Date: Fri, 26 Sep 1997 21:51:02 -0700<br>
Subject: Fwd: Re: Fwd: Wednesday's Outrage:  COLLECTING CONTRIBUTIONS!<br>
Subject: Re: Fwd: Wednesday's Outrage:  COLLECTING CONTRIBUTIONS!<br>
<br>
These provisions from Vol. 68A of the Statutes at Large comply with and
verify liability set out at 26 CFR, Part 601, Subpart D in general.
Further, territorial limits of application are made clear by the absence
of regulations supporting 26 USC 7621, 7802, etc., which are the
statutes authorizing establishment of internal revenue districts and
delegations of authority to the Commissioner of Internal Revenue and
assistants. The fact that the liability falls to the "employer" (26 USC
3401(d)) and/or his agent, with no compensation for serving as "tax
collector," narrows the field to federal government entities as
"employers" if for no other reason than the population at large is not
subject to the edict of government officials. As a matter of course,
government cannot compel performance where the general population is
concerned. The subject class that has "liability" for Subtitles A & C
taxes is the "employer" or his agent, fiduciary, etc., as specified
above.<br><br>
The matter is further clarified in Sections 3403 & 3404 of Vol. 68A,
Statutes at Large:<br>
		SEC. 3403. LIABILITY FOR TAX.<br><br>
The employer shall be liable for the payment of the tax required to be
deducted and withheld under this chapter, and shall not be liable to any
person for the amount of any such payment.<br><br>
SEC. 3404. RETURN AND PAYMENT BY GOVERNMENTAL EMPLOYER.<br>
If the employer is the United States, or a State, Territory, or
political subdivision thereof, or the District of Columbia, or any
agency or instrumentality of any one or more of the foregoing,
the return of the amount deducted and withheld upon any wages may be
made by any officer or employee of the United States, or of such State,
Territory, or political subdivision, or of the District of Columbia, or
of such agency or instrumentality, as the case may be, having control of
the payment of such wages, or appropriately designated for that purpose.<br>
	The territorial application, and limitation, is made clear by
definitions in Title 26 of the Code of Federal Regulations, as follows:<br>
31.3121(3)-1 State, United States, and citizen.<br>
(a) When used in the regulations in this subpart, the term "State"
includes the District of Columbia, the Commonwealth of Puerto Rico, the
Virgin Islands, the Territories of Alaska and Hawaii before their
admission as States, and (when used with respect to services performed
after 1960) Guam and American Samoa.<br>
(b) When used in the regulations in this subpart, the term "United
States", when used in a geographical sense, means the several states
(including the Territories of Alaska and Hawaii before their admission
as States), the District of Columbia, the Commonwealth of Puerto Rico,
and the Virgin Islands. When used in the regulations in this subpart
with respect to services performed after 1960, the term "United States"
also includes Guam and American Samoa when the term is used in a
geographical sense. The term "citizen of the United States" includes a
citizen of the Commonwealth of Puerto Rico or the Virgin Islands, and,
effective January 1, 1961, a citizen of Guam or American Samoa.<br>
	Definition of the terms "includes" and "including" located at 26 USC 
7701(c) provides the limiting authority which the above definitions,
beyond constructive application, are subject to:<br>
		(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.<br>
	Two principles of law clarify definition intent: (1) The example
represents the class, and (2) that which is not named is intended to be
omitted. In the definition of "United States" and "State" set out above,
all examples are of federal States, and are exclusive of the several
States, with the transition of Alaska and Hawaii from the included to
the excluded class proving the point. This conclusion is reinforced by
the absence of regulations which extend authority to establish revenue
districts in the several States (26 USC 7621), authority for the
Department of the Treasury [Puerto Rico] in the several States (26 USC 
7801), and no grant of delegated authority for the Commissioner of
Internal Revenue, assistant commissioners, or other Department of the
Treasury personnel (26 USC 7802 & 7803).<br>

5. Lack of Regulations Supporting General Application of Tax<br>
	Here again, the Parallel Table of Authorities and Rules is useful as it
demonstrates that Subtitles A & C taxes do not have general application
within the several States and to the population at large. The regulation
for 26 USC 1 refers to 26 CFR 301, but that amounts to a dead end
 -- there is no regulation under 26 CFR, Part 1 or 31 which would apply to
the several States and the population at large. Further, there are no
supportive regulations at all for 26 USC 2 & 3, and of considerable
significance, no regulations supporting corporate income tax, 26 USC 
11, as applicable to the several States.<br>
Where the instant matter is concerned, regulations supporting 26 USC 
6321, liens for taxes, and 6331, levy and distraint, are under 27 CFR,
Part 70. The importance here is that Title 27 of the Code of Federal
Regulations is exclusively under Bureau of Alcohol, Tobacco and Firearms
administration for Subtitle E and related taxes. There are no
corresponding regulations for the Internal Revenue Service, in 26 CFR,
Part 1 or 31, which extend comparable authority to the several States
and the population at large.<br>
The necessity of regulations being published in the Federal Register is
variously prescribed in the Administrative Procedures Act, at 5 USC 
552 et seq., and the Federal Register Act, at 44 USC 1501 et seq. Of
particular note, it is specifically set out at 44 USC 1505(a), that
when regulations are not published in the Federal Register, application
of any given statute is exclusively to agencies of the United States and
officers, agents and employees of the United States, thus once again
confirming application of Subtitles A & C tax demonstrated above.
