LEGAL DISCLAIMER
I am not a Tax Lawyer, Nor do I play Dan Evans on the internet.
I am not a Certified Public Accountant, Nor do I play Paul Thomas on the internet.
I am not an Enrolled Agent, Nor do I play Richard Macdonald on the internet.
DO NOT TAKE MY WORD FOR ANYTHING ON THIS PAGE.
Go look it up for yourself.

        The following text on this web page is the HTML version of a letter I just sent to the IRS, and one Dennis Parizek.  He is allowing his signature facsimile to be stamped on letters that have no basis in the tax law.  

        The two pages of that letter and two of the pages enclosed with it have been scanned and posted.  Please allow time for the four images to download.   Open new window with page.


Dale R. Eastman
P.O. Box XXX
XXXXX, Wisconsin
XXXX-XXXX

May 29th, 2004

Internal Revenue Service
Attn: D. Parizek
Employee # 29-61699
Ogden, Utah, 84201
Subject: Receipt of Form Letter 1862 (SC) (Rev. 4-1999)




Dear Mr. Parizek,

        This letter is to acknowledge receipt of Form Letter 1862 with your signature facsimile affixed.

        I would be happy to comply with any requirements regarding any tax that I am bona fide liable for, and I will make arrangements with the IRS to do just that, as soon as it is established that I am in fact, bona fide liable for any particular tax.  On the front cover of the publication 2003 J515-015 and on the front of publication 2003-494-571, both enclosed with the Form Letter 1862, are the words, “IRS Mission: Provide America’s taxpayers top quality service by helping them understand and meet their tax responsibilities and by applying the tax law with integrity and fairness to all.”  In order for you to accomplish your mission as stated,  I require information and answers to certain questions so that I may understand and meet any tax responsibilities I may have. 

        You may best assist me in that understanding by answering the attached questions,  supplying the requested information,  and then signing under penalties of perjury,  that the answers and information is true and correct.  The questions on page 3 are duplicated on pages 33 & 34 for your convenience in answering.  The questions on page 3 are also repeated throughout the body of this letter, along with the law as I am aware of it, supporting my request for specific information.



        For the record:       
        It is, and always has been, my intention to pay any bona fide tax I am bona fide liable for.
        It is, and always has been, my intention to submit returns on any bona fide tax I am bona fide liable for.
        I do not agree that I have any bona fide tax liability under Title 26, Subtitle A.
        Therefore,  I do not agree with the tax and penalties shown in the Form 4549 report.
        It is, and always has been, my intention to NEVER let any of my UNALIENABLE RIGHTS, as listed in the Declaration of Independence, and as protected by the Constitution of the United States, to be limited, diminished, or usurped by interlopers in any way, shape or form, Thus I reserve ALL my rights under the Constitution, including those given away by purported contract, when the loss of said rights was not clearly and succinctly noticed.

        This letter, pages 1 through 34 inclusive, a copy of the face of a Form W-9, and the CD with the 861 info presentation are also for the record.

       This letter, your response, and the letter this letter is in reply to will be posted to the internet as either html text, and/or scans of the same. This will be done in the same manner as was done with the NON responsive answers YOU sent to me in reply to the six questions that were sent to Mr. Everson & Mr. Snow.
http://home.sprintmail.com/~dalereastman/tax/wtfover.html


        When you open this letter please be aware that it was sent to you return receipt required. Mailed on the 29th of May, 2004, Pro forma, Not that I believe any suspense date regarding taxes applies to a nontaxpayer.  Also, be aware that copies of this letter will be following, mailed by a third party to supply a witness to the actual return receipt required, mailing of this letter, just in case you or any other agent of the IRS decide to “lose” this letter.
1.
        Please understand my intentions if you, Dennis Parizek, and / or any other IRS Agent,  persist in not following the IRS mission statement to help me to “understand and meet [my] tax responsibilities” and then persist in misapplying the very law that the IRS refuses to answer questions about.

        There is a reason why this letter is quite lengthy.   I am not just replying to your letter.   I am proactively anticipating a jury of my peers in the event that the IRS has not learned from the lessons presented to it in the Kuglin & Long cases.   This letter and its enclosures ARE FOR THE RECORD. After diligently studying the IRC, I have concluded that I do not owe any “income” tax.   This letter is but a small portion of what is available within the IRC to show what Larken Rose, et. al. have said regarding what looks like a misapplication of the IRC. 

       If I am taken to court, for any reason, not in conformity with the proper application of the written law, and you lose,  I am coming after you and any other agents involved in any misapplication of law, using what ever laws or means are legally available to myself,  including but not limited to the following;


-EXPCITE-
    TITLE 26 - INTERNAL REVENUE CODE
    Subtitle F - Procedure and Administration
    CHAPTER 75 - CRIMES, OTHER OFFENSES, AND FORFEITURES
    Subchapter A - Crimes
    PART I - GENERAL PROVISIONS
 
-HEAD-
    Sec. 7214. Offenses by officers and employees of the United States
 
-STATUTE-
    (a) Unlawful acts of revenue officers or agents
      Any officer or employee of the United States acting in connection
    with any revenue law of the United States -
        (1) who is guilty of any extortion or willful oppression under
      color of law; or
        (2) who knowingly demands other or greater sums than are
      authorized by law, or receives any fee, compensation, or reward,
      except as by law prescribed, for the performance of any duty; or

        (7) who makes or signs any fraudulent entry in any book, or
      makes or signs any fraudulent certificate, return, or statement;
      or

    shall be dismissed from office or discharged from employment and,
    upon conviction thereof, shall be fined not more than $10,000, or
    imprisoned not more than 5 years, or both. 

    The court also shall render judgment against the said officer or
    employee for the amount of damages sustained in favor of the party
    injured, to be collected by execution.


        Please find enclosed, one Compact Disc with the 861 info, as available at http://www.861.info/



Sincerely,



Dale R. Eastman




2.

Information required to assist me in determining any tax liabilities I may have.


       1.  What law, clearly and concisely makes me liable for any tax imposed by Subtitle A of the Internal Revenue Code?

       2.  Should I use the rules found in 26 USC § 861(b) and 26 CFR § 1.861-8 (in addition to any other pertinent sections) to determine the SOURCES that my taxable income derives from within the United States?

       3.  If I should not use sections 26 USC § 861(b) and 26 CFR § 1.861-8 (in addition to any other pertinent sections) to determine the SOURCES that my taxable income derives from within the United States, please show where the law says who should or should not use those sections to determine the SOURCES that taxable income derives from within the United States.

       4.  Has the Fifth Amendment to the constitution been rescinded? If so, please identify for me, the Amendment that removed MY protections against incriminating myself under the Fifth Amendment.

       5.  Has the U.S. Constitution been amended such that due process no longer includes jury trials such as noticed in the Sixth and Seventh Amendments?  If so, please indicate which Amendment repealed the provisions of the Sixth and Seventh Amendments.

       6.  What EXACTLY is the “income” tax levied upon in the case of a natural person, in the case of a human, who lives and works solely and wholly within a state of the union?

       7.  Does the definition of “income” as defined in several Supreme Court Cases have any meaning that does not include the reference to “Corporate Activities”?  If so, please indicate where this non Corporate related definition is to be found.






Under penalties of perjury,
I declare that I have read the entire letter this page is contained within, and examined the forgoing answers on this questionnaire, and to the best of my knowledge and belief, they are complete, true, and correct.



______________________________________________                                                                   
Your signature

________________________________
Your employee ID Number

________________________________
Date

3.

Commentary upon specific IRC sections cited in Form Letter 1862


       In Form Letter 1862 it states,  “Under the Privacy Act of 1974, we must tell you that our legal right to ask for this information is Internal Revenue Code sections 6001, 6011, 6012(a) and their regulations.  They say that you must furnish us with records of statements for any tax year that you are liable for, including the taxes your employer withheld.”

    Sec. 6001. Notice or regulations requiring records, statements, and
        special returns
 
-STATUTE-
      Every person liable for any tax imposed by this title, or for the
    collection thereof, shall keep such records, render such
    statements, make such returns, and comply with such rules and
    regulations as the Secretary may from time to time prescribe.
    Whenever in the judgment of the Secretary it is necessary, he may
    require any person, by notice served upon such person or by
    regulations, to make such returns, render such statements, or keep
    such records, as the Secretary deems sufficient to show whether or
    not such person is liable for tax under this title.  The only
    records which an employer shall be required to keep under this
    section in connection with charged tips shall be charge receipts,
    records necessary to comply with section 6053(c), and copies of
    statements furnished by employees under section 6053(a).

    Sec. 6011. General requirement of return, statement, or list
 
-STATUTE-
    (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
    therein the information required by such forms or regulations.


       I have searched the entire Subtitle A - Income taxes of the Internal Revenue Code for all such instances of the words “made liable”.  There is only one instance of the words “made liable” in Subtitle A of the Internal Revenue Code.

    Sec. 1461. Liability for withheld tax
 
-STATUTE-
      Every person required to deduct and withhold any tax under this
    chapter is hereby made liable for such tax and is hereby
    indemnified against the claims and demands of any person for the
    amount of any payments made in accordance with the provisions of
    this chapter.

       I have searched the entire Subtitle A - Income taxes of the Internal Revenue Code for all such instances of the word “liable”.  Of the approximate 32 instances where the word liable appears, none appear to apply to me.
       Note: Congress does know how to clearly and concisely make a person liable. See Section 5005 among others.

       What law, clearly and concisely makes me liable for any tax imposed by Subtitle A of the Internal Revenue Code?

        Sec. 6012. Persons required to make returns of income
 
-STATUTE-
    (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 -

Sec. 1.6012-1  Individuals required to make returns of income.

    (a) Individual citizen or resident--(1) In general. Except as
provided in subparagraph (2) of this paragraph, an income tax return
must be filed by every individual for each taxable year beginning before
January 1, 1973, during which he receives $600 or more of gross income,
and for each taxable year beginning after December 31, 1972, during
which he receives $750 or more of gross income, if such individual is:
    (i) A citizen of the United States, whether residing at home or
abroad,
    (6) Form of return. Form 1040 is prescribed for general use in
making the return required under this paragraph.

       The requirement to file is clearly predicated upon having bona fide gross income. 

We must reject in this case, as we have rejected in cases arising under the Corporation Excise Tax Act of 1909 (Doyle, Collector, v. Mitchell Brothers Co., 247 U.S. 179 , 38 Sup. Ct. 467, 62 L. Ed. --, and Hays, Collector, v. Gauley Mountain Coal Co., 247 U.S. 189 , 38 Sup. Ct. 470, 62 L. Ed. --,
4.
decided May 20, 1918), the broad content on submitted in behalf of the government that all receipts-everything that comes in-are income within the proper definition of the term 'gross income,' and that the entire proceeds of a conversion of capital assets, in whatever form and under whatever circumstances accomplished, should be treated as gross income..
Southern Pacific V. Lowe, 247 U.S. 330 (1918)

       As introduced by, and shown in the excerpt from Southern V. Lowe on the prior page,  The concept that everything that comes in is automatically “gross income” is incorrect.  A second excerpt from a second case, Wright v. United States, re-affirms the concept:

'From whatever source derived,' as it is written in the Sixteenth Amendment, does not mean from whatever source derived. Evans v. Gore, 253 U.S. 245 , 40 S.Ct. 550, 11 A.L.R. 519. See, also, Robertson v. Baldwin, 165 U.S. 275, 281 , 282 S., 17 S.Ct. 326; Gompers v. United States, 233 U.S. 604, 610 , 34 S.Ct. 693, Ann.Cas.1915D, 1044; Bain Peanut Co. v. Pinson, 282 U.S. 499, 501 , 51 S.Ct. 228, 229; United States v. Lefkowitz, 285 U.S. 452, 467 , 52 S.Ct. 420, 424, 82 A.L.R. 775.
WRIGHT v. UNITED STATES, 302 U.S. 583 (1938)

       This concept is further advanced by the words of the Internal Revenue code itself.

    26 USC Sec. 61                                             01/22/02
 
-EXPCITE-
    TITLE 26 - INTERNAL REVENUE CODE
    Subtitle A - Income Taxes
    CHAPTER 1 - NORMAL TAXES AND SURTAXES
    Subchapter B - Computation of Taxable Income
    PART I - DEFINITION OF GROSS INCOME, ADJUSTED GROSS INCOME, TAXABLE
         INCOME, ETC.
 
-HEAD-
    Sec. 61. Gross income defined
 
-STATUTE-
    (b) Cross references
          For items specifically included in gross income, see part II
        (sec. 71 and following).  For items specifically excluded from
        gross income, see part III (sec. 101 and following).

        In addition to confirming, by way of “items specifically excluded from gross income”, the very fact that “items specifically included in gross income” needs to be called out also confirms that Section 61 of the Internal Revenue Code is not as all encompassing as we, the citizens, are led to believe.      Understanding that not everything that comes in is “gross income” one begins to wonder about what “income” is, and what “sources” it derives from.

    Sec. 61. Gross income defined
 
-STATUTE-
    (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:

        Those of us who are aware of the word games played by government career lawyers and legal draftsman, understand that there is a difference between sources of income and items of income which were artfully blended together in section 61(a). 

       As plainly shown in section 61(a) an item of income must derive from a source

       In order to derive from a source, whatever source that source may be, that source must be a sourceFOR PURPOSES OF THE INCOME TAX”.

[Code of Federal Regulations]
[Title 26, Volume 9]
[Revised as of April 1, 2002]
From the U.S. Government Printing Office via GPO Access
[CITE: 26CFR1.861-1]

[Page 119-120]
 
                       TITLE 26--INTERNAL REVENUE
 
    CHAPTER I--INTERNAL REVENUE SERVICE, DEPARTMENT OF THE TREASURY
                               (CONTINUED)
 
PART 1--INCOME TAXES--Table of Contents
 
Sec. 1.861-1  Income from sources within the United States.

    (a) Categories of income. Part I (section 861 and following),
subchapter N, chapter 1 of the Code, and the regulations thereunder
determine the sources of income for purposes of the income tax.

    And as plainly shown,  Subchapter N  DETERMINES THE SOURCES FOR PURPOSES OF THE INCOME TAX. A little further down 1.861-1(a)(1) gives a pointing reference to 1.861-8.
5.
[Code of Federal Regulations]
[Title 26, Volume 9]
[Revised as of April 1, 2002]
From the U.S. Government Printing Office via GPO Access
[CITE: 26CFR1.861-8]

[Page 135-162]
 
                       TITLE 26--INTERNAL REVENUE
 
    CHAPTER I--INTERNAL REVENUE SERVICE, DEPARTMENT OF THE TREASURY
                               (CONTINUED)
 
PART 1--INCOME TAXES--Table of Contents
 
Sec. 1.861-8  Computation of taxable income from sources within
the United States and from other sources and activities.

    (a) In general--(1) Scope. Sections 861(b) and 863(a) state in
general terms how to determine taxable income of a taxpayer from sources
within the United States after gross income from sources within the
United States has been determined
The rules contained in this section apply in determining taxable
income of the taxpayer from specific sources and activities
under other sections of the Code, referred to in this section as
operative sections.

See paragraph (f)(1) of this section for a list and description of
operative sections.

        The applicability of section 1.861-8 is substantiated  by the following.

[Code of Federal Regulations]
[Title 26, Volume 9, Parts 1.851 to 1.907]
[Revised as of April 1, 1998]
From the U.S. Government Printing Office via GPO Access
[CITE: 26CFR1.862-1]

[Page 250-251]
 
                       TITLE 26--INTERNAL REVENUE
 
CHAPTER I--INTERNAL REVENUE SERVICE, DEPARTMENT OF THE TREASURY (CONTINUED)
 
Sec. 1.862-1  Income specifically from sources without the United States.
    (b) Taxable income. The taxable income from sources without the
United States, in the case of the items of gross income specified in
paragraph (a) of this section, shall be determined on the same basis as
that used in Sec. 1.861-8 for determining the taxable income from
sources within the United States.



[Code of Federal Regulations]
[Title 26, Volume 9]
[Revised as of April 1, 2002]
From the U.S. Government Printing Office via GPO Access
[CITE: 26CFR1.863-1]

[Page 262-266]
 
                       TITLE 26--INTERNAL REVENUE
 
    CHAPTER I--INTERNAL REVENUE SERVICE, DEPARTMENT OF THE TREASURY
                               (CONTINUED)
 
PART 1--INCOME TAXES--Table of Contents
 
Sec. 1.863-1  Allocation of gross income under section 863(a).
    (c) Determination of taxable income. The taxpayer's taxable income
from sources within or without the United States will be determined
under the rules of Secs. 1.861-8 through 1.861-14T for determining
taxable income from sources within the United States.


        On September 12th, 2003 I sent a pair of identical letters to Secretary of the Treasury,  John Snow, and Commissioner of the IRS,  Mark Everson.  I sent both of those letters to Washington, D.C. That letter requested answers to 6 simple questions.  The NON-Substantive reply, came from your location in Ogden, Utah with your signature facsimile affixed.  As an agent acting on behalf of the Internal Revenue Service,  You responded to those letters.  As of this date,  You have not answered those questions. 
    Since the answers to those questions are necessary for me to determine whether I have any liability by way of section 6001 or 6012 to make a return of tax or information as evidenced by the above citations of Internal Revenue Code Regulations, I must demand an answer to this question:

       Should I use the rules found in 26 USC § 861(b) and 26 CFR § 1.861-8 (in addition to any other pertinent sections) to determine the SOURCES that my taxable income derives from within the United States?

6.
        A lack of an answer to the negative is an admission that I should use the rules found in 26 USC § 861(b) and 26 CFR § 1.861-8 (in addition to any other pertinent sections) to determine my taxable income derived from SOURCES within the United States.

        I must also demand a reply to this request for information:

        If I should not use sections 26 USC § 861(b) and 26 CFR § 1.861-8 (in addition to any other pertinent sections) to determine the SOURCES that my taxable income derives from within the United States, please show where the law says who should or should not use those sections to determine the SOURCES that taxable income derives from within the United States.

        An answer in the negative to my question #2 without the corresponding information provided as requested in #3,  is an admission that there is nothing in law to support the negative answer to question #2.

       As of this date,  you,  the IRS,  Commissioner Mark Everson,  and Secretary John Snow have deliberately omitted answering the direct questions that my questions were derived from which substantially request the same information. Questions and reply enclosed.

        On page 2 of Form CG-4549 in box 17 there are three items listed.  Whether these three items are applicable to myself is again predicated upon the answers to the questions and information previously requested in this letter.

        Box 17, line a. references IRC 6651(a)(2)

    26 USC Sec. 6651                                          01/22/02
 
-EXPCITE-
    TITLE 26 - INTERNAL REVENUE CODE
    Subtitle F - Procedure and Administration
    CHAPTER 68 - ADDITIONS TO THE TAX, ADDITIONAL AMOUNTS,
               AND ASSESSABLE PENALTIES
    Subchapter A - Additions to the Tax and Additional Amounts
    PART I - GENERAL PROVISIONS
 
-HEAD-
    Sec. 6651. Failure to file tax return or to pay tax
 
-STATUTE-
    (a) Addition to the tax
      In case of failure -
        (2) to pay the amount shown on tax on any return specified in
      paragraph (1) on or before the date prescribed for payment of
      such tax (determined with regard to any extension of time for
      payment), unless it is shown that such failure is due to
      reasonable cause and not due to willful neglect,

        Simple point of logic.  If there is NO return as “specified” in paragraph (1) {shown below} then there simply CAN NOT BE a failure to pay a non-existentamount shown”.

        A second simple point of logic.  If agents of the IRS, starting with the Commissioner of the IRS all the way down to the lowest rank of agent in the IRS, And including the Commissioner’s Supervisor, the Secretary of Treasury,  can’t or won’t answer simple questions that over 1,200 people have asked, in order to “understand and meet their tax responsibilities”,  then I submit that the failure of the IRS and its Agents to speak up when asked direct questions regarding determining those “responsibilities” constitutes “reasonable cause”.

    Box 17, line b. references IRC 6651(a)(1)

    26 USC Sec. 6651                                          01/22/02
 
-EXPCITE-
    TITLE 26 - INTERNAL REVENUE CODE
    Subtitle F - Procedure and Administration
    CHAPTER 68 - ADDITIONS TO THE TAX, ADDITIONAL AMOUNTS, AND ASSESSABLE PENALTIES
    Subchapter A - Additions to the Tax and Additional Amounts
    PART I - GENERAL PROVISIONS
 
-HEAD-
    Sec. 6651. Failure to file tax return or to pay tax
 
-STATUTE-
    (a) Addition to the tax
      In case of failure -
        (1) to file any return required under authority of subchapter A
      of chapter 61 (other than part III thereof),

       Activation of IRC 6651(a)(1) is predicated upon a bona fide requirement to file under chapter 61, which is itself predicated upon being “made liable” (sec. 6001, 6011) or “having gross income” (sec.
7.
6012) of which neither can be determined without the information and answers to questions demanded in this letter.

        On page 2 of Form CG-4549,  there is a statement above the signature boxes.  In that statement are the words:

“Consent to Assessment and Collection - I do not wish to exercise my appeal rights with the Internal Revenue Service or to contest in the United States Tax Court the findings of this report.  Therefore,  I give my consent to the immediate assessment and collection of any increase in tax and penalties, and accept any decrease in tax and penalties shown above, plus additional interest as provided by law.  It is understood that this report is subject to acceptance by the Area Director, Area Manager or Director of Field Operations.”

        I DO NOT CONSENT!

    Before continuing on about what I DO NOT CONSENT to and the limited authority to assess taxes, I am going to point out that Tax Court is for Taxpayers.

    TITLE 26 - INTERNAL REVENUE CODE
    Subtitle F - Procedure and Administration
    CHAPTER 79 - DEFINITIONS
 
-HEAD-
    Sec. 7701. Definitions
 
-STATUTE-
      (a) When used in this 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.

        If I am not liable for certain taxes, then how can I be subject to those same internal revenue taxes?

"The revenue laws are a code or system in regulation of tax assessment and collection. They relate to taxpayers, and not to nontaxpayers. The latter are without their scope. No procedure is prescribed for nontaxpayers, and no attempt is made to annul any of their rights and remedies in due course of law. With them [nontaxpayers] Congress does not assume to deal, and they are neither of the subject nor of the object of the revenue laws". [emphasis added]
Economy Plumbing and Heating Co. v. United States, 470 F. 2d 585 (1972)
Quoted as found at http://www.originalintent.org/edu/fedincometax.php

        Absent my consent, the only thing that can be assessed is taxes to be paid by stamp, or taxes shown on a return.  Since I have not signed a return, the Secretary, or a delegate with proper delegation of authority orders have nothing to assess on.


    26 USC Sec. 6203                                        01/22/02
 
-EXPCITE-
    TITLE 26 - INTERNAL REVENUE CODE
    Subtitle F - Procedure and Administration
    CHAPTER 63 - ASSESSMENT
    Subchapter A - In General
 
-HEAD-
    Sec. 6203. Method of assessment
 
-STATUTE-
      The assessment shall be made by recording the liability of the
    taxpayer in the office of the Secretary in accordance with rules or
    regulations prescribed by the Secretary. Upon request of the
    taxpayer, the Secretary shall furnish the taxpayer a copy of the
    record of the assessment.

        Again, the applicable question is:  “What law, clearly and concisely makes me liable for any tax imposed by Subtitle A of the Internal Revenue Code?”


    26 USC Sec. 6201                                        01/22/02
 
-EXPCITE-
    TITLE 26 - INTERNAL REVENUE CODE
    Subtitle F - Procedure and Administration
    CHAPTER 63 - ASSESSMENT
    Subchapter A - In General
 
-HEAD-
    Sec. 6201. Assessment authority
 
-STATUTE-
    (a) Authority of Secretary
      The Secretary is authorized and required to make the inquiries,
    determinations, and assessments of all taxes (including interest,
8.
    additional amounts, additions to the tax, and assessable penalties)
    imposed by this title, or accruing under any former internal
    revenue law, which have not been duly paid by stamp at the time and
    in the manner provided by law.  Such authority shall extend to and
    include the following:
      (1) Taxes shown on return
        The Secretary shall assess all taxes determined by the taxpayer
      or by the Secretary as to which returns or lists are made under
      this title.
      (2) Unpaid taxes payable by stamp


[Code of Federal Regulations]
[Title 26, Volume 17]
[Revised as of April 1, 2002]
From the U.S. Government Printing Office via GPO Access
[CITE: 26CFR301.6201-1]

[Page 151-152]
 
                       TITLE 26--INTERNAL REVENUE
 
   CHAPTER I--INTERNAL REVENUE SERVICE, DEPARTMENT OF THE TREASURY--
                               (Continued)
 
PART 301--PROCEDURE AND ADMINISTRATION--Table of Contents
 
Sec. 301.6201-1  Assessment authority.

    (a) In general. The district director is authorized and required to
make all inquiries necessary to the determination and assessment of all
taxes imposed by the Internal Revenue Code of 1954 or any prior internal
revenue law. The district director is further authorized and required,
and the director of the regional service center is authorized, to make
the determinations and the assessments of such taxes. However, certain
inquiries and determinations are, by direction of the Commissioner, made
by other officials, such as assistant regional commissioners. The term
``taxes'' includes interest, additional amounts, additions to the taxes,
and assessable penalties. The authority of the district director and the
director of the regional service center to make assessments includes the
following:

    (1) Taxes shown on return. The district director or the director of
the regional service center shall assess all taxes determined by the
taxpayer or by the district director or the director of the regional
service center and disclosed on a return or list.

    (2) Unpaid taxes payable by stamp. (i) If without the use of the
proper stamp:

    (a) Any article upon which a tax is required to be paid by means of
a stamp is sold or removed for sale or use by the manufacturer thereof,
or
    (b) Any transaction or act upon which a tax is required to be paid
by means of a stamp occurs;

The district director, upon such information as he can obtain, must
estimate the amount of the tax which has not been paid and the district
director or the director of the regional service center must make
assessment therefor upon the person the district director determines to
be liable for the tax. However, the district director or the director of
the regional service center may not assess any tax which is payable by
stamp unless the taxpayer fails to pay such tax at the time and in the
manner provided by law or regulations.

        The district director must make assessment upon the person determined to be liable for the tax.  This determination can not be arbitrary.  This determination must be done according to law.  Question #1 applies in this case also.  “What law, clearly and concisely makes me liable for any tax imposed by Subtitle A of the Internal Revenue Code?”

        Acknowledging “such information as he [district director] can obtain”,  and presuming to mean the Form 1099(s) returned to the IRS from my contract tenure with Wxxxxx Txxxxxxxx,  as disclosed on a return or list,  I will now address the allegation of gross income thereupon Form 1099  that the district director may have and consider as “such information”.

       Repeating what was presented above,  not all receipts, not everything that comes in, is gross income, and from whatever source derived does not mean from whatever source derived.

We must reject in this case, as we have rejected in cases arising under the Corporation Excise Tax Act of 1909 (Doyle, Collector, v. Mitchell Brothers Co., 247 U.S. 179 , 38 Sup. Ct. 467, 62 L. Ed. --, and Hays, Collector, v. Gauley Mountain Coal Co., 247 U.S. 189 , 38 Sup. Ct. 470, 62 L. Ed. --, decided May 20, 1918), the broad content on submitted in behalf of the government that all receipts-everything that comes in-are income within the proper definition of the term 'gross income,' and that the entire proceeds of a conversion of capital assets, in whatever form and under whatever circumstances accomplished, should be treated as gross income..
Southern Pacific V. Lowe, 247 U.S. 330 (1918)

'From whatever source derived,' as it is written in the Sixteenth Amendment, does not mean from whatever source derived. Evans v. Gore, 253 U.S. 245 , 40 S.Ct. 550, 11 A.L.R. 519. See, also, Robertson v. Baldwin, 165 U.S. 275, 281 , 282 S., 17 S.Ct. 326; Gompers v. United States, 233
9.
U.S. 604, 610 , 34 S.Ct. 693, Ann.Cas.1915D, 1044; Bain Peanut Co. v. Pinson, 282 U.S. 499, 501 , 51 S.Ct. 228, 229; United States v. Lefkowitz, 285 U.S. 452, 467 , 52 S.Ct. 420, 424, 82 A.L.R. 775.
WRIGHT v. UNITED STATES, 302 U.S. 583 (1938)

        With the understanding that gross income is NOT all that comes in firmly in mind, I will now address the requirement of giving such taxpayer identifying number to Wxxxxx Txxxxxxxx for the purpose of Wxxxxx Txxxxxxxx filing an information return of Form 1099 to the IRS in respect to any money paid by Wxxxxx Txxxxxxxx to myself. 

        To do that, I will state flat out that I was deceived into applying for an EIN (employer identification number) through my ignorance, because I was deceived regarding being required to have an EIN to pay the HVUT (heavy vehicle use tax) on form 2290.  I never had any employees as defined by the dictionary and I never had any employees as the term “employee” is defined in section 7701.

        The next place where I was deceived under color of law was regarding what legal requirements bear upon myself regarding the filling out of a Form W-9,  and the subsequent submission to the company I contracted with, ANY number assigned to me for the purposes of any income tax. 


    TITLE 44 - PUBLIC PRINTING AND DOCUMENTS
    CHAPTER 35 - COORDINATION OF FEDERAL INFORMATION POLICY
    SUBCHAPTER I - FEDERAL INFORMATION POLICY
 
-HEAD-
    Sec. 3512. Public protection
 
-STATUTE-
      (a) Notwithstanding any other provision of law, no person shall
    be subject to any penalty for failing to comply with a collection
    of information that is subject to this subchapter if -
        (1) the collection of information does not display a valid
      control number assigned by the Director in accordance with this
      subchapter; or
        (2) the agency fails to inform the person who is to respond to
      the collection of information that such person is not required to
      respond to the collection of information unless it displays a
      valid control number.
      (b) The protection provided by this section may be raised in the
    form of a complete defense, bar, or otherwise at any time during
    the agency administrative process or judicial action applicable
    thereto.

        As downloaded from http://www.irs.gov/pub/irs-pdf/i1099.pdf ;

        The Privacy Act and Paperwork Reduction Act Notice as stated on page GEN-15 of the General Instructions for Forms 1099, 1098, 5498, and W-2G publication is as follows:

Privacy Act and Paperwork Reduction Act Notice. We ask
for the information on these forms to carry out the Internal
Revenue laws of the United States. You are required to give us
the information. We need it to figure and collect the right
amount of tax.

Sections 220(h), 408, 408A, 529, 530, 6041, 6041A, 6042,
6043, 6044, 6045, 6047, 6049, 6050A, 6050B, 6050D, 6050E,
6050H, 6050J, 6050N, 6050P, 6050Q, 6050R, 6050S, 6050T
and their regulations require you to file an information return
with the IRS and furnish a statement to recipients. Section 6109
and its regulations require you to provide your taxpayer
identification number on what you file.

Routine uses of this information include giving it to the
Department of Justice for civil and criminal litigation, and to
cities, states, and the District of Columbia for use in
administering their tax laws. We may also disclose this
information to Federal and state agencies to enforce Federal
withholding nontax criminal laws and to combat terrorism.
If you fail to provide this information in a timely manner,
you may be subject to penalties.

You are not required to provide the information requested on
a form that is subject to the Paperwork Reduction Act unless
the form displays a valid OMB control number. Books or
records relating to a form or its instructions must be retained as
long as their contents may become material in the
administration of any Internal Revenue law. Generally, tax
and simple returns and return information are confidential, as required by
section 6103.

        The Form W-9 contains NO OMB Control Number. See attached copy of Form W-9 as downloaded from  http://www.irs.gov/pub/irs-pdf/fw9.pdf.
        Information was requested on a form that there is no legal penalty for failure to submit the requested information.   If I knew then, what I know now,  I would not have given my SSN or any other such number that can be used for tax identification purposes.  By deceit, I was tricked into giving up information that had no legal ramifications upon myself for NOT giving up that information, To wit, any number used for taxpayer identification that was linked to myself. 
10.
        Also, since I was tricked, by a deception, to surrender any such taxpayer identification number to any company I worked for as an independent contractor, and this information ROUTINELY goes to places where it can be used against me in a court of law, I submit that I was NOT PROPERLY MIRANDIZED regarding this information.

        Has the Fifth Amendment to the constitution been rescinded? If so, please identify for me, the Amendment that removed MY protections against incriminating myself under the Fifth Amendment.

        Now I will address further, that there was no legal reason to give to the company I contracted with, any such number used for taxpayer identification, because that company had no legal reason to ask for that number.  They, like myself, were deceived into action where they had NO LEGAL DUTY to action.

    26 USC Sec. 6109                                         01/22/02
 
-EXPCITE-
    TITLE 26 - INTERNAL REVENUE CODE
    Subtitle F - Procedure and Administration
    CHAPTER 61 - INFORMATION AND RETURNS
    Subchapter B - Miscellaneous Provisions
 
-HEAD-
    Sec. 6109. Identifying numbers
 
-STATUTE-
    (a) Supplying of identifying numbers
      When required by regulations prescribed by the Secretary:
      (1) Inclusion in returns
        Any person required under the authority of this title to make a
      return, statement, or other document shall include in such
      return, statement, or other document such identifying number as
      may be prescribed for securing proper identification of such
      person.
      (2) Furnishing number to other persons
        Any person with respect to whom a return, statement, or other
      document is required under the authority of this title to be made
      by another person or whose identifying number is required to be
      shown on a return of another person shall furnish to such other
      person such identifying number as may be prescribed for securing
      his proper identification.
      (3) Furnishing number of another person
        Any person required under the authority of this title to make a
      return, statement, or other document with respect to another
      person shall request from such other person, and shall include in
      any such return, statement, or other document, such identifying
      number as may be prescribed for securing proper identification of
      such other person.

       Any person required, would seem to indicate a company that makes payments to an independent contractor, until one digs into the law. 
       A question asked, to be answered in the law, is who is required , under authority of title 26 to make a Form 1099 information return?   Another is, who is the other person, with respect to whom a Form 1099 information return is to be filed, whose identifying number is required?   And lastly, who is the other (second) person to be asked by the first person for securing proper identification of the second person.
        In other words, What company is required to ask for tax identification of what independent contractors, and send out form 1099’s on  what contractors under law?  I am focusing upon being asked for a number that I am not, and was not, under law, required to submit.

        As noticed in IRC Section 6109(a), asking for a number under law does NOT happen until “required by regulations prescribed by the Secretary”, So here are excerpts from the appropriate regulations of the Secretary:


[Code of Federal Regulations]
[Title 26, Volume 18]
[Revised as of April 1, 2003]
From the U.S. Government Printing Office via GPO Access
[CITE: 26CFR301.6109-1]

[Page 83-90]
 
                       TITLE 26--INTERNAL REVENUE
 
    CHAPTER I--INTERNAL REVENUE SERVICE, DEPARTMENT OF THE TREASURY
                               (CONTINUED)
 
Sec. 301.6109-1  Identifying numbers.   
(c) Requirement to furnish another's number. Every person required
under this title to make a return, statement, or other document must
furnish such taxpayer identifying numbers of other U.S. persons and
foreign persons that are described in paragraph (b)(2)(i), (ii), (iii),
or (vi) of this section as required by the forms and the accompanying
instructions.
11.
The taxpayer identifying number of any person furnishing a withholding certificate referred to in paragraph (b)(2)(vi) of this section shall also be furnished if it is actually known to the person making a return, statement, or other document described in this paragraph (c).

    If the person making the return, statement, or other document does not know the taxpayer identifying number of the other person, and such other person is one that is described in paragraph (b)(2)(i), (ii), (iii), or (vi) of this section, such person must request the other person's number.

The request should state that the identifying number is required to be furnished under authority of law.

When the person making the return, statement, or other document does not
know the number of the other person, and has complied with the request
provision of this paragraph (c), such person must sign an affidavit on
the transmittal document forwarding such returns, statements, or other
documents to the Internal Revenue Service, so stating.

A person required to file a taxpayer identifying number shall correct any errors in such filing when such person's attention has been drawn to them.

        Just to be sure that the reader is clear, the ONLY other persons, U.S. or FOREIGN that are required to furnish such taxpayer identifying numbers to the first person, are those persons notified under the sections that I have highlighted in blue ink.  These are the ONLY other persons that must furnish the requested information.  These are the ONLY other persons that the first person “must furnish such taxpayer identifying numbers of” to the IRS.
        In other words,  The only independent contractors of a company to which this request for information applies,  are those independent contractors listed in paragraphs, (b)(2)(i), (ii), (iii), or (vi) of this section.  And here are those paragraphs:


Sec. 301.6109-1  Identifying numbers.   
    (b) Requirement to furnish one's own number--
    (2) Foreign persons.

The provisions of paragraph (b)(1) of this
section regarding the furnishing of one's own number shall apply to the
following foreign persons--

    (i) A foreign person that has income effectively connected with the
conduct of a U.S. trade or business at any time during the taxable year;

    (ii) A foreign person that has a U.S. office or place of business or
a U.S. fiscal or paying agent at any time during the taxable year;

    (iii) A nonresident alien treated as a resident under section
6013(g) or (h);

    (vi) A foreign person that furnishes a withholding certificate
described in Sec. 1.1441-1(e)(2) or (3) of this chapter or Sec. 1.1441-
5(c)(2)(iv) or (3)(iii) of this chapter to the extent required under
Sec. 1.1441-1(e)(4)(vii) of this chapter.

        Since I am none of the foreign or alien entities listed in regulation 301.6109-1, any information return with any identifying numbers of mine are identifying numbers that were fraudulently obtained.  And just a reminder, Form W-9 DOES NOT HAVE an OMB control number…


Other Issues


    There is an old adage, “Fool me once, shame on you, Fool me twice, shame on me.”

        Once one becomes aware of the artfully crafted words in law,  that purport to say one thing while actually saying something else,  one becomes aware of the lies of deception.  Once one understands that sadly, such things can and do exist, one becomes hyper-vigilant in searching out these artfully crafted words.

        What better place to put these artfully crafted words,  than in the foundation of the structure of law.  If the meanings are corrupted in the foundation,  that which is built upon that corrupted foundation will reflect the corruption.  I am speaking of, the definitions section of the Internal Revenue Code found in section 7701 and other sections of definitions through out the code for different parts of the code.  All of these sections contain “terms”.  Terms are sequences of letters that look like words, but are not words.          The meanings of words are defined, and can be found, in a dictionary.  Terms on the other hand are defined only within the law.  When a term is defined, unless the dictionary definition of the plain meaning of the word is included, (some might add, specifically included,) then the term does not include the dictionary meaning.  If the dictionary meaning is not included, then the dictionary meaning of the term DOES NOT APPLY.   The deception even goes so far as to attempt to make the terms “includes” and “including” appear to say something contrary to what I have just stated in this paragraph.

   TITLE 26 - INTERNAL REVENUE CODE
   Subtitle F - Procedure and Administration
12.
   CHAPTER 79 - DEFINITIONS
 
-HEAD-
    Sec. 7701. Definitions
 
-STATUTE-
    (c) Includes and including
  The terms ''includes'' and ''including'' when used in a definition  contained in this title shall not be deemed to exclude other things otherwise within the meaning of the term defined.

    The astute observer might notice what the above quote does not say.  For everyone else, the following highlights what the above quote does not say:

Sec. 7701. Definitions
     (c) Includes and including
  The terms ''includes'' and ''including'' when used in a definition  contained in this title shall not be deemed to exclude other things otherwise within the plain meaning of the word as defined in a dictionary.

        To emphasize this point, I submit a lesson that is absurd in its portrayal, yet is true to the concept.  For the purposes of this portrayal, the term “car” includes sheep, goats, cats, and dogs.

        Does the term car as defined above include any Chevrolet?  The answer is no.
        Does the term car as defined above include any cow?  The answer is yes.
        Here is why.  There are several ‘rule of thumb’ that are used to write and comprehend the meaning of a law.  These rules are referred to as rules of statutory construction.  Their purpose is so that the proper intent of the law is communicated to those that must follow the law, and those that must enforce the law.

        Some of those rules of statutory construction that I am aware of follow.  I believe the last one, Ejusdem generis is the one that applies the most.

Noscitur a sociis
"The ancient and well known maxim noscitur a sociis, literally "it is known from its associates," is a common sense aid to the construction of doubtful language. Its effect is that the meaning of a word or phrase which may be obscure or doubtful when considered in isolation may be clarified or ascertained by reference to those words or phrases with which it is associated. It simply means that, taken in context, a word may have a broader or narrower meaning than it might have if used alone.

Expressio unius est exclusio alterius
One of the linguistic canons applicable to the construction of legislation.  By expressing one thing is [by implication] to exclude another. There is no room for the application of this principle where some reason other than the intention to exclude certain items exists for the express mention in question. Thus what is said may be intended merely as an example or be included for abundance of caution or for some other reason; or the thing supposed to have been impliedly excluded may not have existed at the passing of the enactment.

A principle in statutory construction: when one or more things of a class are expressly mentioned others of the same class are excluded.

The expression of one (specific) thing is the exclusion of another.   
 
Ejusdem generis
(eh-youse-dem generous) v adj. Latin for "of the same kind," used to interpret loosely written statutes. Where a law lists specific classes of persons or things and then refers to them in general, the general statements only apply to the same kind of persons or things specifically listed. Example: if a law refers to automobiles, trucks, tractors, motorcycles and other motor-powered vehicles, "vehicles" would not include airplanes, since the list was of land-based transportation.

   
        For the purposes of this portrayal, the term “car” includes sheep, goats, cats, and dogs. 

        Noscitur a sociis: literally "it is known from its associates," and the term “car” is definitely associated with sheep, goats, cats, and dogs as defined in this portrayal.

        Does the term car as defined above include any Chevrolet?  Ejusdem generis:   Where a law lists specific classes of things (4-H show animals) and then refers to them in general (cars),  the general statements only apply to the same kind of things specifically listed (4-H show animals) . The answer is no. 
       Does the term car as defined above include any cow?  For the same reasons under Ejusdem generis that the answer regarding a Chevrolet is no, the answer regarding a cow is yes.

        Keep the above in mind, whenever you see the words “includes” or “including” in ANY definition within the Internal Revenue Code.  With the above in mind, I can now address the other side of the issue of Form 1099’s being issued in regard to any money I received from a company as an independent contractor.  I can now address what companies are required to send Form 1099’s to the IRS.
  13.
Note: because of the deliberate obtuseness of certain posters in the misc.taxes news group, this study of "includes" and "including" has been revised as shown on this page: http://home.sprintmail.com/~dalereastman/tax/includes.html
    26 USC Sec. 6041                                           01/22/02
 
-EXPCITE-
    TITLE 26 - INTERNAL REVENUE CODE
    Subtitle F - Procedure and Administration
    CHAPTER 61 - INFORMATION AND RETURNS
    Subchapter A - Returns and Records
    PART III - INFORMATION RETURNS
    Subpart B - Information Concerning Transactions With Other Persons
 
-HEAD-
    Sec. 6041. Information at source
 
-STATUTE-
    (a) Payments of $600 or more
      All persons engaged in a trade or business and making payment in
    the course of such trade or business to another person, of rent,
    salaries, wages, premiums, annuities, compensations, remunerations,
    emoluments, or other fixed or determinable gains, profits, and
    income (other than payments to which section 6042(a)(1),
    6044(a)(1), 6047(e), 6049(a), or 6050N(a) applies, and other than
    payments with respect to which a statement is required under the
    authority of section 6042(a)(2), 6044(a)(2), or 6045), or $600 or
    more in any taxable year, or, in the case of such payments made by
    the United States, the officers or employees of the United States
    having information as to such payments and required to make returns
    in regard thereto by the regulations hereinafter provided for,
    shall render a true and accurate return to the Secretary, under
    such regulations and in such form and manner and to such extent as
    may be prescribed by the Secretary, setting forth the amount of
    such gains, profits, and income, and the name and address of the
    recipient of such payment.

        All persons engaged in a “trade or business”.  Section 7701(a)(26) defines “trade or business” generically for the entire IRC title. There is no other “trade or business” defined for Section 6041.

    TITLE 26 - INTERNAL REVENUE CODE
    Subtitle F - Procedure and Administration
    CHAPTER 79 - DEFINITIONS
 
-HEAD-
    Sec. 7701. Definitions
 
-STATUTE-
      (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.

       Noscitur a sociis,  Ejusdem generis, and Expressio unius est exclusio alterius.  Congress defined and included the term “trade or business” to be “the performance of the functions of a public office.”  Congress said exactly what Congress meant to say.  Congress included exactly what Congress meant to include.   I really have doubts that the company I was contracted with was engaged in a “trade or business” as that term is defined in the Internal Revenue Code.

    TITLE 26 - INTERNAL REVENUE CODE
    Subtitle A - Income Taxes
    CHAPTER 2 - TAX ON SELF-EMPLOYMENT INCOME
 
-HEAD-
    Sec. 1402. Definitions
 
-STATUTE-
    (a) Net earnings from self-employment
      The term ''net earnings from self-employment'' means the gross
    income derived by an individual from any trade or business carried
    on by such individual, less the deductions allowed by this subtitle
    which are attributable to such trade or business
    (c) Trade or business
      The term ''trade or business'', when used with reference to
    self-employment income or net earnings from self-employment, shall
    have the same meaning as when used in section 162 (relating to
    trade or business expenses), except that such term shall not
    include -
        (1) the performance of the functions of a public office, other
      than the functions of a public office of a State or a political
      subdivision thereof


        When one looks at Section 162, then at Part VI, then at Subchapter B of Chapter 1, the term “trade or business” is not defined, thus the ‘default’ definition of Section 7701(a)(26) is the one that applies.  I am not engaged in “trade or business” as the term is defined for use in Sec. 1402 or 6041.


        Next item addressed, Liens, Levies, and Seizures.

    TITLE 26 - INTERNAL REVENUE CODE
    Subtitle F - Procedure and Administration
    CHAPTER 64 - COLLECTION
    Subchapter D - Seizure of Property for Collection of Taxes
14.
    PART II - LEVY
 
-HEAD-
    Sec. 6331. Levy and distraint
 
-STATUTE-
   (b) Seizure and sale of property
      The term ''levy'' as used in this title includes the power of
    distraint and seizure by any means.  Except as otherwise provided
    in subsection (e), a levy shall extend only to property possessed
    and obligations existing at the time thereof.  In any case in which
    the Secretary may levy upon property or rights to property, he may
    seize and sell such property or rights to property (whether real or
    personal, tangible or intangible).

        Very telling set of words. If the Secretary may levy, the Secretary may seize. 

 In the interpretation of statutes levying taxes it is the
established rule not to extend their provisions, by implication,
beyond the clear import of the language used, or to enlarge
their operations so as to embrace matters not specifically
pointed out. In case of doubt they are construed most strongly
against the government, and in favor of the citizen. United
States v. Wigglesworth, 2 Story, 369, Fed. Cas. No. 16,690;
American Net & Twine Co. v. Worthington, 141 U.S. 468, 474 , 12
S. Sup. Ct. 55; Benziger v. United States, 192 U.S. 38, 55 , 24
S. Sup. Ct. 189.
GOULD v. GOULD , 245 U.S. 151 (1917)

    What is not said, is that if the Secretary can not levy, the Secretary can not seize.

    Sec. 6331. Levy and distraint
    (a) Authority of Secretary
      If any person liable to pay any tax neglects or refuses to pay
    the same within 10 days after notice and demand, it shall be lawful
    for the Secretary to collect such tax (and such further sum as
    shall be sufficient to cover the expenses of the levy) by levy upon
    all property and rights to property (except such property as is
    exempt under section 6334) belonging to such person or on which
    there is a lien provided in this chapter for the payment of such
    tax.  Levy may be made upon the accrued salary or wages of any
    officer, employee, or elected official, of the United States, the
    District of Columbia, or any agency or instrumentality of the
    United States or the District of Columbia, by serving a notice of
    levy on the employer (as defined in section 3401(d)) of such
    officer, employee, or elected official.

        Please note that “levy may be made upon the accrued salary or wages of any employee OF the United States.  A quick look at the definition of employer in section 3401 will show that the employer is defined in terms of the employee. 

    TITLE 26 - INTERNAL REVENUE CODE
    Subtitle C - Employment Taxes
    CHAPTER 24 - COLLECTION OF INCOME TAX AT SOURCE ON WAGES
 
-HEAD-
    Sec. 3401. Definitions
    (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, except that -

    Which means in order to understand who the employer is, one must look at the meaning of “employee”.

    Sec. 3401. Definitions
    (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.

    Thus, even if I was a “person liable” as mentioned in section 6331(a), I am not employed BY the United States, I am not an employee OF the United States or any other governmental body.  Those are the only people the law clearly states may be levied or have property seized under administrative due process.  The Constitution of the United States says:

Amendment VII
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.

Amendment VI
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
15.
compulsory process for obtaining witnesses in his favor, and to have the assistance of counsel for his defense.

        Has the U.S. Constitution been amended such that due process no longer includes jury trials such as noticed in the Sixth and Seventh Amendments?  If so, please indicate which Amendment repealed the provisions of the Sixth and Seventh Amendments.

    TITLE 26 - INTERNAL REVENUE CODE
    Subtitle F - Procedure and Administration
    CHAPTER 64 - COLLECTION
    Subchapter C - Lien for Taxes
    PART II - LIENS
 
-HEAD-
    Sec. 6321. Lien for taxes
 
-STATUTE-
      If any person liable to pay any tax neglects or refuses to pay
    the same after demand, the amount (including any interest,
    additional amount, addition to tax, or assessable penalty, together
    with any costs that may accrue in addition thereto) shall be a lien
    in favor of the United States upon all property and rights to
    property, whether real or personal, belonging to such person.

        As the law relates to liens for taxes, we are right back to the crux of the issue.  One must be a person liable to pay any tax before one can neglect or refuse to pay any tax.  Without those two conditions met,  nothing activates section 6321.  So once again, I ask, “What law, clearly and concisely makes me liable for any tax imposed by Subtitle A of the Internal Revenue Code?”


More Issues


        TITLE 26 - INTERNAL REVENUE CODE
    Subtitle F - Procedure and Administration
    CHAPTER 75 - CRIMES, OTHER OFFENSES, AND FORFEITURES
    Subchapter A - Crimes
    PART I - GENERAL PROVISIONS
 
-HEAD-
    Sec. 7203. Willful failure to file return, supply information, or
        pay tax
 
-STATUTE-
      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 pay such estimated tax or tax,
    make such return, keep such records, or supply such information, 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 not more
    than $25,000 ($100,000 in the case of a corporation), or imprisoned
    not more than 1 year, or both, together with the costs of
    prosecution.  In the case of any person with respect to whom there
    is a failure to pay any estimated tax, this section shall not apply
    to such person with respect to such failure if there is no addition
    to tax under section 6654 or 6655 with respect to such failure.  In
    the case of a willful violation of any provision of section 6050I,
    the first sentence of this section shall be applied by substituting
    ''felony'' for ''misdemeanor'' and ''5 years'' for ''1 year''.
   
        Again, and again, the question keeps coming up, WHO is REQUIRED?  And to activate the penalties in section 7203, one must be found guilty of willful failure to file.  In order to be found guilty, one must have a clear duty to do something required under this title,  one must know that one has that duty, and having and knowing that duty, one must willfully fail to do that duty

A good-faith misunderstanding of the law or a good-faith belief that one is not violating the law negates willfulness, whether or not the claimed belief or misunderstanding is objectively reasonable.

Statutory willfulness, which protects the average citizen from prosecution for innocent mistakes made due to the complexity of the tax laws, is the voluntary, intentional violation of a known legal duty.

Characterizing a belief as objectively unreasonable [*] transforms what is normally a factual inquiry into a legal one, thus preventing a jury from considering it. And forbidding a jury to consider evidence that might negate willfulness would raise a serious question under the Sixth Amendment's jury trial provision, which this interpretation of the statute avoids.
CHEEK v. UNITED STATES, 498 U.S. 192 (1991)
[* or frivolous]

        In the Vernice Kuglin case,  Ms. Kuglin was acquitted on 6 counts of willful failure to file.  In the Lloyd Long case, Mr. Long was acquitted on 2 counts of willful failure to file.  I have read transcripts to both trials.  For quite a few years, Ms. Kuglin asked the IRS to show her what law makes her liable for the income tax.  The answer was silence.
16.
        The simple question, that shows that Section 7203 does not even apply to Mr. Long, Ms. Kuglin, or myself, is the question who is any person required,  specifically identified in Section 7203 of Chapter 75?  That answer is:

    TITLE 26 - INTERNAL REVENUE CODE
    Subtitle F - Procedure and Administration
    CHAPTER 75 - CRIMES, OTHER OFFENSES, AND
                                FORFEITURES
    Subchapter D - Miscellaneous Penalty and Forfeiture Provisions
 
-HEAD-
    Sec. 7343. Definition of term ''person''
 
-STATUTE-
      The term ''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.

        The definition of person used in 7203 is quite a few sections away from the section it is used in.  Legerdemain or luck of the draw?


        It might be questioned,  that after some 30 years of paying taxes,  why did I quit filling out forms and paying taxes.  It might be presented as ‘evidence’ that I knew I had a “known legal duty” because I used to fill out forms.   In reply, I used to believe in Santa Claus, and acted accordingly.   Once I learned the truth, my actions changed.  Likewise, any actions I took regarding a “known legal duty” changed when I learned the truth of those known legal duties.  Any person that forwards the thought that “everybody knows” about that “known legal duty” is advancing the position that I should take actions based upon hearsay evidence of what the law actually requires instead of reading the law myself.

        If anybody advances the thought that I am not smart enough to read the law, and determine for myself what the law requires of me, or anybody claims that I am misunderstanding the law because I do not agree with their espoused interpretation, then I submit that law is to be held “void for vagueness”.
As cited in CONNALLY v. GENERAL CONST. CO., 269 U.S. 385 (1926):

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 or requires the doing of an act in terms so vague that men of common intelligence must necessarily guess at its meaning and differ as to its application violates the first essential of due process of law. International Harvester Co. v. Kentucky, 234 U.S. 216, 221 , 34 S. Ct. 853; Collins v. Kentucky, 234 U.S. 634, 638 , 34 S. Ct. 924

       What conduct on their part, or what law makes them liable for the Subtitle A income taxes.  And as stated in CONNALLY v. GENERAL CONST. CO.:

The dividing line between what is lawful and unlawful cannot be left to conjecture. The citizen cannot be held to answer charges based upon penal statutes whose mandates are so uncertain that they will reasonably admit of different constructions. A criminal statute cannot rest upon an uncertain foundation. The crime, and the elements constituting it, must be so clearly expressed that the ordinary person can intelligently choose, in advance, what course it is lawful for him to pursue. Penal statutes prohibiting the doing of certain things, and providing a punishment for their violation, should not admit of such a double meaning that the citizen may act upon the one conception of its requirements and the courts upon another.'
CONNALLY v. GENERAL CONST. CO., 269 U.S. 385, 393 (1926)

        With the concept of laws that must be understandable by the common man (person), and the concept that tax laws must not operate by implication, introduced in GOULD v. GOULD and repeated below, the standard of construction of tax law is quite succinct:  The tax laws must be succinct also.

