Time: Thu Mar 27 06:00:14 1997 by primenet.com (8.8.5/8.8.5) with ESMTP id NAA21605; Thu, 27 Mar 1997 13:24:50 -0700 (MST) by usr08.primenet.com (8.8.5/8.8.5) with SMTP id NAA07373; Thu, 27 Mar 1997 13:24:31 -0700 (MST) Date: Thu, 27 Mar 1997 05:59:10 -0800 To: (Recipient list suppressed) From: Paul Andrew Mitchell [address in tool bar] Subject: SLS: SNET: Is The IRS Code Constitutional? (fwd) <snip> >SearchNet's SNETNEWS Mailing List > >Lets start with the Constitution of the United States: > >ARTICLE I, Section 2, Clause 3 - > >Representatives [and direct taxes] {Altered by 16th Amendment} >shall be apportioned among the several States which may be included >within this Union, according to their respective numbers, [which >shall be determined by adding the whole number of free persons, >including those bound to service for a term of years, and excluding >Indians not taxed, three-fifths of all other persons.] {Altered by >14th Amendment} The actual enumeration shall be made within three >years after the first meeting of the Congress of the United States, >and within every subsequent term of ten years, in such manner as >they shall by law direct. The number of Representatives shall not >exceed one for every thirty thousand, but each State shall have at >least one Representative; and until such enumeration shall be >made, the State of New Hampshire shall be entitled to choose three, >Massachusetts eight, Rhode Island and Providence Plantations one, >Connecticut five, New York six, New Jersey four, Pennsylvania >eight, Delaware one, Maryland six, Virginia ten, North Carolina >five, South Carolina five, and Georgia three. > >ARTICLE 1, Section 9, Clause 4 - > >[No capitation, or other direct tax shall be laid unless in >proportion to the census or enumeration herein before directed to >be taken.] {Altered by 14th Amendment} > >AMENDMENT XVI - Passed by Congress July 2, 1909. Ratified February >3, 1913. > >The Congress shall have power to lay and collect taxes on incomes, >from whatever sources derived, without apportionment among the >several States, and without regard to any census or enumeration. >--- > >The U.S. Supreme Court has ruled that the taxing limitation in >Article 1, Section 2, Clause 3; and Article 1, Section 9, Clause 4 >of the U.S. Constitution prohibiting the federal government from >imposing any tax directly on the people, are still in effect and >that the 16th Amendment did not nullify those limitations nor >authorize any direct tax on the people. > >UNITED STATES CODE > TITLE 26 - INTERNAL REVENUE CODE > Subtitle A - Income Taxes > CHAPTER 1 - NORMAL TAXES AND SURTAXES > PART I - TAX ON INDIVIDUALS >--- >Unless the reader understands that the "title" of a section is not >law, and that the wording of the body of the statue --ONLY-- is the >law, they would most likely consider that the words in the title of >Part 1 imposed an income tax on individuals. >--- > ' 1. Tax imposed. > > (a) Married individuals filing joint returns and surviving > spouses > There is hereby imposed on the taxable income of - > (1) every married individual (as defined in section > 7703) who makes a single return jointly with > his spouse under section 6013, and > (2) every surviving spouse (as defined in section 2(a)), > a tax determined in accordance with the following > table: > > (b) Heads of households > There is hereby imposed on the taxable income of every head of > a household (as defined in section 2(b)) a tax determined in > accordance with the following table: > > (c) Unmarried individuals (other than surviving spouses and > heads of households) > There is hereby imposed on the taxable income of every > individual (other than a surviving spouse as defined in > section 2(a) or the head of a household as defined in > section 2(b)) who is not a married individual (as defined > in section 7703) a tax determined in accordance with the > following table: > > (d) Married individuals filing separate returns > There is hereby imposed on the taxable income of every married > individual (as defined in section 7703) who does not make a > single return jointly with his spouse under section 6013, a > tax determined in accordance with the following table: > > (e) Estates and trusts > There is hereby imposed on the taxable income of - > (1) every estate, and > (2) every trust, taxable under this subsection a tax > determined in accordance with the following table: > ><etc.> >--- > >In all of the various parts of Section 1 (which imposes the tax), >it is stated that the tax is imposed on "taxable income," not on >individuals. Furthermore, there is no provision under Subtitle A >or anywhere else in the IRC that makes individuals liable for >(subject to) the income tax or requires them to pay it. This >omission is not generally recognized unless one realized that in >order for individuals to be required to pay an income tax, there >must be a provision of the law that specifically states that the >tax is imposed on them. > >Without such a provision, individuals are not subject to the tax, >and are not required to pay it. It is very clear that the tax is >imposed on "taxable income," NOT on people, and therefore does not >conflict with the constitutional limitations prohibiting direct >taxation of the people. > >UNITED STATES CODE > TITLE 26 - INTERNAL REVENUE CODE > Subtitle F - Procedure and Administration > CHAPTER 61 - INFORMATION AND RETURNS > Subchapter A - Returns and Records > PART II - TAX RETURNS OR STATEMENTS > Subpart B - Income Tax Returns > >' 6012. Persons required to make returns of income > (a) General rule > Returns with respect to income taxes under subtitle A shall > be made by the following: > > (1) (A) Every individual having for the taxable year > gross income which equals or exceeds the > exemption amount .... >--- > >Since this section applies only to those who might be required to >make returns "with respect to income taxes under Subtitle A," it >therefore applies to only those individuals on whom the tax might >be imposed under Subtitle A. Since Subtitle A, as previously >shown, imposes no tax on any individuals, there are no individuals >against who Section 6012 can be applied. The logic of this wording >in Section 6012 is apparent, since individuals are not subject to >the income tax under Subtitle A, they are not required to make >returns under Section 6012. > >Next, the word "Shall" is used, not the word "required," even >though the word "required" is used frequently throughout the IRC. >Shall generally has a mandatory meaning, but courts have ruled that >it must mean the same as the word "may" when necessary to avoid a >"constitutional conflict." As an example, if an individual were >required to make a return, thereby forcing him to disclose >information from his private papers, it would violate his right to >privacy secured by the 4th Amendment of the Bill of Rights of the >United States Constitution, thus creating a "constitutional >conflict." > >Also, compelling an individual to disclose information that could >be used against him criminally would violate his 5th Amendment >right NOT to be required to be a witness against himself, thus >operating to create another "constitutional conflict." Therefore, >since Section 6012 (a) states that individuals "shall" make >returns, it is clear that the making of such returns by individuals >is not required by law, but is a voluntary action. > >Reading on in Section 6012 we see that the provisions just >discussed apply to only those individuals "having for the taxable >year a gross income which equals or exceeds the exemption amount >..." Since an individual must have a taxable year in order to be >subject to Section 6012 (a), it is necessary to understand the >meaning of "taxable year." > >UNITED STATES CODE > TITLE 26 - INTERNAL REVENUE CODE > Subtitle A - Income Taxes > CHAPTER 1 - NORMAL TAXES AND SURTAXES > Subchapter E - Accounting Periods and > Methods of Accounting > PART I - ACCOUNTING PERIODS > >' 441. Period for computation of taxable income > (a) Computation of taxable income > Taxable income shall be computed on the basis of the > taxpayer's taxable year. > (b) Taxable year > For purposes of this subtitle, the term ''taxable year'' > means - > (1) the taxpayer's annual accounting period, if it is a > calendar year or a fiscal year; > (2) the calendar year, if subsection (g) applies; > (3) the period for which the return is made, if a return > is made for a period of less than 12 months; or > (4) in the case of a FSC or DISC filing a return for a > period of at least 12 months, the period determined > under subsection (h). > ><etc.> >--- > >Note that Section 441 defines this period of time for which a >"taxpayer's" taxable income is computed. Nowhere in Section 441, >or anywhere else in the IRC, is there any wording indicating that >an individual has a "taxable year." > >Going further, we determine the definition of the term, >"taxpayer." "Taxpayer" is also a legal term defined in the IRC. > >UNITED STATES CODE > TITLE 26 - INTERNAL REVENUE CODE > Subtitle F - Procedure and Administration > CHAPTER 79 - DEFINITIONS > >' 7701. Definitions > (a) (14) Taxpayer > The term ''taxpayer'' means any person subject to any internal > revenue tax. >--- > >According to that Section, the legal term "taxpayer" does NOT mean >"any person who pays taxes," but is defined as, "... any person >subject to any internal revenue tax." The IRC also defines a >"person." > >' 7701. Definitions > (a) (1) Person > The term ''person'' shall be construed to mean and include an > individual, a trust, estate, partnership, association, company > or corporation. >--- > >The legal term "person" is defined as meaning not only an >individual, but also a corporation. Because the U.S. Constitution >forbids direct taxation of the people, Subtitle A does not make >individuals subject to the federal income (excise) tax; therefore, >according to the law, individuals are not "taxpayers" in respect to >the income tax. Since according to Section 441, only "taxpayers" >have a "taxable year" and individuals do not, then it is clear that >Section 6012 (a) applies to "taxpayers" only and that it does not >require returns to be made by individuals because they are not >subject to the federal income (excise) tax under Subtitle A. Once >more, we see that the wording in Section 6012 is constitutional >because it does not apply to individuals. > >When reading Section 6012 (a) without careful analysis, the >strange words "having income" are generally interpreted as meaning >"receiving income." However, if one understands the definition of >"income" as stated by the U.S. Supreme Court, the words are not >strange. The Court in the case of Merchants Loan & Trust Co. v. >Smietanka [255 US 509], ruled that the term "income" must be given >the same definition in all income tax laws enacted by Congress >under the 16th Amendment that it had under the Corporation Tax act >of 1909, which imposed a tax on profits of corporations. > >In the decision of the case of Eisner v. Macomber [252 US 207], the >Supreme Court stated that "income" under the 16th Amendment means a >"gain" or "profit." The Court stated in the Eisner decision that >Congress has no power to define "income," established by the >Supreme Court. Therefore, Congress has no power to enact any >statute changing or enlarging the Court's definition of "income" >(profits or gains of corporations) and it has no power to include >other items as being "income." > >Despite these facts, IRS spokesmen consistently misinterpret >Section 61(a) of the IRC. > >UNITED STATES CODE > 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. > >' 61. Gross income defined > (a) General definition > Except as otherwise provided in this subtitle, gross income > means all income from whatever source derived, including > (but not limited to) the following items: > (1) Compensation for services, including fees, > commissions, fringe benefits, and similar items; > (2) Gross income derived from business; > (3) Gains derived from dealings in property; > (4) Interest; > (5) Rents; > (6) Royalties; > (7) Dividends; > (8) Alimony and separate maintenance payments; > (9) Annuities; > (10) Income from life insurance and endowment contracts; > (11) Pensions; > (12) Income from discharge of indebtedness; > (13) Distributive share of partnership gross income; > (14) Income in respect of a decedent; and > (15) Income from an interest in an estate or trust. >--- > >The claim that the 15 items listed in that Section are defined as >items of "income," when they are in fact, items of source >(corporate gross receipts). Gross receipts (sources) are NOT >profits or gains (income); but if gross receipts are entered as >"income," on an income tax return, they are then considered to be >"income" to the "taxpayer" who files the return, signed "under >penalties of perjury." > >The exchange of an individual's labor for wages, salaries, >commissions, fees, etc., is an equal exchange of his property >(labor) for other property (money in the form of wages, salaries, >commissions, fees, etc.) of equal value and there is no profit or >gain in the transaction. Such an individual is not one "having >income" (possessing a corporate profit or gain), so we see that >Section 6012 (a) does not apply to individuals just because they >work for a living -- a God given Right secured by the Constitution >of the united States -- or because they are engaged in other >activities of common right. Therefore, there is no conflict with >the Constitution on these points that should make Section 6012 (a) >unconstitutional. The IRC imposes requirements on "taxpayers" >only -- not on individuals. > >In conclusion, these are the observation on this subject: > >1. When an individual voluntarily files his first income tax >return (voluntary compliance) showing a tax is due from him (self- >assessment), signed "under penalties of perjury," (Federal law >under 28 USC 1746 makes unsworn statements, certified under >penalty of perjury, equal in legal force to a sworn statement or >notarized affidavit) he unknowingly established prima facie >evidence (evidence with which, if unexplained or uncontradicted, >is sufficient to sustain a judgement in favor of the issue which it >supports, but which may be contradicted by other evidence) that he >is subject to the income tax and that he is in the legal status of >a "taxpayer" (any person subject to any internal revenue tax). > >2. In relation to federal income (excise) tax, a "taxpayer" is >considered to be in the same legal status as a corporation, which >is a government created "person" that is subject to the direction >and control of the government. A "taxpayer," like a corporation , >has "privileges" only and has no constitutionally secured >individual rights with which a mandatory interpretation of the >word "shall" could create a "constitutional conflict." > >Thus, a "taxpayer" can be required to file an income tax return >and/or do whatever else IRS regulations require him to do relative >to federal excise taxes. > >3. When criminal charges for "wilful failure to file" are pressed, >the defendant is tried as a "taxpayer," not as an individual >possessing all of his constitutionally secured rights. Because of >the defendant's previously filed returns being put into evidence >without challenge, a judge can consider the defendant to be a >"taxpayer" and therefore instruct the jury that the defendant is >required to file income tax returns. > >If, however, an individual's income tax returns were filed because >he was deceived into believing that, as an individual, he was >required -- by law -- to file an income tax return and pay income >tax, he could have grounds for CONSTRUCTIVE FRAUD needed for >retroactive revocation and repudiation of all previously executed >IRS documents to prevent their use as prima facie evidence in bout >civil and criminal proceedings. Prima facie evidence can be >challenged and overcome by positive action explaining and >contradicting such evidence. > >Edited from `Freedom League Newsletter,' March 1986 >-- >Tony Sgarlatti > >tonys@the-truth.org >Lots of IRS protester links - >http://www.future.net/~thetruth/ >The Million Dollar Internet Experiment - >http://www.future.net/~thetruth/million.html > >"What luck for rulers that men do not think." > -- Adolf Hitler > >-> Send "subscribe snetnews " to majordomo@world.std.com >-> Posted by: tfs@adc.com (Tony F Sgarlatti) > > ======================================================================== 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 ========================================================================
Return to Table of Contents for
Supreme Law School: E-mail