Further, the need for regulations is detailed in 1 CFR, Chapter 1, and
where the Internal Revenue Service is concerned, 26 CFR 601.702.
The need for regulations has repeatedly been affirmed by the Supreme
Court of the United States, as stated in California Bankers Ass'n. v.
Schultz, 416 U.S. 21, 26, 94 S.Ct. 1494, 1500, 39 L.Ed.2d 812 (1974):<br>
		Because it has a bearing on our treatment of some of the issues raised
by the parties, we think it important to note that the Act's civil and
criminal penalties attach only upon violation of regulations promulgated
by the Secretary; if the Secretary were to do nothing, the Act itself
would impose no penalties on anyone ... The government argues that since
only those who violate regulations may incur civil and criminal
penalties it is the regulations issued by the Secretary of the Treasury
and not the broad, authorizing language of the statute, which is to be
tested against the standards of the 4th Amendment...<br>
	Because there is a citation supporting these statutes applicable under
Title 27 of the Code of Federal Regulations, it is important to point
out that, "Each agency shall publish its own regulations in full text,"
(1 CFR 21.21(c)), with further verification that one agency cannot use
regulations promulgated by another at 1 CFR 21.40. To date, no
corresponding regulation has been found for 26 CFR, Part 1 or 31, so
until proven otherwise, IRS does not have authority to perfect liens or
prosecute seizures in the several States as pertaining to the population
at large.<br>

6. Misapplication of Authority<br>
	Regulations pertaining to seized property are found at 26 CFR 
601.326:<br>
		Part 72 of Title 27 CFR contains the regulations relative to the
personal property seized by officers of the Internal Revenue Service or
the Bureau of Alcohol, Tobacco and Firearms as subject to forfeiture as
being used, or intended to be used, to violate certain Federal Laws; the
remission or mitigation of such forfeiture; and the administrative sale
or other disposition, pursuant to forfeiture, of such seized property
other than firearms seized under the National Firearms Act and firearms
and ammunition seized under title 1 of the Gun Control Act of 1968. For
disposal of firearms and ammunition under Title 1 of the Gun Control Act
of 1968, see 18 U.S.C. 924(d). For disposal of explosives under Title XI
of Organized Crime Control Act of 1970, see 18 U.S.C. 844(c).<br>
	The only other comparable authority thus far found pertains to windfall
profits tax on petroleum (26 CFR 601.405), but once again, application
is not supported by regulations applicable to the several States and the
population at large.<br>
Where the provision for filing 1040 returns is concerned, the key
regulatory reference is at 26 CFR 601.401(d)(4), and this application
appears related to "employees" who work for two or more "employers",
receiving foreign-earned income effectively connected to the United
States. The option of filing a 1040 return for refund is mentioned in
instructions applicable to United States citizens and residents of the
Virgin Islands, but to date has not been located elsewhere. Reference
OMB numbers for 601.401, listed on page 170, 26 CFR, Part 600-End,
cross referenced to Department of Treasury OMB numbers published in the
Federal Register, November 1995, for foreign application.
The fact that 1040 tax return forms are optional and voluntary, with
special application, is further reinforced by Delegation Order 182
(reference 26 CFR 301.6020-1(b) & 301.7701). The Secretary or his
delegate is authorized to file a Substitute for Return for the
following: Form 941 (Employer's Quarterly Federal Tax Return); Form 720
(Quarterly Federal Excise Tax Return); Form 2290 (Federal Use Tax Return
on Highway Motor Vehicles); Form CT-1 (Employer's Annual Railroad
Retirement Tax Return); Form 1065 (U.S. Partnership Return of Income);
Form 11-B (Special Tax Return - Gaming Services); Form 942 (Employer's
Quarterly Federal Tax Return for Household Employees); and Form 943
(Employer's Annual Tax Return for Agricultural Employees).
