Time: Sun Mar 16 13:18:05 1997 by primenet.com (8.8.5/8.8.5) with SMTP id MAA02909; Sun, 16 Mar 1997 12:59:52 -0700 (MST) Date: Sun, 16 Mar 1997 13:16:53 -0800 To: (Recipient list suppressed) From: Paul Andrew Mitchell [address in tool bar] Subject: SLS: IRS Agent Spills Beans (fwd) <snip> > IRS SPECIAL AGENT SPILLS THE BEANS! > - STATES UNDER OATH IN SWORN COURTROOM TESTIMONY - > >"If no information or return is filed, IRS cannot assess you!" > >As part of an ongoing series of reports created to show working >Americans the truth and facts behind the Internal Revenue Service's >(IRS) wrongful procedures and illegal misapplication of the law, INFORM >AMERICA! is pleased to make available to you this reprint from a 1992 >issue of "Reasonable Action", the membership newsletter of the >Save-A-Patriot Fellowship. > >THE BEANS ARE SPILLED > >"Yes -- the truth can leak out even in the biased courtrooms of America, >but when IRS employees are involved, such honesty comes as quite a >shock! Some- times these revelations occur suddenly or unexpectedly >during cross examination. The official may be caught off guard just long >enough to spill the beans or perhaps the official may not realize the >implications of his own testimony. Whatever the reason, the truth is >revealed. > >In this particular case, the facts were accidentally exposed by an IRS >employee who had been called upon to answer a few simple questions. It >is doubtful that this IRS employee fully understood the ultimate impact >of his statements. IRS personnel sometimes suffer from a >comprehension-gap concerning the application of the law. If they do not >understand the structure of the Code [Internal Revenue Code], they can >not possibly understand the limitations of the law which they are >attempting to enforce. That being the case, any given IRS employee may >fall prey to the presumption that other legal provisions exist to >account for actions which they do not understand. Ignorance and apathy >play an important part in perpetuating the problem. For the most part, >IRS employees simply do what they are told and never question the >direction of superiors. To these employees, the requirement of the law >is irrelevant. Therefore, the authority for their activity rarely >figures into the equation. They just assume that their actions are >legal. Ask any IRS agent to outline the limitations of his legal >authority to sign a summons and you won't get a correct answer. Ask him >what provision within Subtitle F (Administration and Procedure) permits >the issuance of a summons and the agent will not know. Ask for the >delegation order to sign a summons and the answer you will hear is... >"I'm just doing what I way told." It is true that individual IRS >employees may not fully understand the limitations of the law, but their >superiors do understand, and the courts and legal professionals have an >obligation to ensure that the limitations of the law are properly >enforced. Excuses like "I didn't know" or "I'm just following orders are >not acceptable. That defense didn't work at Nuremburg, and it is >doubtful that it will work when IRS employees are eventually prosecuted >for violating the rights of the victims they have plundered. Given the >increasing number of what the, IRS calls "nonfilers", it is only a >matter of time. > >YOU CAN'T HIDE THE TRUTH > >People are discovering this scheme because the truth is leaking out. You >can't hide the truth. You may succeed in covering it up for a short >period of time, but sooner or later the truth will prevail. The >disclosure of IRS fraud is inevitable. At this very moment it is >happening throughout the country. The IRS is fully aware of the >impending demise of their scam. Five years ago Fred Goldberg, the >Commissioner of the IRS, admitted that there were 6 million non-filers. >Last month, Shirley Peterson (the present commissioner) admitted that >the number of non-filers had increased to 10 million. That's a >substantial increase -- almost double what it was 5 years ago. High >ranking IRS officials cannot help but be worried. With each leak, more >and more people learn and react to the knowledge that their government >is intentionally misapplying the law. In the case of United States of >America v. William R Lloyd those facts again leaked out. The defendant >was on trial for tax evasion and the circumstances (authority/procedure) >to assess became the topic of examination. Before he knew it, Special >Agent Gary Makovski let the cat out of the bag and actually admitted >that: "If no information or return is filed, Internal Revenue Service >cannot assess you". To understand why the testimony is so significant, >it is well worth reviewing the constitutional restriction on the power >to tax, the actual application of the income tax laws, and the authority >to assess those who are the subject of the law. > >NOT SO COMMON KNOWLEDGE > >The general public is unaware that the Internal Revenue Code is limited >in application. It cannot (per constitutional restriction) ... does not >... and never has been ... applied against the United States citizen >who is living and working within the 50 states of the union. That >individual is neither the subject nor the object of the tax -- and >neither is his income. The application of the tax is limited to and >imposed upon certain occupations and/or activities. Taxable activities >presently include the manufacture of certain commodities like alcohol, >tobacco, or firearms. An example of a privileged occupation might be the >practice of law. But, it is the privilege associated with the >governments permission to engage in the activity that is the subject of >the tax - not the