Appendix P: Miscellaneous Letters
MEMO
TO: Trusted Colleagues
FROM: Mitch Modeleski, Founder
Account for Better Citizenship
DATE: November 4, 1992
SUBJECT: Trusts, Foreign and Domestic
I have recently taken a keen interest in practical
applications of The Federal Zone to trust creation and
administration. In particular, I now believe I have enough
evidence to prove that the correct distinction between foreign
and domestic corporations is equally applicable to trusts. The
purpose of this memo is to share some of this evidence with you,
in order to challenge your thinking on this subject and possibly
to open new possibilities for trust creation and administration.
Black's Law Dictionary, Sixth Edition, is a good place to
begin. In this dictionary, we find the following important
definitions:
Foreign situs trust. A trust which owes its existence to
foreign law. It is treated for tax purposes as a
non-resident alien individual.
[emphasis added]
Foreign trust. A trust created and administered under
foreign law.
Black's Law Dictionary, Sixth Edition, defines "foreign state"
very clearly, as follows:
The several United States*** are considered "foreign" to
each other except as regards their relations as common
members of the Union.
[emphasis added]
I have added three asterisks ("***") after "United States" in
order to emphasize that the "United States" in this context
refers to the 50 States of the Union.
Now examine the definition of "foreign estate or trust" in
the definitions section of the Internal Revenue Code, as follows:
Foreign Estate or Trust. -- The terms "foreign estate" and
"foreign trust" mean an estate or trust, as the case may be,
the income of which, from sources without the United States
which is not effectively connected with the conduct of a
trade or business within the United States, is not
includible in gross income under subtitle A.
[26 U.S.C. 7701(a)(31)]
Do a bit of grammatical reconstruction, so as to eliminate the
references to "foreign estate", and you get the following:
The term "foreign trust" means a trust, the income of which
is not includible in gross income under subtitle A. The
income of a foreign trust is not includible in gross income
when it derives from sources which are without the "United
States" and which are not effectively connected with the
conduct of a trade or business within the "United States".
Recall the definition of "foreign situs trust" from Black's
supra. Now compare the IRC definition of "foreign trust" with
the IRC definition of "gross income" for nonresident alien
individuals. Notice the component criteria of gross income for a
nonresident alien individual, and their close similarity to the
same criteria for foreign trusts:
In the case of a nonresident alien individual, except where
the context clearly indicates otherwise, gross income
includes only --
(1) gross income which is derived from sources within the
United States and which is not effectively connected
with the conduct of a trade or business within the
United States, and
(2) gross income which is effectively connected with the
conduct of a trade or business within the United
States.
[26 U.S.C. 872(a), emphasis added]
It is crucial to remember that the term "United States", as used
in these sections of the IRC, means the federal zone, i.e., the
territory over which Congress has exclusive legislative
authority. Income which is derived from sources without the
"United States" is not included in gross income for nonresident
aliens. Likewise, income which is effectively connected with the
conduct of a trade or business without the "United States" is not
included in gross income for nonresident aliens. Therefore, I
have proven that the following rule has identical application to
nonresident aliens and foreign trusts:
Income is excludible from the computation of "gross income"
if it derives from sources which are without the "United
States" and which are not effectively connected with the
conduct of a trade or business within the "United States".
Now, let's dig a little deeper in order to determine if this
finding is supported by other sections of the IRC. Find the
heading "foreign trusts" in the Topical Index of the IRC as
published by Commerce Clearing House. There you will find
references to "situs" at 402(c) and 404(a)(4). Read these
sections carefully:
Taxability of Beneficiary of Certain Foreign Situs Trusts.
-- For purposes of subsections (a) and (b), a stock bonus,
pension, or profit-sharing trust which would qualify for
exemption from tax under section 501(a) except for the fact
that it is a trust created or organized outside the United
States shall be treated as if it were a trust exempt from
tax under section 501(a).
