When I started writing this I had no idea it would turn into a book, I swear!
It's my understanding there is some such language. There was a book called the federal zone which had a detailed strategy for legally refusing to pay taxes. What you mentioned sounds like it's right out of this book.
The federal zone has apparently been removed from the net, the site I had accessed it from said it was removed because 1) apparently there were some inaccuracies (I don't know what they were, I never got to that page) and 2) they have what they consider a better strategy now, based on fundamental rights rather than the USC.
They had a link to the newer book, and a site where the federal zone had been moved to, but neither link worked for me at the time and now the site I was accessing them through is down. It has been down since you posted this message, and I got tired of waiting for it to come back up, so I will proceed to outline what I can recall but bear in mind that anything I can say is from possibly faulty memory of reading a book with at least some inaccuracies. In particular the book was built around special legal usage of terms, and my memory for legalistic language isn't good.
Anyway, I will outline it as best I remember, and ask you to read this with the above in mind and let me know if this sounds like what you were thinking of.
With that out of the way...
As I recall, the gist of it was that yes, the income tax is technically a voluntary system - for "foreigners" whose income is not "domestic."
As Nathan alluded to a little earlier in another thread, foreign in legal terms is not necessarily the same thing as in common usage - a Delaware corporation is a "foreign corporation" in North Carolina, for instance. The thesis of the federal zone was that congress never had authority to levy an involuntary income tax in the various states - only within the federal zone (D.C., Guam, Puerto Rico, on various military bases, and so forth.)
In other words that, that in relation to the federal government, the several states are all "foreign" and only federal territory is "domestic."
Citizens of one of the States, whose income is not derived in any way from the federal zone, are thus under no obligation to pay federal income tax, although of course they may voluntarily choose to do so. Sending in a return is taken to indicate either "volunteering" or stipulating that you are a citizen of the Federal govt. (as opposed to one of the several states) - either of which goes to the same affect.
Thus a large part of the book dealt with sections of the US code (or Uniform Commercial Code, I know he made extensive use of both) that give remedy against "implicit" agreements and the claim was that one could use these to overturn the presumption created by having filed a return in the past, or signing a voter registration card affirming in legalistic small print federal citizenship, etc.
The contention was that once you have relinquished your status as a Citizen of one of the States and become a federal citizen instead, that DOES give congress direct jurisdiction over you, effectively making you a citizen of D.C. It also means waiving your rights under the constitution, as those apply to citizens of the states, not of the federal districts.
However, he further contended that if the conversion to federal citizen was done without your conscious knowledge and consent, and you immediately and explicitly repudiated it in the proper way when you became aware of it, and further avoided doing it again in the future, you could nullify the conversion and reclaim your State citizenship, removing yourself from the direct jurisdiction of the federal government and reclaiming your constitutional rights.
A great deal of the book hinged on special legal meaning of variant terms that are pretty much synonyms in common usage, and while the book was very thourough in documenting these things trying to evaluate the documentation was a headache for me as a non-lawyer.
I will keep trying to find active URLs for this and the newer book as well, and post them when I do, if you are interested.
Oh yeah, the book did also have facsimiles of correspondence between the IRS and citizens demonstrating the strategy in use. Notarized letters, sent registered mail, to the IRS informing them that the person was not required to pay income tax because they were not a United States citizen but rather a Citizen of a particular State, whose income is likewise foreign to D.C. and all federal territories... etc. etc.
It did claim that these people were not arrested or anything like that, although it had some major cautions about it - the IRS would definitely NOT like it, they might resort to harrassment and could cause you quite a bit of trouble (although it was said that so far they had been pretty restrained in this - the author believed this was because they feared creating publicity resulting in more people "finding out the truth") and they would NOT refund money they already had their hands on through witholdings under any circumstances.
The book was very interesting reading. I tried and tried but I was never able to find anything in it that I could point to and say "Ahah! He's lying, this is all BS." It was strange and byzantine, but then again from my point of view legalism always is.
On the other hand I was never able to confirm he was correct either - far from it - which is why I haven't sent out those notarized registered letters to the federal offices informing them that I retain my State Citizenship and do not waive my constitutional rights and so forth. ;')
In a way it would be nice if he was right, but that is hardly a proof that he is. There is a lot of similar stuff people come up with that I understand just doesn't work - there is a whole movement built around this sort of stuff and it's my understanding that the majority of it is inaccurate, as well as my suspicion that even were it accurate it might prove a very poor defense against gunfire at some point. And in this case the website that posted it has admitted there were "errors" - wish I had been able to get to the page that would say what they were.
I lived next door to a guy for awhile that was the "Chief Justice of the Supreme Court of the State of Idaho" or at least genuinely thought he was. Not that he was schizo, he knew there was another guy claiming that title who lived in a much nicer house and had several cars and actually got paid, he just thought that his claim was legally correct and the other one wasn't.
He was a disabled vet and licensed paralegal who sat in the library digging through legal books and microfilms for years researching, and when he finally thought he had figured out what exactly was going on and where it had gone wrong he and others formed a provisional State government, just like the Republic of Texas guys have done. Not sure if this was before or after them, but I understand there are groups in maybe a dozen states that have done this so far, and his was if not the first certainly among the first.
Now he was a nice guy, certainly, although I would have to say he was "kinda kooky" - to use the technical term. He was certainly harmless and decent, far from the worst neighbor one could have and so forth. But none of that means that he understood all this legal stuff correctly.
Occasionally there were incidents where the cops came over because of his disobedience of orders he considered illegal (including subpoenas from the "de facto" courts,) and actions such as filing liens against all the officials in the state government and sending judges orders to cease and desist their false representation that they were actually judges for instance. But neither he nor they ever became violent and in fact they never arrested him, at least not in the time I knew him, which was maybe 2-3 years.
When they came to the door he would smile and invite them into his (very) humble abode, offer them whatever he had by way of food, drink, a place to sit, etc. , and listen to what they had to say. Then he would give them a lecture on the law and their duty, always in a friendly, pleasant tone of voice. I know this not just from his accounts, but I actually heard it on occasion, both the parts before and after they went inside his room as the walls in this house were very thin.
He thought they never arrested him because he was right about the law. Another possibility is that they just had a really hard time with the idea of picking up this smiling, friendly non-violent crippled veteran who I am sure they thought was totally but harmlessly insane and carting him off to gaol. I sure would have liked to have had the ability to listen in on their conversations amongst themeselves and with their superiors each time they left empty handed.
He tried to explain it to me, how the government occupying the state house was a de facto government, fundamentally illegitimate, and his was the de jure government, legal and legitimate. How the flag displayed at the court downtown had gold trim on it, which meant it was a military ensign, and the court was a military court, and martial law had actually been in effect all these years and "they" had just kept the fact quiet, while "they" converted our state citizenship into federal citizenship and substituted statutory and martial law for common law.... you get the idea I am sure.
Mostly just gave me a headache. Same type of headache I got reading the federal zone. For that matter, same kind of headache I got from examining the references in the federal zone, to the USC and UCC and similar documents, at sites with addresses including .gov and law...edu. So what do I know?
Not much. I sure would like to find someone actually qualified and trustworthy to analyze this sort of thing, and tell me precisely how much of it is true, how much of it false, and why. Almost makes me wish you were a lawyer instead of an economist. But no, I couldn't wish such a fate on you. :')