individual -- nor the income -and even then the income >is only the "measure" of the tax. The income tax laws were never applied >against citizens themselves, or their occupations in general, because >Congress was never granted the power to levy a "direct" tax against the >citizen. The power to levy a direct tax is limited to the taxing of >state governments only, and according to the Supreme Court, the 16th >Amendment merely clarified a power that Congress had "from the >beginning" to levy an "indirect" tax (in the form of an excise) on >income without apportionment; but this is not the same as, nor did it >allow for, a "direct" tax on the property or person of the U. S. citizen >unless apportioned among the states according to the formula directed to >be taken in Article 1, Section 2, Clause 3. All such "direct" taxes must >still be apportioned by the census of enumeration and billed to the >state governments respectively. Yes, the federal government may tax >"income," but it cannot tax the person or property of a citizen without >violating the rule of apportionment concerning direct taxes. If it did, >it would by virtue of its application, create a direct tax in violation >of Article 1, Section 9, Clause 4, and Article 1, Section 2, Clause 3 of >the Constitution. This is why there is no statutory liability for a >citizen living and working within the 50 states to pay a federal tax on >income. And that is why the tax is 100% constitutional. > >THE 16TH AMENDMENT > >The 16th Amendment does tend to confuse the average person. Most people >do not understand the difference between "direct" taxation and >"indirect" taxation. They assume that a "tax on income" is neither. In >fact, some law schools actually teach that the income tax is (in their >own words) a "bastard" tax that falls somewhere between direct and >indirect. That is incorrect. No doubt the contention arises and results >from a naive belief that the government would not allow the intentional >misapplication of the tax laws, (when in fact it propagates it) and that >there must be some other explanation - but, it has probably never >occurred to those who are of this opinion, that the taxes and the >resulting social programs effectively buy the public vote, and >strengthen the political establishment that benefits from the >misapplication. Such opinions exist because people are unaware of >Supreme Court decisions confirming that the tax on income is an >"indirect" tax in the form of an excise, rather than a "bastard" tax >that is neither direct nor indirect. It is NOT some "unique" tax, that >is "direct," and yet not subject to the rule of apportionment. It is >indirect, and by virtue of this status, it cannot be subject to the rule >of apportionment just as the language of the 16th Amendment reads. It is >therefore not applicable against a citizen living and working in the >United States of America (50 States). Congress has by statute identified >the taxable party and/or entity. The IRS has provided by regulations the >procedure by which the U.S. (50 States) citizen claims his/her exemption >from withholding -- the presentation of a statement of citizenship to >the employer who retains the original copy and forwards the duplicate to >the IRS in Philadelphia, PA with an accompanying letter of transmittal. >Congress has directed that those who are liable for a tax on income are >subject to withholding; has created a withholding agent; and, imposed >liability for any tax on same. The withholding agent must withhold tax >from anyone coming under the provisions of Internal Revenue Code >sections (IRC) 1441, 1442, 1443, and has imposed liability on the >withholding agent per section 1461. Congress has in IRC 1461 also >indemnified the withholding agent from claims asserted by those >identified in IRC section 1441, 1442, and 1443 for obeying the >appropriate statutes. Nevertheless, the citizen is under the protection >of the Constitution and Congress has been obedient to the Constitution >by not enacting a liability statute against a citizen living and working >in the United States of America (50 States). The IRS inputs phony >entries to its computers in a blatant attempt to defraud U.S. citizens. >Congress acquiesces in this criminal activity by ignoring the pleas of >the citizens that improper actions of the IRS be controlled. Congressmen >forward to their constituents copies of IRS responses to Congressional >inquiries and members of Congress drop the issue by telling their >constituents that "the IRS has responded (see enclosed)," but the "see >enclosed" they mention is a copy of the IRS response to the inquiring >member of Congress. The constituent is then advised that if their >elected official "may be of service to them in the future" that the >elected official should be contacted without hesitation. This "drop >issue" letter is designed to convey to their constituents the idea that >the IRS response is to be assumed to be correct. This is the heart of >the scam. If Congress wanted to exercise control of the IRS and keep >them obedient to the Constitution, a different posture would be adopted. >Most politicians are unaware of the limited application of the tax laws >anyway, and most legal professionals are woefully uneducated in such >matters; but even assume that the income tax serves the political >purpose of funding programs that buy the public vote, and there is no >reason (other than morality) for them to rock the ship of state. The >political machine thus ignores, if not encourages, (by default) the >routine misapplication and illegal enforcement of the tax laws. That is >a fact of life -- and that is why our struggle has been long and >difficult; but considering the increase in the number of so-called >"nonfilers," that struggle may soon be over, and we may yet see the >tables turned on the illegal activities of an increasingly globalist- >minded government. > >SEE NO EVIL, SPEAK NO EVIL, HEAR NO EVIL > >So who is to blame? Are just a few select officials responsible, or is >the average IRS employee also to blame and if so, to what degree? Do the >agents themselves know what they are doing, or is their training and >function within the service sufficiently limited to allow for an >acceptable misunderstanding as to their actual authority? Perhaps the >truth lies somewhere in between. The instant case may shed some light >and help us answer this question. The fact is, some agents are aware of >the limited application of the law and some are not -- possibly some >suspect but go along with policy for the sake of expediency, not caring >about their moral or legal obligations as long as they do what they are >told and get a pay check at the end of the week. If some agents know and >some don't, it is just as certain that this education was not included >in their training. Those who know, probably figured it out on their own, >or were made privy to such information by a friend or associate who was >higher up within the IRS. If the employee were so inclined, he could put >it all together and figure out what is happening. Unfortunately, most >have neither the character nor the where with all to do this, and the >hierarchy within the IRS is certainly not going to train its personnel >in the knowledge that would defeat the political objectives of those who >appoint them to office. Indeed, to ensure their very existence and >preserve their employment these IRS officials must "encourage voluntary >compliance." Were there an honest concerted effort to inform the various >agents of the limited application of the law, the IRS could not expect >them to ignorantly misapply its provisions and they might be out of a >job. Instead, the IRS fosters an atmosphere where their agents operate >in the dark. The agents have a "duty" to know, but end up making >incorrect assumptions, or they leap to conclusions because of their >incomplete education. With this in mind we will examine agent Makovski's >testimony to determine the extent of his actual knowledge and the >significance of his testimony. > >EVASION OF WHAT? > >Mr. Lloyd was on trial for alleged violations of IRC section 7201 >(evasion of taxes). To evade a tax, one must first have a "known duty " >to file a return and pay a tax. Second, and more important as far as >evasion is concerned, there must be an outstanding "bill" or >"assessment" that is due and owing. In the case of someone who has not >filed, there must be a "presumed valid assessment" executed with proper >taxpayer, (notifying the taxpayer of the liability) otherwise, there is >nothing to evade. Now for the facts ... Mr. Lloyd did NOT file a return. >Moreover, he had NOT received a "bill" or "assessment," presumed valid >or otherwise. As a United States citizen who was not involved in one of >the activities previously mentioned we can make several presumptions >about his alleged liability or lack thereof, and the authority for the >IRS to assess a tax against him; all of which are relevant for >demonstrating the wrongful prosecution instituted by the IRS, and >determining agent Makovski's knowledge and intent. > >TO ASSESS OR NOT TO ASSESS > >Given the above facts, and knowing that Lloyd was not required to file, >(and did not) there would be no authority or procedure which would allow >the IRS to assess a tax. Section 6201 is the assessment authority found >within Subtitle F, and it reveals something which may not have occurred >to those IRS agents who simply "do what they are told." When no return >is filed, the authority to assess is limited to assessments involving >stamp taxes. What on earth is this statute referring to? Could it be the >stamps we see on a bottle of alcohol or a pack of cigarettes? When a >manufacturer of alcohol or tobacco products wishes to sell his goods, he >must purchase stamps to pay the tax associated with his taxable >activity, and then place the stamps on the products he sells. Did you >ever take the time to examine the stamps on a pack of cigarettes or a >bottle of alcohol? These are the stamps that this statute is referring >to. They are required for those products whose manufacture is the >subject of the excise. If they fail to pay the stamp tax associated with >the activity, then 6201(a)(2) provides the authority for the IRS to >assess a tax. If the bill remains unpaid, then it could be construed as >evasion for which the penalty in section 7201 might apply. Lloyd was not >involved in such activity. The remaining provision for assessment >authority (section 6201(a)(1)) pertains only to those individuals who >have filed returns. The information on that return is subject to >assessment by virtue of the fact that the return was signed under >penalty of perjury by the taxpayer who filed it, testifying to the fact >that a liability, and a requirement to file exists; and that the >information on the return is true and correct. If it is not correct, the >authority under this section allows for a correction to be made based on >the information that is given on the return. Under no circumstances >(except stamps) may the IRS assess a tax without a return being filed by >the taxpayer himself. Therefore, there was no authority to assess Lloyd. >Courts have held that an unsigned substitute return such as those >typically filed by the IRS when a 1040 return has not been filed "... is >no return at all." (Vaira v. C.I.R., 444 