The "notice of levy" instrument forwarded to various third parties is
not a "levy" which warrants surrender of property. The Internal Revenue
Code, at 6335(a), defines the "notice" instrument by use -- notice is
to be served to whomever seizure has been executed against after the
seizure is effected. In short, the notice merely conveys information, it
is not cause for action. The term "notice" is clarified by definition in
Black's Law Dictionary, 6th Edition, and other law dictionaries. Use of
the "notice of levy" instrument to effect seizure is fraud by design.
Proper use of the "notice" process, administrative garnishment, et al,
is specifically set out in 5 USC 5514, as being applicable exclusively
to officers, agents and employees of agencies of the United States (26
USC 3401(c)). Even then, however, the process must comply with
provisions of 31 USC 3530(d), and standards set forth in 3711
& 3716-17. In accordance with provisions of 26 CFR, Part 601, Subpart D,
the employer, meaning the United States agency the employee is employed
by, is responsible for promulgating regulations and carrying out
garnishment.<br>
Even if IRS was the agency responsible for collecting from an
"employee," due process would be required, as noted above, so authority
to collect would ensue only after securing a court order from a court of
competent jurisdiction, which in the several States would mean a
judicial court of the State. In law, however, there is no authority for
securing or issuing a Notice of Distraint premised on non-filing, bogus
filing, or any other act relating to the 1040 return. See United States
v. O'Dell, Case No. 10188, Sixth Circuit Court of Appeals, March 10,
1947. In G.M. Leasing Corp. v. United States, 429 U.S. 338 (1977), the
United States Supreme Court held that a judicial warrant for tax
levies is necessary to protect against unjustified intrusions into
privacy. The Court further held that forcible entry by IRS officials
onto private premises without prior judicial authorization was also an
invasion of privacy.<br>

7. Liability Depends on a Taxing Statute<br>
	General demands for filing tax returns, production of records,
examination of books, imposition and payment of tax, etc., are of no
consequence to the point a taxing statute (1) defines what tax is being
imposed, and (2) the basis of liability. In other words, even if the
Internal Revenue Service was a legitimate agency of the United States
Department of the Treasury and had authority in the several States, the
Service would have to be specific with respect to what tax was at issue
and would have to demonstrate the tax by citing a taxing statute with
the necessary elements to establish that any given person was obligated
to pay any given tax.<br>
This mandate has been clarified by the courts numerous times, with the
matter definitively stated by the Tenth Circuit Court of Appeals in
United States v. Community TV, Inc., 327 F.2d 797, at p. 800 (1964):<br>
		Without question, a taxing statute must describe with some certainty
the transaction, service, or object to be taxed, and in the typical
situation it is construed against the Government. Hassett v. Welch, 303
U.S. 303, 58 S.Ct. 559, 82 L.Ed.858<br>
	In other words, to the point Service personnel produce the statute
which mandates a certain tax and which specifies, "... the transaction,
service, or object to be taxed..," the burden of proof lies with the
Government, with the consequence being that no obligation or civil or
criminal liability can ensue to the point a taxing statute that meets
the above requirements is in evidence.<br>
This conclusion is supported by the statute which provides the
underlying requirements for keeping records, making statements, etc.,
located at 26 USC 6001:<br>
		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 employee 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).<br>
	The control statute for Subtitle F, Chapter 61, Subchapter A, Part I,
concerning records, statements, and special returns, clearly returns the
matter to the "employee" defined at 3401(c), and the "employer"
defined at 3401(d). In general, however, (1) the Secretary must
provide direct notice to whomever is required to keep books, records,
etc., as being the "person liable," or (2) specify the person liable by
regulation. In the absence of notice by the Secretary, based on a taxing
statute which makes such a person liable according to provisions
stipulated in United States v. Community TV, Inc., Hassett v. Welch, and
other such cases, or regulations which specifically set establish
general liability, there is no liability.<br>
Sec. 6001 also exempts "employees" from keeping records except where
tips and the like are concerned. This is consistent with constructive
demonstration that "employers" rather than "employees" are required to
file returns, as opposed to paying deducted amounts as income tax
returns, constructively demonstrated in a previous section of this
memorandum and specifically articulated in 26 CFR 601.104.
Clarification via 26 USC 6053(a) is as follows:<br>
		(a) REPORTS BY EMPLOYEES. -- Every employee who, in the course of his
employment by an employer, receives in any calendar month tips which are
wages (as defined in section 3121(a) or section 3401(a)) or which are
compensation (as defined in section 3231(e)) shall report all such tips
in one or more written statements furnished to his employer on or before
the 10th day following such month. Such statements shall be furnished by
the employee under such regulations, at such other times before such
10th day, and in such form and manner, as may be prescribed by the
Secretary.<br>
	Unraveling 6001 straightens out the meaning of 6011, which requires
filing returns, statements, etc., by the person made liable (3401(d)),
as distinguished from the person required to make returns (payments) at
6012 (3401(c)). Even though a person might be a citizen or resident
of the United States employed by an agency of the United States, and
thereby be required to return a prescribed amount of United
States-source income, he is not the person liable under 6011 and
attending regulations.<br>
The "method of assessment" prescribed at 26 USC 6303 is therefore
dependent on the taxing statute and must rest on authority specifically
conveyed by a taxing statute which prescribes liability where the
Secretary (1) has provided specific notice, including the statute and
type of tax being imposed, or (2) supports assessment by regulatory
application. In the absence of one or the other, an assessment by the
Secretary is of no consequence as it is not legally obligating.
The requirement for the Secretary to provide notice to whomever is
responsible for collecting tax, keeping records, etc., is clarified at
26 CFR 301.7512-1, particularly (a)(1)(i), relating to "employee tax
imposed by section 3101 of chapter 21 (Federal Insurance Contributions
Act)," and (a)(1)(iii), relating to "income tax required to be withheld
on wages by section 3402 of chapter 24 (Collection of Income Tax at
Source on Wages)..." The person liable is the employer or the employer's
agent, and of particular significance, it is this "person" who is
subject to civil and particularly criminal penalties (26 CFR 301.7513-1(f); 26 CFR 301.7207-1 & 301.7214-1, etc.). Officers and
employees of the United States are specifically identified as being
liable at 26 USC 301.7214-1.<br>
The matter of who is required to register, apply for licenses, or
otherwise collect and/or pay taxes imposed by the Internal Revenue Code
is ultimately and finally put to rest under "Licensing and
Registration", 26 USC 301.7001-1, et seq. Each of the categories so
addressed has liability based on some particular taxing statute which
creates liability.<br>

8. The Necessity of Administrative Process<br>
	The requirement for a specific taxing statute, with 26 USC  6001
clearly providing the first leg in necessary administrative procedure to
determine liability, was addressed at length in Rodriguez v. United
States, 629 F.Supp.333 (N.D. Ill. 1986).<br>
Presuming (1) the Secretary has provided the necessary notice, or (2) a
regulation prescribes general application which makes any given person
liable for a tax and requires tax return statements to be filed, each
step in administrative process prescribed by 26 USC 6201, 6212, 6213, 
6303 and 6331 must be in place for seizure or any other encumbrance to
be legal.<br>
Here again, regulations published in the Federal Register are
significant, with provisions of 5 USC 552 et seq., 44 USC 1501 et
seq., 1 CFR, Chapter I, and 26 CFR, Part 601 all supporting the mandate
for regulations to be published in the Federal Register before they have
general application. It will be noted by referencing the Parallel Table
of Authorities and Rules, beginning on page 751 of the 1995 Index volume
to the Code of Federal Regulations, that application by regulation to
the several States is only under Title 27 of the Code of Federal
Regulations, or that there are no regulations published in the Federal
Register. The following entries, or non-entries, are found:<br>
26 USC 6201	Assessment authority<br>
27 CFR, Part 70<br>
26 USC 6212	Notice of deficiency			No Regulation<br><br>
26 USC 6213	Restrictions applicable to deficiencies;							petition to
Tax Court			No Regulation<br>
26 USC 6303	Notice and Demand for Tax		27 CFR, Part 53, 70<br>
26 USC 6331	Levy and distraint				27 CFR, Part 70<br>
	The assessment authority under 26 USC 6201, in relevant part as<br>
applicable to Subtitles A & C taxes, are as follows:<br>
		(a) AUTHORITY OF SECRETARY. -- The Secretary is authorized and
required to make the inquires, determination, and assessments of all
taxes (including interest, additional amounts, additions to the tax, and
assessable penalties) imposed by this title, or accruing under any
former internal revenue law, which have been duly paid by stamp at the
time and in the manner provided by law. Such authority shall extend to
and include the following:<br>
(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.<br>
(3) ERRONEOUS INCOME TAX PREPAYMENT CREDITS. -- If on any return or
claim for refund of income taxes under subtitle A there is an
overstatement of the credit for income tax withheld at the source, or of
the amount paid as estimated income tax, the amount so overstated which
is allowed against the tax shown on the return or which is allowed as a
credit or refund may be assessed by the Secretary in the same manner as
in the case of a mathematical or clerical error appearing upon the
return, except that the provisions of section 6213(b)(2) (relating to
abatement of mathematical or clerical error assessments) shall not apply
with regard to any assessment under this paragraph.<br>
(b) AMOUNT NOT TO BE ASSESSED. --<br>
(1) ESTIMATED INCOME TAX. -- No unpaid amount of estimated income tax
required to be paid under section 6654 or 6655 shall be assessed.
(2) FEDERAL EMPLOYMENT TAX. -- No unpaid amount of Federal unemployment
tax for any calendar quarter or other period of a calendar year,
computed as provided in section 6157, shall be assessed.<br>
(d) DEFICIENCY PROCEEDINGS. --<br>
For special rules applicable to deficiencies of income, estate, gift,
and certain excise taxes, see subchapter B. [emphasis added]<br>
	The grant of assessment authority with respect to taxes prescribed in
Subtitles A & C is limited to provisions set out above even where the
Service might have authority relating to those made liable for the tax,
meaning the "employer" specified at 26 USC 3401(d). Clearly, returns made either by the agent of the United States
agency required to file a return, or the Secretary, are to be evaluated
mathematically, and errors are to be treated as clerical errors, nothing
more. The Secretary has no authority to assess estimated income tax
(individual estimated income tax at 6554; corporation estimated income
tax at 6655), or unemployment tax ( 6157). For all practical
purposes, the trail effectively ends here.<br>

9. The Impossibility of Effective Contract/Election<br>
	In order for there to be an opportunity for a nonresident alien of the
United States (a Citizen of one of the several States) to elect to be
taxed or treated as a citizen or resident of the United States, one or
the other of a married couple, or the single "individual" making the
election, must be a citizen or resident of the United States (26 USC 
6013(g)(3)). Some party must in some way be connected with a "United
States trade or business" (performance of the functions of a public
office (26 USC 7701(a)(26)). A nonresident alien never has
self-employment income (26 CFR 1.1402(b)-1(d)). In the event that a
nonresident alien is an "employee" (26 USC 3401(c)), the "employer"
(26 USC 3401(d)) is liable for collection and payment of income tax
(26 CFR 1.1441-1). And in order for real property to be treated as
effectively connected with a United States trade or business by way of
election, it must be located within the geographical United States (26
USC 871(d)).<br>
Provisions cited above preclude any and all legal authority for Citizens
of the several States, or privately owned enterprise located in the
several States, to participate in federal tax and benefits programs
prescribed in Subtitles A & C of the Internal Revenue Code and companion
legislation such as the Social Security Act which provide benefits from
the United States Government, which is a foreign corporation to the
several States.<br>
<br>
Summary & Conclusion<br>
	This memorandum is not intended to be exhaustive, but merely sufficient
to support causes set out separately.  The most conspicuous conclusions
of law are that Congress never created a Bureau of Internal Revenue, the
predecessor of the Internal Revenue Service; Subtitles A & C of the
Internal Revenue Code prescribe excise taxes, mandatory only for
employees of United States Government agencies; the Internal Revenue
Service, within the geographical United States where the Service appears
to have colorable authority, is required to use judicial process prior
to seizing or encumbering assets; and the law demonstrates that people
of the several States, defined as nonresident aliens of the
self-interested United States in the Internal Revenue Code, cannot
legitimately elect to be taxed or treated as citizens or residents of
the United States. If a Citizen of one of the several States works for
an agency of the United States or receives income from a United States
"trade or business" or otherwise effectively connected with the United
States, the employer or other third party responsible for payment is
made liable for withholding taxes at the rate of 30% or 14%, depending
on classification, and is thus "the person liable" and may be subject to
Internal Revenue Service initiatives, with administrative initiatives,
where seizure and/or encumbrance actions are concerned, subject to judicial determinations by courts of
competent jurisdiction.<br>
Under penalties of perjury, per 28 USC 1746(1), I attest that to the
best of my knowledge and understanding, all matters of law and fact
presented herein are accurate and true.<br>
<br>
please prove me wrong!<br>
<br>
Jerry Nicolas<br>s