated by the fact that I was charged with one thing and declared guilty, by 12 persons in a jury box, of another. I was charged as a person who was a transferee with regard to tax (income or property) that belonged to the U.S. Government, but was convicted for not making and submitting a debt instrument in the name of a ''U.S. Individual Income Tax Returns" (which is conduct not required by law). The planned for conviction was malicious and demonstrates the most vicious form of Federal Government employee humbug used to control society. This misuse of a U.S. courtroom is a message from Federal Government employees that this can happen to anyone that refuses to create a debt in the name of filing a "U.S. Individual Income Tax Return" upon which Federal Government employees can control their labor. Such IRS humbug forces persons into the service of the IRS by controlling their labor through debt. This is prohibited and punishable under the peonage civil rights laws of the United States of America (see chapter 5). This practice will continue until people possess the knowledge to defend themselves. This book is intended to provide that knowledge.

Humbug used to seat 12 persons in the jury box

To accomplish the result that Federal Government employees want from their humbug charge, humbug summons, humbug arraignment, and humbug malicious prosecution, they need to arrange for, and use, 12 persons who are of the opinion that the phantom law exists that

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requires the making and delivery of a "U.S. Individual Income Tax Return" on income from all sources.6 By seating such persons in a jury box the Federal Government employees have full control over the outcome of a prosecution and makes it malicious.

In a humbug charge that does not specify any law reflecting requirement, but asks for punishment under a I.R. Code statute, the prosecuting attorney needs to select 12 persons to sit in a jury box that are of the personal opinion that the accused is guilty of tax evasion if that person failed to deliver a "U.S. Individual Income Tax Return" to the Director of the IRS. Details of the selection of those that sit in a jury box is important enough to give it a full chapter so, for now, I will only say that there is great care in seeing that the questions asked in the voir dire7lead those selected to sit in the jury box to believe the subject matter is the making of a ''U.S. Individual Income Tax Return" even though no such document is placed into evidence and even though the person is charged as a transferee of U.S. Government property (income), which is not a criminal subject matter unless the accused made himself a transferee by fraud. In the action against me I was not charged with fraud with intent to evade tax.

Federal Government employees in the Justice Department get the result they desire through voir dire questions that establish that each person selected to sit in a jury box delivered ''U.S. Individual Income Tax Returns" to the IRS with regard to property they received. Yet, the law says that the arr~y (balance) of the jury must not favor either party in the case. If this condition is not present the outcome is fixed. With a fixed group of 12 persons in a jury box a fixed outcome becomes a simple matter. Federal Government employees rely upon false opinions to have the accused unduly punished when they have no law upon which to base legal punishment. Such false and malicious punishment enables Federal Government employees to continue the false IRS belief that (A) a ''U.S. Individual Income Tax Return" is required to be filed, and (B)

6

7

Review chapter 3: section 7701(a)(31) shows that income from a sources other than the U.S. Government is not includible in gross income under subtitle A of the I.R. Code.

Voir dire is the legal termin~logr. for the questioning of a group of pers~ns in order to seat those wno are unbiased and hereby assure the accused a fair tnal.

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that all income is includible in "gross income" under the laws of the I.R. Code.

It should also be noted that without a law upon which a person must control his conduct the destiny of the accused in a malicious prosecution depends upon the majority rule of those sitting in the jury box. Majority rule is a democratic principle, but this country is a Republic where the rights of individuals is honored. Establishing and using due process of democracy is tantamount to being controlled by a mob.s

First Federal Government employee witness humbug

The first government witness was a young lady who said she worked at the IRS Ogden Service Center. She brought with her IRS forms 4340, titled Certificate of Assessments and Payments. These forms are signed by a Director who certifies that they are "a true and complete transcript for the period stated in respect to the taxes" of the "taxpayer."

The 4340 forms with my name on them show that a liability was created when I delivered a ''U.S. Individual Income Tax Return" and that those liabilities had been discharged (Appendix J). They also showed that no liability existed for 1978 (Appendix K) and 1979 when I did not submit a ''U.S. Individual Income Tax Return," nor was a liability created by the "substitute for return prepared by Exam" shown on record dated 09-15-80. In fact, an entry made under the date 10-09-80 specifically stated "Not liable this period" (period ending December 31, 1978). My attorney did not share this information with me or use it to my benefit during the malicious prosecution. Instead these IRS 4340 forms were used to establish that I had delivered ''U.S. Individual Income Tax Returns" to the IRS prior to 1975 and that I did not for the years 1978

8 Mob. An assemblage of many people, acting in a violent and disorderly manner, defying the law, and committing, or threatening to commit, depredations upon property or violence to persons. Black's Law Dictionary, 5th Edition.

Author's note: I find the term that best describes the action against me as a mob scene. Both the Federal Government employees and the 12 persons in a jury box defied their duty and violated laws by tbe action against me. Proof that Federal Government employees conspired to use the persons sitting in a jury box to deprive me of property and imposed violence upon me is that no faw upon which I was to control my conduct was presented to those sitting in the JUry box. Th.ough unwittingly, the persons in the jury box were party to the malicious prosecution.

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IRS HUMBUG

and 1979. Unfortunately, I did not come into possession of these IRS humbug 4340 forms until after the first malicious action was over.

The humbug in the 4340 forms indicated to the 12 persons in the jury box that my decision was willful when I stopped delivering ''U.S. Individual Income Tax Returns" to the IRS, which it was. The forms do not prove that I was a person required to make a return of income to the U.S. Government. The only way to prove that a person's conduct violated a law is to place the law into evidence. With no such law available, the prosecuting attorney used my past conduct of making and delivering ''U.S. Individual Income Tax Returns" to support the false belief humbug opinions of those seated in the jury box that the requirement exists. The prosecuting attorney, in his summation, said: "Was Frank Kowalik required to make income tax returns for 1978 and 1979? Well, as the witnesses told you .... "[transcript: Vol. III, page 448, lines 6-7]. This inferred the lay witness' opinion was valid under law. He went on to infer that I knew a requirement existed because I had filed returns prior to 1975. This only proved that only a habit existed. Without the law in evidence nothing in law was established. Yet, in our country only law provides a guide as to what one's conduct should be, not habits which are nurtured by Federal Government employees.

The intent to manipulate and use those in a jury box by humbug is the only possible conclusion when no law showing requirement is provided in a charge that suggests a person be punished additionally pursuant to section 7203, and no law of requirement is provided at the proceedings that follow that humbug charge. Since those in the jury box were specifically selected because they falsely believe that they are personally required to make and deliver a "U.S. Individual Income Tax Return" to the IRS it is an easy matter for Federal Government employees involved to manipulate them with IRS 4340 humbug forms. It would be a breakthrough for justice if this book did nothing more than make persons called upon to sit in a jury box demand the production of a law passed by Congress upon which to judge the accused person's conduct. In other words, in these kinds of actions ask the judge to produce the law that requires a person to deliver a ''U.S. Individual Income Tax Return" to the IRS and states that for willful failure to do so section 7203 has been violated.9

9 The answer presently given is that a "return of income" is required by the law

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Second IRS witness humbug


After a parade of persons who worked in the private sector appeared to state amounts of interest, dividends, and remuneration for services that were in the records in their possession with regard to property said to be mine, another Federal Government employee was brought in. She said she worked as a revenue agent for the IRS, that she had audited hundreds of tax returns and that she even taught her skills to others in the IRS. Though she admitted she was not knowledgeable in the law, just accounting, she was allowed to be considered "an expert in the field of examining income to determine whether a person is required to file income tax returns." Though trained by the IRS, she was NOT trained to know that a "return of income" or "income tax return" meant returning to Caesar that which belongs to Caesar. She obviously believed it meant the making and delivery of a ''U.S. Individual Income Tax Return." Therefore, she stated that in her "opinion" I was required to make such returns. She also indirectly stated that her opinion was that my gross income was includible in gross income under subtitle A of the I.R. Code when by law (Sec. 7701(a)(31)) it is not.

The U.S. Government has hundreds, possibly thousands, oflawyers who would be qualified to make statements on the requirement of making returns of income, but they would perjure themselves if they made statements such as the ones produced by the lay Federal Government employee in the malicious prosecution against me. This is the reason a lay person like this IRS trained employee was needed to give her "opinion" on law to a panel of persons who, based upon their own habit of delivering a ''U.S. Individual Income Tax Return" to the IRS each year, are predisposed to believe such a law exists. This predisposition helps Federal Government employees enforce their humbug, and the enforcement of the humbug enhances the predisposition.

Though the prosecuting attorney supposedly had the duty to prove beyond a shadow of a doubt that I had violated a law, he was able to get

in section 6012, but this does not mean to deliver a "U.S. Individual Income Tax Return" (review chaJ?ter 8). It means if one has the U.S. Government's income in one's possession that 1s subject to being returned he is ~uired to do so. Also, section 6012 does not provide authority for tfie application of section 7203.

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a guilty declaration from a panel of 12 person sitting in a jury box without presenting the law I supposedly violated. With no law of requirement in the charge or in testimony the panel of persons had nothing upon which to compare my conduct. The opinions of laypersons on what they believe is law is not sufficient to sustain a lawful conviction. For this reason the proceeding against me in a U.S. courtroom was not a trial, it was a malicious prosecution arranged for through Federal Government employee humbug and the use of this planned false witness.

Humbug after being declared guilty

More Federal Government employee humbug is experienced after the arranged-for guilty declaration is received from the 12 persons who were misused in the jury box. The first is from the court's probation department. This department has the duty under Rule 32(c) of the Federal Rules of Criminal Procedure to make what is called a Presentence Investigation Report (hereafter PSI report). The purpose of the PSI report is to give the judge enough personal information about a person duly convicted to be aware of mitigating circumstances which could, if not considered at sentencing, result in cruel and unusual punishment. As an example, if a person faces five years in prison and upon investigation and it is learned that a disease will take his life in six months, five years is cruel and unusual punishment.

The PSI report with regard to me stated that I was convicted of "tax evasion" to an exact dollar amount. Even though fraud is inferred by the criminal sanctions imposed by the misuse of sections of the I.R. Code law which prescribe additional punishment, I was not charged with tax evasion or fraud. When asked to sign the PSI report, I refused. It was dishonest, it was a hoax, it was humbug intended for the bad purpose of having me plead guilty to tax evasion by signing it under penalty of perjury, but not under penalty of perjury under the laws of the United States of America. I was being coerced to plead guilty to a condition for which I was not charged, therefore I refused to cooperate. Though my attorney specifically expressed concern for his credibility with Federal Government employees by my not signing the PSI report and an Assets and Liability Statement, my position was, and is, that I would only sign an honest report.

The legal question that arises by the conduct and concern over my not signing the PSI report is this, why is it necessary to sign anything if

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Federal Government employees have the authority to impose their punishment upon an individual? Why was I being asked to confess to tax evasion (which infers fraud) in the PSI report when I was not accused of tax evasion or fraud? Notwithstanding it's humbug, would not such a confession imply that the humbug used by Federal Government employees was acceptable to me? Would it not be used by Federal Government employees against me? Does it not prove malicious intent of the Federal Government employees involved? I know it does because there is no law that creates the duty for any person to deliver a ''U.S. Individual Income Tax Return" to the IRS, thereby surrendering control over a specific amount of personal property.

As a point of information, the PSI report is also used by Federal Government employees in the Federal Government's prison system to keep a person incarcerated longer than the parole guidelines permit, but that is a long story unto itself. In short, the Justice Department's guidelines call for a person convicted to two years in prison under a lawful 7203 prosecution to be eligible for parole in six months. Notwithstanding my prosecution was maliciously accomplished by Justice Department Federal Government employee humbug, I was imprisoned 22 months plus some days on a two year sentence. Federal Government employee humbug made possible the difference.

Judgment Order identifies the humbug

A Judgment Order is the document authored by a U.S. judge. It cannot contain a lie or misstatement because it is a record of the judge speaking for the Court. The Judgment Order (Appendix L) that issued because of the malicious prosecution against me stated:

"Defendant has been convicted as charged of the offense(s) of failure to file income tax returns, in violation of Title 26 U.S.C. Sec. 7203."

For the U.S. Court to validly express a conviction where the additional punishment of section 7203 was applicable it would be essential for the word "willful" to appear in the Judgment Order. By Omitting the word "willful" the Judgment Order was not a document from the court but a humbug stipulation by the U.S. judge that my conduct was not willful with regard to either the charge or as to failure to file a ''U.S. Individual Income Tax Return" and therefore I had not actually violated any law of the United States. As this document reads, legal imposition of the additional punishment of section 7203 was

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impossible. Yet, other Federal Government employees relied upon it and thereby acted illegally.

Being unable to supply the law that made my conduct willful the word was dropped. Had the word "willful" appeared in the Judgment Order the U.S. judge would have provided the evidence needed to prove that the proceeding in a U.S. courtroom was based upon Federal Government employee humbug and prove her participation in the malicious prosecution. The Fifth Amendment to the U.S. Constitution protects everyone from being forced to provide evidence against themselves. This judge took advantage of this immunity and counted on the humbug Judgment Order she signed not being discovered.

The Judgment Order that contains my name supports the conclusion that a trial under law did not take place and demonstrates the contribution of a U.S. judge to the IRS humbug. Notwithstanding that the judge violated her duty as a judge of a U.S. Court, she willingly participated in the Federal Government employee humbug program of enforcing the IRS service of creating debt by the making and filing of a ''U.S. Individual Income Tax Return." Thus the IRS false belief is fueled by the conduct of U.S. judges in all U.S. courtrooms.

Sentencing humbug

Confirmation of the bad purpose of the malicious prosecution was made clear at what is called a sentencing hearing. At the first such hearing the U.S. judge asked the prosecuting attorney what the government thought was appropriate punishment for me. He did not state I should be punished for violating the law. Instead his response was that the government feels a maximum term in prison and maximum fine should be imposed so that I could serve as an example to deter the balance of society, as well as myself, from such conduct in the future. In doing so he confessed that any punishment imposed was not for violating a law but for refusing to obey the will of Federal Government employees to create and deliver a debt instrument to the IRS. Indirectly he stated that I should be punished for refusing to be a peon.

Had I been lawfully convicted of violating a United States law, making the additional punishment in section 7203 applicable, it is logical, reasonable and lawful to expect the presiding judge to order that I make and deliver such returns upon being declared guilty. She did not do so even after two such malicious prosecutions. Instead, at the first humbug sentencing, the judge bribed me to cooperate with the IRS by

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saying that '1F" I file U.S. Individual Income Tax Returns for the years 1978 and 1979 she would order that I spend one year in prison instead of two. I refused her bribe, so the humbug Judgment Order reflects two-year imprisonment.

The U.S. judge granted me bail pending appeat but an illegal procedure was subsequently used to deny that. The story is too long to relay here and now, therefore I will just say that I was in prison for more than six months before the initial appeal I filed, which made a record of the IRS humbug, caused a hearing to be held that needed to put me back on the streets for awhile.

To this date I have no answer to my appeal even though three judges of the Appellate Court had the obligation to do so. Instead a new trial was ordered in a document signed by the chief clerk of the Appellate Court. His document is judicial branch of the federal court system humbug when it was not backed by a written opinion signed by the three judges of the Appellate Court assigned to answer my appeal. Still the U.S. judge in the District Court and the prosecuting attorney regarded this document as an order from the Appellate Court judges and, when I challenged this and refused to appear without a proper answer from them, I was falsely arrested, forced into a U.S. courtroom and subjected to another malicious prosecution. False imprisonment followed after the predictable guilty declaration from 12 controlled persons in the jury box, but first I was again pressured to sign a PSI report similar to the first one and make out an Asset and Liability Statement.10 However, at this sentencing hearing the U.S. judge told me to do what I please with regard to the making of a ''U.S. Individual Income Tax Return."

10 The Asset and Liability Statement is a document that provides detailed personal information about a ~rson's estate, which is foreign to the U.S. Government. This is the reason Federal Government employees cannot mandate a person to fill it out (Fourth and Fifth Amendment). However, once Federal Government employees have coerced such information from a person it can, and is, used against them in many ways. One is to hold them in prison until a fine is paid even tf the full term of imprisonment was fulfilled. This might be considered Imprisonment for a debt, whicfi. is prohibited, but when a person voluntarily provided information that he has sufficient assets to cover tne fine then any continued imprisonment is considered as a personal choice to remain in prison in lieu of paying the fine. Yet when you pay the fine it is taken as a confession to the judgment against you. Is this not another example of Federal Government employee humbug?

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The record that proves humbug If the first proceeding against me in a U.S. courtroom and the

Judgment Order made pursuant to it were lawful then my refusal to appear for another proceeding because of an appeal that resulted in a valid order for a new trial would be deemed a revocation of my appeal. This would mean that the punishment prescribed in the original Judgment Order could be enforced. However, the Federal Government employees involved hoped to wipe out the record of the humbug first proceeding, as well as my appeal that revealed their humbug, by forcing me into another malicious prosecution. I have not let it rest. The issues are still plaguing them.

Are these violations appealable? The subject matter covered in the next chapter is how the process of

enforcing Federal Government employee humbug was made possible by a jury that was fixed in favor of enforcing the beliefs of the Federal Government employee instead of enforcing a duty which is established by laws of the United States of America. Following that is a chapter about humbug not being appealable. It explains why the Tenth Circuit Court of Appeals did not answer the questions on law in my appeal and why the clerk of that court was used to send a document that notified me that a new trial was issued based upon an instruction to the persons in the jury box. Other Federal Government employees used this document to bodily force me into a second malicious prosecution. The intent of this new proceeding was to establish a new record and cancel the record I made of the first proceeding being unlawful. To this date I do not have a report of the opinion of any Appellate Court, which is more Federal Government employee humbug. But then, it is impossible for Federal Government employees to make humbug lawful so humbug must be followed by more humbug.

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CHAPTER13

RELATIONSHIP BETWEEN A FIXED JURY, MALICIOUS PROSECUTION AND A BILL OF PAINS AND PENAL TIES

Fixed Jury-a weapon of enslavement

By now it should be clear that IRS employees are legally and morally required to limit their activities to the lawful return of U.S. Government income that is in the possession of a specific person the I.R. Code refers to as a transferee. When they extend such activities to include the collection of personal income of persons in our society, they control the person by controlling his labor. Forcing a person to labor against his will is involuntary servitude. Forcefully controlling labor by debt is the form of involuntary servitude called peonage. Peonage is forbidden under the Constitution and laws of the United States of America.

By using humbug, IRS employees have caused hundreds of millions of people to be peons of Federal Government employees through the vehicle of the collection of a forced debt. Under the Thirteenth Amendment the U.S. Government has the duty to eradicate involuntary servitude, not make peons of persons.1 Therefore, Federal Government employees do this for themselves, not for the U.S. Government.

Justice Department employees then used the false belief that the making and delivery of a debt instrument to the IRS each year is required by law to aid IRS employees in enforcing this condition of peonage through malicious prosecutions. In their scheme, they use this false

1 The U.S. Supreme Court explains the duties which the Thirteenth and Fourteenth Amendments to the U.S. Constitution placed upon Congress in Clyatt v. U.S., 197 U.S. 207 at page 217-218 (1904).

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belief and arrange for fixed panels of 12 persons to participate in these malicious prosecutions. With this, a person is not convicted by a jury under the law based on facts as presented to them, rather under opinions based upon the false belief of 12 persons sitting in a jury box who are not legally jurors and become part of the IRS weapons of enslavement.

The selection of 12 persons who are all of the opinion that the requirement to file a ''U.S. Individual Income Tax Return" exists is the subject matter of this chapter. With no law of such requirement placed into evidence, because it does not exist, Federal Government employees do not act to enforce law but act to control people by inflicting punishment based upon opinions established by the false belief.

Biased Persons Do Not Make a Jury Trial

Black's Law Dictionary, Fifth Edition, defines "jury" in part as:

A certain number of men and women selected according to law, and sworn (jurati) to inquire of evidence to be laid before them.

A jury is a body of persons temporarily selected from the citizens of a particular district, and invested with power to present or indict a person for a public offense, or to try a question of fact.

and defines ''jury trial" in part as:

The right to "jury trial" of controverted issues implies a trial by an impartial and qualified jury.

The key to a jury trial is that the jurors are impartial and qualified. If they are partial they are automatically unqualified.

They must also be selected according to law, sworn to inquire of certain matters of fact and declare the truth upon evidence to be laid before them. In a lawful trial, since law is notice of a public offense, the facts presented must relate to law and support probable cause that the law has been violated. The absence of a law that clearly and positively states the conduct expected of the defendant makes it impossible for anyone to act as a competent juror since then they have nothing upon which to compare the conduct expected of themselves or of the defendant. Without a law, the standard for the defendant's conduct is established by the 12 persons in the jury box. This does not comply with due process of law. Hence, without a law to set the standard, there is no case, making it impossible for a person to be a juror under the law in the

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RELATIONSHIP BETWEEN A FIXED JURY, MALICIOUS PROSECUTION AND A BILL OF PAINS AND PENALITIES CHAPTER 13

case. They are only persons in the jury box acting pursuant to the humbug in the action.

Section 7203 Hoax

In a prosecution under section 7203, jurors under the law would have to be presented with a law that states a person is required to make and deliver a debt instrument in the name of a ''U.S. Individual Income Tax Return" and that section 7203 is violated for willful failure to do so. No such law is presented to those sitting in the jury box in a section 7203 prosecution because none exists. It does not exist because such law is prohibited by the peonage laws.

Section 7203 is the only statute given to those sitting in the jury box. Its title, ''Willful failure to file return, supply information, or pay tax," infers that willful failure to file any type of return document is punishable by such statute. But, titles have no legal effect (see Sec. 7806(b) in chapter 8) and the law in the body of section 7203 makes no reference to willfulfailure to make and deliver a "U.S. Individual Income Tax Return." Without such clear, direct and positive notice section 7203 is being misapplied when used with regard to this type of document and the intent of those who bring such action is to control peoples' conduct with false belief.

Most prosecutions under section 7203 are implied to relate to a ''U.S. Individual Income Tax Return" and are maliciously planned for the bad purpose of controlling society. The planned misapplicaiton of the additional punishment of section 7203 is fulfilled because of the false beliefs of a fixed panel of persons in the jury box. Such false belief will disappear once the reality that section 7203 does not apply to, or authorize a jury to convict for, willful failure to file the document called a ''U.S. Individual Income Tax Return" is understood. Until then, 12 persons in a jury box will continue to be used by Federal Government employees to enable them to inflict undue punishment upon their targeted person.

In a malicious prosecution under section 7203, Federal Government employees ask 12 persons in a jury box to declare a person guilty for not making and submitting "U.S. Individual Income Tax returns." To accomplish this, Federal Government employees make certain they have persons who will easily be led to believe this is the subject matter of the action instead of the lawful subject matter of section 7203, which is the

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return of U.S. Government income to the U.S. Government. By doing so, the persons sitting in the jury box are not under the influence of law, but under the influence of a Federal Government employee hoax.

Federal Government employees have learned how to implement their hoax2 by selecting 12 persons whose opinions can be controlled so that they do exactly what is wanted of them. By establishing that all of them did make and deliver "U.S. Individual Income Tax Returns" Federal Government employees know that IRS false belief controls them and that they are 100 percent partial to the Federal Government employee position. The habit of making and delivering these debt instruments exists because of fear of the IRS and not because of conduct required by laws of the United States of America.

Once it is established that such habit exists Federal Government employees know they selected people to sit in the jury box who will be 100 percent partial to the opinions given by Federal Government employees solicited to be witnesses. The opinions of IRS employees used as witnesses are not based upon the return of U.S. Government income, but upon IRS usages. When one IRS employee said she thought I was required to make a return, it was taken by the 12 persons in the jury box to mean that I was required to make a "U.S. Individual Income Tax Return." They are predisposed to believe this because it supports their habit of making such an instrument, and they were also conditioned to think this based upon the voir dire question to them, "Have your returns ever been audited?"

Federal Government employee humbug assures a fixed jury. With a fixed jury, a jury trial does not take place. Fixing the jury to favor the Federal Government employees by specifically culling persons suspected of disliking the IRS or the so-called taxing system, proves the whole process is a deliberately planned malicious prosecution.

This chapter covers how a Federal Government employee, employed as a U.S. judge, aided the Executive Branch of the U.S. Government in this selection process and permitted the misuse the U.S. courtroom for a malicious prosecution against me. PSI reports prove that this is done to many people each year. The bad purpose of malicious

2 Though not thoroughly researched, I suspect the same hoax is implemented by Federal Government employees in actions in U.S. courtrooms under section 7201, as for section 7203, when personal income is the subject matter.

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prosecutions under section 7203 is to increase the fear of the IRS so that the IRS employees can enforce the collection of income that is not lawfully in question of being returned to the U.S. Government.

Section 7203 becomes a 11bill of pains and penalties"

The exploitation of the opinions of 12 persons seated in a jury box, who under law cannot constitute a jury in a controversy with the United States of America, establish the condition for a trial by ordeal, a trial by a mob, outlawry, and not a jury trial. By arranging to misapply section 7203 upon a person with respect to his personal estate, Federal Government employees have made section 7203 as a ''bill of pains and penalties."

As seen by the definition provided in Black's Law Dictionary,3 the term "Bill of Attainder'' is a legislative act that is used with intent to strip a person of his property without benefit of due process of law because he is deemed a felon by his conduct and has been sentenced to die (capital punishment) for it. If an act inflicts a milder degree of punishment than death, stripping a person of his property without due process of law is called a "bill of pains and penalties." Both forms of

3 Black's lAw Dictionary, Fifth Edition. Attainder. At common law, that extinction of civil rights and capacities which

took place whenever a person who had committed treason or felony received sentence of death for his crime.

The effect of "attainder" upon such felon was, in general terms, that all his estate, real and personal, was forfeited. At the common Jaw, attainder resulted in three ways, viz.: by confession, by verdict, and by process or outlawry. The first case was where the prisoner eieaded guilty at the bar, or having fled to sanctuary, confessed his guilt and abjurea the rearm to save his life. The second was where the prisoner Eieaded not guilty at the bar, and the jury brought in a verdict against liim. The third, when tile person accused made his escape and was outlawed.

In England, oy statute 33 & 34 Viet. c. 23, attainder upon conviction, with escheat, was abolished. In the United States, the doctrine of attamder is now scarcely known, although during and shortly after the Revolution acts of attainder were passed by severaf of the states. The passage of such bills is expressly forbidden by the Constitution (Art. I, Sec. 9).

Bills of attainder. Such special acts of the Jesislature as inflict capital punishments upon persons supposed to be guilty of h1gh offenses, such as treason and felony, without any conviction in the ordinary course of judicial proceedings. If an act inflicts a milder degree of punishment than death, it is called a "bill of pains and penalties," but both are included in the prohibition in the Constitution (Art. I, Sec. 9).

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extinction of civil rights and capacities4 without due process of law are included in the prohibition in Art. I, Sec. 9 of the U.S. Constitution (Appendix A).

Since due process of law is not present in malicious prosecutions, a person punished because of such prosecution is without conviction in the ordinary course of judicial proceedings. Section 7203 becomes a legislative act unlawfully used to deprive that person of his liberty and property when the prosecution is malicious. Federal Government employees have then made section 7203 into a "bill of pains and penalties."

Sham rules used in section 7203 actions

As briefly stated in the previous chapter, in a lawful trial, persons selected to decide the fate of the accused are to be unbiased. To accomplish this, a number of questions are asked of the prospective jurors to establish if they have existing opinions with regard to the defendant or the offense in question that would result in their being an unfair juror.

In a malicious prosecution, where there is no offense established by law, the voir dire questioning is used to assure that the 12 persons sitting in the jury box are biased in favor of the Federal Government employee's position. Being biased provides false credence to the phantom humbug offense in their minds and to the false belief that all income from whatever source is includible in gross income under subtitle A of the I.R. Code (see Sec. 7701(a)(31) in chapter 3), when such is not the law.

When the prosecuting attorney cannot produce a law to those in the jury box upon which to compare the defendant's conduct, it is necessary for him to set up sham rules. The conduct of the Federal Government

4 As used here, the word "capacities" means the legal ability to act. The clear mandate in the U.S. Constitution that Bills of Attainder are prohibited means that even a person convicted of a crime cannot be denied the rignt to act in a lesal capacity with regard to his/her person or propertr. This shows that in a Repubhc, whlch is what this country is, the sovereignty o each person cannot be ignored under any condition. This is the major difference between a Republic and a Democracy. A Democracy means people are controlled by majority rule, a Republic demands the respect of the sovereignty of each natural person. Too often the United States of America is erroneously referred to as a Democracy. .

The next chapter will discuss how humbug has allowed discretion that overndes this Constitutional mandate, and humbug is not appealable.

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employees in their malicious section 7203 prosecution against me reveals how sham rules were established for the 12 persons selected to sit in the jury box, and thereby assure Federal Government employees that those 12 persons would use their opinions, which were based upon false belief rather than upon the laws of the United States of America, in arriving at a decision.

The Federal Government employees involved must be sure those sitting in the jury box falsely believe that section 7203 is the law violated when a person willfully fails to make and deliver a "U.S. Individual Income Tax Return."S Section 7203 states "any person required." This phrase destroys it as a law of requirement for any person, so Federal Government employees need to place the critical word "is" into the minds of those sitting in the jury box. If they falsely believe that section 7203 says "any person is required," section 7203 is the only statute needed to make them believe filing a ''U.S. Individual Income Tax Return" is required and applies to the targeted person. With only persons in the jury box known to have made such a declaration with regard to themselves by personally making and delivering such documents, Federal Government employees avoid being asked to produce a law showing who is the "person required." The questions asked by the U.S. judge show how this is accomplished.

First sham rule: Establish a phantom law

In a lawful case, a U.S. judge will use questions suggested by the attorneys for both the prosecution and defense in voir dire of prospective jurors. In my malicious section 7203 prosecutions, the U.S. judge used only questions given to her by the prosecuting attorney.

Keep in mind the duplicity of the subject matter. The allegation made by the prosecuting attorney in the "Information" (document which he would not swear to under oath, proving he knew it was a lie) was that I was a person who was required under law to return U.S. Government income to the U.S. Government. I was charged as being a transferee of

5 By usage in malicious prosecutions, section 7203 has falsely become the law that establishes the reguirement to make and deliver a "U.S. Individual Income Tax Return." Althougn this was not directly stated in my action, the Judgment Order indirectly proved this by dropping the word "willful."

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U.S. Government income but, knowing I was not such a person, he had to make the panel of 12 persons in the jury box believe the allegation was that I was a person required to make and deliver a "U.S. Individual Income Tax Return" to the IRS for the years in question. This is the evil of vague laws. When the condition charged is misunderstood because of false belief, it makes possible the prosecution of a second subject matter by a phantom law. Vague law makes the false belief possible, which provides the reason for vague laws to be enacted.

Since the prosecuting attorney could not place into evidence a law that requires making and delivering a "U.S. Individual Income Tax Return," or a law that the willful failure to do so makes applicable the additional punishment of section 7203, he needed to indirectly establish phantom laws for their evil effect in the minds of those selected to sit in the jury box. This becomes an easy task for the prosecuting attorney when the personal experience of those selected is to make and deliver these debt instruments every year. Obviously they would not do so if they did not believe that any person is required to make and deliver a ''U.S. Individual Income Tax Return." Such persons have no reason to believe that the prosecution is unlawful, since their conduct and opinions support the action.

It would not be legally possible for the prosecuting attorney to present a ''U.S. Individual Income Tax Return" into evidence because it was not in the charge, so he starts to establish the belief that the subject matter is a ''U.S. Individual Income Tax Return" in other ways. By selecting persons to sit in the jury box from all walks of life (some were, either personally or through their spouse, associated with private enterprise and others with governmental entities), it was falsely established that sources of the income was of no consequence. This makes it appear as though the amount of the income was the only criteria for which the determination of whether or not a "U.S. Individual Income Tax Return" was required to be made. But, the truth is, no one but the Secretary is required to make such a document; the amount has to do only with when a return of U.S. Government income is to be made by a "transferee" (chapter 8); and the definition of "foreign estate" in section 7701(a)(31) makes it clear that the source is the only consideration in determining what is includible in gross income under the I.R. Code laws (chapter 3).

The prosecuting attorney then had the U.S. judge ask each person, "Have your tax returns ever been audited?" This instills into the minds

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of all those sitting in the U.S. courtroom (there were about 50 from whom the 12 were selected) that the subject matter is the same kind of personal income tax forms they falsely believe they must submit each year. It may also invokes fear into those who are finally selected to sit in the jury box that they might be audited if their decision is adverse to the governrnent.6 This is then reinforced by the questions, "Do you or anyone you know have strong adverse feelings about taxes or the taxing system in this country?" and "Do you or anyone you know belong to an organization concerned with the payment or the nonpayment of Federal income taxes?" The persons who answered affirmatively to these questions were immediately dismissed. Independent thinkers were avoided. Only those whose professed beliefs matched what the prosecuting attorney wanted were seated in the jury box. For due process of law to exist, a law by Congress must establish the standard of conduct, not personal opinions.

These kinds of questions, along with the fact that the proceeding is identified as a criminal action, provided false credence to the common false belief that the making and delivery of a "U.S. Individual Income Tax Return" is the subject matter in a section 7203 action; that such a document is required by law to be sent to the IRS each year; that all income any person receives is to be reported on such an instrument; and that failing to make and deliver such an instrument to the IRS is unlawful conduct and punishable under section 7203.

Second sham rule: Establish false belief that all income is includible

The prosecuting attorney needs to be sure those sitting in the jury box also believe that any income a person receives in exchange for labor is includible on a "U.S. Individual Income Tax Return." This is accomplished by asking them where they are employed. If they were not employed (i.e. a housewife), they were asked where their spouses were employed. Such a question would be immaterial if this were a lawful section 7203 case where the U.S. Government wanted the additional

6 In the first court action against me, those who were finally seated in the jury box h~d heard the question "Have your tax returns ever been audited" 31 times in 91 mmutes.

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punishment prescribed by section 7203 to be imposed upon a person who had already been tried and convicted in a state court for fraud against the U.S. Government. What, then, did these questions about employment accomplish? With these questions, the persons sitting in the jury box were made to believe that the remuneration any person receives in exchange for his labor under any employment agreement is includible in gross income in the U.S. Government's kickback program even though such income is actually part of a person's estate, which is foreign to the U.S. Government and declared not to be includible by Congress (see 26 U.S.C. Sec. 7701(a)(31), footnote 7, chapter 8.

The false belief that the income a person receives in exchange for labor is includible reinforces the false belief that all income from whatever source, i.e. interest, dividends, etc., is includible in gross income under subtitle A of the I.R. Code. This is in contradiction to the law in section 7701(a)(31).

Sham rules get Federal Government employee desired result

The charge against me was not a lawful charge made for the Justice Department when the prosecuting attorney did not support his statement as to probable cause under oath. It was merely his personal declaration. The chief clerk of the district court issued an unlawful summons based upon a personal declaration. This was a violation of his duty. The magistrate, without establishing jurisdiction, honored the unlawful summons by permitting a U.S. courtroom to be used to establish a date for my malicious prosecution to take place. The U.S. judge permitted a U.S. courtroom to be misused to maliciously prosecute me with intent that I would be forced to give the IRS permission to control my labor by debt and to allow them to use me as their "example" so that they could exercise control over the rest of society. Such a condition is prohibited by the peonage laws of the United States of America and due process of law, but was forced to be accomplished by the misuse of the opinions of 12 persons.

It is obvious that the U.S. judge involved in my malicious prosecution was aware of the planned misconduct of the prosecuting attorney when, by dropping the word "willful" in the judgement orders she signed, she admitted I had not violated any law of the United States. The fact that she did not order me to pay the costs of prosecution, which is mandated by section 7203 upon a person lawfully found guiltY,

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verifies that I had not violated any law. Since I had not lawfully been found guilty of violating any law, imposing the costs of prosecution upon me would have forced upon me an illegal debt obligation that would result in the U.S. judge personally forcing me into a condition of involuntary servitude. To avoid personal liability, the word "willful" had to be omitted from the judgment order and the costs not applied (see Appendix L). This way the resultant liability for imposing punishment is against the Justi.ce Department and the Judicial Branch of government employees as a whole. Federal Government employees feel less vulnerable to exposing themselves personally when the whole Federal Government employee gang is liable for the conduct of violating laws of the United States of America. Their defense would most probably be that they were just doing their jobs.

The voir dire questions were all designed to utilize a phantom law in the minds of the 12 persons sitting in the jury box that a ''U.S. Individual Income Tax Return" is required to be delivered and, when it is not delivered, such phantom law provides for the application of the additional punishment of section 7203. By using the controlled thinking of the persons sitting in the jury box, Federal Government employees are assured that the targeted person will be pronounced guilty even though those seated in the jury box did not even know what the true subject matter was and were not provided with any law upon which to apply the facts presented to them. All these people were able to find me guilty of was violating their personal opinions, which was precisely the task for which they were selected.

Sham facts supported opinions, not law

The facts presented by Federal Government employee witnesses were that I received income and that the unidentified IRS instruments submitted by me in past years were not submitted for the years in question. These facts did not support any violation of laws of the United States of America, but did support the phantom violation established by the Federal Government employees involved. With sham rules firmly in place, these facts also supported the false belief that all income any person receives from whatever source must be reported on a ''U.S. Individual Income Tax Return." This false belief was known to be held by the 12 persons sitting in the jury box since they were specifically selected because they all made and delivered such instruments.

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Misuse of section 7203 is growing

Statistics given in PSI reports prove that the malicious prosecution against me under section 7203 is not part of an isolated incident. As discussed in chapter 12, the PSI report has many purposes. In section 7203 actions, the PSI report contains a statement of taxes evaded to a specific amount. When signed by the targeted person, it is used by Federal Government employees as a personal declaration, a confession, of tax evasion. This infers fraud and is taken by Federal Government employees as a confession by their targeted person of being a taxpayer under the I.R. Code? This switches the burden to the targeted person to prove otherwise.

The PSI report gives statistics of the number of persons prosecuted for the offense involved. The PSI reports with my name on it gave statistics that prove many people are targeted for malicious prosecution under section 7203 each year. The one dated October 29, 1984, showed the number of persons subjected to malicious prosecution under section 7203 for the 12 month period ending June 30, 1982, were as follows:

(A) Person sentenced to confinement and fined. 69 (B) Persons sentenced to probation

(1) Probation only 82 (2) Probation and fine 125

(C) Split sentencing part confinement and part probation 79

(D) Fine only 11 Total persons sentenced 366

These statistics show that the punishment in these malicious prosecutions are divided into five categories ranging from imprisonment to just probation or fine. When a person insists on due process of law, he is considered the least cooperative. The least cooperative probably got maximum imprisonment and fine. I say this because when I refused to accept the judge's bribe of reduced prison time if I cooperated by making the IRS debt instruments she imposed the maximum punishment.

7 By my refusal to sign the PSI report, I did not declare myself a "taxpayer." The importance of not making declarations that say, or infer, that one is a "taxpayer" will be covered in chapter 16.

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These statistics give some indication of how many people were targeted by the IRS for the 12 month period ending June 1982. The total of 366 who were actually punished to some degree because of the false opinions of 12 persons in a jury box represents a small fraction of the total number of persons subjected to IRS undue influence. When faced with criminal charges, only about one in 20 fights the issues, the balance go into a plea bargaining process. Using 20 times 366 means up to 7,320 persons were charged with "willful failure to file tax returns" in the span of that year. Using the same ratio to arrive at those harassed by IRS undue influence, but not criminally charged, gives a figure of 146,400 (20 x 7 ,320). These are persons audited or subjected to other questioning by IRS employees, which is a tactic that perpetuates fear of the IRS. This fear is used to hold such persons in a condition of peonage.

The statistics in my second PSI report showed 401 as the total for the 12 month period ending June 30, 1984. I had occasion to review another person's later PSI report which showed the total had again increased. This means the figure of 146,400 persons harassed by IRS employees each year is an understatement today.

With a new batch of people contacted each year it is easy to see why most adults in this country have been subjected to the undue influence of IRS employees at one time or another. The entire record made demonstrates why terror of the IRS is real.

False trust of Federal Government employees makes IRS humbug possible

From childhood, Americans have been instilled with the thought that they can trust their government. If they trust their government, it is because they trust its employees.

When it comes to violating one's rights under the law, the majority of people think the conduct of any Federal Government employee in the Justice Department and/ or the Judicial Branch of the U.S. Government is above suspicion After all, such Federal Government employees do take an oath to uphold the constitutional rights of the sovereign people of the United States of America. And, of course, the media constantly reminds its viewers that they have it better here than elsewhere in the world.

Judges hold an official position that is especially highly respected. When the Justice Department employees and the IRS employees are

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permitted by a U.S. judge to use the U.S. courtroom for a malicious prosecution, it is natural for those in the jury box to assume that the prosecution is lawful and that Federal Government employees have the right to do what is being done to the targeted person. The major flaw in this logic when applied to cases such as mine is that no law exists upon which to base the lawfulness of the prosecution.

Holding a false proceeding in a U.S. courtroom gives the artificial impression of authenticity. The manipulation of persons to get the result that Federal Government employees desire is not only despicable, it is unlawfuL When this was brought to the attention of Appellate Court judges, they chose not to answer these issues. By their silence, they participated in the malicious prosecution and concealed facts which affect the welfare of the general public that their duty requires them to reveal.

With no law in evidence, the conduct of Federal Government employees is not motivated by duty under the law but by Federal Government employee humbug. The whole procedure is a hoax upon the general public by which Federal Government employees establish false authority over income not subject to their control under any law. In fact, their conduct is prohibited by the peonage laws.

This conduct of Federal Government employees is detrimental to the welfare of the general public because due process oflaw is violated when the result is any person being deprived of property without law. By clever manipulation of the thinking of 12 persons in the jury box, Federal Government employees have made section 7203 a Bill of Attainder and used it as a "bill of pains and penalties" upon their targeted victim.

Obligation of jurors

The purpose of this chapter is to emphasize the importance of persons selected to sit in a jury box being more aware of their duty. Right now, only those selected to sit in a jury box can stop the well-orchestrated, malicious prosecutions under I.R. Code statutes. Such persons need to understand that the issue in any criminal prosecution under I.R. Code statutes can only be the lawful return of U.S. Government income to the U.S. Government that is found to be in the possession of a person by fraudulent means. The subject matter of fraud with regard to any property is between two sovereigns, and is to be determined in a state court.

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People also need to understand that any civil action, initiated by the U.S. Government upon a person with regard to the I.R. Code, is related to the legal kickback that is due to the U.S. Government under employment contracts with their employees. Federal Government employees lack authority to involve themselves with any other property. IRS employees' practice of going after a person's personal property is evidence of criminal conduct on the part of the Federal Government employees involved.8 When they intentionally manipulate 12 persons into participating in a malicious prosecution for the purpose of forcing the inclusion of property not includible in gross income under subtitle A of the I.R. Code, they misuse the U.S. courtroom and the court's process. This shows contempt for the Court, the U.S. Constitution, the laws of the United States, and the sovereign status of persons who live under these laws. With this they demonstrate that they violate the public trust and are not qualified to hold their jobs of serving the public.

Federal Government employees' intent is to control the targeted person by controlling his labor through a debt process upon which collection is enforced. Such person is forced to express the will of these Federal Government employees to his prejudice. This is peonage. The Federal Government employees who participate in such conduct accept the legal consequence of 18 U.S.C. Sec. 1581, which is a felony. The 12 persons they select to sit in the jury box are used and forced to be co-conspirators in this illegal conduct. These persons not only have a right, but a duty, to question and insist on answers from the judge of the Court when they are in doubt about any aspect of law. If a statute, such as section 7203, uses verbiage such as "any person required," jurors have the duty to ask for, and see that they receive, the law that places a requirement on a person or property such as the targeted person in that action. When the action is brought under section 7203, they should insist upon the judge providing them with a law that says ANY PERSON IS

8 TO ALL U.S. JUDGES: pursuant to 18 U.S.C. Sec. 4, by the writing of this book, I make known the felonious conduct of Federal Government emfloyees of enforcing an illegal kickback to the IRS in the name of Federal Individua Income Tax.

18 U.S.C. Sec. 4. Misprison of felony. Whoever, having knowledge of the actual commission of a felony cognizable

by a court of the United States, conceals and does not as soon as p<?Ssib1e make known the same to some judge or other person in civil or military authority under the United States, shall be fined not more than $500 or imprisoned not more than three years, or both.

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REQUIRED to make and deliver a ''U.S. Individual Income Tax Return" and a law that says the additional punishment of section 7203 is applicable for willful failure to do so. Remember, the Court cannot make law, only Congress can. When the judge in a U.S. Court cannot produce the law passed by Congress that clearly states this, the persons sitting in the jury box should refuse to become co-conspirators in an unlawful action. They can honestly say that there is sufficient doubt, and bring in a "not guilty" verdict. This demonstrates the power we have as sovereigns in this great country of ours. Lets keep it great by exercising that personal power.

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CHAPTER14

HUMBUG IS NOT APPEALABLE

Roots of eliminating appeal process

The Fifth Amendment to the U.S. Constitution says that no person shall be deprived of his life, liberty and property except by due process of law. With this mandate, no U.S. judge is permitted discretionary power to deprive any person of his liberty by a procedure that limits, impairs or eliminates his right to appeal any type of conviction in a U.S. courtroom. ·If they do, they exercise personal, not lawful, control over the person.

Though the right to appeal a conviction is unalienable} a trial judge at sentencing always has had the authority to deny liberty during the appeal process where, after a lawful trial, it can be shown conclusively by the prosecuting attorney that the person convicted is a danger to society or is likely to flee the country. In such cases, there is probable cause to deny liberty during the appeal process.

In 1984 Congress put what is regarded as a new condition for denying bail pending appeal on the books when what is called the "Comprehensive Crime Control Act" was passed into law. Though it was promoted as a way to put stiffer restrictions upon those who deal in drugs, it obviously was intended to be used on any person, since Congressmen knew they could not design and enact a law and limit it to a specific group of persons.

The Comprehensive Crime Control Act made it a condition that bail pending appeal could be denied if the appeal does not raise a substantial question of law or fact likely to result in reversal or for an order for a new trial (18 U.S.C. Sec. 3143(b)(2)). It did not directly state who would

1 I use the spelling of this word as found in the Declaration of Independence, July 4, 1776. In current writings it is usually spelled inalienable.

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make such a determination, though Congress, under fundamental doctrine, is required to do so.2

Misuse of this new condition by lower court judges has made a fair review of the issues by higher court judges impossible. Without a fair review, the appeal cannot be deemed an appeal. Thus the appeal process is not only impaired, but eliminated. In essence, those in the U.S. Court system are saying they do not care to have a corrective system survive.

I was the first person in the U.S. District Court of Denver, Colorado, who was denied bail pending appeal under this Act. Here is what happened.

Denial of bail pending appeal

At a sentencing hearing held November 14,1984, following my first so-called trial, the presiding judge granted me bail pending appeal and transferred me into the hands of the executive department. I initiated the appeal process by having my notice of appeal filed and a bond posted. This was accomplished prior to my being brought before a magistrate that same day. At this time, the magistrate's only authority was to effectuate the order for granting me bail pending appeal. Instead, upon the prosecuting attorney calling his attention to the new act, he chose to have me held in custody and brought before the presiding judge the next day even though jurisdiction had technically been removed from that level by my submission of a notice of appeal and posting bond. The following morning, the presiding judge of this U.S. Court of inferior jurisdiction was informed of the new act and had her clerk make some inquiries. Her clerk reported that the persons he talked to in Washington, D.C. said the law speaks for itself. The presiding judge took this subordinate person's homework to mean that she was to make a decision on the new condition. Though this cannot be the interpretation intended by Congress, it is being used by all U.S. District Court judges with the permission of the Appellate Courts.

2 The U.S. Court explains this as follows in U.S. v. Wilson, 3 Blatchf, 435 (1856): " .... it is a fundamental doctrine, in respect to the federal courts in inferior

jurisdiction .... To enable them to exercise the functions bestowed by the constitution over crimes and misdemeanors, there must be a designation, by ~sitive law, both of the offense and of the tribunal which shall take cognizance of It."

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HUMBUG IS NOT APPEALABLE CHAPTER14

Congress said in this law that it is "the appeal" that must raise a substantial question of law or fact. This makes a determination by the presiding judge in the inferior court lawfully impossible. The only person who can raise the questions on appeal is the person convicted. At the time a sentencing hearing is held, the appeal questions have not been presented to anyone. In fact, what happens at a sentencing hearing often becomes a major appeal issue.

Denial of bail based on the questions on appeal is obviously a duty of the Appellate Court. This power always has been theirs. Unless the defendant appeals to the U.S. Supreme Court, bail pending appeal always ceases when the Appellate Court finds that the questions in "the appeal" do not offer proof that the defendant was unjustly treated in the court action. So, the only thing the new condition could legally accomplish is the forfeiture of bail pending appeal during the appeal process to the U.S. Supreme Court.

On November 15, 1984, when the presiding judge in the action against me made the statement,

"I'm not able to say that the appeal raises a substantial question of law or fact likely to result in reversal, or for an order for a new trial, because I truly do not feel that it does." [Hearing on Appeal Board Transcript, page 3, lines 15-18]

she, in essence, wrote an appeal for me and answered it for the Appellate Court. She then denied me bail pending appeal on the phantom appeal she wrote. I was controlled by her appeal, not mine. From her statement, she confesses that her personal feeling was permitted to control my liberty, which is not due process of law. When it is not due process of law it is humbug.

Purpose of the appeal process

The right to appeal is unalienable because of the consideration for the general welfare of society. The appeal process is an indispensable aid to the court system to assure society that due process of law would be the only standard tolerated in the courts. To impair the appeal process is to remove an indispensable aid to the court system. This results in a standard of justice that is less than justice for all. Appeal process impaired is justice denied. The Appellate Court exists for the purpose of insuring justice.

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The reason the appeal process is so important is that it allows the truth to surface and prevail with regard to our justice system. Justice for all is assured when a record is made that corrects any untruthfulness in the lower court. The legal way this is stated in the Fifth Amendment is "No person .... shall be deprived of his life, liberty or property without due process of law."

As a sovereign, a defendant has a right to freedom of expression. If he does not appeal, he is expressing his acceptance of the legal consequences of the action against him. When he produces an appeal, he is expressing his insistence that his life, liberty and property be subject only to deprivation by due process of law. Although an appeal might appear to be for selfish purposes, if his prayer results in justice, his appeal has made a contribution to improving the welfare of society by correcting lies or misconduct in the lower court. Justice for anyone assures justice for all.

For the sake of justice for all, a judge's duty is to answer the prayer of an appellant. To do otherwise is to plan for injustice. When U.S. judges use procedures that impair the appeal process, they avoid correcting wrongs that occur in a U.S. courtroom. That is exactly what was done in Aflick/Kowalik v. U.S., 765 F.2d 944. A procedure was established through intentional misinterpretation of the new condition for bail pending appeal when the Tenth Circuit Court of Appeals went along with other circuits. The Appellate Court adds to any injustice already inflicted by shifting the burden they once had to the court that created, caused, or permitted the conditions that are appealable.

The record shows that those in the U.S. Appellate Courts have established a court procedure that has the end result of denying remedy by denying liberty during the process of appeal. Unless Congressmen intended to deny remedy to everyone accused of a crime against the United States, U.S. judges are using discretionary power to accomplish that end. Their conduct has made it possible for misuse of this condition regarding bail pending appeal, and the misuse of the condition makes this law tantamount to a "bill of pains and penalties."

Due process of humbug imposed

The Appellate Court judges cannot be objective once punishment has started upon a judgment emanating from the U.S. District Court. Punishment already inflicted cannot be reversed, hence reversal of an action in a lower court is impossible once enforcement of the Judgment

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Order has begun. With this, the appeal process is seriously impaired, if not eliminated. Nothing can change this fact. Therefore, lawful denial of bail pending appeal upon the new condition that the appeal does not raise a substantial question of law or fact likely to result in reversal or for an order for a new trial must be done by the Appellate Court judges after receiving "the appeal" from the defendant. Without "the appeal" from a defendant the new condition cannot be lawfully applied. This makes it apparent that the new condition is being misused, and a procedure is in place whereby a person is controlled by Federal Government employees and not by the law. Deprivation of life, liberty and property without any conviction in the ordinary course of judicial proceedings occurs, which means the new condition (18 U.S.C. Sec. 3143(b)(2)) has also become a bill of pains and penalties, at the personal discretion of a U.S. judge.

An appellant is stripped of his appeal rights when a procedure permits a presiding U.S. judge to exercise control over that person by controlling his liberty through denying bail pending appeal based upon that judge's presumption of questions that could be raised upon appeal. Relief from a prisoner status to the street is only possible by administrative means. Hence, once the defendant is no longer a defendant, but a prisoner, it is impossible for the higher court to grant relief from the action in the lower court. When the court cannot grant complete relief, it cannot redeem itself from wrongful conduct, which is the purpose of including reversal in the appeal process.

Once a person's liberty has been unjustly denied because of a lower court action, the only decision possible from the Appellate Court is an order for a new trial. But, when a new trial is ordered under such conditions, how can a fair trial be conducted in a U.S. courtroom? It is always conducted by the same Federal Government employees, through the same U.S. judge. A new trial would require a new judge and prosecuting attorney. This not being the case, the old trial is replayed. The purpose of ordering such a trial would not be to see that justice is served, but to give the Federal Government employees involved a chance to prove they were correct in instituting the punishment in the first place. This is self serving-not due process of law. A new proceeding gives Federal Government employees a chance to erase the errors made in the original action and provide them with an opportunity to conceal their humbug.

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IRS HUMBUG

A new trial by more humbug

With no law on the books that requires anyone to make and deliver a "U.S. Individual Income Tax Return," punishment for not doing so accomplished through a humbug action in a U.S. courtroom is enforcement of a lie.

When I appealed to the Tenth Circuit Court of Appeals to review the untruthfulness in the malicious action against me, they refused to make a record and acknowledge it with an answer in the form of an opinion. Instead I was only sent a letter from the clerk of that court ordering a new trial.

The U.S. judge who presided in the first action against me also presided in the second one. It would not be in her best interest to have 12 persons declare me innocent when I had already spent more than six months in prison because of her conduct. Also, to assure against a possible legal action against her personally, the outcome had to be that I was again declared guilty. Expecting her to make a record of acting impartially is impossible. She distinctly demonstrated her prejudice twice. First, when she accepted the guilty decision brought in by the panel of 12 persons seated in the jury box, since a judge has the power to override such a decision when the judge knows that there was not sufficient evidence or facts to sustain such a decision or that due process was violated. Then again after the first action when she said she felt I had no appealable questions. With this she was saying that she thought everything that occurred during this malicious action was acceptable under lawful standards. I moved to have her step down and be replaced based upon her prejudice. She denied my motion, which was a self-serving decision.

U.S. judges can only exercise discretion when given such power by positive law. 18 U.S.C. Sec. 3143(b)(2) does not give this inferior court such power, but its procedures did. The result is that a defendant is forced today to be a prisoner and deprived of appeal rights by Federal Government employees because of Federal Government employee procedure that is violative of due process of law. When discretion pursuant to Federal Government employee procedure is used to have a person imprisoned prior to appeal, the only conclusion possible is that Federal Government employees established a procedure to serve the purpose of hiding untruthfulness that may be present in the prosecution of a person by not making the action appealable. The end result is the

236


corrective process the court needs to redeem itself is eliminated and replaced with a self-serving process for Federal Government employees.

Notwithstanding unfair review of the appeal once a person has been imprisoned, the appeal process is so lengthy a person appealing will often be in and out of prison before the appeal is answered. As an example, pursuant to the Code of Federal Regulations, a person sentenced to serve two years in prison under a lawful section 7203 conviction would be eligible for parole in six months. Since most appeals take at least one year, they would be released prior to the appeal being answered. Being released prior to an answer makes the appeal moot, depriving such person of his appeal rights for that reason.

Appellate court judges lose objectivity

Appeals are made to the higher courts, not to the judges under a duty to act for those courts. All appeals to the U.S. Court of Appeals must be answered. An appeal can only be considered as answered when every issue presented to that Court has been addressed by the three judges assigned to do so. Proof that the judges did not fulfill their duty is evident if there is no written opinion from the Court on the appeal presented to them. Remedy is denied when there is no record of an opinion rendered by the Court upon which to appeal to the Supreme Court. So, not providing a written opinion can only be deemed to be humbug and goes to the conduct of concealing from the general public the humbug presently used by Federal Government employees with regard to everyone.

My appeal to the Tenth Circuit Court of Appeals proves that the objectivity of judges in all levels is prejudiced in any situation where punishment has already been inflicted upon the person who appeals an action. It contained nine questions,3 eight of them on law and one on

3 The nine questions in my appeal were as follows: 1. The D1strict Court lacked jurisdiction to hear a case involving a charge of

violation of 26 U.S.C. Sec. 7203 against Frank Kowalik, Jr., as he is not a person to whom section 7203 can be applioo.

2. Without a specific law, passed by Congress, taxing compensation received in the private sector the compensation I received for my labors 1s not taxable.

3. The government prosecutor did not establish: that Frank Kowalik, Jr., had sufficient taxable income to trigger requirements to file under any I.R. Code statute and I.R. Code section 6012 is ambiguous.

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technical procedure (a jury instruction). To this day my appeal has not been answered by the Appellate Court judges assigned to do so. Their duty was to provide their opinions on all the questions raised. Instead, what I received was a letter from the clerk of the Appellate Court in Denver that said the Appellate Court judges had reversed my conviction due to the technical issue raised4 and ordered a new trial. Under Rule 45(c) Federal Rules of Appellate Procedure,5 the clerk had no authority to author such a document unless it reiterated a written opinion of record from three judges of that court. I asked him for a copy of the opinion. After several exchanges of communications on this matter, he admitted that his letter is all there is.

I refused to willingly appear for a new trial

Another trial would not necessarily have to take place just because a new trial is ordered pursuant to an appeal submitted by a defendant. If an appellant refused to show up for new trial that was lawfully ordered because of his appeal, the Court would have every right to conclude that he had exercised his free choice to accept the legal consequences of the judgment ordered in the original action. In that instance, such person could be arrested and ordered to prison pursuant

4. Summons issued on Information was defective. 5. Due process was denied Frank Kowalik by ineffective assistance of counsel. 6. The District Court erred in denying the motion to suppress information

obtained b)' the IRS through summons tssued in bad faith. 7. The District Court improperly instructed the jury that the standard on

willfulness in a mistake of law must be objectively reasonable. 8. The District Court erred in not changing the incorrect reference to "tax

evasion" in the PSI report when the objection was raised. 9. The District Court created reversible error by not permitting bail pending

appeal to Frank Kowalik, Jr.

4 I used this jury instruction in #7 as a question in my appeal only because my attorneys had used it in their quest for glory in bucking the new bail conditions in an en bane ap~l. An en bane appeal is one presented to the entire panel of Appellate Court Judges within a circuit rather than being addressed by a panel of three judges.

5 Federal Rules of Ap~llate Procedure, Rule 45. Duties of Clerks. (c) Notice of Orders or Judgments. Immediately upon the entry of an order or judgment the clerk shall serve notice of entry by mail UJX>n each party to the proceeding together with a copy of any opinion respecting the order or judgment, and shall make a note in the cfocket of the mailing. Service on a party represented by counsel shall be made on counsel.

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to the original judgment order without benefit of the new trial offered. This did not occur with me even though I made it clear in numerous formal documents to the courts and personal letters to Federal Government employees involved that I would not appear of my own volition.

Shortly before the "new trial" was scheduled I was arrested, transported to Denver from Oklahoma City, and bodily brought to the U.S. courtroom in handcuffs so that a new humbug action record could be made. Predictably, I was again declared guilty. The new Judgment Order was for two years in prison, with credit for the time already spent there, and a $20,000 fine. The $20,000 originally posted as an appeal bond was confiscated by the judge of the District Court for not voluntarily appearing, which goes to prove the point made in the previous paragraph. If the judge had the right to take the $20,000, she also had the right to control my liberty by the first judgment order. Not having a legal right to either, to make it appear as though the confiscation of my property and control of my liberty was legally done, they needed to conduct a new court action for their purpose of concealing Federal Government employee misconduct in the former record with a new one and make moot the need to answer the questions on my appeal. Obviously, one cannot appeal humbug.

More Appellate Court humbug

Since the lawyers I hired for the first action refused to "defend" me and only represented me poorly, I chose to handle the second humbug court action against me myself. For this reason I filed my own Notice of Appeal. The Appellate Court sent me some paperwork that indicated I had to show them under what statutory authority I wanted them to take jurisdiction over the issues to be appealed.6 This caused me to consider the fact that I did not want my conduct to be considered as giving them jurisdiction that they would not otherwise have. I also did not care to go the same route as before and subject myself to a predictably futile result

6 This proves jurisdiction in U.S. courts is very limited and must be forced from the appellant when jurisdiction is questionable under law. Further, the jurisdtctional statement of the appellant is taken as his willingness to accept the decisions expressed in case law under it.

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because of the conditions under which my appeal would be presented and the time involved to get an answer.

Having again been denied bail pending appeal, I thought a petition for a Writ of Habeas Corpus would be a faster and better avenue for remedy. Before I could use this petition I had to withdraw my Notice of Appeal, which I did. The U.S. Appellate Court responded by telling me, in writing, that this would be allowed only if done with prejudice to me. Doing it with prejudice to me would mean that I stipulate that I have no appealable questions and therefore the action against me was legal. In essence I was asked to plead guilty and make impossible any remedy. A confession by indirect means is just what Federal Government employees want in a humbug action. Fortunately, after some research, I was able to beat them at their own game by using a court opinion on this subject matter of law to my favor that forced them to withdraw my Notice of Appeal without prejudice to me.

Supreme Court humbug

During my second stint in prison, which lasted more than eight months, I basically appealed the same issues that were presented to the Tenth Circuit Court of Appeals in a Petition for Writ of Habeas Corpus to the U.S. Supreme Court. The primary function of the writ is to release a person from unlawful imprisonment. It is not to determine a prisoner's guilt or innocence. The only issue which it presents is whether the prisoner is restrained of his liberty by due process. Initially, the writ only permitted a prisoner to challenge a state conviction on constitutional grounds that related to the jurisdiction of the state court. But the scope of the inquiry was gradually expanded, and the writ now extends to all constitutional challenges. 7

When I received a response that the U.S. Supreme Court refused to consider my Petition for Writ of Habeas Corpus, I sent them a motion to reconsider. In it I made the record that refusal to address the issues presented to the Supreme Court made the Supreme Court Justices culpable in perpetuating the false beliefs that exist about the so-called federal "income tax." As expected, they did not answer this either.

7 This description of Writ of Habeas Corpus is from Black's Law Dictionary, Fifth Edition.

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Which is prima facie evidence that the Justices of the U.S. Supreme Court still participate in the concealment of the Federal Government illegal kickback.

Conclusion about the new bail pending appeal condition

The only conclusion that can be drawn is that the new law regarding bail pending appeal was placed upon society with intent to provide Federal Government employees control over the liberty of persons where Federal Government employee humbug is the process used in place of due process of law, such as with most section 7203 actions. This new procedure gives Federal Government employees one more enforcement tool to control a person's labor in the name of taxation and make the appeal process moot as well, thus concealing the enforcement process.

The new procedure being used is not in the best interest of the general welfare of society because it impairs the court's ability to correct itself when a defendant questions an injustice and the Appellate Court helps hide the original humbug used with more humbug.

On the other hand, Federal Government employees of the Justice Department are favored when punishment is inflicted for malicious prosecutions with the Appellate Court's permission by providing the procedure whereupon the lower court can use personal discretion when law provides no discretion whatsoever. The appeal process is now sufficiently arranged to make it impossible to correct the practice of malicious prosecutions. This proves that cooperation exists between Federal Government employees of the Judicial Branch of Government and those of the Justice Department.

Unimpaired appeal process is an essential part of due process of law. A person targeted for malicious prosecution is now being deprived of his liberty by procedures rather than due process of law.

Probation humbug

After more than fourteen months in the FCI (prison),8 I was offered

8 FCI is the abbreviation used for Federal Correctional Institution. Since the U.S. Government is not permitted police power by the U.S. Constitution, how can it have

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release on probation. I had mixed emotions about accepting because mandatory release was only a little more than three months away, while probation supervision would extend to the end of the two-year period of time. I had no idea what kind of conditions would be involved. But, I feared that if I did not accept probation it would be misconstrued as some sort of acceptance of my unlawful detention, so I went for it. Here again, it is obvious that a person can be controlled by two subject matters.

Conditional release is handled in stages. Late in May 1987, I was released from the FCI and instructed to go to what is called a half-way house. This is a privately-operated facility which houses persons for a short period of time, supposedly to aid them in making a transition from prison life to life on the streets. The one I was sent to in Oklahoma City is funded by the U.S. Government's Justice Department and supervised by the Parole Commission in Dallas, Texas. During my three-month stay there, I slept at this facility during the week, but (with permission) had freedom to leave to search for a job during the day and also spend weekends at horne, which was most welcome.

On August 28, 1987, I was scheduled to be released from the half-way house and transferred to the supervision of a probation officer. As expected, there are standard probation conditions (Appendix M) that I was asked to accept by my signature before leaving the half-way house. When I indicated that I would change those conditions that I would not accept, the manager of the half-way house called someone at the Parole Commission in Dallas. That person told her that I could not deface the Parole Certificate itself but could make a separate statement in writing that would be part of the parole conditions. With that, I sat down and wrote my statement (Appendix N) and had the half-way house manager acknowledge receiving it. I was then instructed to immediately visit a probation officer, whose office was just five minutes away, and deliver some documents. When I arrived I found the probation officer had already been informed of my statement taking excepting to some of the parole conditions. He made no attempt to negate my statement and never refused to accept the monthly reports submitted to him upon which I noted why the financial information requested was not being

a prison system? Is that why they are called correctional institutions? Is this not another humbug subject matter?

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supplied. Then on March 22, 1988, he called and said a warrant for my arrest was issued based upon violation of the parole condition that I pay the fine (which was the primary exception I had taken).

Federal Government employees violate their own procedures

18 U.S.C. Sec. 4209(d)(2) permits a parolee to petition the Parole Commission on his own behalf for a modification of parole conditions if he does so within 10 days of receiving notice of the conditions. The procedure I was told by an employee of the Parole Commission to use to change the parole conditions imposed by the Parole Commission on their printed Parole Certificate became my petition to the Parole Commission. Pursuant to 18 U.S.C. Sec. 4209(d)(1) the Parole Commission had 21 days to act upon the changes I made on August 28, 1987. They never did, demonstrating that they accepted these changes. In fact, the parole officer I met with monthly confirmed this when he said, at our December, 1987, meeting, that he thought it was funny that the Parole Commission had not asked him to collect the fine from me. This was more than three months after I made the changes. Notwithstanding this, Federal Government employees working for the Parole Commission violated their own procedures.

Pursuant to 2.40-15 of the U.S. Commission Rules and Procedures Manual, the probation officer is required to observe a specific procedure with regard to fines. Here is this rule in its entirety.

UNITED STATES PAROLE COMMISSION

DEPARTMENT OF JUSTICE

RULES and PROCEDURES MANUAL

AprilS, 1987

contains

Sections 2.10-2.64 (inclusive) plus Appendix Sec. 2.40-15: Satisfaction of Court Orders [including the payment of fines, restitution orders, court costs and assessments, and court ordered child support or alimony payments].

When a parolee is subject to an outstanding fine, restitution order, court cost and assessment, court ordered child support or alimony payment, and is unable to pay the obligation in one sum, the following procedures apply:

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IRS HUMBUG

(a) The U.S. Probation Officer will meet with the parolee to develop a written plan for the payment of the fine, restitution order, etc. The plan will include, among other things, a payment schedule and the amount to be paid at each installment. It will include also the following clause: "This plan and the obligations described herein, are part of the conditions of my parole." The parolee will supply all financial information and record necessary to the development of the plan and will sign the plan, along with the probation officer. A copy of the signed plan will be forwarded to the U.S. Parole Commission. (b) As to the payment schedule and the amount to be paid at each installment, the plan will include any relevant court ordered installment payment schedule. If no such installment payment schedule exists, one will be developed that takes into account other things, the amount of the fine [restitution order, etc.], any interest and penalties due as well as the parolee's employment status, earning ability, financial resources, and the economic burden that the payment of the obligation will impose on the parolee or his dependents. Where feasible, the installment terms for fines and restitution orders should not exceed two years. (c) When the parolee has an outstanding restitution order in addition to a fine or other financial obligations, the plan will give precedence to the satisfaction of the restitution order. (d) If the parolee refuses to accept the terms of the plan in general, refuses to accept the installment payment schedule, and/ or refuses to sign the plan, the U.S. Parole Commission will be notified. The U.S. Parole Commission will then resolve any outstanding disputes as to terms and installment payment schedules, completing the plan as necessary and making the terms and schedules contained therein themselves a special parole condition. (e) Any changes to or modifications of the plan will be reduced to written form and signed by the parolee and the U.S. Probation Officer. A copy of the signed change or modification will be forwarded to the U.S. Parole Commission. (f) If the parolee does not make diligent effort to make the payments, according to the schedule in the plan, the U.S. Probation Officer will report such failure to the U.S. Parole Commission as a violation of the conditions of Parole.

It is clear from these rules and procedures that the Parole Commission would only have cause to violate my freedom based upon the nonpayment of the so-called fine if they had a declaration from me that I accepted the fine as an obligation. The declaration they had from me was to the contrary. Appendix N shows that I made an affirmative statement taking specific exception to the fine.

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Besides this, under rule 240.15(a), the procedure required of those in the Parole Commission is to have the parole officer assigned to me arrange a payment schedule of the fine. He never even attempted to do so, nor did Federal Government employees of the Parole Commission follow up as required of them by rule 240.15(d) by "making the terms and schedules" themselves and making it a "special parole condition." Not one of them attempted to fulfill this duty.

The Parole Commission instituted their rules and regulations regarding payment of a legal fine by a parolee so that due process of law would not be violated. This is the reason the parole officer needed to gain my cooperation and obtain a declaration from me that I willingly accept the fine as a personal obligation. To do otherwise would force a debt upon me that goes to controlling my labor. This would constitute peonage. Parole Commission rule 240.15 proves that in the United States of America the sovereignty a person has over his labor is to be respected even when that person has the status of a prisoner. Remember, the Fifth Amendment states that NO PERSON shall be deprived of his life,liberty or property without due process of law.

Notwithstanding the above, making the payment of any fine imposed by a Judgment Order as a condition of parole is Federal Government employee humbug. As discussed earlier, under Rule 69 of the Federal Rules of Civil Procedure, the Justice Department has authority to collect a valid fine by having it reduced to a judgment debt through a state court. This makes the need for having the fine as a condition of parole unnecessary unless they plan humbug to collect it and use the forced declaration as a confession of guilt to complete their humbug process.9

Knowing my fine was not valid, Federal Government employees in the Justice Department could not employ Rule 69. Because of the exception I took to that Parole Certificate condition, Federal Government employees in the Parole Commission could not use their standard humbug procedures to get me to pay the so-called fine, so they used extraordinary humbug to coerce me into making plans to pay it. Their conduct of having me falsely arrested and forced back into prison

9 If the A.C.L.U. is listening, here is a First Amendment issue of great magnitude.

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IRS HUMBUG

was their attempt to provide the undue influence with intent to force my cooperation by coercion.

Humbug used by Parole Commission for false arrest

I found myself in prison for a third time in March of 1988. This time I was again falsely arrested through Justice Department humbug, which includes, among others, the Parole Commission and U.S. marshals. Due process of law requires an arrest warrant to be signed by the judge of a court. Federal Government employees arrested me under administrative documents called a warrant application that was signed by a clerk of the office of the Parole Commission in Dallas, Texas, and a warrant signed by the Parole Commissioner. Use of administrative documents to effectuate an arrest and imprisonment proves that administrative process is used by Federal Government employees in lieu of due process of law when they plan to control a person and force him to become a prisoner through humbug.