F.2d, citing Dixon v. >Commissioner, 28 T.C. 348); and that, "Since the 'returns' prepared by >the IRS contained no information from which a tax could be determined, >they were not returns" (U.S. v. Verkuilen, 822 U.S.T.C., Schiff v. >Commissioner, U.S.T.C. 1984 223). If a return is not filed, the IRS's >only recourse is to move for an indictment against the individual who is >presumably required to file. To do so they must cite the section of the >law allegedly requiring that person to file. Reference may of course be >made to the penalty associated with having a "known duty to file" and >willfully not filing the return, but even then such penalty is >applicable only if a person actually believes he has a requirement to >file and chooses to shirk that duty. Lloyd had not filed a return and >there was no other provision for assessing a tax against him. > >THE CAT SLIPS OUT OF THE BAG > >Since there was no assessment, Lloyd had never received a "bill" to >evade, so naturally the question arose as to the assessment >circumstances. When Makovski was asked under what circumstances an >assessment was made he explained "two ways." He did not say that it was >limited to just two ways, but it wasn't necessary for him to elucidate. >The law itself provides only two ways, and agent Makovski's reference to >two circumstances would seem to indicate that he had personal knowledge >of the two provisions in law. He said ... 'First of all, whenever you >file a return yourself'" (emphasis on 'yourself') "and it is sent to the >service center, an assessment is made". He then added ... "If no >information or return is filed, the Internal Revenue Service cannot >assess you anything." To which section under 6201 was he referring? Was >it subsection (a)(1) or subsection (a)(2), and did it suddenly occur to >Makovski that there was no authority or did he know or suspect all >along? He obviously knew enough to answer the question! He knew that >Lloyd had not filed a return. He investigated Lloyd so he knew that >Lloyd was not involved in an activity that required the purchase of >stamps. He knew that there was no assessment. What's more, he knew that >Lloyd was on trial" for allegedly "evading" an "assessment" that did >not, and could not, by law exist. Therefore he had to know his >investigation was a fraud. If there was no authority to assess Lloyd >then how could Makovski investigate an "evasion" of an "assessment" that >could not possibly exist. If a return had been filed, then the story >would be different. The authority to assess under section (a)(1) would >have allowed for an "assessment" that could conceivably be "evaded", but >Makovski knew that Lloyd had not filed a return for the years in >question. He certainly knew from his own criminal investigation that >Lloyd was not involved in an occupation involving a stamp tax. So what >was he investigating? If no return was filed, and the authority is >limited to stamp taxes, then in Makovski's own words "the IRS cannot >assess you." Agent Makovski not only knew the law, but he >(accidentally?) told the truth. > >THE ONE HUNDRED YARD DASH > >We were informed by attendees of the trial that after Makovski's >admission the U.S. attorney put her head in her hands. The jury must >have understood the implication of the testimony because it took even >less time for the jury to acquit Lloyd than it did to pick the jury from >the jury pool; and, Lloyd received a standing ovation from those in the >courtroom as the U.S. Attorney slithered out with the Judge to avoid >talking with the media. This case is just one example of the coming >deluge of opposition to IRS fraud. The public will no longer accept this >flagrant disregard for the law. What will the government do? Find out in >the next issue of the Reasonable Action where we will look at why the >income tax is obsolete and review the dangers of proposed alternative >forms of taxation." > >INTERESTED IN LEARNING MORE? > >The Save-A-Patriot Fellowship has offered information since 1982, backed >by a $10,000 Cash Reward to anyone who can show a single error of fact >or substance. To date, no one - not a single judge, attorney, CPA or IRS >agent - has been able to collect the reward. We offer this same >information to you at a nominal cost on whichever format you choose - >audio, video or books. Call (800)-677-1207 PIN# 1505 and leave a message >spelling your name and address and stating both your day and evening >phone numbers. Or, from the handset of a fax machine, call >(703)-904-7770 and request document # 777 to immediately retrieve >(faxback) an information and ordering package. Thank you. > ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ > Liberty's Educational Advocacy Forum, Indiana-FIJA, Inc. > Url: http://www.iquest.net/~rjtavel/ > ************************* > Not a high-tech law firm brochure. > Dr. Tavel's Self Help Clinic and Sovereign Law Library > promotes "action that raises the cost of state violence > for its perpetrators (and) that lays the basis for > institutional change " -- Noam Chomsky > For Liberty in Our Lifetime, R.J > > ======================================================================== Paul Andrew, Mitchell, B.A., M.S. : Counselor at Law, federal witness email: [address in tool bar] : Eudora Pro 3.0.1 on Intel 586 CPU web site: http://www.supremelaw.com : library & law school registration ship to: c/o 2509 N. Campbell, #1776 : this is free speech, at its best Tucson, Arizona state : state zone, not the federal zone Postal Zone 85719/tdc : USPS delays first class w/o this ========================================================================
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