 In the interpretation of statutes levying taxes it is the
established rule not to extend their provisions, by implication,
beyond the clear import of the language used, or to enlarge
their operations so as to embrace matters not specifically
pointed out. In case of doubt they are construed most strongly
against the government, and in favor of the citizen.
GOULD v. GOULD , 245 U.S. 151 (1917)
17.
        In my study of the Internal Revenue Code, The tax laws of the U.S., and my deliberation of the same, I have noted that there are 6 main components to the imposition of a tax.  Just as molecules are composed of atoms, and atoms are composed of subatomic particles like quarks and muons, So too a tax and its imposition is composed of components and subcomponents.  Those components and subcomponents are as follows:

1. The “tax” collected, the amount of "money" to be paid over to the U.S. Treasury.
2. The rate of tax imposed, to be used with the measure (#3) to calculate the “tax” (#1).
3. The thing measured, used with the rate of tax (#2) to create the amount of tax (#1).
4. The person liable, the one who must pay the tax (#1) to the treasury.
5. The "thing", the nexus of the tax. The excuse for the tax.
5a. The nexus may be an object or property.
5b. The nexus may be a privilege.
5c. The nexus may be an activity.
5c1. The activity may be one that is done by Privilege.
5c2. The activity may be one that is done by RIGHT.
5c3. The activity may be one that is done in contravention of a proscription.
6. What the tax money is to be spent on. (listed and ignored)

        I have already had the experience of having certain individuals attempt a misguided denial of the truth contained above.  It is a fruitless endeavor since I can show that the first 5 components do indeed exist, and are contained and embodied within the IRC. 

        The tax (#1) to be paid over to the Treasury is addressed within Section 6001.

Sec. 6001
    Every person liable for any tax imposed by this title, or for the  
    collection thereof, shall keep such records, render such statements, 
    make such returns, and comply with such rules and regulations as the
    Secretary may from time to time prescribe.

        And the tax (#1) to be paid over to the Treasury is addressed within Section 6151.

Sec. 6151. Time and place for paying tax shown on returns
(a) General rule
    Except as otherwise provided in this subchapter, when a return of tax
    is required under this title or regulations, the person required to 
    make such return shall, without assessment or notice and demand from
    the Secretary, pay such tax to the internal revenue officer with whom
    the return is filed, and shall pay such tax at the time and place fixed
    for filing the return (determined without regard to any extension of
    time for filing the return).

        The tax (#1) to be paid over to the Treasury is addressed, In the case of distilled spirits taxes, within Section 5007:

Sec. 5007. Collection of tax on distilled spirits
(a) Tax on distilled spirits removed from bonded premises
    The tax on domestic distilled spirits and on distilled spirits
    removed from customs custody under section 5232 shall be paid in
    accordance with section 5061.
(b) Collection of tax on imported distilled spirits
    The internal revenue tax imposed by section 5001(a)(1) and (2)
    upon imported distilled spirits shall be collected by the Secretary
    and deposited as internal revenue collections, under such
    regulations as the Secretary may prescribe.

        The rate of tax (#2) imposed is addressed, In the case of distilled spirits taxes, within Section 5001:

Sec. 5001.
(a) Rate of tax
(1) General
    There is hereby imposed on all distilled spirits produced in or
    imported into the United States a tax at the rate of $13.50 on
    each proof gallon and a proportionate tax at the like rate on all
    fractional parts of a proof gallon.

        The thing measured (#3) is addressed, In the case of distilled spirits taxes, within Section 5001:

Sec. 5001.
(a) Rate of tax
(1) General
    There is hereby imposed on all distilled spirits produced in or
    imported into the United States a tax at the rate of $13.50 on
    each proof gallon and a proportionate tax at the like rate on all
    fractional parts of a proof gallon.

        The person liable (#4) to pay the tax to the Treasury is addressed, In the case of distilled spirits taxes, within Section 5005:

Sec. 5005. Persons liable for tax
(a) General
     The distiller or importer of distilled spirits shall be liable for the
18.
     taxes imposed thereon by section 5001(a)(1).
(b) Domestic distilled spirits
(1) Liability of persons 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.

        nex·us (nµk“s…s) n., pl. nexus or nex·us·es. 1. A means of connection; a link or tie.
        American Heritage Electronic Dictionary.

        The nexus (#5), the thing or reason for the tax is addressed, In the case of distilled spirits taxes, within Section 5001:

Sec. 5001.
(a) Rate of tax
(1) General
    There is hereby imposed on all distilled spirits produced in or
    imported into the United States a tax at the rate of $13.50 on
    each proof gallon and a proportionate tax at the like rate on all
    fractional parts of a proof gallon.

        At this point, I have validated the main components of the imposition of the tax, components #1 through #5.  I used the distilled spirits tax as an example because it can be seen to plainly reinforce the first 5 components of tax imposition. 
        I also used the distilled spirits tax for example because it plainly, clearly, and concisely says WHO IS LIABLE, by directly and unequivocally touching that person made liable for the tax.

        Although I could detail the nexus (#5c3), a tax upon a proscribed activity,  I will not since it is not germane (pertinent or fitting) to the issues at hand.

    Returning now, to the subcomponents of the nexus (#5) that are germane:

5a. The nexus may be an object or property.
5b. The nexus may be a privilege.
5c. The nexus may be an activity.
5c1. The activity may be one that is done by Privilege.
5c2. The activity may be one that is done by RIGHT.

       One of the subcomponents of the nexus (#5) that could appear to be active, in the case of the distilled spirits tax, is the nexus (#5a) of an object or property, to wit: distilled spirits.  

Sec. 5001.
(a) Rate of tax
(1) General
    There is hereby imposed on all distilled spirits produced in or
    imported into the United States a tax at the rate of $13.50 on
    each proof gallon and a proportionate tax at the like rate on all
    fractional parts of a proof gallon.

        The Constitution in Article I, Section 9 states:

No capitation, or other direct, tax shall be laid,
unless in proportion to the census or enumeration
herein before directed to be taken.

        The reason that the nexus (#5a) of Section 5001 is not active, is because a tax on property, simply because it exists, is a Direct Tax, and there are no Federal Direct Taxes active that I am aware of, laid by the rule of apportionment using the census figures.

       Another subcomponent, that is active, in the case of the distilled spirits tax, is the nexus (#5) of an activity (#5c) or a privilege (#5b).

Sec. 5001.
(a) Rate of tax
(1) General
    There is hereby imposed on all distilled spirits produced in or
    imported into the United States a tax at the rate of $13.50 on
    each proof gallon and a proportionate tax at the like rate on all
    fractional parts of a proof gallon.

        As can be plainly seen in the Code, the tax nexus (#5) is upon the activity (#5c) of importing or producing the item labeled ‘distilled spirits’.    I shall not enter into consideration of who decides what is a privilege and what is a right, in regard to distillation of spirits within the U.S.   I will make passing comment that importation does clearly fall within the Legislative Jurisdiction of Congress as addressed in one or more of the clauses under Article I, Section 8 of the Constitution of the United States.  And I will make one final observation, using the distilled spirits tax as an example.  The title or nomenclature (a system of names) is meaningless as to the taxing nexus (#5).
19.
TITLE 26 - INTERNAL REVENUE CODE
Subtitle E - Alcohol, Tobacco, and Certain Other Excise Taxes
CHAPTER 51 - DISTILLED SPIRITS, WINES, AND BEER
Subchapter A - Gallonage and Occupational Taxes
PART I - GALLONAGE TAXES
Subpart A - Distilled Spirits

        As compared to the prior two pages of analysis of the distilled spirits tax and the components of the imposition of ANY tax, any  title or label of any tax is meaningless in regard to the actual tax imposed, other than as a ‘handle’ to define which of the many taxes in the Code is being referred to.  In the case of the distilled spirits tax, the ‘handle’ or label of “Gallonage Taxes” is meaningless when it comes to understanding what the nexus activity is, what the tax is about. 

        Likewise, the label or ‘handle’ “Income Taxes”,  “normal taxes and surtaxes” is just as meaningless and lacking in substance in regard to what is actually being taxed by the “Income” Tax as the ‘handle’ “gallonage” tax is above.

TITLE 26 - INTERNAL REVENUE CODE
Subtitle A - Income Taxes
CHAPTER 1 - NORMAL TAXES AND SURTAXES
Subchapter A - Determination of Tax Liability
PART I - TAX ON INDIVIDUALS

        Nevertheless, the “income” tax can be examined in light of, and in terms of the five components of imposition of a tax, just as the distilled spirits tax was above.  In doing so, I refer the reader back to the top of page 18 for the list of components and subcomponents to the imposition of a tax.  Since this letter is a response to the Form Letter 1862, regarding an alleged tax owed, and an alleged requirement to file a return,  I am going to focus on finding those components that relate to this alleged “income” tax.

        The tax (#1) to be paid over to the Treasury is addressed within Section 6001.

Sec. 6001
    Every person liable for any tax imposed by this title, or for the  
    collection thereof, shall keep such records, render such statements, 
    make such returns, and comply with such rules and regulations as the
    Secretary may from time to time prescribe.

        And the tax (#1) to be paid over to the Treasury is addressed within Section 6151.

Sec. 6151. Time and place for paying tax shown on returns
(a) General rule
    Except as otherwise provided in this subchapter, when a return of tax
    is required under this title or regulations, the person required to 
    make such return shall, without assessment or notice and demand from
    the Secretary, pay such tax to the internal revenue officer with whom
    the return is filed, and shall pay such tax at the time and place fixed
    for filing the return (determined without regard to any extension of
    time for filing the return).

        The rate of tax (#2) imposed is addressed, In the case of “income” taxes within Section 1.  The rate (#2) within the table differs according to the thing measured (#3).

        The thing measured (#3) is addressed, In the case of “income” taxes within Section 1.

    TITLE 26 - INTERNAL REVENUE CODE
    Subtitle A - Income Taxes
    CHAPTER 1 - NORMAL TAXES AND SURTAXES
    Subchapter A - Determination of Tax Liability
    PART I - TAX ON INDIVIDUALS
 
-HEAD-
    Sec. 1. Tax imposed
 
-STATUTE-
    (a) Married individuals filing joint returns and surviving spouses
      There is hereby imposed on the taxable income of -
    (b) Heads of households
      There is hereby imposed on the taxable income of
    (c) Unmarried individuals (other than surviving spouses and heads of 
        households)
      There is hereby imposed on the taxable income of
    (d) Married individuals filing separate returns
      There is hereby imposed on the taxable income of
    (e) Estates and trusts
      There is hereby imposed on the taxable income of -

a tax determined in accordance with the following table:

        There are five different tables, one for each category of taxable income. 

        Note: I am NOT my alleged “taxable income”.  Any “taxable income” I am alleged to have, is an item that is separate from myself.   I exist separately from any taxable income I may be alleged to have.  Any taxable income I may be alleged to have, exists separately from myself.   And as proven in the case of the distilled spirits, gallonage tax,  the imposition of the rate of tax,  and the imposition of the
20.
measure of tax are separate from the imposition of the liability to pay the said distilled spirits, gallonage tax.
        The person liable (#4) to pay the tax to the Treasury is addressed… In section 1461?

    TITLE 26 - INTERNAL REVENUE CODE
    Subtitle A - Income Taxes
    CHAPTER 3 - WITHHOLDING OF TAX ON NONRESIDENT
                            ALIENS AND FOREIGN CORPORATIONS
    Subchapter B - Application of Withholding Provisions
 
-HEAD-
    Sec. 1461. Liability for withheld tax
 
-STATUTE-
      Every person required to deduct and withhold any tax under this
    chapter is hereby made liable for such tax and is hereby
    indemnified against the claims and demands of any person for the
    amount of any payments made in accordance with the provisions of
    this chapter.

        Clear and unequivocal liability for payment of the “income” taxes of subtitle A in regard to a human non-alien living in one of the several states seems to be missing within the code.  As on page 4 of this letter,  the same question comes up again:

        What law, clearly and concisely makes me liable for any tax imposed by Subtitle A of the Internal Revenue Code?

        Moving on:  The nexus (#5), the thing or reason for the tax is addressed,  In the case of the “income” tax is addressed…

    TITLE 26 - INTERNAL REVENUE CODE
    Subtitle A - Income Taxes
    CHAPTER 1 - NORMAL TAXES AND SURTAXES
    Subchapter A - Determination of Tax Liability
    PART I - TAX ON INDIVIDUALS
 
-HEAD-
    Sec. 2. Definitions and special rules
    (d) Nonresident aliens
      In the case of a nonresident alien individual, the taxes imposed
    by sections 1 and 55 shall apply only as provided by section 871 or
    877.

    TITLE 26 - INTERNAL REVENUE CODE
    Subtitle A - Income Taxes
    CHAPTER 1 - NORMAL TAXES AND SURTAXES
    Subchapter N - Tax Based on Income From Sources Within or Without
         the United States
    PART II - NONRESIDENT ALIENS AND FOREIGN CORPORATIONS
    Subpart A - Nonresident Alien Individuals
 
-HEAD-
    Sec. 871. Tax on nonresident alien individuals
    (b) Income connected with United States business - graduated rate
        of tax
      (1) Imposition of tax
        A nonresident alien individual engaged in trade or business
      within the United States during the taxable year shall be taxable
      as provided in section 1 or 55 on his taxable income which is
      effectively connected with the conduct of a trade or business
      within the United States.

        In view of the definition of trade or business on page 14 of this letter as defined in section 1402,  I will admit to some time spent studying and clarifying  my confusion regarding the use of the three words, “trade or business” in Section 871 shown above.  Context is not always openly presented within the Code.  The cross references to the important definitions are not always shown, and when the terms are re-defined as many as dozens of times within the Code, one does begin to wonder if the convoluted manner of the code is a deliberate attempt to confuse.  Be that as it may, here is the definition of the above term used in Section 871.  Note for any member of a jury reading this letter as evidence in any trial, section 55 is the Alternative Minimum Tax, or AMT in the parlance of tax professionals, and does not apply in this case.

    TITLE 26 - INTERNAL REVENUE CODE
    Subtitle A - Income Taxes
    CHAPTER 1 - NORMAL TAXES AND SURTAXES
    Subchapter N - Tax Based on Income From Sources Within or Without
         the United States
    PART I - SOURCE RULES AND OTHER GENERAL RULES RELATING TO FOREIGN
         INCOME
 
-HEAD-
    Sec. 864. Definitions and special rules
    (b) Trade or business within the United States
      For purposes of this part, part II, and chapter 3, the term
    ''trade or business within the United States'' includes the
    performance of personal services within the United States at any
    time within the taxable year, but does not include -
21.
        So now we know that the nexus (#5) in this case is a nonresident alien individual engaged in the performance of personal services within the United States at any time within the taxable year subject to the exceptions not shown in this letter.  This would make sense since the subject matter jurisdiction of Congress in international affairs does apply.   Also of note, is that a nonresident alien individual does not have Constitutional rights (not being one of ‘we the people’) so a non-apportioned direct tax upon a nonresident alien is valid.

        A nonresident alien individual engaged in making money within the United States, is engaged in a privilege, and thus the nexus of a nonresident alien individual’s “income” tax could also be the nexus of privilege (#5b) that earns the nonresident alien the income (#5a)  or the nexus of activity done by privilege (#5c1) which also earns the nonresident alien the income.

        A second look, a review of the subcomponents to a nexus (#5):

5. The "thing", the nexus of the tax. The excuse for the tax.
5a. The nexus may be an object or property.
5b. The nexus may be a privilege.
5c. The nexus may be an activity.
5c1. The activity may be one that is done by Privilege.
5c2. The activity may be one that is done by RIGHT.

        I am still not satisfied with the my understanding of the nexus (#5), the reason or purpose or connection as to what the “income” tax is actually applied to, in my situation as an individual exchanging my labor for money, solely and wholly within any one of several states of the union, that is not within a Federal Enclave where Congress has been given the power of  “Exclusive Legislation”.  (That mouthful of words is for any member of a jury reading this letter, and will be explained in more detail below).   In order for Congress to tax my existence, which would be a Direct Tax, Congress would have to apply that tax under the rule of apportionment.  Obviously, that would not be an “income” tax.

        What EXACTLY is the “income” tax levied upon in the case of a natural person, in the case of a human, who lives and works solely and wholly within a state of the union?

        The specific wording of the IRC in Section 1, is that the tax is imposed upon “taxable income”.  (See page 20 of this letter, or IRC section 1).  The following is excerpted from section 1:

Sec. 1. Tax imposed
(a) There is hereby imposed on the taxable income of -
(b) There is hereby imposed on the taxable income of
(c) There is hereby imposed on the taxable income of
(d) There is hereby imposed on the taxable income of
(e) There is hereby imposed on the taxable income of -

        In all five cases in section 1, the tax is imposed upon “taxable income”.  Is “taxable income” the nexus (#5) or ‘reason’ for the “income” tax?   Is “taxable income” something a person could hold in their hand?   In a sense, “taxable income” is an artificial construct.  One does not have “taxable income” until a mathematical action is explained, commanded, and executed via instructions contained within the IRC.  Part of the explanation is the definition of “taxable income”.

   TITLE 26 - INTERNAL REVENUE CODE
    Subtitle A - Income Taxes
    CHAPTER 1 - NORMAL TAXES AND SURTAXES
    Subchapter B - Computation of Taxable Income
    PART I - DEFINITION OF GROSS INCOME, ADJUSTED GROSS
                    INCOME, TAXABLE INCOME, ETC.
 
-HEAD-
    Sec. 63. Taxable income defined
 
-STATUTE-
    (a) In general
      Except as provided in subsection (b), for purposes of this
    subtitle, the term ''taxable income'' means gross income minus the
    deductions allowed by this chapter (other than the standard
    deduction).
    (b) Individuals who do not itemize their deductions
      In the case of an individual who does not elect to itemize his
    deductions for the taxable year, for purposes of this subtitle, the
    term ''taxable income'' means adjusted gross income, minus -
        (1) the standard deduction, and
        (2) the deduction for personal exemptions provided in section
      151.
    (c) Standard deduction
      For purposes of this subtitle -

        There is little argument regarding the fact that “taxable income” is “gross income” minus appropriate deductions.  Is “gross income” the nexus (#5) or ‘reason’ for the “income” tax?   Is “gross income” something that one can hold in their hand?  Congress has used a lot of “terms” that seem to mean one thing to those reading the law for the first time, yet mean something totally different when one actually reads the terms as defined.  “Gross income” is no exception.  That “before tax” figure on most
22.
people’s payroll check stub is NOT “gross income”.  “Gross income” is a “term” and as a “term” it has a specific definition.  Here it is:

    Sec. 61. Gross income defined
 
-STATUTE-
    (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:

        You will recognize this from page 5 of this letter where I discussed the source that the income is derived from.  I am presently discussing what the nexus (#5) or ‘reason’ is for the “income” tax.  I may have to give up on understanding just what the nexus is in regard to the “income” tax.  Perhaps the nexus (#5) of the “income” tax is actually the “income”.  In all the words of the Internal Revenue Code, Section 61 is THE ONLY SECTION that even comes close to addressing what “income” is.   “Income” is simply NOT defined within the IRC.
        Income is not defined within the IRC, yet the “gross income” of section 61 is what agents of the IRS point to as the starting point for the “income” tax.  Section 61 is an extremely effective point to start from, for the purposes of planting an incorrect conclusion based upon assumptions, in the minds of the people section 61 is being pointed out to, IF those people do not know that “income” is NOT what the they think it is. 
        Yes, even “income” is a term defined.  That term has been defined by the Supreme Court of the United States.   

        A little background is in order here. 

        Prior the passage of the 16th Amendment, The following clauses from the Constitution of the United States were the only authority and restraints on Congress regarding the power to

Article I, 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 defense and general welfare of the United States; but all duties, imposts and excises shall be uniform throughout the United States;

Article I, Section 9.
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.

        Either a tax is Direct and laid by the rule of Apportionment, or a tax is NOT Direct (Indirect) and laid by rule of Uniformity.  In the following case, and in several others, the courts address that there is no third category of taxation.

        On August 15, 1894 'An act to reduce taxation, to provide revenue for the government, and for other purposes,' was passed.  A legal action was taken, resulting in the case being heard by the supreme court.  That court case is Pollock v. Farmer’s Loan & Trust Co., 157 U.S. 429 (1895).  The following excerpts are from the Pollock v. Farmers’ case until otherwise noted.

The bill charged that the provisions in respect of said alleged income
tax incorporated in the act of congress were unconstitutional, null, and
void, in that the tax was a direct tax in respect of the real estate
held and owned by the company in its own right and in its fiduciary
capacity as aforesaid, by being imposed upon the rents, issues, and
profits of said real estate, and was likewise a direct tax in respect of
its personal property and the personal property held by it for others
for whom it acted in its fiduciary capacity as aforesaid, which direct
taxes were not, in and by said act, apportioned among the several
states, as required by section 9 of article 1 of the constitution; and
that, if the income tax so incorporated in the act of congress aforesaid
were held not to be a direct tax, nevertheless its provisions were
unconstitutional, null, and void, in that they were not uniform
throughout the United States, as required in and by section 8 of article
1 of the constitution of the United States, upon many grounds and in
many particulars specifically set forth.

    Mr. Chief Justice FULLER, after stating the facts in the foregoing language, delivered the opinion of the court.

The contention of the complainant is:

First. That the law in question, in imposing a tax on the income or
rents of real estate, imposes a tax upon the real estate itself; and in
imposing a tax on the interest or other income of bonds or other
personal property, held for the purposes of income or ordinarily
yielding income, imposes a tax upon the personal estate itself; that
such tax is a direct tax, and void because imposed without regard to the
rule of apportionment; and that by reason thereof the whole law is
invalidated.

    Note that in each case,  rent of real estate,  interest of bonds,  or other personal property yielding
23.
income,  the funds or money that is generated by the property, is generated without labor.  One could imagine if the instrument we know as a CD or Certificate of Deposit existed at that time, it would have been included.  I have heard words to the effect of ‘putting money to work’ by “investing” your money.  One could think of the interest of any interest bearing account or instrument as the “rent” derived from the ownership and lending of money.  I state this, only to have the reader make a mental note, that so far, in this court case of the year of 1895,  the only mention of income is the ‘rent’ ‘derived’ from the ownership and lending of ‘property’, be the property, money, real estate, or other property.  Continuing with the Pollock case:

And although there have been, from time to time, intimations that there
might be some tax which was not a direct tax, nor included under the
words 'duties, imports, and excises,' such a tax, for more than 100
years of national existence, has as yet remained undiscovered,
notwithstanding the stress of particular circumstances has invited
thorough investigation into sources of revenue. [157 U.S. 429, 558] 
The first question to be considered is whether a tax on the rents or
income of real estate is a direct tax within the meaning of the
constitution. Ordinarily, all taxes paid primarily by persons who can
shift the burden upon some one 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. Nevertheless, it may be admitted
that, although this definition of direct taxes is prima facie correct,
and to be applied in the consideration of the question before us, yet
the constitution may bear a different meaning, and that such different
meaning must be recognized. But in arriving at any conclusion upon this
point we are at liberty to refer to the historical circumstances
attending the framing and adoption of the constitution, as well as the
entire frame and scheme of the instrument, and the consequences
naturally attendant upon the one construction or the other.

        The Chief Justice has noted that there is NO  KNOWN THIRD CATEGORY of tax.  This will be repeated in other Supreme Court cases.  The Chief justice has also described direct and indirect taxes.  I point these out to the reader also, so that the reader can make a mental note of these points.  The Justice and the court come to the conclusion that the taxation of the income yielded by [or from] this property is direct.  The Justice then expends much effort in looking to what the founders and drafters of the Constitution meant by Direct tax.  [This is an excellent primer on Constitutional issues of taxation and observations of the drafter’s and founder’s thoughts].

The real question is, is there any basis upon which to rest the contention
that real estate belongs to one of the two great classes of taxes, and
the rent or income which is the incident of its ownership belongs to the
other? We are unable to perceive any ground for the alleged distinction.
An annual tax upon the annual value or annual user of real estate
appears to us the same in substance as an annual tax on the real estate,
which would be paid out of the rent or income. This law taxes the income
received from land and the growth or produce of the land. Mr. Justice
Paterson observed in Hylton's Case, 'land, independently of its produce,
is of no value,' and certainly had no thought that direct taxes were
confined to unproductive land.

        As indicated, the court could not see any distinction between taxing real estate rent or income, or the taxing of the real estate itself.  With that in mind, the last paragraph of the court decision is thus:

The result is that the decree of the circuit court is reversed and the
cause remanded, with directions to enter a decree in favor of the
complainant in respect only of the voluntary payment of the tax on the
rents and income of the real estate of the defendant company, and of
that which it holds in trust, and on the income from the municipal bonds
owned or so held by it.

        In other words, the court found that the tax on the rents and income of the real estate was void for want of apportionment, and ruled the entire taxing law unconstitutional because of that.  Another mental note for the reader:  It was a tax on the ‘incomeof a corporate entity, that owned or controlled real property, and received rents from the property owned or held.

        This court case was the sole purpose and reason behind the Sixteenth Amendment.  Before introducing the words of the 16th Amendment, I am going to exhibit excerpts from  the Brushaber v. Union Pacific Railroad Company that support my statement that the Pollock decision is the sole reason for the 16th Amendment.

Before coming, however, to the text of the Amendment, to the end that its significance may be determined in the light of the previous legislative and judicial history of the subject with which the Amendment is concerned, and with a knowledge of the conditions which presumptively led up to its adoption, and hence of the purpose it was intended to accomplish, we make a brief statement on those subjects.

        Then for some significant number of words, the court re-affirms what is known about the two great classes of taxation, and Congress’ power regarding the same. Continuing the Court said: 

[I]n 1894... an act was passed laying a tax on incomes from all classes of property and other sources of revenue which was not apportioned, and which therefore was of course assumed to come within the classification of
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excises, duties, and imposts which were subject to the rule of uniformity, but not to the rule of apportionment.

The constitutional validity of this law was challenged on the ground that it did not fall within the class of excises, duties, and imposts, [240 U.S. 1, 16]   but was direct in the constitutional sense, and was therefore void for want of apportionment, and that question came to this court and was passed upon in Pollock v. Farmers' Loan

The court, fully recognizing in the passage which we have previously quoted the all embracing character of the two great classifications, including, on the one hand, direct taxes subject to apportionment, and on the other, excises, duties, and imposts subject to uniformity, held the law to be unconstitutional in substance for these reasons:

    Concluding that the classification of direct was adopted for the purpose of rendering it impossible to burden by taxation accumulations of property, real or personal, except subject to the regulation of apportionment, it was held that the duty existed to fix what was a direct tax in the constitutional sense so as to accomplish this purpose contemplated by the Constitution. ( 157 U.S. 581 .)

Coming to consider the validity of the tax from this point of view, while not questioning at all that in common understanding it was direct merely on income and only indirect on property, it was held that, considering the substance of things, it was direct on property in a constitutional sense, since to burden an income by a tax was, from the point of substance, to burden the property from which the income was derived, and thus accomplish the very thing which the provision as to apportionment of direct taxes was adopted to prevent.

        The Court in the Pollock case recognized that to burden the income derived from property, was to burden the property, which would also burden the accumulation of property.  This was something that was supposed to only happen by a tax laid under the rule of Apportionment.

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 [240 U.S. 1, 17]   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, and hence subject the tax to the regulation as to apportionment which otherwise as an excise would not apply to it.

        The Court is stating that an income tax, in its nature, is an excise (indirect) tax UNLESS it is enforced (collected) in a manner and with the result, that the burden was upon property by reason of the property’s ownership.

        This action by the Court, removed a great deal from the reach of Congress, because the whole law was struck down as unconstitutional even though other parts of the law were not.  In essence, the Pollock court looked through the tax on income, to see that the source the income was derived from was “property” and ruled accordingly.  Again, a mental note reminder for the reader, the ‘income’ tax was upon the ‘income’ of a corporation, which by its nature, would be gain or profit derived from its invested capital and the gain or profit derived from its use or ‘investment’ in labor (or both combined).

        Here is the text of 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.

        Remember from above, the current tax code does not have a definition of “income”.  As I bring into evidence, the topical court cases, the definition of “income” will be shown. As well as the limited applicability of the 16th Amendment.

        The Flint v. Stone Tracy Co. case happened in 1911.  This was after Pollock ruled that taxes on the income derived from property was in effect a tax on property.  The 16th Amendment had not yet been passed, but was ( I assume ) in the process of attempted ratification, since my understanding is that the 16th amendment was drafted in 1909 at the same time as the ‘Corporate excise tax act’.  Congress could not have known if the 16th amendment was going to be ratified when they drafted the ‘Corporate excise tax act’.

This tax, it is expressly stated, is to be equivalent to 1 per centum of the entire net income over and above $5,000 received from all sources during the year,-this is the measure of the tax explicitly adopted by the statute. The income is not limited to such as is received from property used in the business, strictly speaking, but is expressly declared to be upon the entire net income above $5,000 from all sources, excluding the amounts received as dividends on stock in other corporations, joint stock companies or associations, or insurance companies also subject to the tax. In other words, the tax is imposed upon the doing of business of the character described, and the measure of the tax is to be income, with the deduction stated, received not only from property used in business, but from every source.
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        “Net income over and above $5,000”.  What would that figure be, in today’s dollars, adjusted for inflation?  
        The tax act of 1894 attempted to tax basically the same things, “incomederived from every source owned by the business. 
       In terms of my components of tax imposition in this letter, the act of 1894 taxed the nexus (#5) of property by its existence and ownership. nexus (#5a),   The tax act of 1909 taxed the nexus (#5) of a privilege (#5b) or an activity done under privilege (#5c1).  {see pages 18-19 regarding components of tax imposition}

       In Flint v. Stone Tracy, the words of another case were cited:

And in the same connection the chief justice, delivering the opinion of the court in Thomas v. United States, 192 U.S. 363 , 48 L. ed. 481, 24 Sup. Ct. Rep. 305, in speaking of the words 'duties,' 'imposts,' and 'excises,' said:

      'We think that they were used comprehensively, to cover customs and excise duties imposed on importation, consumption, manufacture, and sale of certain commodities, privileges, particular business transactions, vocations, occupations, and the like.'

Duties and imposts are terms commonly applied to levies made by governments on the importation or exportation of commodities. Excises are 'taxes laid upon the manufacture, sale, or consumption of commodities within the country, upon licenses to pursue certain occupations, and upon corporate privileges.' Cooley, Const. Lim. 7th ed. 680.

       “Excises are ‘taxes laid upon the manufacture, sale, or consumption of commodities within the country, upon licenses… and upon corporate privileges.”  In all these events, the tax is avoidable by avoiding the action that is taxed.

The tax under consideration, as we have construed the statute, may be described as an excise upon the particular privilege of doing business in a corporate capacity, i.e., with the advantages which arise from corporate or quasi corporate organization; or, when applied to insurance companies, for doing the business of such companies. As was said in the Thomas Case, 192 U. S. supra, the requirement to pay such taxes involves the exercise of [220 U.S. 107, 152]   privileges, and the element of absolute and unavoidable demand is lacking. If business is not done in the manner described in the statute, no tax is payable.

        That comment certainly nails down the 1909 tax on the doing of business in a corporate form as an activity done under privilege {nexus (#5c1)}.

        In addressing its own case at bar, the Flint case expounds upon the privilege of doing business in a corporate capacity:

The thing taxed is not the mere dealing in merchandise, in which the actual transactions may be the same, whether conducted by individuals or corporations, [220 U.S. 107, 162]   but  the tax is laid upon the privileges which exist  in conducting business with the advantages which inhere in the corporate capacity of those taxed, and which are not enjoyed by private firms or individuals. These advantages are obvious, and have led to the formation of such companies in nearly all branches of trade.

The continuity of the business, without interruption by death or dissolution, the transfer of property interests by the disposition of shares of stock, the advantages of business controlled and managed by corporate directors, the general absence of individual liability, these and other things inhere in the advantages of business thus conducted, which do not exist when the same business is conducted by private individuals or partnerships. It is this distinctive privilege which is the subject of taxation, not the mere buying or selling or handling of goods, which may be the same, whether done by corporations or individuals.

        In writing about the Pollock case, the Flint case addresses the expansion of what property is considered to be taxable only by apportionment.

      'Considering that the constitutional rule of apportionment had its origin in the purpose to prevent taxes on persons solely because of their general ownership of property from being levied by any other rule than that of apportionment, two things were decided by the court: First, that no sound distinction existed between a tax levied on a person solely because of his general ownership of real property, and the same tax imposed solely because of his general ownership of personal property. Secondly, that the [220 U.S. 107, 150]   tax on the income derived from such property, real or personal, was the legal equivalent of a direct tax on the property from which said income was derived, and hence must be apportioned.

        This point is mentioned for a mental note of the reader, and will be addressed again when I return to writings from the Brushaber. 
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        Stratton’s Independence, LTD. v. Howbert  case of 1913 (231 U.S. 399) addresses the doing of business:

But when a company is digging pits, sinking shafts, tunneling, drifting, stoping, drilling, blasting, and hoisting ores, it is employing capital and labor in transmuting a part of the realty into personalty, and putting it into marketable form. The very process of mining is, in a sense, equivalent in its results to a manufacturing process. And, however the operation shall be described, the transaction is indubitably 'business' within the fair meaning of the act of 1909; and the gains derived from it are properly and strictly the income from that business; for 'income' may be defined as the gain derived from capital, from labor, or from both combined, and here we have combined operations of capital and labor.

        In addressing the doing of business, the Stratton Court addresses that the gains derived from doing that business is the “income” from that business.  “Income” may be defined as gain derived…. and at this point I start highlighting and pointing out the word “derived” from capital or labor or both. Continuing with Stratton:   In regard to “income”, the measure of tax, and corporate business benefit, The Stratton court says:

As to what should be deemed 'income' within the meaning of 38, it of course need not be such an income as would have been taxable as such, for at that time (the 16th Amendment not having been as yet ratified) income was not taxable as such by Congress without apportionment according to population, and this tax was not so apportioned.

Evidently Congress adopted the income as the measure of the tax to be imposed with respect to the doing of business in corporate form because it desired that the excise should be imposed, approximately at least, with regard to the amount of benefit presumably derived by such corporations from the current operations of the government.

In Flint v. Stone Tracy Co.… it was held that Congress, in exercising the right to tax a legitimate subject of taxation as a franchise [231 U.S. 399, 417]   or privilege, was not debarred by the Constitution from measuring the taxation by the total income, although derived in part from property which, considered by itself, was not taxable. It was reasonable that Congress should fix upon gross income, without distinction as to source, as a convenient and sufficiently accurate index of the importance of the business transacted.

        Brushaber v. Union Pacific Railroad Company was in 1916 after the alleged ratification of the 16th  Amendment.  I state alleged, because of excerpts and commentary about a book written by Bill Benson.  That the 16th amendment was not properly ratified is outside the realm of this letter, and is immaterial to the point of what law alleges to makes me liable for subtitle A income taxes.
        Brushaber v. Union Pacific Railroad Company, 240 U.S. 1 (1916), in making comment about the expansion of what property is ‘protected’ by the rule of Apportionment, noted above in the Flint case, and commenting upon the same itself, notes the following about the 16th Amendment, that its drafters were aware of:

… [O]n the contrary shows that it was drawn with the object of maintaining the limitations of the Constitution and harmonizing their operation.

We say this because it is to be observed that although from the date of the Hylton Case, because of statements made in the opinions in that case, it had come to be accepted that direct taxes in the constitutional sense were confined to taxes levied directly on real estate because of its ownership, the Amendment contains nothing repudiation or challenging the ruling in the Pollock Case that the word 'direct' had a broader significance, since it embraced also taxes levied directly on personal property because of its ownership, and therefore the Amendment at least impliedly makes such wider significance a part of the Constitution

        Taxes upon personal property, because of its ownership, is now under the requirement of the rule of apportionment.  

        Brushaber also re-affirms what was stated in Pollock, that there is no third category of taxation, and that the 16th Amendment DID NOT CREATE a third category.

We are of opinion, however, [240 U.S. 1, 11]   that the confusion is not inherent, but rather arises from the conclusion that the 16th Amendment provides for a hitherto unknown power of taxation; that is, a power to levy an income tax which, although direct, should not be subject to the regulation of apportionment applicable to all other direct taxes.

And the far-reaching effect of this erroneous assumption will be made clear by generalizing the many contentions advanced in argument to support it, as follows:

        After examining four scenarios that proceed from the “erroneous assumption” and showing why they can not be, the Brushaber court then says this about the contention of a third category of taxation and why it can not be:

But it clearly results that the proposition [*] and the contentions [240 U.S. 1, 12]   under it, if acceded to, would cause one provision of the Constitution to destroy another; that is, they would result in bringing the provisions of the Amendment exempting a direct tax from apportionment into irreconcilable conflict with the general requirement that all direct taxes
27.
be apportioned.
                [*] The erroneous assumption from above.

Moreover, the tax authorized by the Amendment, being direct, would not come under the rule of uniformity applicable under the Constitution to other than direct taxes, and thus it would come to pass that the result of the Amendment would be to authorize a particular direct tax not subject either to apportionment or to the rule of geographical uniformity, thus giving power to impose a different tax in one state or states than was levied in another state or states.

This result, instead of simplifying the situation and making clear the limitations on the taxing power, which obviously the Amendment must have been intended to accomplish, would create radical and destructive changes in our constitutional system and multiply confusion.

       The Sixteenth Amendment did not create a class of taxation that was direct without the rule of apportionment, nor did it create a class of taxation that was indirect without the rule of uniformity. 

        The Stanton v. Baltic Mining Company case of 1916 followed the Brushaber case.  In the Stanton case, the Court said addressed and summarized a  proposition of the plaintiff as this:

That as the 16th Amendment authorizes only an exceptional direct income tax without apportionment, to which the tax in question does not conform, it is therefore not within the authority of that Amendment.

    The Stanton court then dismissed the proposition and along with it, the third category of taxation argument with these words:

As the first proposition is plainly in conflict with the meaning of the 16th Amendment as interpreted in the Brushaber Case, it may also be put out of view.

        In addressing a second proposition the court found in error, and again re-iterating that there is no third power or category of taxation, the court said this:

But, aside from the obvious error of the proposition, intrinsically considered, it manifestly disregards the fact that by the previous ruling it was settled that the provisions of the 16th Amendment conferred no new power of taxation, but simply prohibited the previous complete and plenary power of income taxation possessed by Congress from the beginning from being taken out of the category of indirect taxation to which it inherently belonged, and being placed [240 U.S. 103, 113]   in the category of direct taxation subject to apportionment by a consideration of the sources from which the income was derived,-that is, by testing the tax not by what it was, a tax on income, but by a mistaken theory deduced from the origin or source of the income taxed.

       I am going to interject that what “income” is, has not really been addressed openly.  Remember when I started on the Constitutional (and the court related ) issues of taxation,  the definition of “income”, missing from the present IRC has not yet been addressed.  Without a non-nebulous or non-missing definition of “income”, the understanding of a tax onincome” is going to be just as nebulous. (nebulous - Cloudy, misty, or hazy. - Lacking definite form or limits; vague)

Mark, of course, in saying this we are not here considering a tax not within the provisions of the 16th Amendment, that is, one in which the regulation of apportionment or the rule of uniformity is wholly negligible because the tax is one entirely beyond the scope of the taxing power of Congress, and where consequently no authority to impose a burden, either direct or indirect, exists.

In other words, we are here dealing solely with the restriction imposed by the 16th Amendment on the right to resort to the source whence an income is derived in a case where there is power to tax for the purpose of taking the income tax out of the class of indirect, to which it generically belongs, and putting it in the class of direct, to which it would not otherwise belong, in order to subject it to the regulation of apportionment.

        It is of passing interest, that there are taxes that are beyond the power of Congress to impose a burden upon.

       The Supreme Court in the 1918 Doyle v. Mitchell Bros. CO. , (247 U.S. 179) case, in regard to “income”, said this:

Yet it is plain, we think, that by the true intent and meaning of the act the entire proceeds of a mere conversion of capital assets were not to be treated as income. [247 U.S. 179, 185]   Whatever difficulty there may be about a precise and scientific definition of 'income,' it imports, as used here, something entirely distinct from principal or capital either as a subject of taxation or as a measure of the tax; conveying rather the idea of gain or increase arising from corporate activities. As was said in Stratton's Independence v. Howbert, 231 U.S. 399, 415 , 34 S. Sup. Ct. 136: 'Income may be defined as the gain derived from capital, from labor, or from both combined.'
28.
        In the 1920 case of Eisner v. Macomber  (252 U.S. 189), The court said this regarding the 16th Amendment:

The Sixteenth Amendment must be construed in connection with the taxing clauses of the original Constitution and the effect attributed to them before the amendment was adopted. In Pollock v. Farmers' Loan & Trust Co., under the Act of August 27, 1894, it was held that taxes upon rents and profits of real estate and upon returns from investments of personal property were in effect direct taxes upon the property from which such income arose, imposed by reason of ownership; and that Congress could not impose such taxes without apportioning them among the states according to population, as required by article 1, 2, cl. 3, and section 9, cl. 4, of the original Constitution.

Afterwards, and evidently in recognition of the limitation upon the taxing power of Congress thus determined, the Sixteenth Amendment was adopted, in words lucidly expressing the object to be accomplished:

      'The Congress shall have power to lay and collect taxes on incomes, from whatever source derived, without apportionment among [252 U.S. 189, 206]   the several states, and without regard to any census or enumeration.'

As repeatedly held, this did not extend the taxing power to new subjects, but merely removed the necessity which otherwise might exist for an apportionment among the states of taxes laid on income.

        The 16th Amendment only acts upon what could be called 16th Amendment income.  This “income” is a “term” that has been defined several times already as cited in the court cases above in this letter.  I will be dealing specifically with this “income” when I summarize the string of cases I have cited.  Eisner continues in regard and referring to the 16th Amendment:

A proper regard for its genesis, as well as its very clear language, requires also that this amendment shall not be extended by loose construction, so as to repeal or modify, except as applied to income, those provisions of the Constitution that require an apportionment according to population for direct taxes upon property, real and personal. This limitation still has an appropriate and important function, and is not to be overridden by Congress or disregarded by the courts.

        Only this 16th Amendment “income” is to be considered as a direct tax that would not require apportionment.  If something is not 16th Amendment “income”, then any direct taxes on that something STILL require apportionment.  My comments regarding the existence of a “16th Amendment Income” is substantiated by this continuation of citation of the Eisner case:

In order, therefore, that the clauses cited from article 1 of the Constitution may have proper force and effect, save only as modified by the amendment, and that the latter also may have proper effect, it becomes essential to distinguish between what is and what is not 'income,' as the term is there used, and to apply the distinction, as cases arise, according to truth and substance, without regard to form. Congress cannot by any definition it may adopt conclude the matter, since it cannot by legislation alter the Constitution, from which alone it derives its power to legislate, and within whose limitations alone that power can be lawfully exercised.

        In addressing its own case the Eisner court states this regarding both “income” and the 16th Amendment:

For the present purpose we require only a clear definition of the term 'income,' [252 U.S. 189, 207]   as used in common speech, in order to determine its meaning in the amendment, and, having formed also a correct judgment as to the nature of a stock dividend, we shall find it easy to decide the matter at issue.

        The Court continues:

After examining dictionaries in common use, … we find little to add to the succinct definition adopted in two cases arising under the Corporation Tax Act of 1909 (Stratton's Independence v. Howbert; Doyle v. Mitchell Bros. Co) 

'Income may be defined as the gain derived from capital, from labor, or from both combined,' provided it be understood to include profit gained through a sale or conversion of capital assets, to which it was applied in the Doyle Case

        In addressing its own case again, the Eisner Court states:

The government, although basing its argument upon the definition as quoted, placed chief emphasis upon the word 'gain,' which was extended to include a variety of meanings; while the significance of the next three words was either overlooked or misconceived. 'Derived-from- capital'; 'the gain-derived-from-capital,' etc. Here we have the essential matter: not a gain accruing to capital; not a growth or increment of value in the investment; but a gain, a profit, something of exchangeable value, proceeding from the property, severed from the capital, however invested or employed, and coming in, being 'derived'-that is, received or drawn by the recipient (the taxpayer) for his separate use, benefit and disposal- that is income derived from property. Nothing else answers the description.
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        So here they have the essential matter: A gain, a profit, severed from the capital. The capital is not reduced in the severing.  So moving back up in the text of the Eisner case to quote this:

The fundamental relation of 'capital' to 'income' has been much discussed by economists, the former being likened to the tree or the land, the latter to the fruit or the crop; the former depicted as a reservoir supplied from springs, the latter as the outlet stream, to be measured by its flow during a period of time.

        My dictionary defines derive as To obtain or receive from a source (or origin).  It also uses the metaphor of a spring as a source.  A spring would insure that the source never “dried up”.  To derive a gain or profit from capital is to increase the value of the capital and then sever the gain from the capital. 

       In the Merchant’s Loan & Trust Co. v. Smietanka, (255 U.S. 509) of 1921, The meaning of “income” and the 16th Amendment is again addressed by the Supreme Court.

It is obvious that these decisions in principle rule the case at bar if the word 'income' has the same meaning in the Income Tax Act of 1913 that it had in the Corporation Excise Tax Act of 1909, and that it has the same scope of meaning was in effect decided in Southern Pacific Co. v. Lowe, where it was assumed for the purposes of decision that there was no difference in its meaning as used in the act of 1909 and in the Income Tax Act of 1913.

There can be no doubt that the word must be given the same meaning and content in the Income Tax Acts of 1916 and 1917 that it had in the act of 1913.

When to this we add that in Eisner v. Macomber, supra, a case arising under the same Income Tax Act of 1916 which is here involved, the definition of 'income' which was applied was adopted from Stratton's Independence v. Howbert, supra, arising under the Corporation Excise Tax Act of 1909, with the addition that it should include 'profit gained through sale or conversion of capital assets,' there would seem to be no room to doubt that the word must be given the same meaning in all of the Income Tax Acts of Congress that was given to it in the Corporation Excise Tax Act, and that what that meaning is has now become definitely settled by decisions of this Court.

In determining the definition of the word 'income' thus arrived at, this Court has consistently refused to enter into the refinements of lexicographers or economists, and has approved, in the definitions quoted, what it believed to be the commonly understood meaning of the term which must have been in the minds of the people when they adopted the Sixteenth Amendment to the Constitution. Doyle v. Mitchell Brothers Co.; Eisner v. Macomber.

Notwithstanding the full argument heard in this case and in the series of cases now under consideration, we continue entirely satisfied with that definition, and, since the fund here taxed was the amount realized from the sale of the stock in 1917, less the capital investment [255 U.S. 509, 520]   as determined by the trustee as of March 1, 1913, it is palpable that it was a 'gain or profit' 'produced by' or 'derived from' that investment, and that it 'proceeded' and was 'severed' or rendered severable from it by the sale for cash, and thereby became that 'realized gain' which has been repeatedly declared to be taxable income within the meaning of the constitutional amendment and the acts of Congress. Doyle v. Mitchell Brothers Co. and Eisner v. Macomber, supra.

Some observations about common labor


       The Supreme Court in the IN RE SLAUGHTER-HOUSE CASES, 83 U.S. 36 (1872), in dealing with a situation of a monopoly set up by a city, the court stated:

By an act of legislative partiality it enriches seventeen persons and deprives nearly a thousand others of the same class, and as upright and competent as the seventeen, of the means by which they earn their daily bread.

The right to labor, the right to one's self physically and intellectually, and to the product of one's own faculties, is past doubt property, and property of a sacred kind.

        The Supreme Court in the Butcher’s Union Co. v. Crescent City Co., 111 U.S. 746 (1884) quoted Adam Smith’s wealth of nations, in a case again about a monopoly that affected individuals rights to labor at common occupations.

Among these inalienable rights, as proclaimed in that great document, is the right of men to pursue their happiness, by which is meant the right to pursue any lawful business or vocation, in any manner not inconsistent with the equal rights of others, which may increase their prosperity or develop their faculties, so as to give to them their highest enjoyment.

The common business and callings of life, the ordinary trades and pursuits, which are innocuous in themselves, and have been followed in all
30.
communities from time immemorial, must therefore be free in this country to all alike upon the same conditions. The right to pursue them, without let or hindrance, except that which is applied to all persons of the same age, sex, and condition, is a distinguishing privilege of citizens of the United States, and an essential element of that freedom which they claim as their birthright.

It has been well said that 'the property which every man has in his own labor, as it is the original foundation of all other property, so it is the most sacred and inviolable. The patrimony of the poor man lies in the strength and dexterity of his own hands, and to hinder his employing this strength and dexterity in what manner he thinks proper, without injury to his neighbor, is a plain violation of this most sacred property. It is a manifest encroachment upon the just liberty both of the workman and of those who might be disposed to employ him. As it hinders the one from working at what he thinks proper, so it hinders the others from employing whom they think proper.' Smith, Wealth Nat. bk. 1, c. 10.


        In Coppage v. State of Kansas, 236 U.S. 1 (1915) the Supreme Court makes a Constitutional connection regarding the Right of personal Liberty and the Right of Private Property, as well as the connection to the Right to labor and contracts.

And the court has reached a conclusion which, in its judgment, is consistent with both the words and spirit of the Constitution, and is sustained as well by sound reason.'

The principle is fundamental and vital. Included in the right of personal liberty and the right of private property-partaking of the nature of each- is the right to make contracts for the acquisition of property. Chief among such contracts is that of personal employment, by which labor and other services are exchanged for money or other forms of property.

If this right be struck down or arbitrarily interfered with, there is a substantial impairment of liberty in the long-established constitutional sense. The right is as essential to the laborer as to the capitalist, to the poor as to the rich; for the vast majority of persons have no other honest way to begin to acquire property, save by working for money.

        Labor and other services are exchanged for money. Both parties to the exchange must agree that the exchange is fair and equal, or the exchange simple would not happen.


31.
Recap of “income

        It should be noted, that in every case except Macomber involving the definition of the word “income”,  that I am aware of,  it was a corporate entity that was involved as a litigant in the court case.

Farmer’s Loan & Trust Co.
Stone Tracy Co.
Stratton’s Independence, LTD.
Union Pacific Railroad Company   
Baltic Mining Company
Mitchell Bros. CO.
Macomber --  Owner of stocks of a corporation.
Merchant’s Loan & Trust Co.

        For review, I am going to repeat the words of the Doyle v. Mitchell Bros case:

Whatever difficulty there may be about a precise and scientific definition of 'income,' it imports, as used here, something entirely distinct from principal or capital either as a subject of taxation or as a measure of the tax; conveying rather the idea of gain or increase arising from corporate activities.

        To derive a gain or profit from property is much the same as from capital.  My one dictionary defines capital as - Wealth in the form of money or property, used or accumulated in a business by a person, partnership, or corporation. 
        To derive a gain or profit, one would invest money (a form of property, capital) or other property in an investment or business.  The gain or profit would be the return on investment, referred to in the parlance of that arena as ROI.   If one takes $100 and puts it in an interest bearing account, or other instrument that pays interest for the use of the money, and one receives 7% gain per year, this money, absent taxes, would double in approximately 11 years.  Absent taxes, the ROI of 100% would happen in 11 years.   On the other hand, if one were to take that money and invest it in 4 hours of a mechanic’s labor ($25/hour) and then charge $50/hour as a shop rate, as in a corporate auto repair garage, the ROI of that original $100 would be 100% after 4 hours, Absent taxes, and the other expenses related to the business.  That would be gain or profit derived from labor.

        On page 23 I noted that “income” is not defined within the IRC.  In the Merchant’s Loan & Trust Co. v. Smietanka case, The Supreme Court stated: “there would seem to be no room to doubt that the word must be given the same meaning in all of the Income Tax Acts of Congress that was given to it in the Corporation Excise Tax Act.”

    Sec. 61. Gross income defined
 
-STATUTE-
    (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:

        “Income” is to be given the same meaning in ALL THE INCOME TAX ACTS of Congress as given to it in the Corporation Excise Tax Act of 1909.   If one substitutes the “idea” from above in the Doyle v. Mitchell Bros case: where “income” “conveys” the idea of “gain or increase arising from corporate activities” for the use of the word “income” in section 61, And keeping in mind from the Stratton case that gain is derived from capital, from labor, or from both combined, We get “ gain or increase arising from corporate activities derived from capital, labor, or both.  A completely different picture appears regarding what the “income” tax is about.

    Sec. 61. Gross income defined
 
-STATUTE-
(a) General definition
Except as otherwise provided in this subtitle, gross income means
all gain or increase arising from corporate activities derived from capital, labor, or both, or from whatever source derived, including (but not limited
to) the following items:

        This gives one something to think about, regarding the comment in passing, on page 28, where the Stanton Court observes that there are some taxes not within the power of Congress to reach.

        Does the definition of “income” as defined in several Supreme Court Cases have any meaning that does not include the reference to “Corporate Activities”?  If so, please indicate where this non Corporate related definition is to be found.
32.

Information required to assist me in determining any tax liabilities I may have.


       1.  What law, clearly and concisely makes me liable for any tax imposed by Subtitle A of the Internal Revenue Code?

       2.  Should I use the rules found in 26 USC § 861(b) and 26 CFR § 1.861-8 (in addition to any other pertinent sections) to determine the SOURCES that my taxable income derives from within the United States?

       3.  If I should not use sections 26 USC § 861(b) and 26 CFR § 1.861-8 (in addition to any other pertinent sections) to determine the SOURCES that my taxable income derives from within the United States, please show where the law says who should or should not use those sections to determine the SOURCES that taxable income derives from within the United States.

       4.  Has the Fifth Amendment to the constitution been rescinded? If so, please identify for me, the Amendment that removed MY protections against incriminating myself under the Fifth Amendment.

       5.  Has the U.S. Constitution been amended such that due process no longer includes jury trials such as noticed in the Sixth and Seventh Amendments?  If so, please indicate which Amendment repealed the provisions of the Sixth and Seventh Amendments.

       6.  What EXACTLY is the “income” tax levied upon in the case of a natural person, in the case of a human, who lives and works solely and wholly within a state of the union?

       7.  Does the definition of “income” as defined in several Supreme Court Cases have any meaning that does not include the reference to “Corporate Activities”?  If so, please indicate where this non Corporate related definition is to be found.






Under penalties of perjury,
I declare that I have read the entire letter this page is contained within, and examined the forgoing answers on this questionnaire, and to the best of my knowledge and belief, they are complete, true, and correct.



______________________________________________                                                                   
Your signature

________________________________
Your employee ID Number

________________________________
Date
33.

Information required to assist me in determining any tax liabilities I may have.


       1.  What law, clearly and concisely makes me liable for any tax imposed by Subtitle A of the Internal Revenue Code?

       2.  Should I use the rules found in 26 USC § 861(b) and 26 CFR § 1.861-8 (in addition to any other pertinent sections) to determine the SOURCES that my taxable income derives from within the United States?

       3.  If I should not use sections 26 USC § 861(b) and 26 CFR § 1.861-8 (in addition to any other pertinent sections) to determine the SOURCES that my taxable income derives from within the United States, please show where the law says who should or should not use those sections to determine the SOURCES that taxable income derives from within the United States.

       4.  Has the Fifth Amendment to the constitution been rescinded? If so, please identify for me, the Amendment that removed MY protections against incriminating myself under the Fifth Amendment.

       5.  Has the U.S. Constitution been amended such that due process no longer includes jury trials such as noticed in the Sixth and Seventh Amendments?  If so, please indicate which Amendment repealed the provisions of the Sixth and Seventh Amendments.

       6.  What EXACTLY is the “income” tax levied upon in the case of a natural person, in the case of a human, who lives and works solely and wholly within a state of the union?

       7.  Does the definition of “income” as defined in several Supreme Court Cases have any meaning that does not include the reference to “Corporate Activities”?  If so, please indicate where this non Corporate related definition is to be found.






Under penalties of perjury,
I declare that I have read the entire letter this page is contained within, and examined the forgoing answers on this questionnaire, and to the best of my knowledge and belief, they are complete, true, and correct.



______________________________________________                                                                   
Your signature

________________________________
Your employee ID Number

________________________________
Date
34.