Shortly after being falsely arrested and placed in the Oklahoma City Jail, where city employees illegally accepted administrative documents as authority to do so, I was transferred to a FCI, this time from a status as a parolee. The records of the Justice Department in this action read as though I had committed two separate offenses. The first was the (non-existent) crime of "failure to file income tax returns" shown on a Judgment Order that I had been imprisoned for originally. The second conviction was for the crime of refusing to accept the fine as a debt obligation. Since Congress has not made such conduct a criminal offense, this was a crime fabricated by Federal Government employees of the Parole Commission. The administrative tribunatiO conducted resulted in conviction and imprisonment for the offense of refusing to express the will of Federal Government employees in the Parole Commission as to the condition on their Parole Certificate regarding fines. This gives their Parole Certificate the effect of a Bill of Attainder (see chapter 13).

By manipulating records with feigned crimes, it appears as though the Parole Commission has authority to extend a person's incarceration.

10 My accuser, prosecutor, and judge was a U.S. Parole Commission employee who would not permit me to have fhe witnesses of my choice at this unlawful administrative tribunal.

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This again shows how Federal Government employees use humbug to control one's liberty and violate due process of law. I witnessed from others handled the same way that this is a standard practice of the Parole Commission with all persons returned to prison from the status of a probatidner. This unlawful standard practice is condoned by judges of the U.S. Courts. This statement is possible to make since Justice Department employees stated definitively to my wife that the U.S. judges cooperate with them in matters such as this. The subsequent record made of my attempt to gain freedom proves this.

Due process of humbug for payment of the fine

Since the Judgment Orders with my name on them were not validly issued to represent a decision lawfully made in a U.S. courtroom, the Federal Government employees involved needed to have me pay the fine to make it appear as though I accepted the invalid judgment as being valid. This would negate any complaint I make that section 7203 is a "bill of pains and penalties." My acceptance of the judgment as being valid would be taken as providing them with a post conviction confession that the Federal Government employee malicious prosecution humbug used in the court action against me was accepted by me as valid, and that the illegal imprisonment was also accepted by me. This is not due process of law, it is due process of humbug.

Perhaps Federal Government employees justify their conduct with the notion that I, being a sovereign person, should know better than to pay the fine when they attempt to enforce a null and void Judgment Order. Still, under the laws of the United States of America, there is no way it can be considered that a person volunteered to be maliciously prosecuted. If Federal Government employees think so, it is proof they play with a set of laws not in harmony with the U.S. Constitution or authorized by the Legislative Branch of the U.S. Government, vague laws of Congress notwithstanding. The interpretations of vague laws must have a basis in the U.S. Constitution.

If Federal Government employees had managed to get me to pay the fine, they would have considered my conduct as a condition of acquiescence, just as they regard the condition one imposes on oneself when delivering a debt instrument in the name of a "U.S. Individual Income Tax Return" as voluntary compliance--self assessment. But, my voluntary payment of the fine goes beyond that. Federal Government

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IRS HUMBUG

employees would also regard paying the fine as my confession to the statement in the PSI report that said I evaded taxes to a specific amount, thus aiding IRS employees in their attempt to return me to a condition of peonage by a bogus notice of deficiency. By implying that I confess to fraud with intent to evade tax, they would use humbug to enforce humbug. Even though the three elements in proving violation of section 7203 have nothing to do with tax evasion, and even though no law exists which provides notice that tax evasion is fraud with intent to evade tax, the burden would be switched to me to prove, in a court system that created the burden, that I had not acted fraudulently against the United States of America. Such burden would not be permitted to be sustained and would provide no chance for justice. It creates a civil rights issue of the greatest magnitude in the United States of America. The only condition to which I will confess is that I willfully refuse to discharge conduct that expresses the will of Federal Government employees. The fact is, Federal Government employees rely upon humbug to support their illegal actions of depriving a person of his life, liberty and property when they cannot produce the law by Congress that provides them authority to justify their conduct.

Case law used as if it is law helps Federal Government employees sustain their humbug. Even though court cases do not make law, court cases do make the misuse of discretion possible. Misuse of discretion makes misuse of administrative procedure possible through which a person is controlled. Depriving a person of his liberty by first establishing an administrative procedure and then misusing it in place of due process causes that person to be deprived of guaranteed appeal rights. Rights are guaranteed and not subject to conditions of impairment by the personal discretion of U.S. District Court judges.

U.S. judges supported such Federal Government employee humbug

Though I have already shown how the permission of one judge for the misuse of a U.S. courtroom and the jury process in Denver is supported by other judges the following story emphasizes this truth.

After the U.S. Supreme Court refused to address the issues in my Petition for Writ of Habeas Corpus, I submitted one to the District Court in Oklahoma City asking release from my unlawful detention. Under law, the court in the district where a person is being detained has jurisdiction, therefore the U.S. District Court in Oklahoma City had

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jurisdiction over the petition I filed September 9, 1987, (CIV-87-1844T). The judge assigned to answer it refused to accept jurisdiction. Instead he dismissed it without prejudice saying that jurisdiction was in the District Court in Denver.

28 U.S.C. Sec. 2241(b) provides authority for one court to transfer any pleading to a court with jurisdiction. By not doing so, this judge proved jurisdiction was actually in the Oklahoma Court. His answer was a ploy to have me to give the Denver District Court jurisdiction it otherwise did not have. This judge's conduct is evidence of concealment of the Federal Government employee humbug used to control the sovereign persons in this country.

I presented another Petition for Writ of Habeas Corpus to the U.S. District Court in Oklahoma City on April 7, 1988, (CIV-88-580T) after being falsely arrested and imprisoned by the Parole Commission for the non-payment of the fine. That judge avoided answering the writ and denied me relief by stating that I needed to exhaust administrative remedy. Exhaustion of administrative remedy is only applicable when the issue is an administrative one. Due process of law must be applied when the issue is unlawful incarceration. By imposing administrative remedy upon me, in place of due process of law, this U.S. judge took away my right to remedy under a writ of Habeas Corpus guaranteed by the U.S. Constitution (Art. I, Sec. 9, Cl. 2). His intent could only be to conceal the real subject matter of false arrest by using the tolling of time to make any further attempt for relief through the U.S. Court moot. He knew I would be released before administrative process could be exhausted since I could only be imprisoned this third time for about six more months. His reliance upon case law to apply his discretion to control my conduct is typical, but the U.S. Constitution permits no such discretion when the issue of unlawful imprisonment is presented to them in a Petition for Writ of Habeas Corpus.

More proof that Federal Government employees use the U.S. Courts for their humbug

In September 1989, an attorney from the Justice Department in OklahomaCity asked and received cooperation from a U.S. magistrate to pressure me into paying the fine. This U.S. magistrate ordered me to appear and answer to assets with regard to what the Justice Department referred to as a "judgment debt" of $20,000 based upon a fine of $20,000

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IRS HUMBUG

referred to in the Judgment Order (Appendix L). A fine can be made into a debt under specific procedures found in Rule 69 of the Federal Rules of Civil Procedure. The procedure calls for the conversion of the fine into a debt under the rules of a State Court, which is similar to anyone obtaining the aid of a court to collect a lawful debt. The only place where rules of a State Court can be administered is in the court of the State in which the Justice Department is attempting to convert a fine to a personal debt. That would be due process of law and would allow me to bring my arguments into a State Court and make a record of the illegal humbug used by Federal Government employees against me. The fact that Federal Government employees have never used this legal route to have me pay the fine is prima facie evidence that they know the Judgment Order prescribing this fine is not valid. However, if I cannot defend myself or if I am forced into a plan to pay the fine, then it is regarded that I agree to the Federal Government employee humbug. Federal Government employees look upon this as doing their job. Dishonesty, immorality, and violations of due process of law notwithstanding, due process of humbug it is!

The purpose of appearing in a courtroom to answer to my assets and the assets of my family, including those of my children who have long been on their own, was to be subjected to the pressure, the undue influence, that a court order placed upon me. One cannot help but feel the ever present threat of contempt of court, which means prison. Still, I appeared before the magistrate to make the record that I am not a person required to cooperate and give the personal information requested. Before I could do so, the magistrate, probably as planned, ordered me to enter into dialog with the attorney for the Justice Department with intent to make some plan to pay the fine. The attorney and I went to his office where I made the following record to him:

1) My refusal to pay the fine is based upon the fact that all Federal Government employees will regard such conduct as a post conviction confession of tax evasion which will be taken as fraud with intent to evade tax, conditions of which I was not charged.11

11 If a f>erson confesses to tax evasion, they indirectly confess to being a "taxpayer'' under the I.R. Code. This is taken as post conviction jurisdiction upon which Feder~ Government employees not only feel justifies the malicious prosecution, but also 15 a personal declaration from that person that they are subject to any internal revenuf tax. Such personal declaration is regarded as a product of a person's freedom o

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HUMBUG IS NOT APPEALABLE CHAYTER14

2) I told him that I would consider a plan to pay the fine under protest only if he could obtain Justice Department immunity from such a happening as outlined in #1.

3) I asked for the immunity in writing with his signature and the signature of his supervisor.

This attorney's reply was, ''You have it." He said he would obtain such immunity for me in writing and it would be delivered by putting it in the mail the next day. I received a letter (10 days after our meeting) from him that suggested a payment schedule, hoping I would cooperate and pay.12 The authority cited as the requirement was the Judgment.13 This letter failed to live up to his agreement to provide me with Justice Department immunity. Of course, ir~"1munity from the legal consequence of a law would be possible only where the law exists. Immunity from a phantom law, a fiction, is impossible.

With no law upon which to grant immunity, the only legal consequence from which I could be granted immunity was the Judgment. But, immunity from a judgment that has already been unduly enforced is impossible. Again showing how a person is prejudiced by procedures regarding bail pending appeal.

Still, if the collection of the fine was the primary purpose, which was not the case here, they could have arranged for my immunity from

12

13

expression, and is taken by Federal Government employees as providing them with broad power to control the life, liberty and property of that person. I continually made personal declarations that expressed my powers as a sovereign to benefit me, not them. This is contrary to the result they usually get from their humbug.

The procedure he was to use was much the same as that for the probation officers under tli.eir rules and regulation 2.40-15. (provided on page 243)

The l'udgment did not state I violated a positive law by Congress. It only cited a special aw in the I.R. Code that made adaitional punishment applicable Up<?n a special person (Sec. 7343) who is first found guilty of fraudulently possessing U.S. Government income. The Judgment makes a record that I was not such a person and that I was not found to be fraudulently in possession of U.S. Government income when the U.S. judge deliberately omitted the word "willful" and did not charge the cost of prosecution, as required by section 7203. The judgment was a fraud upon me, hence Federal Government employees could not collect the fine reflectea. on it by legal methods. The record made by Federal Government emJ?loyees in their attempt to force me to pay the fine is evtdence of enforcement of the IRS service of controlling me by debt.

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IRS HUMBUG

further Federal Government employee humbug, and I would have been willing to give them immunity from personal prosecution. Any immunity they provided, however, would be positive evidence against themselves personally14 of forcing an illegal debt upon me. Their concealment of enforcement of the IRS condition of peonage is less evident when they get a person to acquiesce to their humbug.

While awaiting the letter of immunity I made an appeal under Rule 60, Federal Rules of Civil Procedure, and delivered it to the judge who presided in the action against me in Denver. It spelled out the humbug used by Federal Government employees, warned those involved that they accept the legal consequences of 18 U.S.C. Sec. 1581 for attempting to enforce a condition of peonage upon me, and asked that the subject judgments be declared null and void.

A copy of my Rule 60 motion was sent to this Justice Department attorney before we were again scheduled to appear before the magistrate. The attorney and I met just before going into the magistrate's courtroom. At that time he suggested that I ask that his motion to appear and answer to assets be quashed, but when we got into the courtroom he quickly took this matter our of my hands and asked that it be quashed. The magistrate agreed to do so. Could it be the issues in my Rule 60 motion were of concern to them? As of this date, no further attempts have been made to collect the fine.

Though after our appearance before the magistrate, in January of 1990 I responded to that attorney's letter offering a payment plan by pointing out that he too has accepted the legal consequence of 18 U.S.C. Sec. 1581, which is punishment for his participation in attempting to return me to a condition of peonage. His response was a withdrawal of his offer for a payment schedule of the fine. I think it is because I have left a trail of evidence declaring my sovereignty.

The main thought here is that the use of Federal Government employee undue influence tactics was intended to coerce me to pay the fine. This is proof that they could not order me to pay it. The fact that Federal Government employees could not order me to pay the fine and did not implement the lawful procedures available to them to collect

14 Federal Government employees, just like anyone else, are protected by the Fifth Amendment to the U.S. Constitution from being forced to be a witness against themselves.

252


valid fines is prima facie evidence that the Judgment Orders with my name on it were not valid. It all goes to show how Federal Government employees, with the aid of U.S. judges, used humbug to impair the appeal process and control my life, liberty and property with intent to use me as an example so that they could maintain control over the balance of society. This made me a person who was unduly convicted, which is violative of the Fifth and Thirteenth Amendments to the U.S. Constitution.

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CHAPTER15

SOVEREIGNTY EXPLOITED

Due Process-Not judges' opinion control

Sovereignty is a condition under the laws of the United States of America whereby any natural person has 100 percent power, or authority, to control their own life, liberty and property, including labor, to the exclusion of any other person or government entity. This condition is a result of our republic form of government (U.S. Constitution, Article IV, Section 4). The laws under which we are to survive cannot provide direct or indirect authority to anyone that results in deprivation of life, liberty and property of another without due process of law.

Control over life, liberty and property is within the personal authority and jurisdiction of a sovereign person until it can be charged with probable cause that one has violated the life, liberty, or property of another sovereign person or one is charged with probable cause of violating a specific state or federal positive law. At that point, one's life, liberty, and property become subject to the jurisdiction of a court for determination of guilt beyond a reasonable doubt. If the accused is found guilty, the court, pursuant only to law, will consider the damage and order punishment and/or remedy to the injured party. With this, the general welfare of society, for which the government is responsible, is considered served.

One is not required to make oneself subject to the authority of persons employed in the court system. The conduct of everyone in the courtroom is controlled by the law. A decision made in a courtroom that is not based upon law is only the opinion of the judge about the agreements made between persons and cannot be used to control the conduct of other parties in other court cases. This is why any conduct or opinions in the name of judicial decision about a section 7203 action, when it is not proven that the person violated any duty in law, is not legally binding upon anyone, including those assigned to enforce it. A judicial decision with regard to malicious prosecutions is a legal impossibility.

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SOVEREIGNTY EXPLOITED CHAPTER IS

Judicial decisions based upon positive law do set a precedent. However, even judicial decisions which interpret the law and establish precedent are subject to change. One reason for the appeal process is to challenge the precedent established in the court, but more often it is used to challenge the opinions of other courts in other cases used to control the destiny of the appellant.

The restriction placed upon those conducting tribunals in a court of law is that they must follow due process of law for the determination to be validly enforceable. Only when Federal Government employees follow due process of law do they serve society. When Federal Government employees use a process other than due process oflaw, they force society to serve them.

Since there are no common law offenses1 against a government, all charges made on behalf of the U.S. Government must exist in law. As discussed in an earlier chapter, the laws of the United States of America are codified into 50 U.S. Codes called Titles. Some Titles contain positive law and others do not.2 Only positive laws have general applicability, meaning they apply to everyone.

Federal Register is notice of controlling law

Section 1505(a)3 of Title 44 (contains positive laws) requires that every document or order which has general applicability and legal effect

1 From Black's Law Dictionary, Fifth Edition, (in part): "Common Law'' consists of those principles, usage and rules of action applicable to government and security of persons and property which do not rest for tneir authonty upon any express ana J:lOSitive declaration of the will of the Legislature. Bishop v. 11.5., D.C. lex., 344 F.Supp. 415,418.

2 Appendix Cis a list of the U.S. Codes. Those with an asterisk contain positive laws.

3 44 U.S.C. Sec. 1505. Documents to be published in Federal Register. (a) Proclamations and Executive Orders; documents having general

!lJ'plicability and legal effect; document required to be published by Congress. There shall &e .P.ublished m the Federal Reglster-

(1) Presidential proclamations and Executive orders, except those not having general applicability and legal effect or effective only against Federal agencies or persons in their capacity as officers, agents, or employees thereof;

(2) documents or classes of documents that the President may determine from time to time have general applicability and legal effect; and

(3) documents or classes of documents tnat may be required so to be

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IRS HUMBUG

be printed in the Federal Register. This means all positive laws must appear in the Federal Register before it can be deemed that the general public has been placed on notice about a law according to which they must control their conduct. Prima facie evidence that a statute in the U.S. Code has specific limited applicability is its absence from the Federal Register.

The explanation of the Federal Register in Black's Law Dictionary, Fifth Edition, is as follows:

Federal Register. The Federal Register, published daily, is the medium for making available to the public Federal agency regulations and other legal documents of the executive branch. These documents cover a wide range of Government activities. An important function of the Federal Register is that it includes proposed changes (rules, regulations, standards, etc.) of governmental agencies. Each proposed change published carries an invitation for any citizen or group to participate in the consideration of the proposed regulation through the submission of written data, views, or arguments, and sometimes by oral presentations. Such regulations and rules as finally approved appear therefore in the Code of Federal Regulations.

This description explains that the Federal Register also serves as the means by which notice is given to the general public that laws by Congress can be enforced by rules and regulations which appear in the Code of Regulations (hereafter C.F.R.). The C.F.R. is the means by which Federal Government employees are told the limits of their conduct when implementing the laws they are authorized and required to enforce. The description also tells us the procedure for presenting our views about regulations and that we have a right to expect our views be given due consideration.

A search of the Federal Register and the C.F.R. will not find sections 7201 and 7203 of Title 26 (the I.R. Code) anywhere. This fact seems to contradict the mandate of 44 U.S.C. Sec. 1505(a) which says, "For the purposes of this chapter (Sec. 1501 et seq.) every document or order which prescribes a penalty has general applicability and legal effect'' and that those "having general applicability and legal effect" are "required to be published." From this it would appear as though these

published by act of Congress. For the purposes of this chapter (Sec. 1501 et seq.) every document or order which prescribes a penalty has general applicability and legal effect. (emphasis added)

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SOVEREIGNTY EXPLOITED CHAPTER15

penalty statutes should be in the Federal Register and the C.F.R., but Congress limited the application of these penalty statutes and all of chapter 75 of the I.R. Code to a person described in section 7343 of the I.R. Code-a person who is "under a duty to perform the act in respect of which the violation occurs." The person under a duty is only a person who effectively connected himself with U.S. Government income and willfully made some of that income part of their own estate by criminal conduct, such as fraud or perjury. Upon proof of fraud or perjury, the additional punishment of these statutes is applicable. Hence, sections 7201 and 7203 are not statutes of primary punishment, they only provide for additional punishment after a primary act has been charged and proven. Only then does the U.S. Court have authority to impose the additional punishment under section 7201 and section 7203 upon such a person, and no other.4

The Federal Government employee who works in a federal area and is responsible for handling part of the U.S. Government's income is the most likely candidate to be in a position to act fraudulently with regard to that income. Such person is in a fiduciary relationship with regard to U.S. Government income and 44 U.S.C. Sec. 1505(a)(1) excepted statutes that are "effective only against Federal agencies or persons in their capacity as officers, agents, or employees thereof." So, technically, section 1505(a) does not require section 7201 and section 7203 of the I.R. Code to be in the Federal Register or C.F.R.

If these statutes were laws prescribing primary punishment, they would have general applicability and would be required to be noticed. But, these laws state they are additional punishment, so they cannot

4 I, Frank Kowalik, take this opportunity to publicly express my sovereignty by declaring I am not, nor have I ever been, tile person described in 26 U.S.C. sec. 7343 (definition in chapter 11). Section 7203 was m1sa pplied to me, as well as many others. I was punished for refusing to surrender control over my personal income. I was not, and I am not, a person under a duty to be certain the U.S. Government's income is returned. I have never had U.S. Government income in my possession, therefore Federal Government employees have no authority to invade my personal records to search for U.S. Government income and, not being the person described in section 7343, they have no authority to use section 7203 to mflict punishment upon me for refusing to make an illegal kickback to them. I committed no crime ag~inst the United States of America upon which the additional P.Unishment of sect1on 7203 could be made applicable. Further, the record shows that the Justice Deflartn:tent did not charge me with fraudulent conduct or conduct where the issue of pel")ury is involved.

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IRS HUMBUG

lawfully be used as primary punishment. The fact that they are not noticed is evidence that they can only be applied upon the specific person described in section 7343 and only upon specific U.S. Government income. Absence in the Federal Register tells that the subject matter is limited to internal revenue service and not possible to use for external revenue service.

With sections 7201 and 7203 being applied generally through malicious prosecutions, there remains only one other source of authority being used by Federal Government employees. Unlawfulness notwithstanding, Federal Government employees must be relying on authority received by judicial decisions, referred to as case law by lawyers within and without the U.S. Government.

Positive law is controlling law An example of wording that can be used to make law positive is in

the Fifth Amendment to the U.S. Constitution. By starting out "No person .... " it is clear that no one is excluded. In statutes, a phrase such as "any person is required" is used to indicate that the statute applies to anyone. When Congress omits the word "is" from such a phrase, making it read "any person required" (as in 26 U.S. C. Sec. 7203), it is saying that this law only applies to a specific person. This is not a positive law. It only applies to the person who exercised his personal choice (sovereignty) to become effectively connected with it by accepting some duty that made him a "person required," i.e. the person in section 7343 of the I.R. Code who is under a duty to perform the act in respect of which the violation occurs (see chapter 8).

Acquiescence to the legal consequence of a non-positive law is possible only when a person makes himself subject to that law, i.e. a Federal Government employee as to income belonging to the U.S. Government. Once a person is effectively connected with a law, he is required to obey it. If a person is not effectively connected with such a law, a violation of that law is not legally possible. For example, it is impossible for a person who is not connected with the U.S. Government's income to be under a legal obligation or condition to perform some act or duty with regard to such income. When no legal duty exists, the consequences of section 7203 cannot be legally forced upon him.

258

Location of positive laws


Each Title of the U.S. Codes indicate whether or not it contains positive law. As an example, Title One, General provisions, (Appendix 0) starts out with:

This title has been made positive law by section 1 of act July 30, 1947, ch. 388, 61 Stat. 633, which provided in part that: "Title 1 of the United States Code entitled 'General Provisions,' is codified and enacted into positive law and may be cited as 'I U.S.C. Sec ..... "'

whereas Title 26 makes no statement that it is positive law. Congress just says that I.R. Codes were enacted and how they may be cited (see Appendix P).

No reference to the I.R. Code being positive law confirms that it applies to specific persons. These specific persons are those who chose to become effectively connected with U.S. Government income and the "individual" in the I.R. Code is a person with the specific status of a Federal Government employee.

The authority of the IRS is limited to seeing that a proper return (kickback) of U.S. Government property (income) is made by Federal Government employees in the name of tax. When IRS employees act upon property not within the authority given them by the I.R. Code, they are NOT acting in behalf of the U.S. Government and personally accept the consequences of their actions.

Discretion circumvents positive law

lllegal activity is not limited to Federal Government employees working for the IRS. The record of court actions, called case law, show how U.S. judges have imposed their personal discretion upon persons through their special process of making law by setting personal precedent and not lawful or judicial precedent. In doing so, they ignore due process of law and make it possible to illegally control the life, liberty, and property of persons present in a U.S. courtroom because of Federal Government employee humbug. It is humbug when employees of any government and lawyers in the private sector use personal precedent in place of law. In doing so, they force upon their targets conduct patterned upon what some person agreed to in some other court case and ignore the standard of conduct that law establishes. When they do so, the targeted person is not permitted to express his sovereignty.

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What results is that his sovereignty being expressed for him. A good example of this is the abortion issue. Instead of law being the controlling issue, for 17 years opinions of justices in the U.S. Supreme Court established conduct that resulted in the destruction of an estimated 20 million children. Today, state legislators are asked to make laws regarding the standard upon which potential parents are to control their conduct. To protect the sovereignty of unborn children, who are incapable of protecting themselves, laws in each state should make it clear that when consenting adults enter into sexual intercourse they have already expressed their sovereign power over their bodies and, if conception occurs, the rights of the child become the only issue. Therefore, the only condition under which abortion is lawfully possible is if one of the adult parties were forced into sexual intercourse, meaning the right to the free choice over the use of their body was denied. Of course, lawyers are lining their pockets by not using this fundamental First Amendment issue though required to do so under a republic form of government where laws must take into account personal sovereignty and persons must conduct themselves in accord with law, not personal opinions. When lawyers refuse to surface the primary legal issue, they intend to conceal the hoax deliberately imposed upon the targeted person.

Currently the American public is being controlled by the choice of lawyers to use discretionary opinions of judges in place of law. We can only blame ourselves when our life, liberty and property is controlled in a manner that circumvents due process. Though done unwittingly, it is we who have permitted this to occur.

This book uncovers the record made by a U.S. judge who used personal discretion to permit other Federal Government employees the misuse of a U.S. courtroom for the express purpose of providing undue influence upon me with intent to coerce me to return to the unlawful condition of peonage. It shows how the vague laws (usually composed by Federal Government employees in a Federal agency for congressmen) in the I.R. Code made it possible to take the lawful phrase "a return of income is required by law to be made" and force it by practice to mean that "a U.S. Individual Income Tax Return is required to be filed." Vagueness notwithstanding, their duty is to enforce the legal issues in the law and not the alternate illegal issue.

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Only judicial and legal discretion is permitted

A review of how U.S. judges misuse the rules of the court to force their personal discretion upon us in place of judicial and legal discretion will help explain how this happens. Black's Law Dictionary, Fifth Edition will help explain the meaning of these terms.

Discretion. When applied to public functionaries, discretion means a power or right conferred upon them by law of acting officially in certain circumstances, according to the dictates of their own judgment and conscience, uncontrolled by the judgment or conscience of others. As applied to public officers means power to act in an official capacity in a manner which appears to be just and proper under the circumstances. Application of Blackburn, 206 Misc. 393, 134 N.Y.S.2d 138, 142, 144.

In criminal law and the law of torts, it means the capacity to distinguish between what is right and wrong, lawful or unlawful, wise or foolish, sufficiently to render one amenable and responsible for his acts.

Wise conduct and management; cautions discernment, especially as to matters of propriety and self-control; prudence; circumspection; wariness.

Judicial and legal discretion. These terms are applied to the discretionary action of a judge or court, and mean discretion bounded by the rules and principles of law, and not arbitrary, capricious, or unrestrained. It is not the indulgence of a judicial whim, but the exercise of judicial judgment, based on facts and guided by law, or the equitable decision of what is just and proper under the circumstances. It is a legal discretion to be exercised in discerning the course prescribed by law and is not to be given effect to the will of the judge, but to that of the law. The exercise of discretion where there are two alternative provisions of law applicable, under either of which court could proceed. A liberty or privilege to decide and act in accordance with what is fair and equitable under the peculiar circumstances of the particular case, guided by the spirit and principles of the law. Manekas Allied Discount Co., 6 Misc.2d 1079, 166 N.Y.S.2d 366, 369. (emphasis added)

This description of judicial and legal discretion shows that judges have the power to exercise discretion. Only when it is in accord with positive law is it deemed to be judicial and legal discretion. As I experienced it, the U.S. judges are using personal discretion as if it were judicial and legal discretion. When they do so, they are acting outside

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the authority given them by their office and accept any legal consequences that apply to such conduct.

An example of a judge using personal discretion is in applying the additional punishment of section 7203 for willful failure to file a "U.S. Individual Income Tax Return" when there is no law that makes this a crime. When such an action is brought into a courtroom, judicial and legal discretion is considered used by the judge who throws it out. But, personal discretion is used when they provide permission for the misuse of the U.S. courtroom.

Rules of court-basis for personal discretion

Just as with administrative agencies of the U.S. Government, Congress provided the U.S. courts the power to make rules pursuant to law. It also told the courts in Title 1, Sec. 2045 (which is positive law) that only positive law can be used as legal evidence of the laws of the United States. And, only upon positive laws can judicial and legal discretion be established.

There is this evidence that non-positive laws, which a "person required" is to obey, have been made applicable as if "any person is required" by judges of the U.S. Courts. By misusing the rules of the court, U.S. judges have provided themselves with self-serving personal discretionary power.6 This evidence begins with Rule 1 in the Federal Rules of Criminal Procedure.

5

6

Rule 1. Scope.

These rules govern the procedure in all criminal proceedings in the courts of the United States, as defined in Rule 54(c); and, whenever specifically provided in one of the rules, to preliminary,

1 U.S.C. Sec. 204 Codes and Supplements as evidence of the laws of United States and District of Columbia; citation of Codes and supplements.

(a) United Stated Code ... Provided, however tnat whenever titles of such Code shall have been enacted into positive law the text thereof shall be lega( evidence of the laws therein contained, in all the courts of the United States,_the several states, and the territories and insular possessions of the United States. (emphasis added)

(above provided in part)

This book also establishes a record of the misuse of discretionary power to enforce the misapplication of section 7203 upon persons who are included in the description of sect~on 7343 but not first charged and proven to be guilty of a primary act of fraud or pel')ury.

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supplementary, and special proceedings before United States magistrates and at proceedings before state and local judicial officers.

"Courts of the United States" is not specifically defined so Rule 1 puts us on notice that the scope (limit) of the criminal proceedings cognizable in the courts of the United States is found in the definitions in Rule 54(c).

The definitions in Rule 54(c) for attorney for the government, civil action, district court, magistrate, minor offense, oath, petty offense, United States magistrate, and words such as demurrer, motion, quash, etc., found in Rule 54(c) will be omitted. The definitions pertinent to understanding the subject matter are the following:

Rule 54(c) Application of terms. As used in these rules the following terms have the designated meanings. "Act of Congress" includes any act of Congress locally applicable to and in force in the District of Columbia, in Puerto Rico, in a territory or in an insular possession. "Federal magistrate" means a United States magistrate as defined in 28 USC Sec. 631-639, a judge of the United States or another judge or judicial officer specifically empowered by statute in force in any territory or possession, the Commonwealth of Puerto Rico, or the District of Columbia, to perform a function to which a particular rules relates. "Judge of the United States" includes a judge of a district court, court of appeals, or the Supreme Court. "Law" includes statutes and judicial decisions. "State" includes District of Columbia, Puerto Rico, territory and insular possessions.

(emphasis added)

By the use of the word includes in the definition of "State" those not listed are excluded. This means that not one of the 50 states of the United States of America is included in this definition of the term "State." With this we are told that criminal proceedings in the courts of the United States are limited to the District of Columbia, Puerto Rico, and a territory or in an insular possession; which is backed by the definition of" Act of Congress" and confirms the knowledge of the U.S. courts that Congress is limited to making laws applicable to the District of Columbia, Puerto Rico, territories and insular possessions of the United States Government. It also corroborates the proofs offered in chapter 4 of this book about the definition of "State" (Sec. 7702(a)(l0)) in the I.R. Code.

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From these self-made rules the U.S. court admits that those presiding in them only have jurisdiction over actions under Acts of Congress applicable to and in force in the District of Columbia, Puerto Rico, a territory or insular possession. The term "insular possession" is synonymous with federal areas which can be within any of the 50 states. Federal areas7 can be buildings or lands owned or rented by the U.S. Government. Technically it can probably be extended to land, sea or air vehicles owned by the U.S. Government since Acts of Congress are applicable to persons who work in any insular possession of the U.S. Government. This goes to understanding what this book is all about, the limited application of Title 26, the I.R. Code, to persons who work for the U.S. Government wherever that may be in the world. It is the U.S. Government's income that is in the possession of its employee that provides the IRS jurisdiction. It is the identity of U.S. Government income in the possession of a person that is of essence, not the person unless fraud is involved.

Rule 54(c) also tells us that the definition of the word "law" includes statutes and judicial decisions. Only Congress was empowered by the U.S. Constitution to make law. The inclusion of judicial decisions (case law) in the definition of the word "law" has enabled judges of the U.S. courts to expand the application of these rules beyond the laws passed by Congress to case laws they have illegally enforced by exercise of personal discretion in place of judicial discretion. In such actions the U.S. judge is a referee, not a person judging the facts under the law in the case; and the court action is a contest, not a due process of law proceeding. The Fifth Amendment to the U.S. Constitution mandates that no person be required to make his life, liberty or property subject to deprivation except by due process of law.

As an example, Congress enacted laws placed into the I.R. Code with regard to employees of the U.S. Government making and submitting W-4 forms and "U.S. Individual Income Tax Returns." Personal decisions of judges have been made with regard to persons who do not

7 "Federal area" is defined in Title 4 (positive law) as follows: 4 U.S.C. Sec. llO(e) The term "Federal area" means any lands or premises held or acquired by or for the use of the United States or any department, establishment, or agency of the United States; and any Federal area, or any part thereof, which is located witnin the exterior boundaries of any state, shall be deemed to be a Federal area located within such state. (emphasis added)

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work for the U.S. Government but sign W-4 forms and "U.S. Individual Income Tax Returns." With no law on the books that require the submission of these documents, decisions about them do not represent judicial or legal discretion. They are nothing more than personal opinions which basically say non-Federal Government employees agreed to express their sovereignty over their property and turn it over to the IRS patterned after the LR. Code special laws; and if they fail to continue to cooperate an attempt will be made to force them to do so by malicious prosecutions. However, if Federal Government employees within U.S. Courts say a person has the right as a sovereign to make and submit these forms, then they must admit a person also has the right not to do so. Therefore, any Federal Government employee enforcement procedure that arranges for this fact to occur is evidence of the IRS enforcement of the service to control people by a process of debt. The history of what happened to this author is proof of statements made in this paragraph.

W-2 Form pinch hits for the 1040 Form

The most direct proof that Federal Government employees violate persons of the United States of America by a controlling debt based upon income not subject to being returned to the U.S. Government is in their own notice provided Sept. 11, 1946 in the Federal Register at 117 A-39. The portion of it with regard to IRS W-2 forms reads:

Form W-2. Withholding statement. This is a statement of wages paid during the calendar year and the amount of income tax withheld on such wages, if any. The original and duplicate are furnished by the employer to the employee at the close of the calendar year or upon termination of his status as an employee. The original is used as an optional Income Tax Return by the employee in lieu of Form 1040.

(emphasis added)

The fact that the IRS is instructed to accept the W-2 form as a substitute Form 1040 (U.S. Individual Income Tax Return) is proof that the IRS' authority is exclusively limited to the collection of a kickback on wages. The term "wages" is the LR. Code means only what is paid to Federal Government employees for personal services, and is the only thing includible in gross income under subtitle A of the LR. Code (review chapter 6). If the IRS had authority to collect on other forms of income, i.e. interest, dividends, pensions, etc., of the Federal Government employees, they would not be instructed to ignore these forms of income

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by saying the W-2 form (that the employer, the U.S. Government, is required to make and reflects only "wages") is an acceptable substitute for a "U.S. Individual Income Tax Return."

The fact that the IRS is instructed to accept the W-2 form as a substitute Form 1040 is also evidence that the additional penalty statute of section 7203 is not applicable to persons who make and submit a "U.S. Individual Income Tax Return" to the IRS. Nowhere in section 7203 is reference made to failure to file a Form 1040 or in the alternate a W-2 form. On its face, this is prima facie evidence that all actions in a U.S. courtroom that are related to a ''U.S. Individual Income Tax Return" are malicious, and that the bad purpose of such a court action is to provide undue influence upon a person to coerce him or her into creating a personal debt by making and submitting a Form 1040 to the IRS.

Though it is not unlawful for the notice regarding the use of a W-2 form in lieu of a Form 1040 to appear in the Federal Register, it could have been given to Federal Government employees only in the C.F.R. since it only applies to them. 44 U.S.C. Sec. 1505 (discussed early in this chapter) does not limit the documents published in the Federal Register to those with general applicability, but placing this notice therein infers it does have general applicability when under the I.R. Code law it does not. This shows the intent to mislead employers in the private sector into believing they are required to make W-2 forms, and demonstrates how Federal Government employees exercise control over employers and employees in the private sector by procedure where no law provides authority for them to operate.

Kickback is from within the property, not from within the person

Section 11 O(c) of Title 48 defines the term "income tax" by saying it "means any tax levied on, with respect to, or measured by, net income, gross income, or gross receipts." In this definition, Congress states that

8 Title 4 contains positive law. Its title "Flag and Seal, Seat of Government, and the States" is misleadmg because the word State does not include any of the 50 states of the United States of America. The seat of government is Washington, D.C., and the "States" are insular possessions of the U.S. Government (i.e. territories or possessions of the U.S. Government such as Puerto Rico and the Virgin Islands or any federal area).

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the income tax is levied on property (the gross income) and not on any person.9 When it is not levied on the person, no penal punishment is possible on any person unless he has U.S. Government income in his possession by fraudulent means. The subject matter then is not the return of U.S. Government property in the name of tax, but criminal conduct by fraud.

A condition of fraud is not possible when the income is a result of an equal exchange. In 4 U.S.C. Sec. 111,10 Congress stated that "the United States consents to the taxation of pay'' (not the pay) " .... if the taxation does not discriminate against the officer or employee because of the source of the pay." Here Congress is stating that a kickback is due to be returned in the name of tax which is included in the pay, or is to be derived from the wages.

The fact that the "wages" placed in the possession of a Federal Government employee contains tax (kickback) that is required to be returned to the U.S. Government and the income the Federal Government employee receives in exchange for labor is the reason special precautions need to be taken to assure that the Federal Government employees income is not unlawfully taken. 4 U.S.C. Sec. 111 is notice to those who have the duty to administer the return of U.S. Government income program to be certain that 100 percent of the U.S.

9 Real estate is a good example of a tax levied on property and not the owner. If a property owner refuses to pay that tax, the law permits the property to be sold to pay it. So, the property is responsible for paying the tax, not the owner. Persons only accept the payment of the tax as a legal obligation as long as they wish to remain owners of the property.

10 4 U.S.C. Sec. 111. State, and so forth, taxation affecting Federal areas; taxation affecting Federal employees; income tax.

The United States consents to the taxation of pay or compensation for personal service as an officer or employee of the United States, a territory or possession or political subdivision thereof, the government of the District of Columbia, or an agency or instrumentality of one or more of the foregoing, by a duly constituted taxing authority having JUrisdiction, if the taxation does not discriminate against the officer or employee oecause of the source of the pay or compensation.

Author's note: The only duly constituted taxing authority having jurisdiction ov~r tax within the pay or compensation of officers or employees of tfie United States IS the U.S. Government. In tnis law, the U.S. Government is providing notice that only the U.S. Government's income is subject to being returned to it. Congress cannot enact law for any other taxing authonty.

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Government income be accounted for without prejudice to its employees. As long as the Federal Government employee receives what he or she was entitied to in the employment agreement, the condition of equal exchange of pay for labor exists and there is no discrimination because of the source of pay, the U.S. Government, imposing a kickback. To put it another way, the return of U.S. Government income can be considered verified as being correct if the IRS has no cause to believe that the deduction benefits claimed by the Federal Government employee are incorrect. Under this condition the remaining income derived from the wages is regarded as the amount received and accepted for the performance of personal services to the U.S. Government. An equal exchange results and the Federal Government employee has not been prejudiced because of his choice to sell his time to the U.S. Government, the source of his pay. It can then be considered that the conduct of the IRS is in accord with Congress' mandate in 4 U.S.C. Sec. 111 and that they did not discriminate against the Federal Government officer or employee. Certainly it would be an act of discrimination to charge a Federal Government employee for willful failure to file a ''U.S. Individual Income Tax Return" when the law makes it optional for him or her to do so and the Secretary has administrative remedy when it is not filed.

The mandate that there be no discrimination against Federal Government employees because of the source of their pay is also the reason a dispute about the amount due to be kicked back to the U.S. Government and the amount to be retained by the employee is left to negotiation. If brought to the administrative body called the U.S. Tax Court, the Tax Court judge orders that the parties act in accord with the requirements of the Tax Court and not under any laws of the United States of America. This is made clear by one paragraph in a letter I received from a U.S. Tax Court judge.ll It reads:

11

Your attention is called to the Court's requirement that, if the case cannot be settled on a mutually satisfactory basis, the parties,

I was scheduled to go to the U.S. Tax Court but withdrew my petition when the Tax Court judge said the issue of my not being a transferee of U.S. Government property woufd not be addressed. My not being a transferee means the Tax Court has no JUrisdiction over the property being claimed by IRS Federal Government employees, and with the withdrawal of my petition the Tax Court lost ~he jurisdiction I gave it. Without jurisdiction, those presiding in this administrative agency are powerless to act, lawfully.

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before trial, must agree in writing to all facts and all documents about which there should be no disagreement. Therefore, the parties should contact each other promptly and cooperate fully so that the necessary steps can be taken to comply with this requirement. YOUR FAILURE TO COOPERATE MAY ALSO RESUL TIN DISMISSAL OF THE CASE AND ENTRY OF DECISION AGAINST YOU.

In this paragraph the U.S. Government is permitting the return of its income to be upon a mutually satisfactory basis. It shows that an agreement exists between the Federal Government employee and the U.S. Government. This is much like an agreement of marriage, where two persons agree to love, honor and obey the agreement that exists between them. When one person violates the agreement, he exercises his own powers of reconciliation in order to get back on tract. Sometimes the violation is intolerable, but only the two persons can make the determination of what they will tolerate. The letter from the U.S. Tax Court proves that the U.S. Government will tolerate that the return of its income is subject to that which is mutually satisfactory. Gross income is fixed. It is only the "wages" a transferee (Federal Government employee) received from the U.S. Government. It is not expandable by adding to it income from sources outside the U.S. Government. So the difference of opinion that might exist can only be based upon the deduction benefits claimed by the Federal Government employee unless it is proven that the Federal Government employee received or stole U.S. Government income not intended by the U.S. Government to be put into his possession. In this instance he sweetened his employment agreement without permission and made himself subject to charges of fraud. If he did not report it on a ''U.S. Individual Income Tax Return," he also made himself subject to the additional punishment of section 7201 for attempting to evade tax, but only after fraud has been proven.

Because the return of income is subject to agreement, the U.S. Government calls for negotiations when there is an unresolved question as to how much of the gain portion derived from "wages" delivered to the Federal Government employee is to be returned to the U.S. Government and how much is to be retained in exchange for the Federal Government employee's labor. This way, once the Federal Government employee (transferee of U.S. Government income) agrees the amounts are satisfactory, a record is made that the Federal Government employee stipulates to not being prejudiced because of the source of his pay and the IRS has proof that they met the requirement of 4 U.S.C. Sec. 111. Also, by the last sentence of the paragraph from the U.S. Tax Court

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judge's letter (which was capitalized), both the transferee and the IRS respondent are on notice that they prejudice their positions by lack of cooperation with the other party.

With this, the U.S. Tax Court, for the U.S. Government, confirms that the requirement for the return of U.S. Government income is based upon agreement that is satisfactory to both parties and not on positive laws of the United States of America. The U.S. Government can only establish requirements as to the return of its own income. Income that is foreign to the U.S. Government is subject only to deprivation by due process of law (Fifth Amendment to the U.S. Constitution).

In 4 U.S. C. Sec. 111, Congress is stating to IRS employees that in their collection procedure of the Federal Government kickback, they must be certain that the U.S. Government receives its lawful kickback and that the Federal Government employee receives the income to which he or she is entitled. For the IRS to return to the U.S. Government income that belongs to the Federal Government employee is to force upon him or her a debt against his or her will. This is prejudicial to that person since his labor is then controlled by debt. Such condition is prohibited by the peonage laws of the United States of America. Therefore, this law is stating the intention of Congress not to have an illegal kickback program. Unfortunately U.S. judges have employed their personal discretion to use vague laws and judicial decisions not based upon law to make possible what is not lawfully possible.

With section 111, Congress proves the U.S. Government cannot have a law that discriminates against anyone with regard to personal income. No other construction can be made of section 111. It would be humbug for Congress to give authority to some other taxing body to do what they cannot do. This means a state income tax must also be an agreement between the state and its employees. This is proven by Art. I, Sec. 10, Cl. 1 of the U.S. Constitution:

''No State shall pass any .. .law impairing the obligation of contracts."

Though the history of section 111 shows it exists because of the Public Salary Tax Act of 1939 (Appendix E), it cannot mean that Congress makes this the terms of any employment contract that a person enters into with any other taxing authority. This is verified by the definition of the term "State." When Congress speaks, its says the "State" is Washington, D.C. (subject covered in chapter 4), where all the talking for the Federal Government takes place, and it confesses is is obligated not to impair the obligations of contracts, vagueness notwithstanding.

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No governmental authority, whether it be federal, state, or local, can lawfully control a person's labor by a process of debt because it would result in a condition of peonage. Therefore, neither section 111 nor the Public Salary Tax Act of 1939 can be construed to give the taxing authorities of one of the 50 states or any of the local governments in which a Federal Government employee lives the right to tax what the Federal Government employee receives in exchange for his or her labor; nor can it be construed that the U.S. Government can tax what employees of these other taxing authorities received in exchange for their labor. Congress does not have power to tax directly what anyone received in exchange for labor without the restriction of apportionment.12 How then could they have the power to give permission to other taxing authorities to do so. It would result in legislative discrimination as to pay received, and thereby impair the entitlement due a person in exchange for his labor. Such construction is humbug. Yet it exists because of a lack of knowledge and forced cooperation.

Need to exercise personal sovereignty

It is clear that the tax laws are lawfully constructed with enough vagueness to intend to make possible dual meanings. This gives taxing authorities a reason to act outside of lawful authority in striving to make persons in the United States of America agree to that which the authorities want them to agree. The result is that the will of the Federal Government employees is expressed in lieu of the individual's will dominating. The conduct of Federal Government employees shows conclusively that they are bent upon illegally controlling people so that they can have access to property otherwise not lawfully within their reach. They prove that their conduct is unlawful since, when one fails to

12 In essence, voting rights are apportioned, one vote for one person, because it is not based upon the wealth, income, or status of the person. Apportioned taxation is the same, it is based upon ~uality, the same amount of tax for each person regardless of their income. If Congress enacts a tax on labor it would have to be apportioned to be in accord with tne U.S. Constitution. If fair representation is to eXIst, those who don't like this and want the U.S. Constitution changed so that.a ~ax on labor will be in proportion to what a person earns for his labor snould be w1lhng to give that person voting power in proportion to the tax he pays on his labor. One cannot expect it to be two ways.

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agree, Federal Government employees force agreement. Remember, the IRS' authority is only over U.S. Government income in the possession of a transferee (Federal Government employee). Still, Federal Government employees will assert that they do not impair the sovereignty of non-Federal Government employees when it is expressed by the making and delivery of a "U.S. Individual Income Tax Return." The question that must then be addressed is was our expression of sovereignty voluntarily made or not? The answer is not unless done with one's full knowledge and the willing acceptance of the legal consequences of the act.

Only with knowledge can one exercise sovereignty and control over one's life,liberty and property. The information provided in this chapter shows that Federal Government employees in the federal court system have taken it upon themselves to manipulate the rules of the court and act outside their duties under the U.S. Constitution (the supreme law of the land). They act outside of their authority when they aid those working for the IRS to fulfill their acts of enforcing illegal kickback.13 As long as this is happening, it is necessary for each person to act personally in protecting and exercising personal sovereignty rather than expecting it to be respected by Federal Government employees.

Each person must make respect for their sovereignty a part of the Federal Government employee's job. To do so a person must have an understanding of the limited authority of government, how this authority is exceeded by Federal Government employees, and what authority a sovereign person possesses under a republic form of government. Until each and every person in the United States of America understands this, or at least a noticeable number do, illegal IRS enforcement will continue. This makes it necessary for those who wish to stake their claim to sovereignty to make a personal record, under penalty of perjury under the laws of the United States of America, that

13 An example of this was in the second court action against me when, after making a sufficient record that I was not a person included in the definition of the person described in section 7343, I asked that those seated in the jury box be instructed that the only person upon whom the additional punishment of section 7203 can ?e applied is described in section 7343. This was refused based upon other judicial decisions. By this Federal Government employee conduct, the law as to section 7343 and section 7203 was ignored because of juaicial decisions, and I was forced to agree with opinions and agreements made in other court actions to which I was not a party. This is of recora in the judicial decision used to control me.

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they are not "taxpayers" under the I.R. Code and, as to property not eminating from an employment agreement within the U.S. Government, to declare that they are not "transferees" under the I.R. Code, thereby putting IRS employees on notice that no Lawful authority exists to pursue it. The next chapter gives some suggestions on how this can be done.

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EXORCISING THE IRS

Personal sovereignty

Sovereignty is often associated with regard to nations, but rarely understood with regard to a person. Expressing power as a sovereign person is the subject matter of this chapter. Specifically, deprivation of property without due process of law is not permitted. Those who understand this subject matter can recover complete control over their lives, liberty and property. The record shows that those who fail to exercise control are believed to give permission to have control exercised over them, notwithstanding that it often is exercised to their prejudice.

The definition of sovereignty clearly shows that this term is not limited to governments. In Webster's, "sovereignty" is defined in part as:

sovereignty Supreme excellence or example of it; .... supreme power .... ;freedom from external control .... autonomy .... one that is sovereign. sovereign (n) One possessing or held to possess sovereignty; one that exercises supreme authority within a limited sphere. sovereign (adj) Possessed of supreme power; unlimited in extent, absolute; enjoying autonomy; independent.

and in Black's Law Dictionary, Fifth Edition, in part as:

sovereign A person, body, or state in which independent and supreme authority is vested; ....

Any person under the laws and Constitution of the United States of America is vested with personal sovereignty over their life, liberty, and property. Think in terms of the sovereignty (complete power or authority) each person possesses over his organs and how this is acknowledged and understood by all government authorities as well as by other individuals. All governments demonstrate that each person is considered sovereign over the organs within his body. Each possesses 100 percent control over the use of his organs while living and upon

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death. While living only the individual can donate one of his organs to a recipient, and when he provides clear, positive, and direct notice by personal written declaration that upon death his organs can, or cannot, be used in an organ donor program, no one, under any circumstance, has the right to act contrary to those wishes. The point is, one is permitted complete sovereign authority over his body parts by making a declaration of sovereignty over them.

If the individual can decide when and how someone can intrude upon the personal sovereignty he possesses over his organs, it follows that the individual's time as well as the fruits of the time sold also is subject to the individual's 100 percent control to the exclusion of any outside implied authority. One's personal estate is dependent upon the time he has in this world and the time one has in this world depends upon the health of one's organs. They are inseparable. This is the reason one has sovereign (absolute) power over the disposition of one's estate (limited sphere) and that includes one's body. The last will and testament is a record of one's expression of his personal sovereignty.

In a Republic form of government each person is guaranteed personal sovereignty. No one, including Federal Government employees, can control a sovereign person's time by controlling his labor. Thereby Federal Government employees have no authority to control the by-product of the employment of one's time, which is income. This is true whether the income is derived as a direct result of the employment of one's time, or indirectly from investments made with the income derived from the employment of that time (covered in Chapter 3). In other words, time is the source of all personal wealth (estate) and such estate is acknowledged by Congress as foreign to the Federal Government (26 U.S.C. Sec. 7701(a)(31)). One's income is not subject to being returned to the U.S. Government as part of their kickback program. The only income which can be kicked back is U.S. Government income, which is included in the wages paid to its employees and by employment agreement is not part of the income agreed to be paid in exchange for their labor. A person in possession of U.S. Government income is required by non-positive law to return it because that is the personal deal made by a person when entering into an employment agreement within the U.S. Government.

This explains the phrase "a return of income is required by law." Such phrase is valid because the return of U.S. Government income is expressed by Congress in non-positive law (agreements) because it only

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IRS HUMBUG

applies to persons working for the Federal Government. Non-positive law is analogous to contract law. Though it has been made far more complex, I.R. Code agreements are no different than the agreements made for a rebate on any product. The example given earlier was the $1,000 rebate the car manufacturer promised to return to the customer when he purchased the manufacturer's car. The customer made available to the manufacturer $1,000 of his income as part of the deal in purchasing the car with the understanding that it would be returned to him. With this deal, the return of the customer's income is required by law; the law of agreement (contract) when the manufacturer agreed to settle for $1,000 less profit than it would have otherwise received in the marketing of the car. Under the law of contract (agreement) the U.S. Government made available to its employees a portion of the U.S. Government's income as part of "wages" with the understanding that it would be returned to the government. Making the phrase "a return of income is required by law" as used by IRS and Justice Department employees a valid statement and still leaves the income received by Federal Government employees for their labor an equal exchange.

Any property or income received as a result of the employment of one's time is an equal exchange. When anyone, to any extent whatsoever, requires that another person provide him the benefits of that person's time against his will, it constitutes the enforced collection of a debt. It does not matter whether that debt is created by a voluntary or involuntary action on the part of the individual, it leads to controlling the sovereign power that person has over his organs and his labor. The control of labor against ones will by debt is prohibited by the peonage laws of the United States of America (see Chapter 5).

Law does not make you a "taxpayer," you do

How have IRS employees been able to conduct themselves as though they have legal authority over the fruits of a person's labor? The answer is by the implied authority that we personally give to them. My experience with them shows that they operate upon the basis that when any person, whether directly or indirectly, declares himself a "taxpayer," that person is considered by Federal Government employees to be subject to any internal revenue tax (see chapter 4). If one can lose sovereignty over his life, liberty and property by his declaration or silence, it follows that one also can regain it by declaration (written or verbal).

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Why should this subject matter be taken seriously? Because anywhere income is involved the IRS has arranged for the holder of that income to declare himself an I.R. Code "taxpayer'' even though that is a legal impossibility. If authority existed in law for the IRS to arrange for a kickback on such property, there would be no need for them to deceptively arrange for one to provide them with inferred authority and they would not need to operate outside the law to implement and enforce it.

We have unwittingly provided a trail of evidence that declares we are I.R. Code taxpayers. This evidence is used by taxing authorities to make us tax debtors. We must now produce a trail of evidence that exorcises the IRS from our personal affairs so that its employees cannot use it to force a tax debt upon us. This is why it is essential that each individual expresses sovereignty by a personal declaration that he is not a "taxpayer'' under the I.R. Code and that he does not intend to be subject to any internal revenue tax every time he is given the opportunity to do so.

Owners of the Federal Reserve System arranged to have notice of their sovereignty expressed in law

Contrary to the beliefs of many, the Federal Reserve System is a privately-owned banking business. Expressed in law is part of the deal (personal contract) the owners of the Federal Reserve System banks made with the U.S. Government to handle the money supply for the commerce that is conducted in the United States of America. They, just as anyone else, have a right to do business in every state. To avoid continually having to fight for their personal rights, they had Congress set the record straight at the time the Federal Reserve System was set up in 1913 (12 U.S.C. Sec. 226). They had Congress make impossible any interference from any taxing authority by the enactment of a law declaring that the income derived from the Federal Reserve Bank's operation would be exempt from any taxation whatsoever, except taxes upon real estate. Here is how that law reads.

12 U.S.C. Sec. 531. Exemption from taxation.1

1 Title 12 is titled "Banks and Banking." It is not positive law, but specific as to the banking industry.

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Federal reserve banks, including the capital stock and surplus therein, and the income derived therefrom shall be exempt from Federal, State, and local taxation, except taxes upon real estate.

(Dec. 23, 1913, C. 6, Sec. 7, 38 Stat. 258)

12 U.S.C. Sec. 531 does not give a unique status or privilege to the owners of the Federal Reserve System banks. Congress merely expressed for these owners the personal sovereignty that the owners of this private business have over their time and labor. All persons in the United States of America have the same rights, privileges and immunities under the U.S. Constitution. What section 531 did for the owners of the Federal Reserve System banks is prevent the power inferred by the Sixteenth Amendment2 from controlling their personal sovereignty by declaring them NOT to be "taxpayers" under the I.R. Code or under any other government entity laws. What Congress did for the owners of the Federal Reserve System we must do for ourselves.

Note that section 531 does not state that the owners of the Federal Reserve banks are exempt from any legal indirect or direct tax. As discussed in chapter 3, they, as all of us, associate themselves with indirect taxes in the purchase of products and services that they buy. If Congress imposed a direct tax upon society, as sovereigns, the owners of the Federal Reserve Banks would have to pay their proper proportionate share. They would not do this as owners of a business but as persons in society obligated to do so by positive law enacted by Congress.

Owners of the Federal Reserve System banks make a profit from the monies they sell to the banks of this country at a going discount rate. The profit they make is eventually paid by each consumer. Through enactment of 12 U.S. C. Sec. 531, Congress removed the hassle the owners of the Federal Reserve System might have had to keep the personal records of the day to day business of operating the Federal Reserve Banks private. Which proves they are not a corporation or government entity whose records would be open to the public.

2 The Sixteenth Amendment to the U.S. Constitution was enacted in 1913, the same year the Federal Reserve System was established. A short time later the U.S. Supreme Court declared that the Sixteenth Amendment added no new taxing power to the U.S. Congress (chapter 3)

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The Federal Reserve System does business with banks in the private sector. Therefore, their conduct is effectively connected with sources of income which include the private sector and not the government of the United States and/ or any state. Their income is part of their estate which is foreign to governmental entities. In section 7701(a)(31), Congress specifically expressed that income not effective! y connected with a trade or business within the U.S. Government is not includible in gross income under subtitle A of the I.R. Code (chapters 3, 10, 11). For this reason, no taxing authority can legally audit their accounts. There is no question possible that they have in their possession income that belongs to the U.S. Government, or to any state government. That is essentially the notice that Congress made in 1913 to everyone when they enacted this into law for the owners of the Federal Reserve System owners. It is also specific notice to the IRS that these owners are not "taxpayers" under the I.R. Code, nor are they subject to the IRS kickback enforcement program as I.R. Code "transferees."

If what is being stated here is not true then this is an example of unequal treatment under the law. Congress cannot provide special treatment under the law, therefore reliance upon this information is lawful and constructive.

A feeling of outrage is experienced at first reading of 12 U.S.C. Sec. 531. However, the owners of the Federal Reserve System banks were not treated with any special consideration except that section 531 is direct, positive and clear notice that, in the process of working for a living, the labor of these people will not be taxed directly3 by taxing the income that their labor produced. The balance of society was not provided such clear notice that we have the same rights, privileges and immunities as the owners of the Federal Reserve Banks.

3 The U.S. Government Printing Office has included the U.S. Constitution among the documents they printed in the U.S. Code Books just before Title I. They inserted a footnote with regard to Art. I, Sec. 9, Cl. 4 of the U.S. Constitution, which deals with direct taxation. That footnote says: ''fhis clause has been affected b)' the 16th amendment." This confused me since the U.S. Supreme Court has long held that the 16th Amendment added no new taxing Rowers to Congress. Why would the printing office seem to contradict the U.S. Supreme Court? Then I found that Webster's defines the word "affect" in part as "to tend toward: incline" and shows as a synonym the word "assume." BasCd upon this definition the U.?. Government Printmg Office is quite correct. The 16th Amendment has been inclined to change the taxmg powers by assumption.

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IRS HUMBUG

12 U.S.C. Sec. 531 is proof that Congress can be explicit in making laws. What they did for the owners of the Federal Reserve System in 29 words they have done for the balance of society in subtitle A and chapter 24 of the I.R. Code, which has more than 1,000 pages supplemented with volumes of regulations, none of which authorize Federal Government employees to tax ones time and labor by taxing his income. Its sole purpose is to control how much of the U.S. Government's income is returnable. Still, the intent of such volumes oflaws and regulations was to allow for enough IRS humbug to have one falsely believe that the subject matter of rendering to Caesar that which is Caesar's means that one is required to create a personal debt by making and submitting a ''U.S. Individual Income Tax Return" to the IRS.

The fact that Congress enacted a personal declaration for the owners of the Federal Reserve System banks is evidence that such a declaration is lawfully proper. Since Congress chose to be clear about the restrictions on taxing the personal property of the owners of the Federal Reserve System banks but vague with regard to all other personal property, we must personally exorcise IRS control by exerting the right to make our sovereign position clear. With declarations made to the U.S. Government done under penalty of perjury, it is imperative that penalty of perjury be understood.

Perils of penalty of perjury

Expressing personal sovereignty under penalties of perjury needs to be understood before a declaration under penalty of perjury can be considered as voluntarily made. A person's signing documents under penalties of perjury without understanding whether he is doing so pursuant to law or an agreement can lead to personal and economic hardship, if not disaster. This is especially true when it involves governmental forms.

The willingness of the U.S. Government to accept a declaration made under penalty of perjury on documents in lieu of a personal oath is expressed by Congress as follows:

28 U.S.C. Sec. 1746. Unsworn declarations under penalty of perjury. Whenever, under any law of the United States or under any

rule, regulation, order, or requirement made pursuant to law, any matter is required or permitted to be supported, evidenced, established, or proved by the sworn declaration, verification, certificate, statement, oath, or affidavit, in writing of the person making

280


the same (other than a deposition, or an oath of office, or an oath required to be taken before a specified official other than a notary public), such matter may, with like force and effect, be supported, evidenced, established, or proved by the unsworn declaration, certificate, verification, or statement, in writing of such person which is subscribed by him, as true under penalty of perjury, and dated, in substantially the following form:

(1) If executed without the United States: "I declare (or certify, verify, or state) under penalty of perjury under the laws of the United States of America that the foregoing is true and correct. Executed on (date).

(signature)"

(2) If executed within the United States, its territories, possessions, or commonwealths: "I declare (or verify, or state) under penalty of perjury that the foregoing is true and correct. Executed on (date).

(signature)"

The phrases "within the United States" and "without the United States" mean within or without the U.S. Government, not inside or outside the geographical boundaries of the United States of America. Thus, section 1746 states that whenever, not wherever, the U.S. Government is asking that an instrument, document, or form be made under penalty of perjury-not under the laws of the United States of America-it is a declaration made by agreement between the two parties. As such it is an obligation taken as being created by the person signing it. To put it another way, with the exception of a person who is drafted into the armed forces during war time, a person employed within the U.S. Government is there because of a personal agreement and any paperwork that requires one's signature is part of the agreement.

The U.S. Government requires that some of the paperwork of its employees be signed under penalty of perjury, but the perjury is not under the laws of the United States of America, it is under the employment agreement. As such it cannot be signed under penalty of perjury under the laws of the United States of America and so phrasing similar to (2) in 28 U.S. C. Sec. 1746 must be used to show that the person signing the form attests to the truth of the statements made on it. This way these forms become evidence of the agreement that can be used to prove perjury if the employee lied about any material fact that affects

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IRS HUMBUG

his duty under the agreement. This is why the penalty of perjury declaration made on the IRS W-4 form and the "U.S. Individual Income Tax Return" is not made under the laws of the United States of America. These documents are forms designed and intended to be a personal declaration made by Federal Government employees with regard to a claim for deduction benefits used to reduce the kickback due to the U.S. Government. As such, these forms are part of the U.S. Government's legal kickback program.

It is deceitfulness on the part of Federal Government employees to construe it to mean that when non-Federal Government employees sign an IRS document under penalty of perjury-not under the laws of the United States of America-they have entered into an agreement within the U.S. Government to be IRS tax debtors. With regard to a U.S. Individual Income Tax Return, such construction would mean those persons have agreed to be peons, which is a legal impossibility. This is why the IRS W-4 form and the "U.S. Individual Income Tax Return" become IRS weapons of enslavement in a U.S. Government illegal kickback program when used by persons who are not Federal Government employees. However, as you know by now, IRS employees conceal the fact that they have us agreeing to an illegal kickback.

The thing to remember is that when the obligation sought is not by personal agreement, but one created by a positive law that is in accord with the U.S. Constitution, then the instrument, document, or form would state that it is being signed under penalty of perjury under the laws of the United States of America. When one is asked to sign a document under penalty of perjury, but not under the laws of the United States of America, he is being asked to enter into an agreement. His life, liberty and property may be damaged by the agreement if he does not understand what it is. Therefore, it is imperative that people understand what it is that they are agreeing to.

Penalties of Perjury as to a Federal Government employee

The agreement of employment within the U.S. Government establishes the purpose for a W-4 form and a "U.S. Individual Income Tax Return." Though this is expressed as law, it is not positive law that has general applicability to anyone. The fact that the IRS has remedy if these forms are not executed means they are not even required to be made by a Federal government employee.4 However, by accepting

282


employment within the U.S. Government Federal Government employees have accepted the obligation to return 100 percent of the U.S. Government's income that is to be kicked back and is within the "wages" they received from the U.S. Government. The amount of the kickback is controlled by the Federal Government employee's deduction benefits. An error made in claiming deduction benefits that short changes the U.S. Government might be due to mistake or misunderstanding. In that case, it is collectible from the Federal Government employee by IRS administrative means, along with interest for the use of the U.S. Government's income.

U.S. Courts have said that a person is a witness against himself with the signing of documents under penalty of perjury. Since the laws of the United States of America cannot, and do not, require a any person to be a witness against himself, Federal Government employees do so of their own choice when they opt to make a personal declaration under penalties of perjury (not under the laws of the United States) in order to take advantage of deduction benefits offered in their employment agreement within the U.S. Government. If they take it upon themselves to deliberately lie they accept the legal consequences of their act. Fraud exists if there is specific intent on the part of a Federal Government employee to lie with the result of depriving the U.S. Government out of income that is to be returned to it. Upon proving perjury on documents fraudulent conduct is proven, or vice versa. So, when a Federal Government employee signs documents under penalty of perjury they are agreeing to be a witness against themselves with regard to perjury or fraud.

Since the W-4 form and the "U.S. Individual Income Tax Return" are used by a Federal Government employee to state a claim for the benefits offered as a result of their employment agreement within the U.S. Government, and the claim controls the return of income belonging to the U.S. Government, it must be made under penalties of perjury. The personal declaration Federal Government employees make on a W-4 form under penalties of perjury is that they are "entitled to the number of withholding allowances" stated; and on a "U.S. Individual Income Tax Return" that under penalties of perjury the deduction benefits

4 Review sections 3401(e) infootnote 1, chapter 7, and section 6020(b} in chapter 8.

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IRS HUMBUG

claimed are "true, correct, and complete" to the best of their ''knowledge and belief." With this the Federal Government employee is accepting the burden to prove the validity of his statements and the deduction benefits claimed. If the deduction benefits are overstated then the U.S. Government is being deprived of income due to be returned under their legal kickback program. If the Federal Government employee deliberately (willfully) overstates deduction benefits on forms he or she signed under penalties of perjury it becomes fraud with intent to evade the return of U.S. Government income in the name of tax. In the latter instance, a charge of violating 18 U.S.C. Sec. 1001,5 regarding false statements, or a charge of perjury under 18 U.S.C. Sec. 1621(2)6 can be made against that Federal Government employee, but probably not both since the same evidence would be used to prove either and that would result in double jeopardy. However, proving fraud under 18 U.S.C. Sec. 1001 would be prima facie proof of perjury, and proving perjury under 18 U.S.C. Sec. 1621 would be prima facie proof of fraud. This would make the addition punishment of section 7201, Attempt to evade or defeat tax, in the I.R. Code possible because burden of proof required under S-7454 has been met (see chapter 11). Keep in mind that it is the property that belongs to the U.S. Government that makes possible the

5

6

18 U.S.C. Sec. 1001. Statements or entries 17enerally. Whoever, in any matter within theJ'urisd1ction of any department or agency of

the United States knowingly and will ully falsifies, conceals or covers up by any trick, scheme, or device a material fact, or makes any false, fictitious or fraudulent statements or representations, or makes or uses any false writing or document knowing the same to contain any false, fictitious or fraudulent statement or entry, shall be fined not more than $10,000 or imprisoned not more than five years, or both.

18 U.S.C. Sec. 1621. Perjury generally. Whoever-

(1) having taken an oath before a competent tribunal, officer, or person, in any case in whidi a law of the United States authorized an oath to be administered, that he will testify, declare, depose, or certify truly, or that any written testimony, declaration, deposition, or certificate by him subscribed, is true, willfully and contrary to such oath states or subscribes any material matter which he does not believe to be true; or

(2) in any declaration, certificate, verification, or statement under penalty of perjury as permitted under section 1746 of title 28, United States Code, willfully subscribes as true any material matter which he does not believe to be true;

is guilty of perjury and shall, except as otherwise expressly provided by law, be fined not more than $2,000 or imprisoned not more than five years, or both. This section is applicable whether the statement or subscription is made within or without the United States.

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EXORCISING THE IRS CHAYfER16

subject matter of fraud and perjury. Upon such property the U.S. Government has a cause of action.

Penalties of perjury as to non-Federal Government employees

If a non-Federal Government employee makes, signs and delivers a W-4 and/ or a "U.S. Individual Income Tax Return," he is not doing so to return U.S. Government income to it. He is surrendering control of his own income under an illegal kickback program in the name of federal income taxation. The fact that these forms are not executed under penalties of perjury under the laws of the United States of America, but in agreement form, make them personal declarations of the validity of the information on them. As it is requested upon these forms "under Penalties of perjury, I declare . . . ."

On a ''U.S. Individual Income Tax Return," an amount owed is declared. Since it is not a return of U.S. Government income it must be regarded by IRS Federal Government employees as a personal obligation created of one's own volition (voluntary compliance--self assessment). If payment of the amount declared owed is not mailed with the ''U.S. Individual Income Tax Return," IRS employees will use the undue influence of implied authority to enforce payment by administrative means, down to the last penny, even though the only legal way to collect a personal debt is through an action in a state court by first reducing the debt to a judgment debt.

When a ''U.S. Individual Income Tax Return" is the vehicle that produced an unpaid false personal debt, IRS humbug is even used to coerce additions to the false debt by IRS employees claiming authority to add penalties and interest. If the additions are not summarily accepted by the non-Federal Government employee who unwittingly created this personal debt, Federal Government employees usually offer to go into a negotiating session. The purpose of this is to try to get the non-Federal Government employee to agree to participate to a greater extent in the illegal kickback program that the IRS has administered to for decades. This is all evidence of enforcement of the IRS illegal service.

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IRS HUMBUG

Alteration of a W -4 Form for Non-Federal Government employees

Though covered in chapter 6, another look at Section 3402 concerning the W-4 certificate is in order.

26 U.S.C. Sec. 3402. Income tax collected at source. (a) Requirement of withholding. Except as otherwise provided in this section, every employer making payment of wages shall deduct and withhold upon such wages, a tax determined in accordance with tables prescribed by the Secretary.

Section 3402 gives the Secretary the duty to prescribe the tables for deducting and withholding of tax on "wages" made by the employer paying wages, and the duty for every employer making the payment of "wages" to deduct and withhold tax upon "wages" that is in accord with those tables. The only authority given is with regard to "wages." The information given in Chapter 6 about the definition of "wages" in section 3401 (a) shows that "wages" under the I.R. Code are only paid to U.S. Government employees, and that this requirement of withholding only applies to such "wages."

The purpose of a W-4 form is to bring the amount withheld from the "wages" of a Federal Government employee as close as possible to the kickback due to the U.S. Government at the end of the year from those "wages." If the Federal Government employee does not provide a W-4 certificate, the I.R. Code (Sec. 3401 (e)) authorized the employer (U.S. government) to consider the exemption to be zero and deduct the maximum amount. The point is, withholding on wages of a Federal Government employee can be done legally whether or not a W-4 form is in effect. So, a Federal Government employee is not mandated to be a witness against himself by executing a W-4 form under penalty of perjury. On the other hand, employers in the private sector usually mandate that a person execute a W-4 form before being allowed to begin work.lllegality notwithstanding, an employer in the private sector must have an agreement in writing to withhold any part of the pay agreed to in exchange for his employee's labor. This is true whether it be monies he sends to the IRS, an insurance company or any other person.

When an employee in the private sector executes and submits a W-4 form, Federal Government employees take this action as the employee's granting permission to withhold a portion of the property agreed to in exchange for his labor and send it to the IRS. The non-Federal Government employee infers he is a "taxpayer'' who is subject to any

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EXORCISING THE ms CHAPTER16

internal revenue tax. However, when this is done under economic compulsion, the employer is depriving the employee of his property against his will. The fact that it is delivered to the IRS, a party who is not party to the employment agreement, does not alter this fact. This employer is then impairing the obligation of his contract with his employee, and the IRS become co-conspirator.

Private sector employers usually believe they must have their employees execute a W-4 form because they have been told this by a lawyer or certified public accountant. Even though the U.S. Government and the IRS cannot legally be party to an employment agreement in the private sector, it is done by inference with the coerced execution of a W-4 form. Private sector employees are threatened with having the maximum amount withheld if they do not provide a W-4 form. This threat is the undue influence that coerces employees to execute and deliver a W-4 form to their employers. Logic would dictate that the purpose of law is to provide the requirements to accomplish an end result and not to provide the threat upon which the end result is accomplished.

It is IRS tradition only which has caused private sector employers to aid that agency in the control of one's personal income that is not lawfully under its jurisdiction. Thus private sector employers unwittingly aid the IRS in the enforcement of an illegal kickback scheme, and they will continue to do so until the truth is known and exercised. The only person who can stop them from illegally confiscating their employees' personal property is the employee.

When one needs the job and the private sector employer insists upon the execution of a W-4 form, he is forced to make the IRS Federal Government employees a party to the employment agreement. Though no person under the laws of the United States of America is required to do this, the employee must deliver it because of economic compulsion. In such a situation one needs to deliver the form, but needs not agree to anything that is prejudicial to him.

There is nothing under the law that forces an individual to agree to that which will damage him. If one unwittingly enters into an agreement which damages himself, the law requires that he prove it was imposed upon him against his will. If one knows the consequences of executing a W-4 form in the private sector, he can take steps to avoid this condition and, at the same time, shift the burden to IRS employees to prove they

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IRS HUMBUG

have the authority to force an individual to surrender control over his income. One can deliberately express his sovereignty by making an agreement in the name of a W-4 form declaring himself exempt from withholding under the laws of the United States of America similar to the example7 provided on the next page.

The IRS only has the right to ask for this information (Privacy Act Notice, chapter 8). Providing the IRS only that to which an individual will agree is that person's right to freely express. Not being asked to sign this form under the laws of the United States of America proves that signing it under conditions to which one can and will agree is not unlawful conduct on his part.

Non-Federal Government employees cannot perjure themselves

Perjury can only exist on a 1040 form submitted by a Federal Government employee. When the U.S. Government is not the source of the income received for the performance of personal services there is no legal possibility that it can be considered that a person lied, or perjured themselves as to the non-existent question of returning to the U.S. Government its income. Though signed under penalties of perjury, not under the laws of the United States of America, a lie on the 1040 Form from a non-Federal Government employee does not deprive the U.S. Government out of a lawful return of its income. It is just willful refusal to create a debt in the magnitude that satisfies the Federal Government employees of the IRS. With no U.S. Government income in the name of tax in one's possession upon which a perjury charge is possible it is not

7 Note how the W-4 form contradicts the law regarding a claim of exempt. Sec. 3402(n) Employees incurring no income tax liabihty.-Notwithstanding any

other provision of tnis section, an employer shall not be required to deduct and withhold any tax under this chapter upon a payment of wages to an employee if there is in effect with respect to such payment a withholding exemption certificate (in such (orm and containing such other information as the Secretary may prescribe) furnished to the employeroy the employee certifying that the employee-

(1) incurred no liability for income tax imposed under subtitle A for his preceding taxable year, and

(2) anticipates that he will incur no liability for income tax imposed under subtitle A for his current taxable year. The Secretary shall by regulations provide for the coordination of the provisions of this subsection with the provisions of subsection (f).

(emphasis added)

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N

------------------------ Cut here and give the certificate to your employer. Keep the top portion for your records.

form W•4 Department of the Treasury Internal Revenue Service

5i':::~:~:ati lwithholding Allowan~e Certificate ,... For Privacy Act and Paperwork Reduction Act Notice, see reverse.

OMB No. 1545-0010

~ number

City or town, state, and Zl P code {

D Single Married 3 Marital 0 Married, but withhold at higher Single rate.

status Note: If married, but legally separated, or spouse is a nonresident alien, check the Single box.

~ 4 Total number of allowances you are claiming (from line G above or from the Worksheets on back if they apply)

5 Additional amount, if any, you want deducted from q<l~B'ft: R LA~ t>F."ii+E! u S Or AM~ ICA' r 61 claim exemption from withholding and I certify that'tj;lebU &nlie"TellewiRg seReljijeRs ~er exej;lpti9Ri

a baGt year I l:rael a rigl:rt tea ref1::1Rel ef Abb ~eeleral iReeA'Ie talt with he lei beea1::1se I had NO talE liabiltty; ANO-• T1:1i5 year I ellpeGt a ref~::~ REI ef Abb Feeleral iReeA'Ie tal< ·t•ithhelt! eeeettse I expect to he•e N9 tex liebility, ANB

7 ~ ~

S~~~~~~~~~~~~~~~4~~~~~at~u~re~ ... ~~~~~~--~~~~~--~~~~--~--~~~~D~a~te~ ... :_--~~~~~~~~~~·~1~9~~ n§ 8 Employer's name and address~mployer: Complete 8 and 10 only If sending to IRS) 9 Office code 10 Employer identification number >:Z: ~

PRIVATE. SEC'fb/( (optional> ~ ~

:= .... .... := ------------------------------------------------------------~--------~----------------------- ~~

IRS HUMBUG

even a moral issue to lie on these forms because unwittingly one was intending to exercise control over his life, liberty and property. The intent is not to deprive the United States of its property, but to make certain that one is not deprived out of his property. It is certainly not a matter of fraud with intent to evade U.S. Government tax. It is a matter of survival and retaining personal sovereignty over one's property. Conduct such as this is not in violation of any laws, state or federal. That is the reason I was not charged with fraud or perjury. Instead I was forced into a malicious prosecution process where it was planned that I would later indirectly confess to tax evasion, inferring fraud.

A review of matters which occurred in the two actions against me in a U.S. courtroom goes to prove that a non-Federal Government employee cannot be guilty of perjury or fraud with intent to evade tax. When I expressed my desire to retain sovereignty over the property I received for services rendered to a particular company, I was threatened that if I did not provide a W-4 form I would not get paid. I was told by the the head of the accounting department that the IRS instructed them to do this. To assure that deprivation of property against my will would not result, I provided a personal declaration in a W-4 form with a wrong social security number. This was used by the prosecuting attorney to discredit me before the 12 persons seated in the jury box. They were told that I was a person who was guilty of attempting to screw the IRS.

The prosecuting attorney did not charge me with attempting to screw the IRS, nor with perjury even though I signed that W-4 form under penalty of perjury. Why not? Because it was my property about which I provided the misinformation when giving a wrong social security number, and not income belonging to the U.S. Government. Making a false statement with regard to my personal property is not subject to the criminal sanctions of perjury. Also, since the IRS knows my proper social security number, it was not damaged. The IRS can only claim damage if I failed to return U.S. Government property to them.

On the other hand, the prosecuting attorney, whose alleged charge was that I was a person who was required to return U.S. Government income to the U.S. Government, failed to make the charge valid by making the mandatory oath that probable cause existed to believe I had committed a crime against the United States. With no law that required me to make a "U.S. Individual Income Tax Return" available for the prosecuting attorney to place in the charge, he could not provide a probable cause statement under the oath by signing it under penalty of

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perjury under the laws of the United States of America, and he certainly could not attest to probable cause of a crime by using penalty of perjury in the form of an agreement. So he used the inapplicable law of additional punishment, section 7203, as the inferred law of requirement. Though acting illegally in behalf of the Justice Department in doing so, it was better than the alternative of providing incriminating evidence against himself as to perjury.

The conduct of the prosecuting attorney of not attesting to probable cause under oath as is required by Rule 9 of the Federal Rules of Criminal Procedure proves his intent was not to perjure himself. By submitting the charge absent the supporting statement under oath there is no possible charge of perjury against him. But, had he attested to it under penalty of perjury, not under the laws of the United States of America, he would hav,e perjured himself because he would have been charging that by agreements I was a person required to return to the U.S. Government its income, which is contradicted by the facts. Only a Federal Government employee makes such an agreement, and the prosecuting attorney knew I was not a Federal government employee. If he had sworn to it under the laws of the United States of America when there is no law in the United States of America that required me to deliver a debt instrument in the name of a "U.S. Individual Income Tax Return," he would also have supplied evidence of perjury against himself as well as evidence of enforcing my return to a condition of peonage laws (18 U.S.C. Sec. 1581 in chapter 5). The only way for him to resolve this dilemma is to submit such a charge without any oath whatsoever and plan for a humbug process upon which 12 persons in the jury box will use their opinions to provide a guilty declaration. The record shows this is exactly what happened (covered in chapters 12-13-14).

Though perjury did not occur, the prosecuting attorney's conduct is criminal since he conspired with Federal Government employees in the IRS to return me to a condition of peonage, a criminal offense under 18 U.S.C. Sec. 1581. However, how could I expect justice to prevail in an action against any of them since their conduct was supported by U.S. judges, up to and including the U.S. Supreme Court justices. All of them are party to humbug prosecutions but, with complete cooperation among each other, the burden for me to sustain a conviction would be impossible.

I take the lesson and ad vice provided by Federal Government employees in the matter of being a witness against myself seriously.

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Since 1976 I have refused to submit a ''U.S. Individual Income Tax Return" for the reason that I do not intend to provide evidence that the amount stated as owed is a debt. Under law I am not required to create such a debt and thereby be a witness against myself in the IRS collection procedure.

The IRS asks one to sign such form to show that an amount certain is owed to them. It is done under penalty of perjury, not under the laws of the United States of America, but in agreement within the U.S. Government. Whether done under the legal or illegal kickback program, this form is taken by Federal Government employees of the IRS to be a personal declaration that an individual provides personal authority for the collection of the debt. It is common knowledge that the IRS will enforce collection of the amount declared owed. When it involves personal property not subject to being returned to the U.S. Government, then it goes to controlling that person's labor by debt. This is prohibited by the peonage laws of the United States of America. Therefore, by making personal declarations that are truthful, honest, and legal whenever one is given the opportunity to do so, one will not only protect his life, liberty and. property, but prevent IRS Federal Government employees from committing a crime.

Imperfect obligation-legal impossibility

Congress has chosen to make it possible to cloud rights as to a sovereign status with its vague laws. It has become necessary for each individual in this country to personally express sovereignty over his own life, liberty and property to avoid infringement upon those rights by government employees. In doing so one shows his intention not to declare himself a tax debtor in the name of a taxpayer (see chapter 4). When one does declare himself a tax debtor, he creates an imperfect obligation which, under the law, is not collectible. But, the IRS will enforce collection by humbug. This provides evidence to prove the condition of peonage. A review of the definition of "perfect or imperfect obligations" in Black's Law Dictionary, Fifth Edition, provides more understanding.

Perfect or imperfect obligation. A perfect obligation is one recognized and sanctioned by positive law; one of which the fulfillment can be enforced by the aid of the law. But if the duty created by the obligation operates only on the moral sense, without being enforced by any positive law, it is called an "imperfect obligation," and creates no right of action, nor has it any legal operation. The duty of exercising

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gratitude, charity, and the other merely moral duties are examples of this kind of obligation. Edwards v. Kearzey, 96 U.S. 595,600,24 L.Ed. 793.

When one signs any document under penalty of perjury without it being under the laws of the United States of America it is an imperfect obligation and is not legally enforceable. However, it is prudent to avoid making a personal declaration for the IRS that infers one is a "taxpayer" under the I.R Code because that switches the burden to the individual to prove the IRS is wrong in any action they take against him. This is why it is important to take advantage of every opportunity to make declarations to the contrary. This switches the burden to the IRS to prove that they have the right to impose upon an individual a legal impossibility. Again Black's Law Dictionary gives the definition of "legal impossibility." It reads in part:

Legal impossibility. Defense of "legal impossibility" may be established only where a defendant's actions, if fully performed would not constitute a crime, .... U.S. v. Johnston, C.A. Ark. 543 F.2d 55, 58. As defense to criminal charge, occurs when actions which defendant performs, or sets in motion, even if fully carried out as he desires, would not constitute crime. U.S. v. Conway, C.A. Tex., 507 F.2d 1047, 1050, See also Impossibility. Impossibility. That which, in the constitution and course of nature or law, no man can do or perform.

This fits in with charging persons with violation of section 7203 and conducting humbug actions in U.S. courtrooms with regard to persons who have refused to make a "U.S. Individual Income Tax Return." An act which does not constitute a crime. Proof that I committed no crime against the United States is when the U.S. judge could not order me to make a ''U.S. Individual Income Tax Return" and omitted the word "willful" from the Judgment Order she signed.

Dues and don'ts for a sovereign

Expressing personal sovereignty can be done once one understands the subject matter of this book, so the first priority would be to study it diligently, along with the U.S. Constitution. Only with understanding can one know how to successfully declare the fact that he is not a "taxpayer" under the I.R. Code by making a record in his day-to-day business that establishes such notice. Of course, expressing so on a W-4 form (as already discussed) is one way to start since it can be altered at any time, and ultimately doing so with regard to a Form 1040 by not

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IRS HUMBUG

delivering it if only personal property is involved is obvious, but there are other areas just as important, for example with banks, savings and loans, stock brokers, insurance companies, mortgages companies, etc., or on any real estate or other transaction where a transfer of personal property is involved. IRS employees will deem them to be transferees8 under the I.R. Code with regard to the property of a "taxpayer'' if one has declared, though indirectly, that he is a "taxpayer." Knowing that a non-taxpayer (natural person) in the I.R. Code is sovereign over his property, IRS employees will plan for declarations that imply they have jurisdiction over property foreign to the U.S. Government in order to gain illegal access to it. This is also illegal access because it cannot be considered that permission to make the IRS party to one's property was voluntarily given when the individual lacked complete knowledge to consent.

The question to be addressed is how such declarations have been made. Consider the following example of an agreement used by many banks to open new accounts.

BACKUP WITHHOLDING CERTIFICATIONS

TIN: _____ _

0TAXPAYER I.D. NUMBER- The Taxpayer Identification Number

I a.) shown above (TIN) is my correct taxpayer identification number.

0BACKUP WITHHOLDING -I am not subject to backup withholding either because I have not been

( b } notified that I am subject to backup withholding as a result of a failure to report all interest or dividends, or the Internal Revenue Service has notified me that I am no longer subject to backup withholding.

0 EXEMPT RECIPIENTS - I am an exempt recipient under the Internal Revenue Service C C) Regulations.

0NONRESIDENT ALIENS- I am notaUnitedStatespersonoriflam (d) an individual, I am neither a citizen nor a resident of the United States.

SIGNATURE: I certify under penalties of perjury the statements checked in this section.

8 Be mindful that only a Federal Government emploxee is a transferee of the taxEayer (U.S. government), but only with regard to the 'wages" they receive from the U.S. Government (review chapter 10).

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The portion of a bank agreement relating to the IRS that is provided above is very extensive. Others, though not identical, will be the same in essence since the intent is to have the individual declare himself a taxpayer, which is taken as a "taxpayer'' under the I.R. Code.

First note that the penalty of perjury declaration is restricted to the statements checked in the section regarding backup withholding. This means it is for establishing some sort of implied authority for the IRS pursuant to the I.R. Code.

The first thing the IRS asks one to do is declare his Social Security number as a TIN (taxpayer identification number) (marked by me as (a) in the sample above). By doing this, the person has indirectly called himself a taxpayer. Calling oneself a taxpayer provides IRS employees inferred authority to access bank records to see if this transferee (the bank) of a taxpayer (the individual, by personal declaration) has property that belongs to the U.S. Government. Making a declaration that one's social security number is not a TIN makes any access to bank records by IRS employees go to a question of illegal search and seizure.

Next the IRS indirectly gets into the agreement that any person who declares himself a taxpayer is subject to withholding (marked by me as (b)). Note the fact that there is no reference here to laws of the United States of America. Neither the bank nor the IRS makes reference to laws, but the IRS considers the individual's conduct as making the IRS party to this agreement with the bank when he calls himself a taxpayer.

If one does not understand IRS regulations, the portion marked (c) cannot be answered. One thing is certain, since the purpose of the IRS is to assure the return of U.S. Government income in the possession of transferees, if one declares that he is not a taxpayer and makes himself exempt, the IRS has the burden to prove the bank is a transferee in possession of U.S. Government income. Therefore, I would always state that I am an exempt recipient under the I.R. Code because the source of the income is not the U.S. Government where a kickback is required. If I fail to declare myself exempt, then I indirectly make myself subject to IRS regulations. I will not consciously have anyone expressing for me any condition that is prejudicial to me.

Income received from sources other than the U.S. Government does not include a kickback to the U.S. Government because the U.S. Government is not effectively connected with this income. Therefore, income in the form of interest, dividends, etc., from a source that is not

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IRS HUMBUG

the U.S. Government does not give cause for a kickback to the U.S. Government. Anyone can declare themselves exempt on any document with regard to interest, dividends, etc. If the interest or dividend is from the U.S. Government and includes a kickback, the Secretary knows who the recipient is and so can withhold on such income at any time it is lawful to do so.

Any implication that a person declares himself a taxpayer on any form will be taken by IRS employees as permission to make the IRS effectively connected with the interest, dividends, proceeds, etc. involved in the transaction and thereby subject it to confiscation under the guise of tax. There is no law that requires anyone to declare himself a taxpayer. That is the reason for the IRS humbug to have one declare that which they want all to declare. To counter this one can, and must, declare that he will not agree to being a taxpayer under the I.R. Code.

The portion of the form above identified by me as (d) creates a dilemma. It is a declaration that the property in the account being opened at the bank belongs to a "nonresident alien." Income that a nonresident alien receives from a trade or business effectively connected within the U.S. Government contains a kickback agreement, just like the "wages" a Federal Government employee receives from the U.S. Government, contains a kickback due to be returned to the U.S. Government under the name of tax. Even though the income received from the bank is not income effectively connected with a trade or business within the U.S. Government by checking off this box it infers that the IRS has cause to look into this account to search for U.S. Government income, thereby switching the burden to the account holder to prove that no such authority exists. But, by not checking this box one declares that his estate is not foreign to the U.S. Government. Estates that are not foreign to the U.S. Government are includible in the subtitle A of the I.R. Code. Either way the statement made for nonresident aliens provides Federal Government employees of the IRS indirect inferred authority to enter into that bank account. To avoid this dilemma, one must attest to that which is truthful. What must be done is to delete this section and attest to being a citizen of the state of current residence. This is not an easy concept to understand, but I will try to explain.

Under the I.R. Code laws a nonresident alien is a corporation or partnership created or organized under the laws of some foreign country or a natural person who is not a citizen of the United States of America

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but is working for the U.S. Government while residing in a foreign country. The confusing part of this is the fact that the term "foreign country'' means the 50 states of the United States of America as well as countries around the world because each has its own sovereign government whose laws cannot be controlled by any other government. This means that the U.S. Government has no authority to impose laws upon any of these foreign countries or its citizens unless they choose to become effectively connected with a trade or business within the U.S. Government. Only then are they nonresident aliens under the I.R. Code.

This becomes evident when analyzing the term "nonresident aliens" as presented in this bank form. The first part says "I am not a United States person." This can be easily misinterpreted to mean that "I am not a United States citizen, but the term "United States person" as associated with I.R. Code laws has nothing to do with natural persons. The definition of "United States person" in section 7701(a) of the I.R. Code tells us that:

(30) The term "United States person" means(A) a domestic partnership. (B) a domestic corporation, and (C) any estate or trust (other than a foreign estate or foreign

trust, within the meaning of section 7701(a)(31)).

Domestic corporations and partnerships are defined in 26 U.S.C. Sec. 7701 (a)(4) as those created or organized in the United States or under the law of the United States or of any state. This makes it clear that corporations and partnerships created or organized in countries other than the United States of America are deemed to be nonresident aliens. What is not so clear is the definition of domestic corporations and partnerships itself. Only by knowing that the meaning of the word "State" in the I.R. Code is limited to territories or possessions belonging exclusively to the U.S. Government can it be understood that a domestic corporation or partnership is not a corporation and partnership created or organized under the laws of any of the 50 states of the United States of America. This means the term "domestic corporation" and "domestic partnership" is limited under I.R. Code law to those created or organized for and in behalf of the U.S. Government. All corporations and partnerships not belonging to the U.S. Government are "foreign" with regard to the I.R. Code laws.

Basically subsection (C) in the definition of "United States person" is saying the same thing, but if one does not know the meaning of foreign

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IRS HUMBUG

estate or trust in section 7701 (a)(31) he might interpret this also as estates and trusts in some foreign country. I have tried to emphasize throughout this book that anyone's personal estate or trust is a "foreign estate" or "foreign trust" in the I.R. Code because personal estates are foreign to the U.S. Government. Hence "any estate or trust" in the term "United States person" is restricted to meaning an estate or trust created for and belonging to the U.S. Government.

Hopefully this clears up any misconception that the term ''United States person" in the I.R. Code has to do with natural persons. It only means an artificial entity created through the U.S. Government or an estate or trust created for and belonging to the U.S. Government.

The second half of that sentence regarding nonresident aliens reads "if I am an individual, I am neither a citizen nor a resident of the United States." This is strictly for the IRS and understanding that an "individual" in the I.R. Code is a Federal Government employee shows that they mean a natural person working for the U.S. Government. But it is a specific type of Federal Government employee, one who is not a United States citizen and who does not have residence in the United States. In this instance the term United States means the 50 states of the United States of America and all of the possessions (States) of the U.S. Government since a person cannot reside within a government, but a geographical area.

By not explaining the limitation of a generically understood term when used with regard to restrictive non-positive laws the intent to mislead is evident. The fact is most corporations and partnerships are not ''United States persons" as described for the I.R. Code would make the checking of the box for nonresident aliens on this bank form lawfully correct, but so doing would infer that this corporation or partnership is subject to I.R. Code laws for nonresident alien corporations and partnerships and thereby give IRS employees indirect inferred authority to enter into that bank account. No law requires them to create such a condition for themselves.

The IRS intent is to make a person who is sovereign under the laws of the state in which they live declare they are subject to the IRS taxing authority, the I.R. Code, when the entire IRS program as to personal income (non U.S. Government income) is an illegal kickback.

Natural persons are faced with an even greater dilemma with the declaration regarding nonresident aliens. It would be lawfully incorrect for most natural persons to check off this box since it only applies to

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natural persons working for the U.S. Government who are not U.S. citizens and artificial entities created and organized under the laws of the U.S. Government. However, even though the term "United States person" only means an artificial entity created through the U.S. Government or an estate or trust created for and belonging to the U.S. Government and legally has nothing to to do with natural persons, if they do not declare that they are not a "United States person," they infer that their estates are not foreign to the U.S. Government and thereby subject to subtitle A of the I.R. Code. Again, this gives Federal Government employees of the IRS indirect inferred authority to enter into bank accounts and switches the burden to the individuals involved to prove the IRS is violating their rights to privacy of records under the Fourth Amendment to the U.S. Constitution.

This long dissertation about nonresident aliens was given primarily to show how easy it is to be mislead by the use of words that have a common generic meaning but a specific meaning with regard to the I.R. Code laws. A suggestion on how to handle this will be given later.

Possibly the single most important thing to remember when asked to sign anything under penalty of perjury is to do so under the laws of the United States of America. Attesting to anything under penalty of perjury without stating that it is under the positive laws of the United States is making a personal agreement.

The bank form discussed above does not state that the individual is signing it under any law, so it is by agreement. No government entity can force obligations created by agreements. Even agreements made with natural persons cannot compel one to labor against his will to discharge the debt. To collect a legal debt the injured party must reduce it to a judgment debt in a court of law in the state where the debtor resides.

On these bank forms, the IRS asks for and accepts one's declaration to being a taxpayer. This is evident because the only things on this form that are attested to under penalties of perjury are the statements checked in the section regarding backup withholding. One is not making this statement for the benefit of the bank, but the the benefit of the IRS. Declaring oneself a taxpayer does benefit the IRS since it will consider that declaration makes one subject to any internal revenue tax.

It is humbug when one is asked to sign documents without knowing the ramifications of the agreement. Under the laws of contracts an

299

IRS HUMBUG

individual has every right to know exactly what the IRS knows before it can be considered that the individual intended to agree with them. One could also require the bank to inform him of their agreements with the IRS.

Until the banking industry (as well as all others) discontinues the practice of aiding and abetting the IRS in its illegal kickback program, then sovereign persons must express that they will only make themselves and their property subject to the laws of the United States of America. Being subject to the laws of the United States of America is an obligation one cannot avoid under any circumstance. But, there is no law that one has to make the IRS a party to any agreement with a bank or anyone else.

IRS employees have no authority except that given to them by law passed by Congress with regard to the seeing that the U.S. Government's income that is subject to being returned from someone to whom it was transferred is returned in full. Yet they continually ask people to sign forms for them without stating under the laws of the United States of America. This must be for the reason of giving them implied authority to use humbug in place of due process of law.

By making truthful minor changes and additions in most forms that one is asked to sign under penalty of perjury, one can destroy any implied authority that IRS employees have to look into his records.

Here is a sample of what I would do with the bank form discussed above. 5SN

...JlN::: BACKUP WITHHOLDING CERTIFICATIONS

~OCI ~ §~UA.lTY {55)

~ i.44lfEi~if~~~~E~u~~~~ ~ ;;;::;;; ~;c:~~~r;rr~~de~mt~~ s}l,Sl~ above~s my correct Internal Revenue Service ~identification number. Regulations a-ncl X. ~. Cod.e.

lSI BACKUP WITHHOLDING- I am ONO~~RESIDE:P.IT ALieNS I aa:1: not subject to backup withholding. ngt a I Initgd. States person or.Ulam-either bgcause I have ngt be-en an individual, I am neither a citizen notified. that I am subj<ilct tg back•1p nor a resident of tJ:\e United States. withholding as a result of a failure I AM AX\'n 2.jN OJ: F\ORtHA · to t=eport all interest or dividends, SIGN TUR ~J .. c~~t.i-~ qn,q~ A· Of tJ:\e Intemal R€Yefll::le Service has penalties of eiJ~ me~m~Tn~nt'S' notified a:1:e tJ:\at I aa:1: no longer checked in this section. sl::lbject to backup withholding X

300


Note, I would change the words "Taxpayer J.D. Number" to Social Security number (or S.S. #)wherever it is used. Then check off the boxes except the one for nonresident aliens. I would draw a line through all of the verbiage for nonresident aliens since it is a catch 22 situation, and write above it "I am a citizen of the state shown." With this I am attesting to a positive, clear, and direct status. Handling the form in this manner is not harmful when the words "under the laws of the United States of America" are added to the phrase "under penalties of perjury." There are no laws of the United States of America with regard to backup withholding. There are only special I.R. Code laws applicable under special conditions to specific persons. Only positive law can create an obligation as to personal property, and there can be no positive law or special law that can create a debt obligation that controls one's labor against his will. A condition prohibited by peonage laws.

Become educated about when one needs to provide evidence that he is declaring his personal sovereignty. The procedure used on the bank form can be used with regard to any form in existence. If necessary, open new accounts with banks, stock brokers, etc. It is most important to be sure to always express sovereignty when dealing directly or indirectly with a government entity. To do otherwise is personal and commercial suicide.

Declaration of sovereignty on checks

One way to provide evidence of personal sovereignty in everyday business is on the checks received or issued to others. They represent part of one's personal estate, which is foreign to the U.S. Government. By making a personal declaration on each one to that effect, one shifts the burden to the IRS to prove otherwise. Rather than the individual having to prove the IRS has no right to enter his private life, the IRS would have the impossible burden to prove that it does.

Here is a sample of a declaration that can be made. This income is included in my estate that is foreign to the U.S. Government (26 USC Sec. 7701(a)(31)).

On outgoing checks this sort of declaration would be placed beneath the line where the amount of the check is written and above the signature. On incoming checks it would be placed on the endorsement section on the back of the check above the signature. A stamp with fairly small but clear lettering can be made to facilitate this procedure since

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IRS HUMBUG

writing this on each check is cumbersome and time consuming. Also, it has been made more difficult to do with the current limitation in space for check endorsements.

Without such a record of declarations of sovereignty there is no doubt that checks can and will be used against a targeted person with intent to control his liberty. Checks I endorsed as a result of my employment for a private sector employer that were used in the malicious prosecution against me did not contain such declarations. If they had, the Federal Government employees involved would not have placed them into evidence for three reasons. First, the IRS has no jurisdiction over income that is foreign to the U.S. Government and so cannot lawfully institute either a civil or criminal cause of action with regard to it. Secondly, if they chose to act unlawfully by taking action without jurisdiction, such a declaration on these checks would have elicited questions from those sitting in the jury box to explain what a foreign estate meant and they would find out that their estate was also foreign to the U.S. Government and that a hoax had been used upon them too. The third reason is Federal Government employees would refuse to use such checks is that they would provide evidence of Federal Government employees attempting to force a kickback on income that is foreign to the U.S. Government. The IRS has no jurisdiction over income foreign to the U.S. Government.

The thing to realize is that people in this country have lost personal sovereignty by personal conduct and the only way to regain it is by personal conduct. One cannot expect help from Congress. Congress, by enacting vague laws, is already on record that they intend to aid the enforcement of an illegal kickback.

The source of money and power is the natural person. IRS employees have learned how to have us use it in their favor. We must learn how to control it in favor of ourselves and our personal goals. If one does not express his personal sovereignty, and it is exercised for him, then it is the U.S. Government that is in control of the people in our society instead of 'We, the people" controlling the government. Having been blessed by living under a republic form of government, the solution is within the power of the people if each person exercises that power rather than complaining about how Federal Government employees conduct themselves. Remember, if they did not have the money to do what they are doing, they couldn't do it. And where do they get the money? From the people of this country! The people of this country have

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to learn how to exercise and maintain control over the government by maintaining control over their own personal property. It can be done, but right now, only on a personal and private basis.

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CHAPTER17

CODE OF ETHICS FOR FEDERAL GOVERNMENT EMPLOYEES

Force Code of Ethics upon Federal Government employees

Each individual has an obligation as a sovereign to see that government servants do not step outside the law in the performance of their duties. Congress provided a standard of conduct for Federal Government employees by the Code of Ethics, made into law by P.L. 96-303, 96th Congress,datedJuly 3,1980 (presently inS U.S. C. Sec. 7301). Here it is.

CODE OF ETHICS FOR GOVERNMENT SERVICE Any person in Government service should: I. Put loyalty to the highest moral principles and to country above loyalty to persons, party, or Government department. II. Uphold the Constitution, laws, and regulations of the United States and of all governments therein and never be a party to their evasion. III. Give a full day's labor for a full day's pay; giving earnest effort and best thought to the performance of duties. IV. Seek to find and employ more efficient and economical ways of getting tasks accomplished. V. Never discriminate unfairly by the dispensing of special favors or privileges to anyone, whether for remuneration or not; and never accept, for himself or herself or for family members, favors or benefits under circumstances which might be construed by reasonable persons as influencing the performance of governmental duties. VI. Make no private promises of any kind binding upon the duties of office, since a Government employee has no private word which can be binding on public duty. VII. Engage in no business with the Government, either directly or indirectly, which is inconsistent with the conscientious performance of governmental duties.

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CODE OF ETHICS FOR FEDERAL GOVERNMENT EMPLOYEES CHAPTER17

VIII. Never use any information gained confidentially in the performance of governmental duties as a means of making private profit. IX. Expose corruption wherever discovered. X. Uphold these principles, ever conscious that public office is a public trust.

In this law Congress recognizes each natural person under the laws of the United States of America are sovereign with regard to their life, liberty, and property. Though Congress places strict requirements upon the conduct of Federal Government employees when dealing with society by this Code of Ethics, they do not impose any civil or criminal sanctions upon Federal Government employees who refuse to comply with it. This law is Congress' way of recognizing that they can only provide guidelines for conduct while providing notice that it is only a damaged sovereign person who can exercise his choice to either accept any illegal conduct on the part of a Federal Government employee or insist upon remedy by the application of laws, both civil and criminal. It is we, individually, who must insist that the Code of Ethics be the standard upon which all conduct with them is based. If we fail to exercise our right to ask for this standard, we are rightfully to blame for the impairment of our sovereignty. This is both a Hazard and a Blessing under a Republic form of Government. It is a hazard if you expect employees of Governments to exercise respect for your property. It is a blessing because employees of Governments must respect you and your property when you express your sovereignty as to your Life, liberty and property. Not to put them on notice provides our implied authority that we gave them our permission to force us to agree to that which they want us to agree.·

The Federal laws Federal Government employees frequently violate are noted in Title 18. Violation of peonage laws of this country are punishable under 18 U.S.C. Sec. 1581. However, Federal Government employees could be subject to common law charges in a court of one of the 50 states when they act outside of the authority given them by law.

My declaration of personal sovereignty

Be it understood by all taxing authorities to which I may subject myself that I am a person sovereign under the laws and Constitution of the United States of America. I do hereby declare that I intend to exercise sovereign authority over my life, liberty and property.

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Let it be known that I am not a person who professes, feels a need, or supports the overthrow of any government. I only want to help keep its employees operating legally under the law so that respect for the law will be the standard expected of everyone. Therefore, I specifically demand that all Federal Government employees respect my declaration of sovereignty as to my life, liberty and property and impose upon themselves the Code of Ethics enacted into law by Congress for Federal Government employees. I declare that any Federal Government employee whose conduct is contrary to this standard and prejudicial to me accept any legal consequences possible to impose under the laws of the United States of America and the state in which they live. I place upon the Justice Department of the United States of America the responsibility to assure the general welfare of society by enforcing justice for all.

I close this book with the prayer that you have found it informative enough to start to understand the limited control governments have over sovereign natural persons and their property in this great country; and that it aids you in regaining personal sovereignty in a dignified, responsible, lawful, and humble manner, without intent to cause personal injury by conducting yourself in a way that will earn the approval of your God as well as the respect of your fellow man.

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APPENDIX A

CONSTITUTION OF THE UNITED STATES OF AMERICA -1787

WE THE PEOPLE of the United States, in Order to form a more perfect Union, establish Justice, insure domestic Tranquility, provide for the common defence, 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.

Article I.

Section 1. All legislative Powers herein granted shall be vested in a Congress of the United States, which shall consist of a Senate and House of Representatives.

Section 2. The House of Representatives shall be composed of Members chosen every second Year by the People of the several States, and the Electors in each State shall have the Qualifications requisite for Electors of the most numerous Branch of the State Legislature.

No person shall be a Representative who shall not have attained to the Age of twenty five Years, and been seven Years a Citizen of the United States, and who shall not, when elected, be an Inhabitant of that State in which he shall be chosen.

Representatives and direct Taxes shall be apportioned among the several States which may be included within this Union, according to their

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respective Numbers, which shall be determined by adding to the whole Number of free Persons, including those bound to Service for a Term of Years, and excluding Indians not taxed, three fifths of all other Persons. The actual Enumeration shall be made within three Years after the first Meeting ofthe Congress ofthe United States, and within every subsequent Term of ten Years, in such Manner as they shall by Law direct. The Number of Representatives shall not exceed one for every thirty Thousand, but each State shall have at Least one Representative; and until such enumeration shall be made, the State of New Hampshire shall be entitled to chuse three, Massachusetts eight, Rhode-Island and Providence Plantations one, Connecticut five, NewYork six, New Jersey four, Pennsylvania eight, Delaware one, Maryland six, Virginia ten, North Carolina five, South Carolina five,

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and Georgia three.

When vacancies happen in the Representation from any State, the Executive Authority thereof shall issue Writs of Election to fill such Vacancies.

The House of Representatives shall chuse their Speaker and other Officers; and shall have the sole Power of Impeachment.

Section3. TheSenateof the United States shall be composed of two Senators from each State, chosen by the Legislature thereof, for six Years; and each Senator shall have one Vote.

Immediately after they shall be assembled in Consequence of the first Election, they shall be divided as equally as may be into three Classes. The Seats of the Senators of the first Class shall be vacated at the Expiration of the second Year, of the second Class at the Expiration of the fourth Year, and of the third Class at the Expiration of the sixth Year, so that one third may be chosen every second Year; and if Vacancies happen by Resignation, or otherwise, during the Recess of the Legislature of any State, the Executive thereof may make temporary Appointments until the next Meeting of the Legislature, which shall then fill such Vacancies.

No Person shall be a Senator who shall not have attained to the Age of thirty Years, and been nine Years a Citizen of the United States, and who shall not, when elected, be an Inhabitant of that State for which he shall be chosen.

The Vice President of the United States shall be President of the Senate,

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but shall have no Vote, unless they be equally divided.

The Senate shall chuse their other Officers, and also a President pro tempore, in the Absence of the Vice President, or when he shall exercise the Office of President of the United States.

The Senate shall have the sole Power to try all Impeachments. When sitting for that Purpose, they shall be on Oath or Affirmation. When the President of the United States is tried, the Chief Justice shall preside: And no Person shall be convicted without the Concurence of two thirds of the Members present.

Judgment in Cases of Impeachment shall not extend further than to removal from office, and disqualification to hold and enjoy any Office of honor, Trust or Profit under the United States: but the Party convicted shall nevertheless be liable and subject to Indictment, Trial, Judgment and Punishment, according to Law.

Section 4. The Times, Places and Manner of holding Elections for Senators and Representatives, shall be prescribed in each State by the Legislature thereof; but the Congress may at any time by Law make or alter such Regulations, except as to the Places and chusing Senators.

The Congress shall assemble at least once in every Year, and such Meeting shall be on the first Monday in December, unless they shall by Law appoint a different Day.

Section 5. Each House shall be the Judge of the Elections, Returns and Qualifications of its own Members,

CONSTITUTION OF THE UNITED STATES OF AMERICA -1787 APPENDIX A

and a Majority of each shall constitute a Quorum to do Business; but a smaller Number may adjourn from day to day, and may be authorized to compel the Attendance of absent Members, in such Manner, and under such Penalties as each House may provide.

Each House may determine the Rules of its Proceedings, punish its Members for disorderly Behaviour, and, with the Concurrence of two thirds, expel a Member.

Each House shall keep a Journal of its Proceedings, and from time to time publish the same, excepting such Parts as may in their Judgment require Secrecy; and the Yeas and Nays of the Members of either House on any question shall, at the Desire of one fifth of those Present, be entered on the Journal.

Neither House, during the Session of Congress, shall, without the Consent of the other, adjourn for more than three days, nor to any other Place than that in which the two Houses shall be sitting.

Section 6. The Senators and Representatives shall receive a Conpensation for their Services, to be ascertained by Law, and paid out of the Treasury of the United States. They shall in all Cases, except Treason, Felony and Breach of Peace, be privileged from Arrest during their Attendance at the Session of their respective Houses and in going to and returning from same; and for any Speech or Debate in either House, they shall not be questioned in any other Place.

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No Senator or Representative shall, during the Time for which he was elected, be appointed to any civil Office under the Authority of the United States, which shall have been created, or the Emoluments whereof shall have been encreased during such time; and no Person holding any Office under the United States, shall be a Member of either House during his Continuance in Office.

Section 7. All Bills for raising Revenue shall originate in the House of Representatives; but the Senate may propose or concur with Amendments as on other Bills.

Every Bill which shall have passed the House of Representatives and the Senate, shall, before it become a Law, be presented to the President of the United States. If he approve he shall sign it, but if not he shall return it, with his Objections to that House in which it shall have originated, who shall enter the Objections at large on their Journal, and proceed to reconsider it. If after such Reconsideration two thirds of that House shall agree to pass the Bill, it shall be sent, together with the Objections, to the other House, by which it shall likewise be reconsidered, and if approved by two thirds of that House, it shall become a Law. But in all such Cases the Votes of both Houses shall be determined by Yeas and Nays, and the Names of the Persons voting for and against the Bill shall be entered on the Journal of each House respectively. If any Bill shall not be returned by the President within ten Days (Sundays excepted) after it shall have been presented to him, the Same shall

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be a Law, in like Manner as if he had signed it, unless the Congress by their Adjournment prevent its Return, in which Case it shall not be a Law.

Every Order, Resolution, or Vote to which the Concurrence of the Senate and HouseofRepresentativesmaybe necessary (except on a question of Adjournment) shall be presented to the President of the United States; and before the Same shall take Effect, shall be approved by him, or being disapproved by him, shall be repassed by two thirds of the Senate and House of Representatives, according to the Rules and Limitations prescribed in the Case of a Bill.

Section 8. 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 unifom1 throughout the United States;

To borrow Money on the credit of the United States;

To regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes;

To establish a uniform Rule of Naturalization, and uniform Lawson the subject of Bankruptcies throughout the United States;

To coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures;

To provide for the Punishment of counterfeiting the Securities and cur-

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rent Coin of the United States;

To establish Post Offices and post Roads;

To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries;

To constitute Tribunals inferior to the supreme Court;

To define and punish Piracies and Felonies committed on the high Seas, and Offences against the Law of Nations;

To declare War, grant Letters of Marque and Reprisal, and make Rules concerning Captures on Land and Water;

To raise and support Armies, but no Appropriation of Money to that Use shall be for a longer Term than two Years;

To provide and maintain a Navy;

To make Rules for the Government and Regulation of the land and naval Forces;

To provide for calling forth the Militia to execute the Laws of the Union, suppress Insurrections and repel Invasions;

To provide for organizing, arming, and disciplining, the Militia, and for governing such Part of them as may be employed in the Service of the United States, reserving to the States respectively, the Appointment of the Officers, and the Authority of training the Militia according to the discipline prescribed by Congress;

To exercise exclusive Legislation in


all Cases whatsoever, over such District (not exceeding ten Miles square) as may, by Cession of particular States, and the Acceptance of Congress, become the Seat of the Government of the United States, and to exercise like Authority over all Places purchased by the Consent of the Legislature of the State in which the Same shall be, for the Erection of Forts, Magazines, Arsenals, dockYards, and other needful Buildings;-And

To make all Laws which shall be necessary and proper for carrying into Execution the foregoing Powers, and all other Powers vested by this Constitution in the Government of the United States, or in any Department of Officer thereof.

Section 9. The Migration or Importation of such Persons as any of the States now existing shall think proper to admit, shall not be prohibited by the Congress prior to the Year one thousand eight hundred and eight, but a Tax or duty may be imposed on such Importation, not exceeding then dollars for each Person.

The Privilege of the Writ of Habeas Corpus shall not be suspended, unless when in Cases of Rebellion or Invasion the public Safety may require it.

No Bill of Attainder or ex post facto Law shall be passed.

No Capitation, or other direct, Tax

shall be laid, unless in Proportion to the Census or Enumeration herein before directed to be taken:

No Tax or Duty shall be laid on Articles exported from any State.

No Preference shall be given by any Regulation of Commerce or Revenue to the Ports of one State over those of another; nor shall Vessels bound to, or from, one State, be obliged to enter, clear, or pay Duties in another.

No Money shall be drawn from the Treasury, but in Consequence of Appropriations made by Law; and a regular Statement and Account of the Receipts and Expenditures of all public Money shall be published from time to time.

No Title of Nobility shall be granted by the United States: And no Person holding any Office of Profit or Trust under them, shall, without the Consent of the Congress, accept of any present, Emolument, Office, or Title, of any kind whatever, from any King, Prince, or foreign State.

Section lO.No State shall enterinto any Treaty, Alliance, or Confederation; grant Letters of Marque and Reprisal; coin Money; emit Bills of Credit; make any Thing but gold and silver Coin a Tender in Payment of Debts; pass any Bill of Attainder, ex post facto Law, or Law impairing the Obligation of Contracts, or grant any Title of Nobility.

• This clause has been affected by the 16th amendment.

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No State shall, without the Consent of the Congress, lay any Imposts or Duties on Imports or Exports, except what may be absolutely neceaasry for executing it's inspection Laws: and the net Produce of all Duties and Imposts, laid by any State on Imports or Exports, shall be for the Use of the Treasury of the United States; and all such Laws shall be subject to Revision and Controul of the Congress.

No State shall, without the Consent of Congress, lay any Duty of Tonnage, keep Troops, or Ships of War in time of Peace, enter into any Agreement or Compact with another State, or with a foreign Power, or engage in War, unless actually invaded, or in such imminent Danger as will not admit of delay.

Article II.

Section 1. The executive Power shall be vested in a President of the United States of America. He shall hold his Office during the Term of four Years, and, together with the Vice President, chosen for the same Term, be elected, as follows:

Each State shall appoint, in such Manner as the Legislature thereof may direct, a Number of Electors, equal to the whole Number of Senators and Representative to which the State may be entitled in the Congress; but no Senator or Representative, or Person holding an Office of Trust or Profit under the United States, shall be appointed an Elector.

The Electors shall meet in their respective States, and vote by Ballot for two Persons of whom one at least shall not be an Inhabitant of the same State with themselves, And they shall make a List of all the Persons voted for, and of the Number of Votes for each; which List they shall sign and certify, and transmit sealed to the Seat of the Government of the United States, directed to the President of the Senate. The President of the Senate shall, in the Presence of the Senate

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and House of Representatives, open all the Certificates, and the Votes shall then be counted,. The Person having the greatest Number of Votes shall be the President, if such Number be a Majority of the whole Number of Electors appointed; and if there be more than one who have such Majority, and have an equal Number of Votes, then the House of Representatives shall immediately chuse by Ballot one of them for President; and if no Person have a Majority, then from the five highest on the List the said House shall in like Manner chuse the President. But in chusing the President, the Votes shall be taken by States, the Representation from each State having one Vote; A quorum for this Purpose shall consist of a Member or Members from two thirds of the States, and a Majority of all the States shall be necessary to a Choice. In every Case, after the Choice of the President, the Person having the greatest Number of Votes of the Electors shall be the Vice President. But if there should remain two or more who have equal Votes, the Senate shall chuse from them by Ballot the Vice President.

CONSTITUTION OF THE UNITED STATES OFAMERICA-1787 APPENDIX A

The Congress may determine the Time of chusing the Electors, and the Day on which they shall give their Votes; which Day shall be the same throughout the United States.

No Person except a natural born Citizen, or a Citizen of the United States, at the time of the Adoption of this Constitution, shall be eligible to the Office of President; neither shall any Person be eligible to that Office who shall not have attained to the Age of thirty five Years, and been fourteen Years a Resident within the United States.

In Case of the Removal of the President from Office, or of his Death, Resignation, or Inability to discharge the Powers and Duties of the said Office, the same shall devolve on the Vice President, and the Congress may by Law provide for the Case of Removal, Death, Resignation or Inability, both of the President and Vice President, declaring what Officer shall then act as President, and such Officer shall act accordingly, until the Disability be removed, or a President shall be elected.

The President shall, at stated Times, receive for his Services, a Compensation, which shall neither be encreased nor diminished during the Period for which he shall have been elected, and he shall not receive within that Period any other Emolument from the United States, or any of them.

Before he enter on the Execution of his Office, he shall take the following Oath or Affirmation:-"! do solemnly swear (or affirm) that I will faith-

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fully execute the Office of President of the United States, and will to the best of my Ability, preserve, protect and defend the Constitution of the United States."

Section 2. The President shall be Commander in Chief of the Army and Navy of the United States, and of the Militia of the several States, when called into the actual Service of the United States; he may require the Opinion, in writing, of the principal Officer in each of the executive Departments, upon any Subject relating to the Duties of their respective Offices, and he shall have Power to grant Reprieves and Pardons for Offences against the United States, except of Impeachment.

He shall have Power, by and with the Ad vice and Consent of the Senate, to make Treaties, provided two thirds of the Senators present concur; and he shall nominate, and by and with the Advice and Consent of the Senate, shall appoint Ambassadors, other public Ministers and Consuls, Judges of the supreme Court, and all other Officers of the United States, whose Appointments are not herein otherwise provided for, and which shall be established by Law: but the Congress may by Law vest the Appointment of such inferior Officers, as they think proper, in the President alone, in the court of Law, or in the Heads of Departments.

The President shall have Power to fill up all Vacancies that may happen during the Recess of the Senate, by granting Commissions which shall expire at the End of their next Session.

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Section 3. He shall from time to time give to the Congress Information of the State of the Union, and recommend to their Consideration such Measures as he shall judge necessary and such Measures as he shall judge necessary and expedient; he may, on extraordinary Occasions, convene both Houses, or either of them, with Respect to the Time of Adjournment, he may adjourn them to such Time as he shall think proper; he shall receive Ambassadors and

other public Ministers; he shall take Care that the Laws be faithfully executed, and shall Commission all Officers of the United States.

Section. 4 The President, Vice President and all civil Officers of the United States, shall be removed from Office on Impeachment for, and Conviction of, Treason, Bribery, or other high Crimes and Misdemeanors.

Article III.

Section 1. The judicial Power of the United States, shall be vested in one supreme Court, and in such inferior Courts as the Congress may from time to time ordain and establish. The Judges, both of the supreme and inferior Courts, shall hold their Offices during good Behaviour, and shall, at stated Times, receive for their Services, a Compensation, which shall not be diminished during their Continuance in Office.

Seo:tion 2. The judicial Power shall extend to all Cases, in Law and Equity, arising under this Constitution, the Laws of the United States, and Treaties made, or which shall be made, under their Authority;-to all Cases affecting Ambassadors, other public Ministers and Consuls;-to all Cases of admiralty and maritime Jurisdiction;-to Controversies to which the United States shall be a Party;-to Controversies between two or more States;-between a State and Citizens of another State;-between Citizens of different States;between Citizens of the same State claiming Lands under Grants of dif-

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ferent States, and between a State, or the Citizens thereof, and foreign States, Citizens or Subjects.

In all Cases affecting Ambassadors, other public Ministers and Consuls, and those in which a State shall be party, the supreme Court shall have original Jurisdiction. In all the other Cases before mentioned, the supreme Court shall have appellate Jurisdiction, both as to Law and Fact, with such Exceptions, and under such Regulations as the Congress shall make.

The Trial of all Crimes, except in Cases of Impeachment, shall be by Jury; and such Trial shall be held in the State where the said Crimes shall have been committed; but when not committed within any State, the Trial shall be at such Place or Places as the Congress may by Law have directed.

Section 3. Treason against the United States, shall consist only in levying War against them, or in adhering to their Enemies, giving them Aid and Comfort. No person shall be convicted of Treason unless on the


Testimony of two Witnesses to the same overt Act, or on Confession in open Court.

The Congress shall have Power to declare the Punishment of Treason,

but no Attainder of Treason shall work Corruption of Blood, or Forfeiture except during the Life of the Person attainted.

Article IV.

Section 1. Full Faith and Credit shall be given in each State to the public Acts, Records, and judicial Proceedings of every other State. And the Congress may by general Laws prescribe the Manner in which such Acts, Records and Proceedings shall be proved, and the Effect thereof.

Section 2. The Citizens of each State shall be entitled to all Privileges and Immunities of Citizens in the several States.

A Person charged in any State with Treason, Felony, or other Crime, who shall flee from Justice, and be found in another State, shall on Demand of the executive Authority of the State from which he fled, be delivered up, to be removed to the State having Jurisdiction of the Crime.

No Person held to Service or Labour in one State, under the Laws thereof, escaping into another, shall, in Consequence of any Law or Regulation therein, be discharged from such Service or Labour, but shall be delivered up on Claim of the Party

to whom such Service or Labour may be due.

Section 3. New States may be admitted by the Congress into this Union; but no new State shall be formed or erected within the J urisdiction of any other State; nor any State be formed by the Junction of two or more States, or Parts of States, without the Consent of the Legislatures of the States concerned as well as of the Congress.

The Congress shall have Power to dispose of and make all needful Rules and Regulations respecting the Territory or other Property belonging to the United States; and nothing in this Constitution shall be so construed as to Prejudice any Claims of the United States, or any particular State.

Section 4. The United States shall guarantee to every State in this Union a Republican Form of Government, and shall protect each of them against Invasion; and upon Application of the Legislature, or of the Executive (when the Legislature cannot be convened) against domestic Violence.

Article V.

The Congress, whenever two thirds of both Houses shall deem it necessary, shall propose Amend-

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ments to this Constitution, or on the Application of the Legislatures of two thirds of the several States, shall call

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a Convention for proposing Amendments, which, in either Case, shall be valid to all Intents and Purposes, as Part of this Constitution, when ratified by the Legislatures of three fourths of the several States, or by Conventions in three fourths thereof, as the one or the other Mode of Retification may be proposed by the

Congress; Provided that no Amendment which may be made prior to the Year One thousand eight hundred and eight shall in any Manner affect the first and fourth Clauses in the Ninth Section of the first Article; and that no State, without its Consent, shall be deprived of its equal Suffrage in the Senate.

Article VI.

All Debts contracted and Engagements entered into, before the Adoption of this Constitution, shall be as valid against the United States under this Constitution, as under the Confederation.

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 Things in the

constitution or Laws of any State to the Contrary notwithstanding.

The Senators and Representatives before mentioned, and the Members of the several State Legislatures, and all executive and judicial Officers, both of the United States and of the several States, shall be bound by Oath or Affirmation, to support this Constitution; but no religious Test shall ever be required as a Qualification to any Office or public Trust under the United States.

Article VII.

The Ratification of the Conventions of nine States, shall be sufficient for the Establishment of this Constitution between the States so ratifying the Same.

DONE in Convention by the Unanimous Consent of the States present the Seventeenth Day of Sep-

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tember in the Year of our Lord one thousand seven hundred and Eighty seven and of the Independence of the United States of America the Twelfth. IN WITNESS whereof We have hereunto subscribed our Names,


ARTICLES IN ADDITION TO, AND AMENDMENT OF THE CONSTITUTION OF THE UNITED STATES OF AMERICA,

PROPOSED BY CONGRESS, AND RATIFIED BY THE LEGISLATURES OF THE SEVERAL STATES, PURSUANT TO THE

FIFTH ARTICLE OF THE ORIGINAL CONSTITUTION.

FIRST AMENDMENT

Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom

of speech, or of the press; or the right of the people peaceably to assemble, and to petition the Government for a redress of grievances.

SECOND AMENDMENT

A well regulated militia, being necessary to the security of a free

State, the right of the people to keep and bear arms, shall not be infringed.

THIRD AMENDMENT

No Soldier shall, in time of peace be quartered in any house, without the consent of the owner, nor in time

of war, but in a manner to be prescribed by law.

FOURTH AMENDMENT

The right of the people to be secure in their persons, houses, papers, and effects, against unreasonable searches and seizures, shall not be violated, and no warrants shall issue, but

upon probable cause, supported by oath or affirmation, and particularly describing the place to be searched, and the persons or things to be seized.

FIFTH AMENDMENT

No person shall be held to answer for a capital, or otherwise infamous crime, unless on a presentment or indictment of a Grand Jury, except in cases arising in the land or naval forces, or in the Militia, when in actual service in time of war or public danger; 11or shall any person be subject for the same offence to be twice

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put in jeopardy of life or limb; nor shall be compelled in any criminal case to be a witness against himself, nor be deprived of life, liberty, or property, withoutdueprocessoflaw; nor shall private property be taken for public use, without just compensation.

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SIXTH AMENDMENT

In all criminal prosecutions, the accused shall enjoy the right to a speedy and public trial, by an impartial jury of the State and district wherein the crime shall have been committed, which district shall have been previously ascertained by law, and to be

informed of the nature and cause of the accusation; to be confronted with the witnesses against him; to have compulsory process for obtaining witnesses in his favor, and to have the

. Assistance of Counsel for his defence.

SEVENTH AMENDMENT

In Suits at common law, where the value in controversy shall exceed twenty dollars, the right of trial by jury shall be preserved, and no fact

tried by a jury, shall be otherwise reexamined in any Court of the United States, than according to the rules of the common law.

EIGHTH AMENDMENT

Excessive bail shall not be re- nor cruel and unusual punishments quired, nor excessive fines imposed, inflicted.

NINTH AMENDMENT

The enumeration in the Constitution, of certain rights, shall not be

construed to deny or disparage others retained by the people.

TENTH AMENDMENT

The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.

(First 10 Amend. Proposed Sept. 25, 1789;ratified by States 1789-1939)

ELEVENTH AMENDMENT

The Judicial power of the United States shall not be construed to extend to any suit in law or equity, commenced or prosecuted against one of the United States by Citizens of

another State, or by Citizens or Subjects of any Foreign State.

(Ratified Feb. 7, 1795}

TWELFTH AMENDMENT

The Electors shall meet in their respective states, and vote by ballot

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CONSTITUTION OF THE UNITED STATES OF AMERICA-1787 APPENDIX A

for President and Vice-President, one of whom, at least, shall not be an inhabitant of the same state with themselves; they shall name in their ballots the person voted for as President, and in distinct ballots the person voted for as Vice-President, and they shall make distinct lists of all persons voted for as President, and of all persons voted for as Vice-President, and of the number of votes for each, which lists they shall sign and certify, and transmit sealed to the seat of the government of the United States, directed to the President of the Senate;-The President of the Senate shall, in the presence of the Senate and House of Representatives, open all the certificates and the votes shall then be counted;-The person having the greatest number of votes for President, shall be the President, if such number be a majority of the whole number of Electors appointed; and if no person have such majority, then from the persons having the highest numbers not exceeding three on the list of those voted for as President, the House of Representatives shall choose immediately, by ballot, the President. But in choosing the President, the votes shall be taken by states, the representation from each

state having one vote; a quorum for this purpose shall consist of a member or members from two-thirds of the states, and a majority of all the states shall be necessary to a choice. And if the House of Representatives shall not choose a President whenever the right of choice shall devolve upon them, before the fourth day of March next following, then the VicePresident shall act as President, as in the case of the death or other constitutional disability of the PresidentThe person having the greatest number of votes as Vice-President, shall be the Vice-President, if such number be a majority of the whole number of Electors appointed, and if no person have a majority, then from the two highest numbers on the list, the Senate shall choose the VicePresident; a quorum for the purpose shall consist of two-thirds of the whole number of Senators, and a majority of the wholenumbershall be necessary to a choice. But no person constitutionally ineligible to the office of President shall be eligible to that of Vice-President of the United States.

(Ratified June 15, 1804)

THIRTEENTH AMENDMENT

Section 1. Neither slavery nor involuntary servitude, except as a punishment for crime whereof the party shall have been duly convicted, shall exist within the United States, or any place subject to their iurisdiction.

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Section 2. Congress shall have power to enforce this article by appropriate legislation.

(Ratified Dec. 6, 1865)

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FOURTEENTH AMENDMENT

Section 1. All persons born or naturalized in the United States, and subject to the jurisdiction thereof, are citizens of the United States and of the State wherein they reside. No State shall make or enforce any law which shall abridge the privileges or immunities of citizens of the United States; nor shall any State deprive any person of life, liberty, or property, without due process of law; nor deny any person within its jurisdiction the equal protection of the laws.

Section 2. Representatives shall be apportioned among the several States according to their respective numbers, counting the whole number of persons in each State, excluding Indians not taxed. But when the right to vote at any election for the choice of electors for President and Vice President of the United States, Representative in Congress, the Executive and Judicial officers of a State, or the members of the Legislature thereof, is denied to any of the male inhabitants of such State, being twenty one years of age, and citizens of the United States, or in any way abridged, except for participation in rebellion, or other crime, the basis of representation therein shall be reduced in the proportion which thenumberofsuch male citizens shall bear to the whole number of male citizens twenty-one years of age in such State.

Section 3. No person shall be a Senator or Representative in Con-

gress, or elector of President and Vice President, or hold any office, civil or military, under the United States, or under any State, who having previously taken an oath, as a member of Congress, or as an officer of the United States, or as a member of any State legislature, or as an executive or judicial officer of any State, to support the Constitution of the United States, shall have engaged in insurrection or rebellion against the same, or given aid or comfort to the enemies thereof. But Congress may by a vote of twothirds of each House, remove such disability.

Section 4. The validity of the public debt of the unites States, authorized by law, including debts incurred for payment of pensions and bounties for services in suppressing insurrection or rebellion, shall not be questioned. But neither the United States nor any State shall assume or pay any debt or obligation incurred in aid of insurrection or rebellion against the United States, or any claim for the loss or emancipation of any slave; but all such debts, obligations and claims shall be held illegal and void.

Section 5. The Congress shall have power to enforce, by appropriate legislation, the provisions of this article.

Ratified July 9, 1868

FIFTEENTH AMENDMENT

Section 1. The right of citizens of the United States to vote shall not be

320

denied or abridged by the United States or by any State on account of


race, color, or previous condition of servitude.

Section 2. The Congress shall have

power to enforce this article be appropriate legislation.

(Ratified Feb. 17, 1870)

SIXTEENTH AMENDMENT

The Congress shall have power to sus or enumeration. layandcollecttaxesonincomes,from (Ratified Feb. 3, 1913) whatever source derived, without ap-portionment among the several States, and without regard toanycen-

SEVENTEENTH AMENDMENT

The Senate of the U.S. shall be composed of two Senators from each State, elected by the people thereof, for six years; and each Senator shall have one vote. The electors in each State shall have the qualifications requisite for electors of the most numerous branch of the State legislatures.

When vacancies happen in the representation of any State in the Senate, the executive authority of such State shall issue writs of election to fill such vacancies; Provided, That the legisla-

ture of any State may empower the executive thereof to make temporary appointments until the people fill the vacancies by election as the legislature may direct.

This amendment shall not be so construed as to affect the election or term of any Senator chosen before it becomes valid as part of the Constitution.

(Ratified AprilS, 1913)

EIGHTEENTH AMENDMENT

Section 1. After one year from the ratification of this article the manufacture, sale, or transportation of intoxicating liquors within, the importation thereof into, or the exportation thereof from the United States and all territory subject to the jurisdiction thereof for beverage purposes is hereby prohibited.

Section 2. The Congress and the several States shall have concurrent power to enforce this article by ap-

321

propriate legislation.

Section 3. This article shall be inoperative unless it shall have been ratified as an amendment to the Constitution by the legislatures of the several States, as provided in the Constitution, within seven years from the date of the submission hereof to the States by the Congress.

(Ratified Jan. 16, 1919) (Repealed by 21st Amend., Dec. 5,

1933)

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NINETEENTH AMENDMENT

The right of citizens of the United States to vote shall not be denied or abridged by the United States or by any State on account of sex.

Congress shall have power to enforce this article by appropriate legislation.

(Ratified Aug. 26, 1920)

TWENTIETH AMENDMENT

Section 1. The terms of the President and Vice President shall end at noon on the 20th day of January, and the terms of Senators and Representatives at noon on the 3rd day of January, of the years in which such terms would have ended if this article had not been ratified; and the terms of their successors shall then begin.

Section 2. The Congress shall assemble at least once in every year, and such meeting shall begin at noon on the 3rd day of January, unless they shall by law appoint a different day.

Section 3. If, at the time fixed for the beginning of the term of the President, the President elect shall have died, the Vice President elect shall become President. If a President shall not have been chosen before the time fixed for the beginning of his term, or if the President elect shall have failed to qualify, then the Vice President elect shall act as President until a President shall have qualified; and the Congress may by law provide for the case wherein neither a President elect nor a Vice President elect shall have qualified, declaring who shall then act as President, or the manner

in which one who is to act shall be selected, and such person shall act accordingly until a President or Vice President shall have qualified.

Section 4. The Congress may by law provide for the case of the death of any of the persons from whom the House of Representatives may choose a President whenever the right of choice shall have devolved upon them, and for the case of the death of any of the persons from whom the Senate may choose a Vice President whenever the right of choice shall have devolved upon them.

Section 5. Sections 1 and 2 shall take effect on the 15th day of October following the ratification of this article.

Section 6. This article shall be inoperative unless it shall have been ratified as an amendment to the constitution by the legislatures of threefourths of the several States within seven years from the date of its submission.

(Ratified Jan. 23, 1933)

TWENTYFIRST AMENDMENT

Section 1. The eighteenth article of amendment to the Constitution of the

322

United States is hereby repealed.

Section 2. The transportation or


importation into any State, Territory, or possession of the United States for delivery or use therein of intoxicating liquors, in violation of the laws thereof, is hereby prohibited.

Section 3. This article shall be inoperative unless it shall have been

ratified as an amendment to the Constitution by conventions in the several States, as provided in the Constitution, within seven years from the date of the submission hereof to the States by the Congress.

(Ratified Dec. 5, 1933)

TWENTYSECOND AMENDMENT

Section 1. No person shall be elected to the office of the President more than twice, and no person who has held the office of President, or acted as President, for more than two years of a term to which some other person was elected President shall be elected to the office of the President more than once. But this Article shall not apply to any person holding the office of President when this Article was proposed by the Congress, and shall not prevent any person who may be holding the office of Presi-

dent, or acting as President, during the term within which this Article becomes operative from holding the office of President or acting as President during the remainder of such term.

Section 2. This article shall be inoperative unless it shall have been ratified as an amendment to the Constitution by the legislatures of threefourths of the several States within seven years from the date of its submission to the States by the Congress.


TWENTYTHIRD AMENDMENT

Section 1. The District constituting the seat of Government of the United States shall appoint in such manner as the Congress may direct:

A number of electors of President and Vice Presidents equal to the whole number of Senators and Representatives in Congress to which the District would be entitled it were a State, but in no event more than the least populous State; they shall be in addition to those appointed by the States, but they shall be considered,

323

for the purposes of the election of President and Vice President, to be electors appointed by a State; and they shall meet in the District and perform such duties as provided by the twelfth article of amendment.

Section 2. The Congress shall have power to enforce this article by appropriate legislation.

(Ratified March 29, 1961)

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TWENTYFOURTHAMENDMENT

Section 1. The right of citizens of the United States to vote in any primary or other election for President or Vice President, for electors for President of Vice President, or for Senator or Representative in Congress, shall not be denied or abridged by the United States or any State by

reason of failure to pay any poll tax or other tax.


(Ratified Jan. 23, 1964)

TWENTYFIFTHAMENDMENT

Section 1. In case of the removal of the President from office or of his death or resignation, the Vice President shall become President.

Section 2. Whenever there is a vacancy in the office of the Vice President, the President shall nominate a Vice President who shall take office upon confirmation by a majority vote of both Houses of Congress.

Section 3. Whenever the Vice President transmits to the President pro tempore of the Senate and the Speaker of the House of Representatives his written declaration that he is unable to discharge the powers and duties of his office, and until he transmits to them a written declaration to the contrary, such powers and duties shall be discharged by the Vice President as Acting President

Section 4. Whenever the Vice President and a majority of either the principal officers of the executive departments or of such other body as Congress may by law provide, transmit to the President pro tempore of the Senate and the Speaker of the House of Representatives their written declaration that the President is unable to discharge the powers and

324

duties of his office, the Vice President shall immediately assume the powers and duties of the office as Acting President.

Thereafter, when the President transmits to the President pro tempore of the Senate and the Speaker of the House of Representatives his written declaration that no inability exists, he shall resume the powers and duties of his office unless the Vice President and a majority of either the principal officers of the executive department or of such other body as Congress may by law provide, transmit within four days to the President pro tempore of the Senate and the Speaker of the House of Representatives their written declaration that the President is unable to discharge the powers and duties of his office. Thereupon Congress shall decide the issue, assembling within forth-eight hours for that purpose if not in session. If the congress, within twenty-one days after receipt of the latter written declaration, or, if Congress is not in session, within twentyone days after Congress is required to assemble, determines by two-thirds vote of both Houses that the President is unable to discharge the


powers and duties of his office, the Vice President shall continue to discharge the same as Acting President; otherwise the President shall resume

the powers and duties of his office.


TWENTY SIXTH AMENDMENT

Section 1. The right of citizens of the United States, who are eighteen years of age or older, to vote shall not be denied or abridged by the United States or by any State on account of age.

325


(Ratified July 1, 1971)

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APPENDIXB

Taken from 1982 IRS Instruction Booklet for 1040 Returns (Page 41). I used the notice for this year because it is a little easier to read. Though the format has changed, the content of this notice has remained the same since then.

IRS PRIVACY ACT & PAPERWORK REDUCTION ACT NOTICE The Privacy Act of 1974 and Paperwork Reduction Act of 1980 say that when we ask you for information we must tell you: a. Our legal right to ask for the information. b. What major purposes we have in asking for the information, and how it

will be used. c. What could happen if we do not receive the information. d. Whether your response is voluntary, required to obtain a benefit, or

mandatory under the law. For the Internal Revenue Service, the laws include: " Tax returns and any papers filed with them. " Any questions we need to ask you so we can:

Complete, correct, or process your return. Figure your tax. Collect tax, interest, or penalties.

Our legal right to ask for information is Internal Revenue Code sections 6001, 6011, and 6012(a), and their regulations. They say that you must file a return or statement with us for any tax you arc liable for. Your response is mandatory under these sections. Code section 6109 and its regulations say that you must show your social security number on what you file. This is so we know who you are, and can process your return and papers. You must fill in all parts of the tax form that apply to you. But, you do not have to check the boxes for the Presidential Election Campaign Fund. We ask for tax return information to carry out the Internal Revenue laws of the United States. We need it to figure and collect the right amount of tax. We may give the information to the Department of Justice and to other Federal agencies, as provided by law. We may also give it to certain cities, states, the District of Columbia, and the U.S. commonwealths or possessions to carry out their tax laws. And we may give it to foreign governments because of tax treaties they have with the United States. If you do not file a return, do not provide the information we ask for, or provide fraudulent information, the law provides that you may be charged penalties and, in certain cases, you may be subject to criminal prosecution. We may also have to disallow the exemptions, exclusions, credits, deductions, or adjustments shown on the tax return. This could make the tax higher or delay any refund. Interest may also be charged. Please keep this notice with your records. It may help you if we ask you for other information. If you have questions about the rules for filing and giving information, please call or visit any Internal Revenue Service office.

326

APPENDIXC

TITLES OF UNITED STATES CODE

•1. General Provisions.

2. The Congress.

"3. The President.

•4. Flag and Seal, Seat of Government, and the States.

•s. Government Organization and Employees; and Appendix.

t6. [Surety Bonds.]

7. Agriculture.

8. Aliens and Nationality.

•9. Arbitration.

•to. Armed Forces; and Appendix.

•11. Bankruptcy; and Appendix.

12. Banks and Banking.

•t3. Census.

•t4. Coast Guard.

15. Commerce and Trade.

16. Conservation.

•t7. Copyrights.

•ta. Crimes and Crlmlnal Procedure; and Appendix.

19. Customs Duties.

20. Education.

21. Food and Drugs.

22. Foreign Relations and Intercourse.

•23. Highways.

24. Hospitals and Asylums.

26. Indians.

26. Internal Revenue Code.

27. Intoxicating Liquors.

•28. Judiciary and Judicial Procedure; and Appendix.

29. Labor.

30. Mineral Lands and Mining.

•31. Money and Finance.

0 32. National Guard.

33. Navigation and Navigable Waters.

:j:34. [Navy.]

0 35. Patents.

36. Patriotic Societies and Observances.

•37. Pay and Allowances of the Uniformed Services.

•38. Veterans' Benefits.

•39, Postal Service.

40. Public Buildings, Property, and Works.

41. Public Contracts.

42. The Public Health and Welfare.

43. Public Lands.

•44, Public Printing and Documents.

45. Railroads.

46. Shipping.

47. Telegraphs, Telephones, and Radiotelegraphs.

48. Territories and Insular Possessions.

"49. Transportation; and Appendix.

60. War and National Defense; and Appendix.

'Thlo title haa been enacted aa law. However, any Appendix to thlo title haa not been enaeted aa law. rrhl.! title waa enacted aa law and haa been repelled by the enaetment of Title 31. JThls Utle haa been eliminated by the enactment of Title 10.

Page III

327

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APPENDIXD

26 U.S.C. SEC. 3402(q) Sec. 3402(q) EXTENSION OF WITIDIOLDING TO CERTAIN GAMBLING WINNINGS.

(1) GENERAL RULE.- Every person, including the Government of the United States, a State, or a political subdivision thereof, or any instrumentalities of the foregoing, making any payment of winnings which are subject to withholding shall deduct and withhold from such payment a tax in an amount equal to 20 percent of such payment.

(2) EXEMPTION WHERE TAX OTHERWISE WITiffiELD. -In the case of any payment of winnings which are subject to withholding made to a nonresident alien individual or a foreign corporation, the tax imposed under paragraph (1) shall not apply to any such payment subject to tax under section 1441(a) (relating to withholding on nonresident aliens) or tax under section 1442(a) (relating to withholding on foreign corporations).

(3) WINNINGS WHICH ARE SUBJECT TO WITHHOLDING.- For purposes of this subsection, the term "winnings which are subject to withholding" means proceeds from a wager determined in accordance with the following:

(A) IN GENERAL.- Except as provided in subparagraphs (B) and (C), proceeds of more than $1,000 from a wagering transaction, if the amount of such proceeds is at least 300 times as large as the amount wagered.

(B) ST A TE-CODUCTED LOTTERIES.- Proceeds of more than $5,000 from a wager placed in a lottery conducted by an agency of a State acting under authority of State law, but only if such wager is placed with the State agency conducting such lottery, or with its authorized employees or agents.

(C) SWEEPSfAKES, WAGERING POOLS, CERTAIN PARIMUfUEL POOLS, JAI ALAI, AND LOTTERIES.- Proceeds of more than $1,000 from-

(i) a wager placed in a sweepstakes, wagering pool, or lottery (other than a wager described in subparagraph (B), or

(ii) a wagering transaction in a parimutuel pool with respect to horse races, dog races, or jai alai if the amount of such proceeds is at least 300 times as large as the amount wagered.

(4) RULES FOR DETERMINING PROCEEDS FROM A WAGER-For purposes of this subsection-

(A) proceeds from a wager shall be determined by reducing the amount received by the amount of the wager, and

(B) proceeds which are not money shall be taken into account at their fair market value.

(5) EXCEPTION FOR BINGO, KENO, AND SLOT MACHINES. -The tax imposed under paragraph (1) shall not apply to winnings from a slot machine, keno, and bingo.

(6) STATEMENT BY RECIPIENT.- Every person who is to receive a payment of winnings which are subject to withholding shall furnish the person making such payment a statement, made under the penalties of perjury, containing the name, address, and taxpayer identification number of the person receiving the payment and of each person entitled to any portion of such payment.

(7) COORDINATION WITH OTHER SECTIONS.- For purposes of sections 3403 and for purposes of so much of subtitle F (except section 7205) as relates to this chapter, payments to any person of winnings which are subject to withholding shall be treated as if they were wages paid by an employer to an employee.

328

Apr!! 12, 19311 [H. R. 3700]

[Public, No. 32]

Public Salazy Tax Act of 19311.

"Orossinoome", definition amended.

?.~· 8: ~·22 (a).

Teachers In Alaska and Hawaii, compeDsation.

A..U, p. 48. I. R. C.' 116 (h). 1udges taking oftloo

on or before June 6, 1932, inclusion of compensation In gross In· come.

?.1{• 8: f·22 (a).

U. 8. consent to taxation of pay of Federal, etc .• omcer or =lo~'f:iv;l 1938.

Condition.

Income tu:. RetrOacllve relief to l:,ta~~el

APPENDIXE [CHAPTER 69)

AN ACT Relating to the taxation of the compen.s&tion of public officers and employee..

Be it e~TUJCted by the Senate a:nd HoWJe of Representatives of the United States oj, America in Oongreaa assembled, That this Act may be cited as the Public Salary Tax Act of 1939".

TITLE I

SECTioN 1. Section 22 (a) of the Internal Re>enue Code (relating to the definition of "gross income") is amended by inserting after the words "compensation for personal service" the following: ("including personal service as an officer or employee of a State, or any political subdivision thereof, or any agency or instrumentality of any one or more of the foregoing)".

SEO. 2. Section 116 (b) of the Internal Revenue Code (exempting compensation of teachers in Alaska and Hawaii from income tax) is repealed.

Soo. 3. Section 22 (a) of the Internal Revenue Code is amended by adding at the end thereof a new sentence to read as follows: "In the case of judges of courts of the United States who took office on or before June 6, 1932, the compensation received as such shall be included in gross income".

SEC. 4. The United States hereby consents to the taxation of compensation, received after December 31, 1938, for personal service as an officer or employee of the United States, any Territory or possession or political subdivision thereof, the District of Columbia, or any agency or instrumentality of any one or more of the foregoing, by any duly constituted taxing authority having jurisdiction to tax such compensation, if such taxation does not discriminate against such officer or employee because of the source of such compensation.

TITLE II

SEC. 201. Any .amount of income tax (including interest, additions to tax, and additional amounts) for any taxable year beginnin_g prior to January 1, 1938, to the extent attributable to compensatiOn for personal sernce as an officer or employee of a State, or any political subdivision thereof, or any agency or instrumentality of any one or more of the foregoing-

( a) shall not be assessed, and no proceeding in court for the collection thereof shall be begun or prosecuted (unless pursuant to an assessment made/rior to January 1, 1939);

(b) if assesse after December 31, 1938, the assessment shall be abated, and any amount collected in pursuance of such assessment shall be credited or refunded in the same manner as in the case of an income tax erroneously collected; and

(c) shall, if collected on or before the date of the enactment of this Act, be credited or refunded in the same manner as in the case of an income tax erroneously collected, in the following cases-

(1) Where a claim for refund of such amount was filed before January 19, 1939, and was not disallowed on or before the date of the enactment of this Act;

(2) Where such claim was so filed but has been disallowed and the time for beginning suit with respect thereto has not expired on the date of the enactment of this Act;

(3) Where a suit for the recovery of such amount is pending on the date of the enactment of this Act; and

(4) Where a petition to the Board of Tax Apreals has been filed with respect to such amount and the Board s decision has not become final before the date of the enactment of this Act.

329

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52 Stat. 447. 28 U. B. 0., Supp.

IV, U l-330b.

Credits and refunds.

Tlmefor1111Dgclalm.

Whore claim boned by statute of llmlta· tlons.

Compensation con· strued.

Moening of terms.

t.~·8:~.1. Restriction on co1·

Jection of taxes by Stata and local author· tties, etc.

Exempt egenclee.

SEc. 202. In the case of any taxable year beginning after December 31, 1937, and before January 1, 1939, compensation for personal service as an officer or emplovee of a State, or any political subdivision thereof, or any agency or mstrumentality of any one or more of the foregoing, shall not be included in the gross income of any individual under Title I of the Revenue Act of 1938 and shall be exempt from taxation under such title, if such individual either-

( a) did not include in his return for a taxable year beginning after December 31, 1936, and before January 1, 1938, any amount as compensation for personal service as an officer or employee of a State, or any political subdivision thereof, or any agency or instrumentality of any one or more of the foregoing; or

(b) did include any such amount in such return, but is entitled under section 201 of this Act to have the tax attributable thereto credited or refunded.

SEC. 203. Any amount of income tax (including interest, additions to tax, and additional amounts) collected on, before, or after the date of the enactment of this Act for any taxable year beginning prior to January 11 1939, to the extent attributable to compensation for personal service as an officer or employee of a State, or any political subdivision thereof, or any agency or instrumentality of any one or more of the foregoing, shall be credited or refunded in the same manner as in the case of an income tax erroneously collected, if claim for refund with res~t thereto is filed after January 18, 1939, and the Commissioner of Internal Revenue, under regulations prescribed by him with the approval of the Secretary of the Treasury, finds that disallowance of such claim would result in the application of tile doctrines in the cases of Helvering a"'ainst Therrell (303 U. S. 218), Helvering against Gerhardt (304 U. S. 405). and Graves et al. against New York ex rei O'Keefe, aecided :March 27, 1939, extending the classes of officers and employees subject to Federal taxation.

SEC. 204. Neither section 201 nor section 203 shall npplv in any case where the claim for refund, or the institution of the suit, or the filing of tile petition with the Board, was, at the time filed or begun, bariOO. by the statute of limitations properly applicable thereto.

SEC. 205. Compensation shall not be considered as compensation within the meanmg of sections 201, 202, and 203 to the extent that it is paid directly or indirectly by the United States or any agency or instrumentality thereof.

SEC. 206. The tlenns used in this Act shall have the same meaning as when used in Chapter I of the Internal Revenue Code.

SEC. 2('/[. No collection of any tax (including interest, additions to tax, and penalties) imposed by any State, Territorry, possession, or local taxing authority on the compensation, received before January 1, 1939, for personal service as an officer or employee of the United States or any agency or instrumentality thereof which is exempt from Federal income taxation and, if a corporate agency or instrumentality, is one (a) a majority of the stock of which is owned by or on behalf of the Umted States, or (b) the power to appoint or select a majority of the board or directors of which is exercisable by or on behalf of the United States, shall be made after the date of the enactment of this Act.

330

Title lnappll<&ble wbere State, etc., tu:es compensation received prior toJan.l, 11139.

E•empt Judges.

~2 Stat. 447. 26 U. S. C., Supp.

IV,cb.l.

Term construed.

BoparabUity ol provisions.

APPENDIX£

SEc. 208. This title shall not apply with r~t to any officer or employee ?f a State, ?r any political subdiVIsion thereof, or any agency or ,instrumentality of any one or more of the foregoing after the secretary of the Treasury has determined and proclaimed that !t is the poli~Y. of such State to coll~t from any individual any tax, mterest, additiOns to tax, or penalties, on account of compensation received by such individual prior to January 1, 1939, for personal service as an officer or emplo:yee of the United States or any agency or instrumentality thereof. In making such determination the Secretary of the Treasury shall disregard the taxation of officers and employees of any corporate agencv or instrumentality which is not exempt from Federal income taxation, or which if so exempt is one (a) a majority of the stock of which is not owned by or on behalf of the United States and (b) the power to appoint or select a majority of the board of directors of which is not exercisable by or on behalf of the United States.

SEo. 209. In the case of the judges of the Supreme Court, and of the inferior courts of the United States created under article III of the Constitution, who took office on or before June 6, 1932, the compensation received as such shall not be subject to income tax Wlder the Revenue Act of 1938 or any prior revenue Act.

SEC. 210. For the purposes of this Act, the term "officer or employee" includes a member of a legislative body and a judge or officer of a court.

SEC. 211. If either title of this Act, or the application thereof to any person or circwnstances, is held invalid, the other title of the Act shall not be affected thereby.

Approved, April 12, 1939.

This Act can be found in U.S. Statutes at Large Public Laws-CH. 59,53 STAT. page 574

331

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APPENDIXF

5 U.S.C. Sec. 552a(e)

(e) Agency requirements

Each agency that maintains a system of records shall-(1) maintain in its records only such information about an individual as is relevant

and necessary to accomplish a purpose of the agency required to be accomplished by statute or by executive order of the President;

(2) collect information to the greatest extent practicable directly from the subject individual when the information may result in adverse determinations about an individual's rights, benefits, and privileges under Federal programs;

(3) inform each individual whom it asks to supply information, on the form which it used to collect the information or on a separate form that can be retained by the individual-

(A) the authority (whether granted by statute, or by executive order of the President) which authorizes the solicitation of the information and whether disclosure of such information is mandatory or voluntary;

(B) the principal purpose or purposes for which the information is intended to be used;

(C) the routine uses which may be made of the information, as published pursuant to paragraph (4)(D) of this subsection; and

(D) the effects on him, if any, of not providing all or any part of the requested information;

(4) subject to the provisions of paragraph (11) of this subsection, publish in the Federal Register upon establishment or revision a notice of the existence and character of the system of records, which notice shall include-

(A) the name and location of the system; (B) the categories of individuals on whom records are maintained in the system; (C) the categories of records maintained in the system; (D) each routine use of the records contained in the system, including the

categories of users and the purpose of such use; (E) the policies and practices of the agency regarding storage, retrievability,

access controls, retnetion, and disposal of the records; (F) the title and business address of the agency official who is responsible for the

system of records; (G) the agency procedures whereby an individual can be notified at his request

if the system of records contains a record pertaining to him; (H) the agency procedures whereby an individual can be notified at his request

how he can gain access to any record pertaining to him contained in the system of records, and how he can contest its contend; and

(I) the categories of sources of records in the system; (5) maintain all records which are used by the agency in making any determination

about any individual with such accuracy, relevance, timeliness, and completeness as is reasonably necessary to assure fairness to the individual in the determination.

(6) prior to disseminating any record about an individual to any person other than an agency, unless the dissemination is made pursuant to subsection (b)(2) of this section,

332

APPENDIXF

make reasonable efforts to assure that such records are accurate, complete, timely, and relevant for agency purposes;

(7) maintain no record describing how any individual exercises rights guaranteed by the First Amendment unless expressly authorized by statute or by the individual about whom the record is maintained or unless pertinent to and within the scope of an authorized law enforcement activity;

(8) make reasonable efforts to serve notice on an individual when any record on such individual is made available to any person under compulsory legal process when such process becomes a matter of public record;

(9) establish rules of conduct for persons involved in the design, development, operation, or maintenance of any system of records, or in maintaining any record, an instruct each such person with respect to such rules and the requirements of this section, including any other rules and procedures adopted pursuant to this section and the penalties for noncompliance;

(10) establish appropriate administrative, technical, and physical safeguards to insure the security and confidentiality of records and to protect against any anticipated threats or hazards to their security or integrity which could result in substantial harm, embarrassment, inconvenience, or unfairness to any individual on whom information is maintained; and

(11) at least 30 days prior to publication of information under paragraph (4)(0) of this subsection, publish in the Federal Register notice of any new use or intended use of the information in the system, and provide an opportunity for interested persons to submit written data, views, or arguments to the agency.

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174 OCTOBER TERM, 1952. APPENDIXG

Opinion of the Court. 344 u.s.

UNITED STATES v. CARDIFF.

CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT.

No. 27. Argued November 17, 1952.-Decided December 8, 1952.

It is not an offense under §§ 301 (f) and 704 of the Federal F:ood, Drug, and Cosmetic Act for the president of a corporation operating a factory engaged in packing and preparing food for interstate distribution to refuse to grant permission for inspectors of the Food and Drug Administration to enter and inspect the factory at reasonable times. Pp. 174-177.

194 F. 2d 686, affirmed.

Respondent was convicted of a violation of § 301 (f) of the Federal Food, Drug, and Cosmetic Act. 95 F. Supp. 206. The Court of Appeals reversed. 194 F. 2d. 686. This Court granted certiorari. 343 U. S. 940. Affirmed, p. 177.

James L. Morrisson argued the cause for the United States. With him on the brief were Acting Solicitor General Stern, Assistant Attorney General Murray, Carl H. Imlay and William W. Goodrich.

John Lichty argued the cause and filed a brief for· respondent.

MR. JusTICE DouGLAS delivered the opinion of the Court.

Respondent was convicted of violating § 301 (f) of the Federal Food, Drug, and Cosmetic Act, 52 Stat. 1040, 21 U. S. C. § 331 (f). That section prohibits "The refusal to permit entry or inspection as authorized by section 704." 1 Section 704 authorizes the federal officers or employees "after first making request and obtaining permis-

1 The violation is made a misdemeanor by 21 U.S. C.§ 333.

334

APPENDIXG

UNITED STATES v. CARDIFF. 175

174 Opinion of the Court.

sion of the owner, operator, or custodian" of the plant or factory "to enter" and "to inspect" the establishment, equipment, materials and the like "at reasonable times." 2

Respondent is president of a corporation which processes apples at Yakima, Washington, for shipment in interstate commerce. Authorized agents applied to respondent for permission to enter and inspect his factory at reason{tble hours. He refused permission, and it was that refusal which was the basis of the information filed against him and under which he was convicted and fined. 95 F. Supp. 206. The Court of Appeals reversed, holding that § 301 (f), when read with § 704, prohibits a refusal to permit entry and inspection only if such permission has previously been granted. 194 F. 2d 686. The case is here on certiorari. 343 U. S. 940.

The Department of Justice urges us to read § 301 (f) as prohibiting a refusal to permit entry or inspection at any reasonable time. It argues that that construction is needed if the Act is to have real sanctions and if the benign purposes of the Act are to be realized. It points out that factory inspection has become the primary investigative device for enforcement of this law, that it is from factory inspections that about 80 percent of the violations are discovered, that the small force of inspectors makes factory inspection, rather than random sampling

2 Section 704 reads as follows: "For purposes of enforcement of this Act, officers or employees duly designated by the Administrator, after first making request and obtaining permission of the owner, operator, or custodian thereof, are authorized (I) to enter, at rmsonable times, any factory, warehouse, or establishment in which food, drugs, devices, or cosmetics are manufactured, processed, packed, or held, for introduction into interstate commerce or are held after such introduction, or to enter any vehicle being used to transport or hold such food, drugs, devices, or cosmetics in interstate commerce; and (2) to inspect, at reasonable times, such factory, warehouse, establishment, or vehicle and all pertinent equipment, finished and unfinished materials, containers, and labeling therein."

335

IRS HUMBUG

176 OCTOBER TERM, 1952.

Opinion of the Court. 344 u.s.

of finished goods, the only effective method of enforcing the Act.

All that the Department says may be true. But it does not enable us to make sense out of the statute. Nowhere does the Act say that a factory manager must allow entry and inspection at a reasonable hour. Section 704 makes entry and inspection conditioned on "making request and obtaining permission." It is that entry and inspection which § 301 (f) backs with a sanction. It would seem therefore on the face of the statute that the Act prohibits the refusal to permit inspection only if permission has been previously granted. Under that view the Act makes illegal the revocation of permission once given, not the failure to give permission. But that view would breed a host of problems. Would revocation of permission once given carry the criminal penalty no matter how long ago it was granted and no matter if it had no relation to the inspection demanded? Or must the permission granted and revoked relate to the demand for inspection on which the prosecution is based? Those uncertainties make that construction pregnant with danger for the regulated business. The alternative construction pressed on us is equally treacherous because it gives conflicting commands. It makes inspection dependent on consent and makes refusal to allow inspection a crime. However we read § 301 (f) we think it is not fair warning (cf. United States v. Weitzel, 246 U. S. 533; McBoyle v. United States, 283 U.S. 25) to the factory manager that if he fails to give consent, he is a criminal. The vice of vagueness in criminal statutes is the treachery they conceal either in determining what persons are included or what acts are prohibited. Words which are vague and fluid (cf. United States v. Cohen Grocery Co., 255 U. S. 81) may be as much of a trap for the innocent as the ancient laws of Caligula. We cannot sanction taking a

336

APPENDIXG

UNITED STATES v. CARDIFF. 177

li4 Opinion of the Court.

man by the heels for refusing to grant the permission which this Act on its faee apparently gave him the right to withhold. That would be making an aet criminal without fair and effective notice. Cf. Herndon v. Lowry, 301 u. s. 242.

Affirmed.

MR. JusTICE JACKSON concurs in the result.

MR. JusTICE BuRTON dissents.

337

IRS HUMBUG

APPENDIXH FRED

IN THE UNITED STATES DISTRICTUe<)ORTrrw:: T CDURT FOR THE DISTRICT OF COLOJii.'60RIG7 Of' Cvt.OfiM·O

Criminal Case No. 84 - CR 1· 9 Q - UJ4 J UN 29 P 4: I 2

UNITED STATES OF AMERICA, .

Plaintiff,

vs.

JAMt::O M,\1,::_.;.·_ ~Kt::R L:LERK

lY DEP. CLK.

FRANK KOWALIK, JR.,

Defendant.

INFORMATION 26 u.s.c. s 7203

COUNT I

The United States Attorney charges:

That during the calendar year 1978, FRANK KOWALIK, JR., who was a resident of Englewood, in the State and District of Colorado, received a gross income of approximately $---: that by reason of such income he was required by law, following the close of calendar year 1978 and on or before April 15, 1979, to make an income tax return to the district director of Internal Revenue for the Internal Revenue District of Colorado at Denver, in the state and District of Colorado, or to the director of the Internal Revenue Service Center in Ogden, Utah, stating specifically the items of his gross income and any deductions and credits to which he was entitled: and that knowing the foregoing facts, he willfully and knowingly failed to make said income tax return to said district director, said director of Internal Revenue Service Center or any other proper officer of the United States.

The foregoing was in violation of Title 26, United States Code, Section 7203.

COUNT II

The United States Attorney further charges:

That during the calendar year 1979, FRANK KOWALIK, JR., who was a resident of Englewood, in the State and Diatrict of Colorado, received a gross income of approximately $----; that by reason of such income he was required by law, following the close of calendar year 1979 and on or before April 15, 1980, to make an income tax return to the district director of

338

APPENDIXH

Internal Revenue for the Internal Revenue District of Colorado at Denver, in the State and District of Colorado, or to the director of the Internal Revenue Service Center in Ogden, utah, stating specifically the items of his gross income and any deductions and credits to which he was entitled~ and that knowing the foregoing facts, he willfully and knowingly failed to make said income tax return to said district director, said director of Internal Revenue Service Center or any other proper officer of the United States.

The foregoing was in violation of Title 26, United States Code, Section 7203.

Respectfully submitted,

-2-

339

IRS HUMBUG

AO 13 ( 1 0/82) SUMMONS IN A CRIMINAL CASE APPENDIX I ~nite~ ~tntes ~istrid QJ:ourt

DISTRICT Colorado

UNITED STATES OF AMERICA OOCKET N~ ·1. """ ·\..' •.. ' L!- 19:1 v. MAGISTRATE CASE NO.

FRANK KOWALIK, JR. TO: (NAME AND ADDRESS OF DEFENDANT)

Frank Kowalik, Jr. 4111 N. Portland Oklahoma City, OK 73112

YOU ARE HEREBY SUMMONED to appear before the 0 U.S. District Court or Rl U.S. Magistrate at the time, date and place ·~t forth below.

PLACE ROOM NO.

United States Courthouse Courtroom Cl69 1929 Stout Street Denver, Colorado DATE AND TIME

July 17, 1984 - 11:00 a.m.

To answer a criminal 0 Indictment 11!1 Information 0 Complaint 0 Violation Notice

CHARGING VOU WITH A VIOLATION OF UNITED STATES CODE TITLE 26 • SECTION Z2QJ DESCRIPTION OF OFFENSE: '

Willful failure to file income tax returns.

C'?

::::::::. c;_:.)

·J "'' - "' : . .!J

-' = --, ·-

,_ ·'

,..:.-;:

~~ -~-j c:.J :.."::t,_ .. ·:·~

~·;; ·-' ,,

.. ·-.. ·-~:

:-:

;

PRIOR TO APPEARANCE IN COURT REPORT AS FOLLOWS: PRETRIAL SERVICESROOM C-122•4~11-: ~--~~-~-

u.S. MARSHAL, ROOM C-3250'··-\:...,..,..,

:JtiiiiSCM&IiiiCLERK OF COURT(l) OATE

July 2, 1984

1) Clerk m•y sign • tummons on'" lndlctm•nt or Information supported by • showing of prott.ble c•use under Olltl'l. F~•r~l Rules of the Crlmlnill Procedure Procedure, Rule 9.

IMPORT ANT: Enlarged for your reading convenience. 1) Clerk may sign a summons on an indictment or information supported by a

showing of probable cause under oath. Federal Rules of the Criminal Procedure. Procedure Rule 9.

340

Frank Kowalik, Jr.

Certificate of Assessments and Payments Name of Taxpayer on record Address (Number, street~ city, and state) on record riN or SSN

5996 S Leyden St. Frank 5o Karen Kowalik Englewood, Colorado 80111

Date Explanation of Assessment Credit Balance DlN or Transactions (Abatement} (Credit Reversal} Account Nuomer

(B) (b) (c) (d) (e) (f)

Remittance 87212-107-4-15-76 return filed 7,930.24 2,020.22 44099-76

Withholding 5o excess FICA 6,118.85 Unallowable tax hold 208.83

84247-321-Audit deficiency .00 00630-76 Unallowable l:\7212-107-tax hold reversed 208.83 44099-76 Interest due 84247-321-

12-13-76 taxpayer 9.17 00630-76

12-13-76 Refund principle & · interest (218.00)

-0-

Income

205-16-8121

23C Date (g)

6-14-76

12-13-76

PIWiod Ending

(h)

Dec. 31, 1975

> 1-0

~ z tj ......

I certify that the foregoing transcript of the taxpayer named above in respect to the taxes specified is a true and complete transcript for the period stated, and all MM•amenQ. )( penalties. interests. abatements. credits, refunds. and advance or unidentified payment relating thereto as disclosed by the recorda of this oHice as of the date of this certific• tion are shown therein. '--1

Signature of Director (required tor cer~m-c io Location D. E. Pecorella, Director~· ~~ By: Carol Keesler, Chief, Ace un ing Branch Ogden, Utah

Date

September 12, 1984

Form434Q (Rev. 7-80) Use and issue first .. Rev. 7-74_. 'Oll. S. GOVEI!NMENT PHI N1'I N•; ·,.~·FJC~ 1':)8;> 52:•-064t595 3 Department of the Treasury- Internal Revenue Service

Frank Kowalik, Jr.

Certificate of Assessments and Payments Income

Name of Taxpayer on record Address (Numbllr. str~ttt. city. 11nd st•ttt} on record IEIN or SSN 5996 S Leyden St. Frank Jr Kowalik Englewood, Colorado 80111 205-16-8121

Date Explanation of Assaument Credit Balance DlN or 23C Date .... iod

Transactions (Absr•,..ntl (Credit R•v•r•al} Account Numba' Ending 1•1 (b) (c) (d) I•J (fl (gJ I hi

Dec. 31, 1978

8-18-80 Delinquent notice Not liable 29249-683-

l0-Q9-80 this period 00427-80 Substitute for 114~U-~bl>-

9-lS-80 return prepared .00 .00 01007-80 ll-03-80 by Examination Division

-o-

I conily that the forOJICIInJI tranaaopt of the lupeyer na- above in r-et 10 the taxea _.:ifled ia a truo and -'•Ill tr-lpt for the period atallld, and ell -ta. PM81liea .. inlereata. abatements. credits. refunda. and advance or unidentified payment relating thereto as diaciOMd by ttw recorda of lhl• office u of ct. dat. of this canific. tlon are .._ -•ln.

location Date

Ogden, Utah September 12, 1984

APPENDIXL

JUDGMENT AND PROBATION/COMMITMENT ORDER., , . 31n the presence of the attorney for the sovernment the defendant appeared in person on this date --------------1--1 L_J WITHOUT COUNSEL However the court advised defendant of riaht to counsel and asked whether defendant daired to have

counsel appointed by the court and the. defendant thereupon waived assistance of counsel.

LlLJ WITH COUNSEL L~£!LA...:.!ii!!.~.!.U_!l.!!_d_§£_O,!L~...£~!!I... __________________ .J (Name of Coun1el)

~L____j GUILTY, and the court being satisfied that l.__l NOLO CONTENDERE, LlLJ NOT GUILTY ~ there is a factual basis for the plea,

FINIIIItG I

JUD6MEIIT

SENTENCE OR

PROBATION ORO£R

SP£CIAL CONIITIONS

OF PROBATION

AOOITI!mAL CONDiTIONS

OF PROBATION

COMMITMENT RECDMMEN·

DATION

SIGNED IT

{ L____j NOT GUILTY. Defendant is discharaed

There being a tmd!IQ(verdict of ULJGUILTY.

Defendant has been convicted as charged of the offense(s) of failure to file Income tax returns, In violation of Title 26 U.S.C. §7203.

The court asked whether defendant had anything to say why judGment should no! be pronounced Bt-cau!.t> no sufficient cause to tht' co•:'"_·ary was shown, or appeared to the court, the court adtudged the defendant "uilt\o· as charged and conv•cled and ordered that: The df"fen~l.-: is hereby committed to the cunodv of the Attorney General or his authoriZed repre~entativ~ for Imprisonment for a Pl"riod of one (1) year as to Count I and a term of Imprisonment for a period of one (I) year as to Count II, said term of Imprisonment Imposed as to Count ll to run consecutively with the term of Imprisonment lm posed in Count I.

IT IS FURTHER ORDERED that the defendant pay a fine to the United States of America In the amount of $10,000.00 on each of said Counts I and II, for a total fine of $20,000.00, said fine to stand on commitment.

In addition to the special conditions of probation imposed abo-ve, it is hereby ordered that the general conditions of probation set out or the reverse s1de of thi~ judiment be imposed lhe Court may change the conditions of probation, redute or extend the period of probatior. ,,d at any time during the probation period or within a maximum probation period of five years permitted by la>N, may inue a warran~ J."ld r~voke probation for a violation occu!ring durina the probation period

The court orders commitment to the custody of the Attorney General and recommends, It Is ordered that the Clerk del11·~·· aBifllll ~opy of this judeme:-: aM-ctrJIIIIrtnt to the U.S Ma·· sftaTOr"!iherc.~alified officer.

L.!J U S District Jud&e

343

IRS HUMBUG

APPENDIXM

11.&. Brpartmmt ofJu.stict Jlntttb &tatts 'antlt O!nmmi&shtn

<lt~tUV <lt)Jut, 8arglanb 20815

O!trtitlcatt of'arnlt

Know all Men by these Presents:

that KOWALIK FRANK

It having been made to appear to the United States Parole Commission

, Register No. 18636-013 , a prisoner in

the OKLA HALFWAY HSE, OKLA CITY. OKLAHOMA is eligible to he PAROLED, and in that said prisoner substantially ob5erved the rules of the institution, and in the opinion of the Commission said prisoner's release would not depreciate the seriousness of this offense or promote disrespect for the law, and would not jeopardize the public welfare. it is ORDERED by the said United States Parole Commission that said prisoner be PAROLED on

_--~:.A!.'U"'G""U-"S-"T_3"'0"----------· J9.JIL; and that said prisoner is to remain within the limits of

_..!W!E<.ilESt.!T.!lE.!!R!l.N'-'/O~KLAH~:!!!!.O~MA!!L ___ until MAX 28 ,t9...n...;

Given under the hands and the seal of the United States Parole Commission this .l2..Ili._ day of AUGUST , nineteen hundred and .Jl..L..

Advisor---------------------------------

Probation Officer ---'T~RA=V~I~S~R..:.· _W~I~N:!!D~HAM=~·__.:::C~US~P~O~,L.::O:!:KLA=:!!H~OMA~_:C~I::.;TY~,c..__::O::::KLAR=~O~MA~------

I have read, or had read to me, the conditions of release printed on the reverse of this cenificate and received a copy thereof. I fully understand them and know that if I violate any, I may be recommitted. I also understand that special conditions may be added or modifications of any condition may be made by the Parole Commission upon no~bylaw. ,

___:ztd-tP·-~ ~~~.c.t £_ 1 EJc ?? ·- o / 3

w~mt::i;w£,~ ,.,..,

UNITED STATES PAROLE COMMISSION: 0 _,....__

The above-named persoa,.was released on the~y af Ptllb , J9nith a_ total otr:l.S"cJays

remaining to be served.· ~u · ; ~ ~ !>~ ---~,,~ p-/~~·/ ~· -~tn (0;(...,_.-;; I '

PAA<X..a H-1 SFJO. I>

1. Inmate Coov

344

APPENDIXM

CONDITIONS OF RELEASE I. You shall go directly lo the dislricl. shown on this CERTIFICATE OF RELEASE !unless released In the <:uslody of other

authorities). Wathm three days after your arnval. you ~hall report to your parole adva~or 1f you have one, and the United State~ Prubatiun

Office~ whl~~~ name appc~rs o~ this C'cnifi~·atc. 1_1_·. in ~my cmcrgcnc:y yn~ arc u~<thlc to g~t in. touch with your parole advisor. or your probatton olttccr or the Umtcd State~ Prohal!on Ollie:~. you shallc:ommun~c.:atc w1th the Umtcd StJll'~ P<Jrolc Ctnnmi~~ion. Department of Justice. Chevy Chase. Maryland 20S 15.

2. If you are released to the custot..ly of other authoritiC:'<.. amJ <tfrcr your rclca-.c from phy~ic:al cu~tody of ~uch authnritic!-1, you are unable In report 10 lhe United Stales Prohmion Officer 10 whom you arc ass1gned within three days. you shall rcpon instead to the nearest United States Probation Officer.

3. You ~hall not leave the limits fixed hy this CERTIFICATE OF RELEASE without written permission from your probation officer. 4. You shall notify your probation offi<:cr within 2 days of any change in your place of residence. 5. You shall make a complete and truthful written rcpon (on a tl>rm provided for that pUilJ<>sC) to your probation officer between the

lirst and third day of each month. and on the final day of parole. You shall also repon to your probation officer at other times as your probation officer directs. providing complete and truthful information.

6. You shall not violate any law. Nor shall you asso<:iatc with persons engaged in criminal activity. You shall get in touch within 2 days with your probation officer or the United States Probation Office if you arc arrested or questioned by a Jaw-enforcement officer.

7. You shall not enter into any agreement to act as an .. informer .. or special agent for any law-enforcemenl agency. 8. You shall work regularly unless excused hy your probation officer. and support your legal dependents. if any. to the best of your

ability. You shall repon within 2 days to your probation officer any changes in employment. 9. You shall not drink alcoholic beverages to cx.rcss. You shall not purcha!->C. pos!<.Cs~. U\C, or admini~ter marihuana or narcotic or

other habit-forming or dangerous drugs. unless prescribed or advised by a physician. You shall not frequent places where such drugs are illegally sold, dispensed. used or given away.

10. You shall not associate with per.;ons who have a criminal record unless you have pennission of your probation officer. I I . You shall not possess a fireann or other dangerous weapon. 12. You shall pennit confiscation by your probation officer of any materials which your probation officer believes may constitute

contraband in your possession and which your probation officer observes in plain view in your residence, place of business or occupation. vehicle(s) or on your person.

13. You shall make a diligent effort to satisfy any fine. restitution order. coun costs or assessment. and/or court ordered child suppon or alimony payment that has been. or may be. imposed. and shall provide such financial information as may be requested. by your Probation Ofticer. relevant to lhe payment of the obligation. If unable to pay the obligation in one sum. will cooperate with your Probation Officer in establishing an installment payment schedule.

SPECIAL CONDITIONS: (Applicable only if indicated) ( ) You shall participate as instructed by your probation officer in a program approved hy the Parole Commission for treatment of

narcotic addiction or drug dependency. which may indude testing and examination lo determine if you have reverted lo the use of drugs. You shall participate in a community based program for the treatment of akoholism as directed by your probation officer. You shall participate in an in-patient or an out-patient mental health program as directed by your probation officer. You shall reside in and participate in a program of the Community Treatment Center as instructed until discharge by the Center Director. but no later than I 20 days from admission. Other:

This CERTIFICATE will become effective on the date of release shown on the reverse side. If the release fails to comply with any of the conditions listed above, the releasee may be summoned to a hearing or retaken on a warrant issued by a Commissioner of the U.S. Parole Commission and reimprisoned pending a hearing to determine if the release should he revoked.

Infonnation concerning a releasee under the supervision >f the U.S. Parole Commission may be disclosed Ill a person or persons who may be exposed to harm through contact with that particular releasee if such disclosure is deemed to he reasonably necessary to give notice that such danger exists. Information concerning relcasees may be released to a law enforcement agency a~ required for the protection of

the public or the enforcement of the conditions of the release.