[26 U.S.C. 402(c), emphasis added]
Trusts Created or Organized Outside the United States. --
If a stock bonus, pension, or profit-sharing trust would
qualify for exemption under section 501(a) except for the
fact that it is a trust created or organized outside the
United States, contributions to such a trust by an employer
which is a resident, or corporation, or other entity of the
United States, shall be deductible under the preceding
paragraphs.
[26 U.S.C. 404(a)(4), emphasis added]
It is a well established principle of law that the 50 States are
"foreign" with respect to each other, just as the federal zone is
"foreign" with respect to each of them (In re Merriam's Estate,
36 NE 505 (1894)). The status of being foreign is the same as
"belonging to" or being "attached to" another state or another
jurisdiction. The proper legal distinction between the terms
"foreign" and "domestic" is best seen in Black's definitions of
foreign and domestic corporations, as follows:
Foreign corporation. A corporation doing business in one
state though chartered or incorporated in another state is a
foreign corporation as to the first state, and, as such, is
required to consent to certain conditions and restrictions
in order to do business in such first state.
Domestic corporation. When a corporation is organized and
chartered in a particular state, it is considered a domestic
corporation of that state.
[emphasis added]
In light of all the above, I now contend that untold numbers
of trusts have been created on the basis of a belief that they
are domestic trusts when, in fact, they are foreign trusts, as
the terms "domestic" and "foreign" are defined in the IRC and in
the law dictionaries. The Internal Revenue Code was written
under authority granted to Congress for the exercise of exclusive
legislative jurisdiction over the federal zone. Accordingly, the
50 States and their respective laws are actually foreign with
respect to the federal zone. The 10th Amendment makes it very
clear that powers not specifically delegated to the United States
by the Constitution, nor prohibited to the States by the
Constitution, are reserved to the States or to the people. A
common-law trust situated in California exercises rights which
are reserved to the people, because California is a common-law
State and because the U.S. Constitution specifically reserves
such rights to the people.
c/o P. O. Box 6189
San Rafael
California Republic
Postal Code 94903-0189/TDC
February 15, 1993
Dagny Sharon
Attorney-at-Law
c/o 17332 Irvine Boulevard, #230
Tustin, California Republic
Postal Code 92680/tdc
Dear Dagny:
I appreciated the opportunity to make your acquaintance at
the Libertarian Party Convention in Sunnyvale this past weekend.
I also regret that we didn't have a chance to spend more time
together. Your videotape is quite original and light-hearted; I
hope it brings you much success.
Had we found a way to spend more time talking with each
other, there is one important matter which I would definitely
have wanted you to consider more carefully. During our
conversation in the bar, while I was eating lunch, you implied
that one of your goals is to work towards a "democracy" for
America. Whether you intended it this way or not, such a goal
directly contradicts Article 4, Section 4 of the Constitution for
the United States of America, to wit:
Section 4. The United States shall guarantee to every State
in this Union a Republican Form of Government ....
What exactly is a "Republican Form" of government? It is
one in which the powers of sovereignty are vested in the people
and exercised by the people. Black's Law Dictionary, Sixth
Edition, makes this very clear:
Republican government. One in which the powers of
sovereignty are vested in the people and are exercised by
the people, either directly, or through representatives
chosen by the people, to whom those powers are specially
delegated. In re Duncan, 139 U.S. 449, 11 S.Ct. 573, 35
L.Ed. 219; Minor v. Happersett, 88 U.S. (21 Wall.) 162, 22
L.Ed. 627.
Both the California State Constitution and the U.S.
Constitution state that the latter shall be the supreme Law of
the land. In the U.S. Constitution, Article 6, Clause 2 states:
This Constitution, and the Laws of the United States which
shall be made in Pursuance thereof; and all Treaties made,
or which shall be made, under the Authority of the United
States, shall be the supreme Law of the Land; and the
Judges in every State shall be bound thereby, any Thing in
the Constitution or Laws of any State to the Contrary
notwithstanding.
At the turn of the century, the U.S. Supreme Court issued a
series of controversial cases now known as The Insular Cases.
These cases were predicated, in part, on the principle that the
Constitution for the United States as such does not extend beyond
the boundaries of the States which are united by and under it.
Accordingly, this principle set a crucial precedent whereby
Congress was free to establish a legislative democracy within the
federal zone, instead of a constitutional republic.
The federal zone is the area over which Congress exercises
exclusive legislative jurisdiction; it encompasses the District
of Columbia and such areas as Guam and the Virgin Islands. Even
more important is the fact that this exclusive legislative
jurisdiction extends to all persons who are subject to it,
regardless of where they may reside. As such, the status of
"citizen of the United States" (also known as "U.S. citizen")
causes one to be subject to the letter of all municipal statutes,
rules and regulations which Congress enacts under this exclusive
legislative authority. The constitutional definition of this
second class of citizens is alleged to be the so-called 14th
Amendment. However, two standing decisions of the Utah Supreme
Court have struck down the ratification of this amendment.
Coupled with all the evidence which that Court utilized to arrive
at these decisions, we have therein good cause to conclude that
the so-called 14th Amendment is null and void for fraud and
duress. My book The Federal Zone discusses the so-called 14th
Amendment as follows:
Not only did this so-called "amendment" fail to specify
which meaning of the term "United States" was being used;
like the 16th Amendment, it also failed to be ratified, this
time by 15 of the 37 States which existed in 1868. The
House Congressional Record for June 13, 1967, contains all
the documentation you need to prove that the so-called 14th
Amendment was never ratified into law (see page 15641 et
seq.). For example, it itemizes all States which voted
against the proposed amendment, and the precise dates when
their Legislatures did so. "I cannot believe that any
court, in full possession of its faculties, could honestly
hold that the amendment was properly approved and adopted."
State vs Phillips, 540 P.2d. 936, 941 (1975). The Utah
Supreme Court has detailed the shocking and sordid history
of the 14th Amendment's "adoption" in the case of Dyett vs
Turner, 439 P.2d 266, 272 (1968).
With this background knowledge firmly in hand, it is easy to
explain why the federal government would reiterate the theme of
"democracy" and "democratic institutions" over and over in its
media propaganda. It is now obvious that such programming has
been entirely successful; witness the large percentage of
"Libertarians" who make repeated reference to their political
goal of "democracy" for America. Perhaps without knowing it,
they are participating in the slow but steady demise of the
nation symbolized by the Stars and Stripes, "the Republic for
which it stands, one Nation, under God, indivisible, with liberty
and justice for all." The Insular Cases made it possible for
America to become divisible into a constitutional republic and a
legislative democracy. It is the strategy of "divide and
conquer", being applied once again with much success, this time
to our very own homeland.
I hope I have given you a few things to think about.
Sincerely yours,
/s/ Mitch Modeleski, Founder
Account for Better Citizenship
enclosures: People vs Boxer pleadings
"Citizen is a Term of Municipal Law"
copy: Jerry Collette
c/o P. O. Box 6189
San Rafael
California Republic
Postal Code 94903-0189/TDC
February 7, 1993
John Voss, Director
N.C.B.A.
c/o P.O. Box 2255
Longmont, Colorado
Postal Code 80502/tdc
Dear John:
Thanks so much for all the materials which you recently
sent, with a copy of your letter to Mitch Beals. Time
permitting, I do intend to do a thorough analysis of the written
opinions. I am very disappointed, but not surprised, that the
appellate decisions were "not for publication". I took all the
decisions to the law library yesterday, but simply ran out of
time. Enclosed are the preliminary results of that one afternoon
at the library. Nevertheless, a distinct pattern is emerging
already.
Item #1: 28 U.S.C. 297. Assignment of judges to courts of the
freely associated compact states
This statute was part of the comprehensive "Judicial
Improvements Act" submitted to Congress by Peter F. Rodino, Jr.,
Chairman, Committee on the Judiciary, House of Representatives.
It went into law on November 19, 1988 (P.L. 100-702, copy
attached). Notice that subsection (a) refers to "the freely
associated compact states" and to "the laws of the respective
compact state". In and of themselves, these references are
significant because I was unable to find any discussion of the
legislative history for this specific statute; the material
cited in U.S. Code Cong. and Adm. News skipped any mention of it.
The statute is also too recent for any case law to have
developed, and much too recent for the term "freely associated
compact states" to appear in Words and Phrases, C.J.S., or Am
Jur, although "compact" has several meanings in Black's Law
Dictionary.
What makes this term even more significant is the reference
to it that is found in subsection (b), to wit:
The Congress consents the acceptance and retention by any
judge so authorized of reimbursement from the countries
referred to in subsection (a) ....
[emphasis added]
I am going on memory now, but I do seem to recall a key exception
to the definition of "state" once found in Title 28. The
exception was to another provision of Title 28 which utilized the
term "State court". I think this exception has since been
removed by subsequent amendment, but the pre-amendment version
clearly implied that the meaning of "state" as found in the
standard definition was different from the meaning of "state" as
intended by the term "State court" (hence the need for the
"exception" clause). Therefore, the standard definition implied
a federal state, not a Union State.
In section 297 supra, we are faced with a choice between two
conflicting and mutually incompatible interpretations of the term
"freely associated compact states". If these states are Union
States, then the "compact" may well be the U.S. Constitution and
Congress has admitted openly that Union States are the "countries
referred to in subsection (a)". If these states are other
nations in the family of nations (e.g. China, Japan), then the
"countries" referred to in subsection (a) are these other
nations, and I can only speculate about the "compact" to which
Section 297 refers. Could it be the U.N. charter? If not, what
else could it be? some international treaty? I wonder if there
is a way to inquire of the House Judiciary Committee without
tipping our own hands and giving the Committee a reason to
obfuscate the real answer. Or, what about the Library of
Congress, or Congressional Research Service? I wouldn't put too
much faith into the CRS, in light of the hack job they continue
to do on "Frequently Asked Questions about Federal Income Taxes".
This little tidbit is highly significant when placed in the
larger context of all the research now assembled into the
electronic version of The Federal Zone, third edition (disk
enclosed). In particular, my interpretation of the distinction
between "foreign" and "domestic" is amply supported by the
definitions in Black's Sixth Edition, and especially by the
Supreme Court decision to uphold the New York Court's decision of
In re Merriam's Estate, 36 NE 505 (1894). Black's definitions of
foreign and domestic corporations, in my opinion, leave little
room for doubt about the correct distinction here. Black's
defines "foreign state" very clearly, as follows:
The several United States*** are considered "foreign" to
each other except as regards their relations as common
members of the Union. ... [O]ne state of the Union is
foreign to another.
[emphasis added]
Item #2: U.S. Code Service, Lawyers Edition, Interpretive Notes
In light of the pivotal importance of this distinction
between "foreign" and "domestic", it was revealing to discover
the nearly total absence of case law on this question in the
U.S.C.S. Lawyers Edition (where you would expect a plethora of
citations). In the main body of U.S.C.S. dealing with the IRC
definitions in 7701, there is only one reference to "foreign
estate" (a revenue ruling) and there are only two references to
"domestic building and loan association" (a revenue ruling and a
district court ruling). What is even more revealing is the case
of U.S. vs Bardina, the one and only citation to the IRC
definition of "United States", to wit:
Even though 26 USCS 7701(a)(9) defines "United States" as
including only United States and District of Columbia,
Puerto Rico is considered as being within United States for
purposes of 6-year statute of limitations on tax crimes;
....
[emphasis added]
Notice the blatant tautology (again). