© Copyright 1993 By Frederick Mann, ALL RIGHTS RESERVED.
Introduction
In order to legally and safely beat the IRS it is necessary for you to adopt a certain frame of mind. You need to have a certain independence of mind. You need to be able to read the U.S. Constitution for yourself. You need to be able to recognize how the Supreme Court “judges” and other politicians routinely violate the Constitution. You need to realize that practically all lawyers and accountants are handmaidens of the “terrocrats” – terrorist bureaucrats or coercive government agents. If you cannot already think for yourself, you need to learn to do so. You need to be able to think and do what is contrary to the entrenched among your family and friends. You need to become the authority of your own life. These and related issues are covered in the many other reports.
The Best Kept Secrets of the IRS
- The Sixteenth Amendment, supposedly giving Congress the power to collect income taxes, was never ratified. (For the compelling evidence, get the book The Law That Never Was from Common Sense Press, PO Box 1544, Billings, MT 59103.) Furthermore, the 16th Amendment, even if ratified, is just a smokescreen that doesn’t grant any new taxing powers to Congress. The Supreme Court found in 1916 in the case Brushaber v. Union Pacific R.R. Co.; 240 U.S. 1, that the 16th Amendment didn’t extend the taxing powers of Congress.
- The Constitution does not empower Congress to delegate any function to the IRS.
- The IRS is apparently a private corporation registered in Delaware.
- The IRS is the Gestapo of the Federal Reserve bankers. The same sponsors pushed the Federal Reserve Act and the Sixteenth Amendment through Congress in 1913.
- The purpose of the IRS is not to collect taxes but to control and terrorize people.
- It is doubtful whether money collected by the IRS goes to the government. Checks received by the IRS seem to be deposited by the Federal Reserve bankers, with “FRB” (for “Federal Reserve Bank”) stamped on returned checks.
- Because of the limitations placed by the Constitution on the federal government, the IRS has no jurisdiction in the 50 states.
- The Internal Revenue Code is not law.
- The Internal Revenue Code defines the term “person” in such a way that it does not apply to most Americans.
- For most Americans, the income tax is voluntary.
- The federal income tax is an indirect or excise tax. The end-recipient of income cannot be liable for income tax.
- The term “income” is so defined in the tax code that wages or salaries do not constitute “income.”
- Most corporations in America need not subject themselves to the IRS in any way.
- Corporations may only withhold taxes from an employee’s earnings if the employee specifically requests such withholding. No one can be legally forced to complete a W4 withholding form.
- Employers who withhold part of the salaries or wages of employees against the will of the latter, commit theft.
- The U.S. Constitution effectively defines “money” as gold and silver – Article I, Section 10: “No State shall make anything but gold and silver coin a tender in payment of debts.” The law agrees: “The terms ‘lawful money’ and “lawful money of the United States’ shall be construed to mean gold or silver coin of the United States.” (12 USC 152.) The Federal Reserve Note is not money; it is counterfeit currency. Hence receipts in Federal Reserve Notes, having no legal value, are not taxable.
- It may be that most Americans can relinquish their “U.S. Citizenship” and declare themselves State Citizens, subject to neither Federal nor State income taxes.
- There is a legal principle “void for vagueness.” The tax code is in many parts so vague that nobody (including IRS terrocrats) can understand it. A 1991 Supreme Court case found that if someone sincerely believes that he or she doesn’t have to file a tax return and pay income tax, then that person cannot be convicted of a crime. Several other courts have found accordingly.
- Also in 1991, the Fifth Circuit Court of Appeals held that if someone claims they are not subject to the federal income tax, then the burden to prove the contrary is on the IRS. For most Americans the IRS can’t prove this.
- Filing a 1040 or other tax return involves the surrender of the Fifth Amendment right to not incriminate oneself. The Fifth Amendment of the Constitution says that no one can be forced to incriminate himself or herself.
- All IRS liens and seizures are illegal.
- The IRS in its totality is a violent, criminal extortion racket with no legal basis whatsover.
- There are methods for protecting income and assets so that, no matter what the IRS terrocrats do, it becomes difficult for them to violate our unalienable rights to own property and the fruits of our labor. One way is to use Trusts.
- In his book Tax Fraud & Evasion: The War Stories, Attorney Donald W. MacPherson exposes the IRS as a paper tiger. The probability that any individual will be prosecuted for not paying taxes to the IRS are about one in 70,000. The probability that any individual will go to jail for not paying taxes are about one in 146,000. I believe that if you follow the advice in Beat-The-IRS Manual and The Pure Trust Package, the probability of having trouble with the IRS drops close to zero.
A Call to Action
Practically everything the Federal Government does is evil, unconstitutional, criminal, and highly destructive. The IRS Gestapo plays a major role in keeping the criminal terrocrats in power. The IRS needs to be eliminated. In the words of Attorney Donald W. MacPherson, “The Beast must be destroyed.” What Federal Government we need (if any) can be financed through voluntary exchange for valuable products and services produced, augmented by voluntary contributions.
Please do your patriotic duty. Finance yourself – and worthy causes and institutions of your choice. Are you going to stay in the cattle herd – or join the human race of free sovereign individuals?
QUESTIONS AND ANSWERS
1. Is it possible for Americans to legally stop paying income taxes?
It is possible for most Americans to legally stop paying both federal and state income taxes. This applies to most Americans who live and work in the 50 States. It does not necessarily apply to Americans working for the federal government, or those who work in federal military installations. The central issue here is federal jurisdiction which is covered under question #3. However, anyone who has entered into a contract with the IRS to pay them, has to fulfill that contract.
How the IRS tricks its victims into becoming “liable”
The IRS see it this way: By sending a 1040 tax return to the IRS, you voluntarily assess yourself, you acquiesce to IRS jurisdiction, and you become “liable” for federal income tax. Essentially, you enter into a contract with them.
Alternatively, when you open a bank account, on your signature card you sign something like, “Under penalty of perjury I certify that… The number shown on this form is my correct taxpayer identification number.” The signature card (without your knowledge) may also commit you to adhere to all current and future IRS regulations. Simply by opening a bank account you condemn yourself to being a “taxpayer” and you swear that your “social security number” is your “correct taxpayer identification number.”
By understanding this, you can learn how to undo it, because these supposed “contracts” with the IRS aren’t valid – as explained in detail in other Tax Reports.
2. Do all Americans have to file 1040 returns? If not, which Americans have to file?
Not all Americans have to file. Americans living and working outside federal jurisdiction (basically in the 50 States) don’t have to file. Those subject to federal jurisdiction (Washington DC, federal military installations, and U.S. territories like Puerto Rico, Guam, American Samoa, and the Virgin Islands) probably have to file. Once any American has filed a 1040 return, he or she has to continue to file, unless he or she takes special measures to revoke the “election” to pay income taxes. See question #4.
3. What does the U.S. Constitution say about federal jurisdiction and how does this affect who is subject to federal income tax?
Two clauses in the Constitution define federal jurisdiction:
(a) Article I, Section 8, Clause 17: “The Congress shall have the power to exercise exclusive legislation, in all cases whatsoever, over such district (not exceeding ten miles square) as may, by cession of particular States, and the acceptance of Congress, become the seat of the Government of the United States; and to exercise like authority over all places purchased by the consent of the Legislature of the State in which the same shall be, for the erection of forts, magazines, arsenals, and other needful buildings…”
(b) Article IV, Section 3, Clause 2: “The Congress shall have the power to dispose of and make all needful rules and regulations respecting the territory or other property belonging to the United States…”
I have news for you, folks: The territorial and legislative jurisdiction of the U.S. Congress extends to the ten square miles of Washington DC, military installations where States have explicitly ceded authority to the federal government, and U.S. Territories such as Puerto Rico, Guam, American Samoa, and the Virgin Islands. In accordance, IRS income taxes apply (if they apply at all) to people who live and/or work in these areas, or who work for the federal government.
4. Does the Internal Revenue Code specifically tell you how to terminate or revoke your “election” to pay federal income tax?
Section 6013(g)(4) states the following: “TERMINATION OF ELECTION. – An election under this subsection shall terminate at the earliest of the following times: (A) REVOCATION BY TAXPAYERS. – If either taxpayer revokes the election, as of the first taxable year for which the last day prescribed by law for filing the return of tax under chapter 1 has not yet occurred.”
ORIGINALLY, MY ANSWER TO QUESTION 4 IMPLIED “YES.” HOWEVER, I WAS MISTAKEN. THE ABOVE IS REALLY AN “ELECTION” TO BE TREATED IN A DIFFERENT WAY BY THE IRS.
SO, THE CORRECT ANSWER TO QUESTION 4 IS “NO!”
5. Why, in its literature, does the IRS consistently say that the federal income tax is based on “self-assessment and voluntary compliance?”
IRS literature often uses the terms “self-assessment” and “voluntary compliance.” The reason for this is that senior IRS personnel know that the law does not require most Americans to file income tax returns. The income tax does not apply to most Americans unless they voluntarily enter into a contract with the IRS. By filling out, signing, and filing an income tax return you voluntarily enter into a contract with the IRS. Once you have entered into such a contract it is not easy to get out of it. Tax abatement service companies provide the expert support to terminate the contract.
Like all government agencies, the IRS has a mission. Its mission as published in the Federal Register of March 25, 1974, includes: “The mission of the Service is to encourage and achieve the highest degree of voluntary compliance… ” Do IRS Commissioners agree with the voluntary nature of federal income tax?
- “Each year American taxpayers voluntarily file their tax returns and make a special effort to pay the taxes they owe.” Johnnie M. Walker, IRS Commissioner, 1971, Internal Revenue 1040 Booklet.
- “Our tax system is based on individual self assessment and voluntary compliance.” Mortimer Caplin, IRS Commissioner, 1975 Internal Revenue Audit Manual.
- “In fairness to the millions of taxpayers who voluntarily file, report all their income and pay the tax due… .” Jerome Kurtz, IRS Commissioner, 1979 Internal Revenue Annual Report.
- “The IRS’s primary task is to collect taxes under a voluntary compliance system.” Jerome Kurtz, IRS Commissioner, 1980 Internal Revenue Annual Report.
- According to Alan Stang (Taxscam: How The IRS Swindles You And What You Can Do About It), Robert J. Brann, Chief of Technical Services Branch, IRS, Washington, D.C., wrote to a “gentleman in New York” on March 11, 1981, “… In carrying out its responsibilities for administering the federal income tax laws, the Service encourages voluntary compliance by taxpayers. Voluntary co mpliance places on tax payers the initial responsibility for deciding whether under the law they are required to file returns, and the responsibility for paying any tax that may be due… “
- “… Encourage and achieve the highest possible degree of voluntary compliance… ” Harold M. Browning, IRS District Director, Hawaii, 1984.
- “Let’s not forget the delicate nature of the voluntary compliance tax system… ” Lawrence Gibbs, IRS Commissioner, Las Vegas Review Journal, May 18, 1988.
- “We don’t want to lose voluntary compliance… We don’t want to lose this gem of voluntary compliance.” Fred Goldberg, IRS Commissioner, Money magazine, April, 1990.
During the Eighty-Third Congress in 1953, Dwight E. Avis, head of the Alcohol and Tobacco Tax Division, Bureau of Internal Revenue, testified before the Ways and Means Committee, “Let me point this out now: Your income tax is 100 percent voluntary tax, and your liquor tax is 100 percent enforced tax. Now, the situation is as different as night and day.”
The tax return for a manufacturer of tobacco products says, “The information is mandatory by statute. (26 USC 5061, 5703).” All mandatory tax returns mention penalties for not filing, for example, the Alcoholic Beverage Tax Return states, “… punishable upon conviction by a fine of not more than $100,000.00… ” Check your 1040 for the statute that says you must file, and the penalty for not filing – you won’t find them.
Congress has a legal research branch called the Congressional Research Service. A letter, dated June 26, 1989, from the office of Senator Daniel K. Inouye in Hawaii to a tax consultant Fred Ortiz states, that based on the research performed by the Congressional Research Service, “there is no provision which specifically and unequivocally requires an individual to pay income taxes.” [Emphasis added]
Let me cite three court cases that seem to support the notion that the federal income tax is voluntary:
- “Our system of taxation is based upon voluntary assessment and payment, not upon distraint [seizure by distress].” Flora v. U.S., 362 U.S. 145, 176 (1959).
- In case of any ambiguity of statutory construction, the doubt should be resolved in favor of the taxpayer, not the government. Greyhound Corp. v. U.S., 495 F. 2d 863 (1974).
- “The taxpayer must be liable for the tax. Tax liability is a condition precedent to the demand. Merely demanding payment, even repeatedly, does not cause liability… For the condition precedent of liability to be met, there must be a lawful assessment, either a voluntary one by the taxpayer, or one procedurally proper, by the IRS. Because this country’s income tax system is based on voluntary assessment, rather than distraint [seizure by distress], the Service may assess the tax only in certain circumstances and in conformity with proper procedures.” Bothke v. Fluor Engineers & Construction, Inc., Ninth Circuit (1983).
The Fifth Amendment to the U.S. Constitution states, “No person shall… be compelled in any criminal case to be a witness against himself.” However, the Supreme Court has ruled:
- The Fifth Amendment “applies alike to criminal and civil proceedings.” McCarthy v. Anderson, 266 U.S. 34.
- “There can be no question that one who files a return under oath is a witness within the meaning of the [Fifth] Amendment.” Sullivan v. U.S., 15 F2nd 809.
- “The information revealed in the preparation and filing of an income tax return is, for Fifth Amendment analysis, the testimony of a “witness” as that term is used herein.” Garner v. U.S., 424 U.S. 648.
6. What is the significance of the 1991 Supreme Court case, Cheek vs. U.S.?
Cheek v. U.S. (No. 89-658; 1991 U.S. Lexis 348; 1991 WL 422 [U.S.]) This Supreme Court case represents a major turning point for those seeking to defend their rights against the IRS. Prior to this case, many courts applied the so-called “Cooley rule,” which was effectively used to prevent people from entering evidence for their own defence in tax cases. Typically, prosecutors would file preliminary (“in limine”) motions prohibiting defendants from entering evidence to defend themselves. Thus most tax prosecutions occurred in farcical kangaroo courts where the defendants were not allowed to defend themselves!
The Cheek decision changed that. Among other things it found:
(a) Defendants may enter evidence in their defense.
(b) Defendants can provide a “good faith” defense: if they sincerely believed (no matter how irrational the belief) that they didn’t have to file and pay income tax, then they can’t be guilty of a crime.
7. What is the significance of the 1991 Fifth Circuit Court of Appeals case, Ramon/Dolores Portillo vs. Internal Revenue?
Ramon and Dolores Portillo v. Commissioner of Internal Revenue. (932 F.2d 1128 [5th Cir., 1991]) The Cheek case was a severs blow to the IRS in criminal cases. The U.S. Court of Appeals of the Fifth Circuit likewise dealt a severe blow to the IRS in civil cases. The court effectively found that in the case of an IRS assessment of tax deficiency, the burden of proof shifts to the IRS. In other words, they have to prove that you owe them money.
8. Who are the people who have most to fear from the IRS?
Those who file tax returns are most at risk. Because of the ambiguities of the Internal Revenue Code it is impossible to file a tax return without the IRS being able to nail you for filing a false return or committing perjury.
High-profile people like Leona Helmsley, Willie Nelson, and the late Red Foxx, who can be nailed as examples – providing wide media exposure.
People who use IRS-handmaiden lawyers and/or accountants to assist them in their tax affairs.
Tax protestors who stop filing and/or paying without properly terminating their contracts with the IRS.
The people who have least to fear from the IRS are those who have never entered into a contract with the IRS, those who know the weaknesses of the IRS, those who have properly “untaxed” themselves under the guidance of a competent tax abatement service company, and those who have organized their personal affairs so they don’t own any assets and don’t have any bank accounts the IRS or other government looters can seize.
It is important that you appreciate that the Internal Revenue Code is so complex and convoluted that nobody can understand it. This means that whatever tax return you file can be “proved” by the IRS to constitute fraud and perjury.
“Well, it’s a system so utterly complex and ultimately inexplicable that half the time the tax professionals themselves aren’t sure what the rules are – a system that even Albert Einstein is said to have admitted he couldn’t begin to fathom. You know, it’s said that his hair didn’t look that way until after he experienced his first tax form.” – Ronald Reagan, 1985.
Every year since 1987 Money magazine has run a contest in which 50 tax preparers complete the federal income tax return for a hypothetical family. In 1988 there were ten correct returns, in 1989 two, in 1990 one, and in 1991 zero. For the 1991 tax year the “target tax” was $26,619 – the tax amount for a correct tax return. Not one of the professional tax preparers got it right. At the low extreme, one tax preparer calculated the tax due as $16,219. She spent 25 hours on the job and charged a fee of $750. At the high extreme, another professional tax preparer calculated the tax due as $46,564. It took him 40 hours and he charged $3,000.
The contestants presumably fancied themselves as expert tax preparers, and did their utmost to win first prize. They consisted mostly of professional CPAs and former IRS agents. If you take your papers and records to two “professional tax preparers,” one might calculate your tax as $16,000, and the other as $46,000! Need I say any more?
Note that if you had hired any of these professionals to prepare your tax return, the result could have been prosecution for fraud and perjury. Not one of them got it right
9. Which 6 books should you read in order to understand the IRS and to safely beat it? (Where can you get them?)
- Congressman George Hansen: To Harass Our People: The IRS and Government Abuse of Power (Positive Publications, Box 23560, Washington DC 20024).
- Donald W. MacPherson: Tax Fraud & Evasion: The War Stories (phone 1-800-BEAT-IRS).
- Mitch Modeleski: The Federal Zone: Cracking the Code of Internal Revenue (Account for Better Citizenship, c/o PO Box 6189, San Rafael, California Republic, PZ 94903-0189/TDC).
- Irwin A. Schiff: The Biggest Con: How Government is Fleecing You (Freedom Books, 60 Skiff St #300, Hamden, CT 06517).
- Irwin A. Schiff: The Federal Mafia: How It Illegally Imposes and Unlawfully Collects Income Taxes (Freedom Books, 60 Skiff St #300, Hamden, CT 06517).
- Alan Stang: Tax Scam: How the IRS Swindles You and What You Can Do About It (Mount Sinai Press, Research Publications, PO Box 84902, Phoenix, AZ 84902).
10. Is it possible for an informed citizen to legally and safely run rings around the IRS?
Yes. The informed citizen can beat the pants off the IRS. The best strategy might be to simply “disappear” as far as the IRS is concerned – see Report #16C: U.S. Tax Abatement Services. For extra safety it is advisable to use Trusts to safeguard assets. You may also want to use alternative banking services, as they become more available and more practical.
“Your mind will muse on the terror: “Where is the one who counted? Where is the one who weighed the tribute? Where is the one who counted the towers?” No longer will you see the insolent people, the people of an obscure speech that you cannot comprehend, stammering in a language that you cannot understand.”
– Isaiah 33, verses 18-19.“To lay with one hand the power of government on the property of the citizen, and with the other to bestow it on favored individuals… is nonetheless robbery because it is done under the forms of law and is called taxation.”
– U.S. Supreme Court – Loan Association v. Topeka (1874).“In a recent conversation with an official at the Internal Revenue Service, I was amazed when he told me that, “If the taxpayers of this country discover that the IRS operates on 90% bluff, the entire system will collapse.””
– Senator Henry Bellmon, 1969.
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