345

IRS HUMBUG

APPENDIXN

rf<AA.JK kowA-L-11<.. Jtf. /8{, 3~- 0/3

c E: ~ ... ,..c. aeR-e of- .P~ YO \e - Pa. Vo 1-eJ a .... v;- "'3o - Ire....,

eJ> eft c.c:J ~ ~e -1 '112 7

; Plea.sc l.?L...~~d-rti....-J-1 NoftU,'tt~r-<t.M.£.••1~'1-€.. t=a.C/-'' ;, : '1-t..~ T.-ef.ec.u.icJ ~u..~d Ce.v•'t-t~t<"~ ~ ,Oa.J>~

;L cl.o (l)oi"' Itt "+€"' c/ '1-e ~ v J-1 cv .... y {t>u1lt-r Ol-L 1"-a..r tZ.Jifs

'09r-t'hthfd 12t1M 1 ~ C,vt/ 12-;«15 ~ tG ~& tc a..~l y -7G. ,,, '7 '1-((,J uYt II t9--'>.e j '-'-,~kc. ate tit a.-. y w ct. y .

' ,.(a.., '1-b Jl ;l: ()n... it"' vC -+-~ Cl a../ 111) 0-.vtc{'~, c~ T~$7" 'i~ '1--U.. c.--Y- '-l-Iz~

<t t.PfU W9-e ry a?IW-j crcf} L)~l ctJl<Y Co->tOl d-u/ q_._./

, :/J/sely T:/.Vt.p1·t e-6?, ed, L c;X e~-~ 'f-A /5 c'J.oc •.))tJ e•~t- '1-1) So'f.lc;(l 'L d e{a_; It>(} ;( el ea.~c ~ p~ ICvl(.IJL €(. ec-erd-JVYf. /<;, To.Ru..z, to o __ -...,L(:(.J-,6'-.( ~~~ J C&-.1c-e.ve.u .. 6 Ft>'le. u)!tt.:.Cit -:c wtll c~-1-,~, ve {../)

.. C lP-vt.'t-e'l /:

·tl&t'!> {, U{vt::lt.c..lCJ..A.oftcrvt. tits -/c., /1-e.. CCN.<:>cr/.v..<.-cl ' ( ~ f f o..- P cu-vf- "!}-- ~ ~ J- C e v 11 H c-4 t!(r- .Oo..L ~

346

APPENDIXO THE CODE OF LAWS OF THE UNITED STATES

OF AMERICA

TITLE 1-GENERAL PROVISIONS

This tiUe was enacted bfl act Julf/30, 1947, ch. 388, § 1, 61 Stat. 633

Chap.

1. 2.

3.

Rules of construction .............................. . Acts and resolutions; formalities of

enactment; repeals; sealin& of in-struments ................................................ .

Code of Laws of United States and Supplements; District of Columbia Code and Supplements ........................ .

POSITIVE LAW; CJTAnON

Sec. 1

101

201

This title has been made positive law by section 1 of act July 30, 1947, ch. 388, 61 Stat. 633, which provided In part that: "Title 1 of the United States Code enti· tied 'General Provisions', Is codified and enacted Into positive law and may be cited as '1 U.S. C., t -."'

REPEALS

Section 2 of act July 30, 1947, provided that the sections or parts thereof of the Statutes at Large or the Revised Statutes covering provisions codified In this Act are repealed Insofar as the provisions appeared In former Title 1, and provided that any rights or liabilIties now existing under the repealed sections or parts thereof shall not be affected by the repeal.

WRITS or ERROR

Section 23 of act June 25, 1948, ch. 646, 62 Stat. 990, provided that: "All Acts of Congress referring to writs of error shall be construed as amended to the extent necessary to substitute appeal for writ of er.ror."

TABLE

Showing where former sections of Title 1 and the laws from which such former sections were derived, have been Incorporated In revised Title 1.

Title I Fof'1'7Ur

Secti<nU ReWed Stlltutu Statvtesat Lllrve

! ................ R.S .. 11 ........................................................... .. 2 ................ R.S .. I 2 ............................................................ . 3 ................ R.S .. 13 ........................................................... . 4 ................ R.S .. I 4 ............................................................ . 5 ................ R.S .• 15 ............................................................ . 6 ................ Jwte II, 1940, ch. 325, II, 54 Slat. 305 .... .. 2l .............. R.S .. I7 ............................................................ . 22 .............. R.S .. I8 .......................................................... .. 23 .............. R.S .. 19 ........................................................... .. 24 .............. R.S .. I 10 .......................................................... . 25 ..........•... R.S .. III .......................................................... . 26 .............. Nov. I, 1893, 28 Stat. App. 5 ....................... ..

Mar. 2, 1895, ch. 177, II. 28 Slat. 769. 27 .............. Mar. 8, 1920, ch. 94, 11. U Slat. 520 .......... . 28 .............. R.S., 112 ......................................................... .. 29 .............. R.S .• 113 .......................................................... .

Mar. 22. 1944, ch. 123, 58 Slat. 118.

Page 1

TIUei New

Seclioru

I 2 3 4 5 8

101 102 103 104 105 108

107 108 109

Title I Fomur

Sectkm• Reviled Statutes Statvi<Jat lArue

29a ............ R.S .•• 5699 ...................................................... .

~g~:::::::::::: r~·~:i. 1l::5,"e~.~-US.a ~~i.Wl::::::: June 20, 193a, ch. 830, 19, 49 Stat. 156!. June 18, 1938, ch. 477, II, 52 Slat. 780.

g~~:::::::::::: ~1: 1 ~.::::::::::::::::::::::::::::::::::::::::::::::::::::::::· ~~~:::::::::::: :~ :W.1r:a.·~1i.S:o.111i.4:s~~/r::i·:::::

Mar. 2, 1829, eh. 588, 12, 45 Stat. 1541. 53 ..•........... May 29, 1938, eh. 910, 13, 45 Stat. 1007 .... . 54 .............. May 29, 1938, ch. 910, I 4, 45 Slat. 1007 .... .

Mar. 2, 1929, ch. 588, 13. 46 Slat. 1641. 64a ............ Mar. 2, 1929, ch. 588, 14. 45 Slat. 1542 ...... .

Mar. 4, 1933, ch. 282, I I, 47 Slat. 1803. June 13. 1834. eh. 483, 111. 2, 48 Slat.

948. 54b ............ Mar. 2, 1929, ch. 588, 15, 45 Slat. 1542 ...... .

Mar. 4, 1933, ch. 282, II, 47 Slat. 1803. June 13, 1934, ch. 483, 111. 2, 48 Stat.

948. 64c ............ Mar. 2. 1929, ch. 588. lB. 45 Slat. 1542 ...... . 64d ............ Mar. 2. 1929, ch. 588, 17, 45 Slat. 1642 .•..•.. 55 .............. May 29. 1938, ch. 910, 15. 45 Slat. 1007 .... . 58 ......•....... May 29, 1928, ch. 910, lB. 45 Slat. 1007 .... . 67 .............. May 29, 1938, ch. 910, 17. 45 Slat. 1008 .... . 58 .............. May 29, 1928, ch. 910, 18, 45 Slat. 1008.. .. . 59 .............. May 29. 1938, ch. 910, 110, 45 Slat. 1008 .. . 80 .............. Mar. 3, 1933, ch. 202, 12. 47 Slat. 1431 .•.....

Title 1 New

Seetforu

110 Ill 112

113 114 201 202

203 204

205

208

207 208 209 210 211 212 213

Rep.

CHAPTER I-RULES OF CONSTRUCTION

Sec. 1. Words denoting number, gender, etc.• 2. "County" as Including "parish". etc.• 3. "Vessel" as Including all means of water

transportation. 4. "Vehicle" as Including all means of land

transportation. 5. "Company" or "association" as Including

successors and assigns. 6. Limitation of term "products of American

fisheries."

§ 1. Words denotlnr number, render, and so forth

In determining the meaning of any Act of Congress, unless the context indicates otherwise-

words Importing the singular Include and apply to several persons, parties, or things;

words importing the plural include the singular;

'So In original. Does not conform to .section eatehllne.

347

APPENDIXP IRS HUMBUG Page 23 TITLE 26-INTERNAL REVENUE CODE

J954 Codt KClion number

770l(aX28l ...........•.•••.•...• 710l(b) ....................•.......• 3791!b). 770Hcl!ll ......................... 3791<c>. 1701(C)(2) ............•••..........

J9J9Codt tection number

180Ha> ....•............•........... Reora. Plan No. 26 or 1950. 780l(b) ............................. 393()(&). 3931. 780Hc> ............................. 3932. 7802 .................................. 3900. 1803<a> ............................. 3920, 3921, 4000, 404Ha>. 180J(b)(l) ........................ 4040. 1803!bl!2) ....•................... 390Ub>. 7803(c) ............................. 3360<bX2XBl, 3943, 3992, 4010. 1803<d> ..•.•....•.••..•.......•..•.• 3915, 3916, 3977, 3918. 7804!&) ...•........•....•........... 616 R.A. 1951. 7804!bl •.......•...................• 3, P.L. 567 <82d Cona.>. 7805(&) ............................. 82, 379l(a). 7805(bl ........••..•...............• 379Hbl. 7605(C) ............................. 390)(&)(2). 7808(&) ..•.....•....•.•..•..•.•..•.. 2. 7806<bl •.•..........•.••......••••.. Ch. I, Sec:. 8, P.L. I. 1801(&) ....•.....•....•.••.•...•••.• 7807(b) ............................ . 1808 ....................•....•.......• 3910. 7609!&) ............................. 2480, 391Ha>. 7809(b) ............................. 397l. 7809(bXI> .•.................••..• 3971<bl!l). 7609!bX2l .......................• 397Hb><2>. 7809<bX3l ........................ 397l<3l. 1851<a> ............................. See 26 U.S.C. 3, 4. 765Hb) ......................•.•...• Stt 28 U.S.C. 4<bl. 785Hc> ..............•••...•.•.•.•.. See 26 U.S.C. 4<c>. 785Hd>. .•.............•.....•.••... Ste 26 U.S.C. 4<d>. 7852(&) ············•·····•·••··•···· 3803. 7852(b) ............................. Stt 26 u.s.c. 4(&), 5, 1. 7852(C) •.................•.....•.... 7852<d>. .•...•...•.•.....•.•..•....• 108 R.A. 1941; 109 R.A. 1942; 136 R.A.

1943: 214 R.A. 1950; 6U R.A. 1951; Set 22<7>.

8001 .................•...•••.•...•.... 5000. 8002 ·······················•·•···•·•·• 5001. 8003 ......•....................•.....• 5002. 8004 .................................. 5003. 8005 ...................•.......•.•.•.• 5004. 8021 ...................•...•.•.•.•••.. 5010. 8022 ···············•···········•······ 5011. 8023 ·····················•···•·•····•• 5012.

An Act to revise the Internal revenue laws of the United States.

Be it enacted by the Senate and House of Representatives of the United States of AmerIca In Congress assembled, That

(a) Citation

11> The provisions of this Act set forth under the heading "Internal Revenue Title" may be cited as the "Internal Revenue Code of 1954".

<2> The Internal Revenue Code enacted on February 10, 1939, as amended, may be cited as ,the "Internal Revenue Code of 1939".

(b) Publication

This Act shall be published as volume 68A of the United States Statutes at Large, with a comprehensive table of contents and an appendix; but without an index or marginal references. The date of enactment, bill number, public law number, and chapter number, shall be printed as a h~adnote.

(c) Cross reference

For saving provisions, effective date provisions, and other related provisions, see chapter 80 <sec. 7801 and following) of the Internal Revenue Code of 1954.

<d) Enactment of Internal Revenue Title into law

The Internal Revenue Title referred to In subsection <a><l> Is as follows: • • •.

348 <Aug. 16, 1954, ch. 736, 68A Stat. 3.)

Subtitle A. B. c. D. E.

F. G.

H.

I.

INTERNAL REVENUE TITLE

Income taxes §§ 1-1564.' Estate and gift taxes U 2001-2622. Employment taxes§§ 3101-3501. Miscellaneous excise taxes §§ 4041-4998. Alcohol, tobacco, and certain other excise

taxes §§ 5001-5872. Procedure and administration §§ 6001-7852. The Joint Committee on Taxation

§§ 8001-8023. Financing of Presidential election campaigns

§§ 9001-9042. Trust Fund Code § § 9500-9602.

AMENDMENTS

1982-Pub. L. 97-248, title III, §§ 307(b)(2l. 308(a), Sept. 3, 1982, 96 Stat. 590, 591, provided that, applica· ble to payments of Interest, dividends, and patronage dividends paid or credited after June 30, 1983, the subtitle C heading Is amended to read ""Employment taxes and collection of Income tax at source". Section 102<al, of Pub. L. 98-67, title I, Aug. 5, 1983, 97 Stat. 369, repealed subtitle A ( §§ 301-308> of title III or Pub. L. 97-248 as of the close of June 30, 1983, and provided that the Internal Revenue Code of 1954 (this title> shall be applied and administered <subject to certain exceptions> as If such subtitle A <and the amendments made by such subtitle A> had not been enacted.

1981-Pub. L. 97-119, title I, § 103(c)(2l, Dec. 29, 1981, 95 Stat. 1638, added subtitle I heading "Trust Fund Code".

1976-Pub. L. 94-455, title XIX, § 1907<2l, Oct. 4, 1976, 90 Stat. 1836, substituted In subtitle G heading "The Joint Committee on Taxation" for "The Joint Committee on Internal Revenue Taxation".

1974-Pub. L. 93-443, title IV, § 408<a>. Oct. 15, 1974, 88 Stat. 1297, added subtitle H heading "Financing of Presidential election campaigns".

TITLE REFERRED TO IN OTHER SECTIONS

This title Is referred to In title 2 sections 60c-1, 65c, 651; title 12 sections 3413, 3607; title 15 sections 78kkk, 631b; title 16 section 470b; title 18 section 4043; title 20 section 1087-1, 1087-1a. 1087ee; title 22 section 3307; title 25 section 1716; title 29 sections 49d, 1002, 1301, 1453; title 30 section 1473; title 31 sections 1324, 3105, 3106, 3124, 3701, 3711, 3718; title 36 sections 1514, 1614, 1714, 1814, 1914, 2014, 2114, 2214; title 42 sections 401, 408, 416, 4636, 5055, 8217; title 49 section 326.

TABLE OF CONTENTS

This Table of Contents is inserted for convenience of users and was not enacted as part of the Internal Revenue Code of 1954.

Subtitle A-Income Taxes Chapter Sec:. 1. Normal taxes and surtaxes...................... I 2. Tax on self-employment income............. 1401 3. Withholding of tax on nonresident

aliens and foreign corporations and tax-free covenant bonds........................ 1441

4. Rules applicable to recovery of exces-sive profits on government contracts. 1471

5. Tax on transfers to avoid Income tax.... 1491 6. Consolidated returns................................. 1501

11. 12. 13.

Subtitle B-Estate and Gift Taxes Estate tax ................................................... . Gift tax ....................................................... . Tax on certain seneration skipping

transfers ................................................. .

• SecUon numbers edltoriaUy supplied.

2001 2501

2601

INDEX

abortion issue: 260 Adams, Samual: 89 aliens (nonresident): 296, 297, 299 Amendment:

Eighth: 153 Fifth: 5, 17, 18, 19, 27, 35, 36, 78,

102, 123, 128, 149, 196, 202 231, 234,253,270

First: 27, 29, 102, 123, 149,245, 260 Fourth: 5, 102, 123, 127, 149, 299 Fourteenth: 83, 215 Ninth: 152 Thirteenth: 14,27,35,36,51,57,58,

78, 82-85, 99, 153, 196, 201, 215, 253

Sixth: 153 Sixteenth:11,38,40,41,73,81,144,

278 No new taxing power: 40 Enforcement clause: 40

amountyouowe: 10,38,51,60,62,65, 80, 82, 99, 123, 124, 132, 162, 178, 285

appeals: 202,231,233 apportionment: see direct taxation arrest (false): 246 ask: 52,102,124,127,128,288,326 assessment: 61; (self) 2, 5 asset & liability statement: 213,249 Attainder (bill of): 219, 228, 246, 311 attorney: (private sector) 88, 202, 318;

(ineffective) 152 audit: 218, 222, 223 bail pending appeal: 232

349

banks: (accounts) 301, 302; (bailout) 65; also see Federal Reserve System

bribe me: 13 burden of proof: 163 Caesar:45,60,93, 120,280 case citings:

Aflick/Kowalik v. U.S., 765 F.2d 944:234

Baker et al v. Comm. of Int. Rev., 149 F.2d 342 (1945): 25

Boyd v. U.S., 116 U.S. 616 (1885): 21

Brusharber v. Union Pacific Railroad Co.,240 U.S. 1 (1915): 54

Clyatt v. U.S., 197 U.S. 207 (1904): 78, 82-87, 105

Cummings v. State of Missouri, 71 u.s. 277 (1866): 94

Evans v. Gore, 253 U.S. 245 (1920): 23,40

Flora v. U.S., 362 U.S. 145 (1959): 5 Henderson v. Mayor of N.Y. et al,

92 u.s. 258: 6 Lanzetta v. New Jersey, 306 U.S.

451 (1938): 15, 138 Miles v. Graham, 268 U.S. 501

(1924): 23 Miranda v. Arizona, 384 U.S. 436

(1965): 102 O'Malley v. Woodrough, 307 U.S.

277(1938):25,27,29,32 People v. Goodchild, 242 NW2d

465:179 Pollock v. Farmers' Loan & Trust

Co., 157 U.S. 429 (1895): 8, 39

IRS HUMBUG

Pollock v. Fanners' Loan & Trust Co., 158 U.S. 601 (1895): 8, 19, 38, 54,144

Pressy v. Ferguson, 163 U.S. 537: 84

Schreveport v. Brewer, 72 So.2d 308 (1954): 122

Strickland v. Washington, 104 S.Ct 2052 (1984): 153,203

U.S. v. Butler, 197U.S.1 (1936): 146 U.S. v. Cardiff, 344 U.S.174 (1952):

150 U.S. v. Charlick, 26 F.Supp 203

(1939): 58 U.S. v. Eaton, 144 U.S. 677 (1892):

133, 134 U.S. v. Golder et al, 11 F.Supp 870

(1935): 76 U.S. v. Grady, 185 F.2d 273 (1950):

137,138 U.S. v. Hughes, 311 F.2d 845

(1962): 137, 138 U.S. v. Wilson, 3 Blatchf 439

(1956): 232 catch 22: 22,23 Chief Justice Taney letter, 157 U.S.

701: throughout chapter 2 civil & criminal violations: 103 civil rights: 29, 31, 36, 77, 89 Code of Ethics: 304-306 Code of Federal Regulations: 237,

256,257 collection: 161 commonlaw:255,318 Comprehensive Crime Control Act:

231 concealment: 102 conduct (standard of): 304 Congress: (duties) 36, 82; (power) 52;

(intent of) 54, 60 conspiracy: 29, 96

350

Constitution: (U.S.) supreme law 116; also see Amendments

contracts/ agreements: (described) 17; (impairment of) 100; (restrictions) 23, 33, 52, 56, 66, 72; (employment)26,56,59,81, 155

court orders: see Judgment Order court rules: see rules crimes (against U.S.): 172 debt: 61, 62, 80-88, 128-131, 132, 276,

280, 285, 292; (forced) 187, 245; (voluntary) 130

deduction benefits: 48, 59, 91, 103 deficiency: see Notice of Deficiency definitions:

debt: 62 employee: 94 employer: 94 foreign estate or trust: 53 humbug:3 kickback: 17 levy: 161 mob:207 peonage:97 person 166, 257 return: 7 State: 71 tax: 8, 61 taxpayer: 60 trade or business: 62 U.S. person: 297 wages:93

democracy: 207 direct taxation: see tax discretion: 236; (judicial & legal) 261;

(personal) 262, 270 District of Columbia: 20, 48, 71, 72, 95,

97, 140, 263, 270; also see State dividends: 209 domestic corporation or partnership:

297 drugs: 84; (war on) 84

due process of law: see law duplicity of subject matter: 129, 195 economic compulsion: 102, 106,287 effectively connected: 169, 201 employees: (U.S. standard of

conduct) 304; (private sector) 26, 57, 100, 112, 113,285, 286; (U.S.) 93, 94,95,97,98,109,111-113,118,119, 283,285,286,302,304,305

employers: (economic compulsion) 102, 106, 287; (liable for tax) 191; (peonage) 87; (withholding) 100; (private sector) 108, 110-113, 286; (U.S.) 93, 94, 98,108-113

entrapment: 106 estate/trust: 19, 39,156-158,188,274,

297, 298, also see tax exorcise: 274, 277, 280 fear of the IRS: 33, 133 Federalareas:96,264 Federal Register: 256, 257 Federal Reserve System: 277-280 Federal Court Rules: (appellate) 238;

(Criminal) 137; also see rules F.I.C.A.: 40, 41, also see social security# fines: 247, 250, 318 Fifth Amendment: see Amendment Food & Drug Admin. (FDA): 149, 151 foreign country: 168, 296, 197; (Reg.

1.911-2(h)) 168,296,297 foreign estate or trust (26 USC

7701(a)(31): 53, 169, 296, 298 foreign income: 224, 275, 302 Fourth Amendment: see Amendment Freedom of Information Act (FIOA):

71 fraud: (definition) 177; (charge of)

178,206, 290; (burden of proof) 184; (tax evasion) 7, 170, 176-178, 182, 184,186,193,195,197,201,248,289, 290; (fraud & larceny) 182,183,190, 194, 196; (against U.S.) 185;

351

INDEX

(penalty of perjury) 283, 284; (as to transferees) 195; (income) 264; (Sec. 7201) 269; (State court) 228

fraudulent conduct: 172, 176,181 freedom of expression: 27, 29,317 gain, profit, income: 20, 22, 24, 26, 48,

59, 91, 104, 108, 112, 118, 120, 131; (liability for) also see Secretary of Treasury

general welfare: 90 gift tax: see tax God:306 governments: (purpose of) 15,

(separation of power) 16, 205 gross income: 7, 10, 12, 20, 22, 24-26,

46,48,51,53,54,59,65,87,88, 90-92, 95, 98, 104, 108, 109, 112, 113, 118-123, 128,132,140,142,143,147,148, 155, 170, 173; (defined) 22, 26, 48, 54, 59, 87, 91, 102, 140, 141; (not includible) 49

habeas corpus: 240, 248, 249, 311; (CIV-87-1884T, CIV-88,580T) 249

half-way house: 242 humbug: 3, 122, 199, 299; (process)

291; (IRS) 132, 280, 285 immunity: 35, 251 imperfect obligation: 65, 292 include: 70, 141, income: (return of) 1, 6, 35, 48, 62, 75,

80, 81, 93, 103; (not includible) 49, 50; also see gain, profit, income; wages; foreign income

indictment: 198, 201 indirect tax: see tax individual: 12; (means Fed. Govt.

employee) 94, 97, 122-124, 127, 130, 166, 170, 194,259

Information (charge by): 198,201 "inside"- "outside" the U.S.: 168 interest: 209 involuntary servitude: see peonage

IRS HUMBUG

I.R. Code laws: see U.S. Code statutes (26 USC)

IRS: (admin. remedy) 63, 83, 102, 172, 249, 268; (authority/duty) 53, 71, 189, 259, 272; (Commissioner) 19; (function/purpose) 84, 106; (violations)

IRS forms: (1040) see withholding on wages; (4340) 81, 132, 207, 208; (W-2) 265, 266; (W-4) 11, 52, 57, 100, 102-106, 108-111, 113, 115, 187, 191, 265,266,282,283,285-287,290,293

judges opinions: see opinions judgmentdebt:187,249,285,299 Judgment Order: 211, 213, 224, 245,

247,250,253 jurisdiction: (U.S. Govt.) 70, 75, 185,

232, 248, 254; (IRS) 55, 92, 106, 175 jury: 35, 205, 214, 216, 218, 228, 236,

318; (trial) 216 justice for all: 139 kickback: (general) 20, 34, 38, 45, 56,

103,123, 127; (illegal) 6, 9, 35, 38,49, 57, 62, 67, 76; (law) 18, 58; (on wages) chapter 6; (not tax) 38

kidnapping: 84 labor (controlling): 174 larceny: 178,179,190,196 law: (due process of) 60, 64, 101, 150,

216,234,235,241,245,246,255,260, 317, 320; (positive) 57,255,256.259, 262, 278, 301; (special) 301; (statutes) see U.S. statutes

legal impossibility: 282, 293 liable (person made): 126 liability: 127, 132 liens (levy on wages): 114, 130 Locke, John: 15 lottery: 68, 70 Madison, James: 16 malicious: 236; (prosecutions) 132,

133,180,195,198,199,205,209,216, 220, 247, 254; (punishment) 206

352

mandatory:127, 127,134 Miranda warning: 102 mob:207 moral issue: 289,290 new trial: 213,239 not liable this period: 132 Notice of Appeal: 240 NoticeofDeficiency:83, 130,160,173,

187, 190, 201,248 oath: 204,313 obligation: (imperfect) 65, 292 order form: on last page organs:274,275 opinions: 269; (judges) 51, 209, 254,

272; (jury) 216, 225 "outside" "inside'"'U.S.: 168 pains and penalties (bill of): 219, 220,

228,234,235,247 Parole Commission: 243; (certificate)

242,243,245, 246; (rule 2.40-15) 243, 245

partnerships: 297 penalties (additional): 176, 182 penaltyofperjury:48,60,73, 100,118,

119,131,190,272,280-283,285,290, 299

peonage: 13, 27, 36, 38, 42, 51, 52, 65, 76, 77, all chapter 5, 96, 98, 101, 105, 112,130,215,229,252,260,271,291, 319; (civil rights) 205

peonagelaws:10,36,37,78,82,85,89 Peonage laws of New Mexico: 78 peons:282 peryury:257,283,284,290,291 phantomlaw:205,220,225 positive law: see law precedent (personal): 255,259 predisposition: 106 prison (FCI): 241 Privacy Act Notice: 52, 102, 103, 124-

128 probation: 241,245,251

profit: 22, 26, 48, 91 promissory note: 80 proper~istaxed:73

PSI report: 199,210,213,218,226,227, 248

public attitude: Public Salary Tax Act of 1939: 96, 270,

271 public trust: 90 rebates: 45, 192,276 regulations: 101; (1.911(h) foreign

country) 168, (2.40-15 parole conditions) 245,251

religion: 317 render: 125, 127, 132 RepubJic: 14, 15, 85, 87, 275, 302 response is mandatory: 124 return of income: 1, 6, 7, 46, 59, 62, 80,

81, 90-92, 103, 109, 116, 119-123, 126-135, 192, 195, 209, 260; (required by law) 275, 276

rights: (of citizens) ; (to councel/Sixth Amendment) ; (to privacy/Fourth Amendment) 26; also see Fifth Amendment; law (due process of>

rules (U.S. court): [scope of juridsiction] (Rule 54(c)) 262, 263; [appellate procedure] (Rule 45(c)) 238; [criminal procedure] 262; (Rule 7) 137, 138, (Rule 9) 138, 198, 201, 202, 291; [civil procedure] (Rule 60) 252, (Rule 69) 193, 245, 250; (rules & regulations) 315

salary: see wages Secretary of Treasury: 49, 59, 66, 99,

101,105,160,170,172,173,268 search & seizure: 161,317 shall: 125, 134; (make a return) 126 Sixteenth Amendment: see

Amendment slavery: see peonage

353

INDEX

snitch: 179 Social Securi~ #: 295, 301; also see

FICA sovereign government: 297 sovereign~: 95, 245, 254, 258, 260,

271,272,274,293,304,305 special law: 301 State: 70, 72, 94-97, 168, 263, 270, 297,

306; (50 States) 305; (court) 228; (citizen of) 301

statutes: see U.S. Code Statutes subtitle A (I.R. Code sections 1-1564):

59,90,91,95, 114,119,121 substitute for return: 207, 265 summons:198,201,202,224 Taney letter: throughout chapter 2 tax:61, 108-113,118,127,134,271,277,

284, 286, 288, 310, 321; (by choice) chapter 3; (direct) 8, 38-43, 54, 64, 307, 311; (indirect) 8, 38, 40, 41; (estate) 8, 40; (gift) 40, 157, 158, 189; (power to) chapter 3; (lottery winnings) 40; (apportionment) 271; (liabili~) 127; (relationship to 16th Amend.) 38; (enforcement) 54; (liquor) 134; (FICA) 40,41

tax debtor: 59-65, 72, 75, 76 tax laws:

1862--Ch.119, 12Stat.472,Sec.86: (quoted) 18; 25-28, 143

1918 --Ch. 18,40 Stat. 1057:22,23, 26,140

1932--Ch.209,Sec.209:24 1939 I.R. Code: 24, 26, 91, 140, 143 1954 I.R. Code: 24, 26, 141, 143 1986 I.R. Code: 143 Public Salary Tax Act of 1939: 96,

270,271 VictoryTax:32,45,91,99, 100,142,

145 Code of Ethics: P.L. 96-303, July 3,

1980:304

IRS HUMBUG

taxpayer: 2, 60, 61, 63, 72, 114, 155, 158,162,250,276,277,286,293,294, 295,296,299

tax protestor: 13, 16, 17,114 tax court: see U.S. Tax Court tax deficiency: see Notice of Deficiency tax evasion: see fraud tax liability: see Secretary of Treasury TIN: 295, 301 trade or business: 62, 92,148,156,169,

192 transferee: 2, 45-48, 60, 63, 65, 83, 156, 1~1~1~1~1~1~1~1~ 205,206,215,222,269,273

undue influence: 90, 96, 131, 260 U.S. Code Statutes: (effect) 6; (Titles

18 & 26 generally) 57 1 USC 204 (Codes--laws of U.S. &

D.C.): 262 4 USC 111 (Tax affecting Fed.

areas/Fed. employees): 63, 267, 270

5 USC 552a (privacy of records): 71, 124, 165

5 USC 5512 (withholding pay of individuals in arrear) 164

5 USC 7103 ("person" "employee" individual") 167

5 USC 7301 (Code of Ethics) 304 12 USC 226 (Fed. Reserve Act, 1913):

266,277 12 USC 531 (Fed. Reserve exempt

from tax): 277, 280 17 USC 506(a) (copyright infringe

ment): 180 18 USC [Criminal Code]:

Sec. 4 (misprison of felony) 229 Sec. 874 (kickbacks): 58, 76 Sec. 1001 (false statements): 284 Sec. 1581 (peonage): 36, 77, 78,101,

229,252,291,305 Sec. 1621 (perjury): 284

354

Sec. 2319 (copyright infringement): 284

Sec. 3143(b)(2) (bail pending appeal):231,235,236

Sec. 4209 (parole conditions): 243 26 USC [I.R. Code]:

Sec. 1 (grossincome):9,59, 104 Sec. 61 (gross income defined): 70,

141, 142 Sec. 931 (income within U.S. pos

sessions): 146, 147 Sec. 3401(a) (wages): 93, 112, 113,

148 Sec. 3401(c) (employee): 94-97,

112, 113, 168 Sec. 3401 (d) (employer): 94, 112 Sec. 3401(e) (withholding exemp

tions): 286 Sec. 3402(a) (withholding require

ment): 104, 105, 112, 114, 130 Sec. 3402(f) (employee exemption

certificate): 100, 104 Sec. 3402(p) (voluntary exemption

certificate): 97-101,105 Sec. 3402(q) (wagering tax): 70 Sec. 3403 (liability for tax): 74,107,

108, 113, 155 Sec. 5005 (persons liable for liquor

tax) 134 Sec. 5061 (collecting liquor tax):

135 Sec. 5603 (filing re: liquor): 135 Sec. 5684(c)(6) (cross ref. to Sec.

7203): 135 Sec. 5690 (11person11 subject to liq

uor law penalties): 135 Sec. 6001 (return required): 124,

125 Sec. 6011 (regulation-return re

quired): 124, 126 Sec. 6011 (f) (return -- income, es

tate, gift): 126

Sec. 6012 (return of income): 119-126,129,133,134,147,208

Sec. 6020(b) (return prepared by Secretary):117, 127,130,133

Sec. 6050 I (returns re: cash in trade or business): 179

Sec. 6103(b)(5) ("State" expanded to reach the 50 States for FIOA): 71

Sec. 6324(a)(2) (estate transferee liability): 159

Sec. 6331(a) (levy on wages): 114, 130

Sec. 6331(e) (seizure): 114 Sec. 6671(b) ("person" civil sanc

tions) 167 Sec. 6901 (transferred assets) 158,

187 Sec. 6902 (transferee - tax court)

162, 170, 187 Sec. 7201 (evade tax): 133, 182, 183, 19~193, 196,197,218,257,269

Sec. 7203 (willful failure to file returns): 86, 129, 130, 133, 135, 177-179, 181-183, 19~196, 199, 208, 211, 212, 217-219, 221, 223, 225,226,229,241,247,248,256-258,266,272,291,293

Sec. 7343 (definition "person" for criminal sanctions): 135, 136, 167, 175, 181, 182, 187, 194, 204, 251,257,258,272

Sec. 7451 (fee- tax court petition): 163, 170, 187

Sec. 7454 (burden of proof in fraud): 184, 284

Sec. 7701(a) (I.R. Code definitions): 62, 71, 161

Sec. 7701(a)(l) person: 60, 63, 122, 123, 136, 166, 166, 168, 193

Sec. 7701(a)(3) corporation: 148 Sec. 7701(a)(4) domestic: 297

355

INDEX

Sec. 7701(a)(10) State: 71, 263 Sec. 7701(a)(11) Secretary of

Treasury: 116 Sec. 7701(a)(14) taxpayer: 60, 63,

72 Sec. 7701(a)(21) levy: 161 Sec. 7701(a)(26) trade or business:

62 Sec. 7701(a)(30) U.S. person: 297 Sec. 7701(a)(31) foreign estate or

trust: 46, 49, (quoted) 53, 66, 148, 169,190,200,206,209,220,222, 224,275,279,198,301

Sec. 7806 (arrangement of I.R. Code)217

28 USC 1746(penaltyofperjury): 100, 280,281

28 USC 2241(b) (habeas corpus): 249 42 USC 1994 (peonage): 36, 77, 78 44 USC 1505 (Fed. Register): 255, 256 Revised Statutes 1990:78 Revised Statutes 5536: 79 U.S. Constitution: [Art.l, Sec.2, CI.3

(direct tax)] 8, 38; [Art.I, Sec.8, Cl.l (indirect tax)] 39; [Art.l, Sec.9, CI.2 (habeas corpus)] 249; [Art.I, Sec.9, Cl.4 (direct tax)] 8, 38; [Art.I,Sec.10, Sc.1 (Attainder)] 270; [Art.III, Sec.l (judges salary)] 16, 21, 28, 32, 36; [Art.III, Sec.2, Cl.1 (judicial power)] 184; [Art.VI, Sec.2, (supreme law of the land)] 116; also see Constitution

U.S. Individual Income Tax Return ·(1040 form): 102, 104, 117, 121, 288; (debt instrument) 86, 88, 100, 115, 129, 272, 291, 301; (purpose) 7, 38, 48, 57, 59, 116, 121, 173, 189, 195; (not for a tax) 80; (cooperation) 154, 188-206; (jury false belief) 206-211, 216, 217, 225, 236; also see amount you owe; fraud; wages

IRS HUMBUG

U.S. marshals: 88 U.S. possessions: 95 U.S. Tax Court: 21, 30, 118, 212, 268,

270; (rules) 83; (jurisdiction) 128, 163, 170, 190; (history of) 161

vague laws: 137, 139, 143, 152, 222, 247

Victory Tax: 32, 45, 91, 99, 100; ($600 to $624) 45, 145

voir dire: 206, 221 voluntary compliance--self assess

ment: 2, 5, 11, 50-52, 76, 80, 99, 132, 136,285

voluntary withholding agreements: 97,101, 105

wages: 12, 25, 63, 90, 104, 112, 113, 118-123,127,131,132,155,156,161, 173,189,190,192,267,269,275,283,

356

286, 296; (garnishment) 114, 130; (withholding on) 83, 101-105, 108, 109,112-114,130,286

weapons of enslavement: 282; also see IRSfonns

Willful failure to file returns: see 26 USC7203

willfulness: 176,211,255,293

winnings: see lottery withholding on wages: (W -4 form) see

IRS fonns; (substitute for return) 207,265

"within" & "without" the U.S.: 53,168, 169,281

witnesses: 318

Writ of Habeas Corpus: see habeas corpus

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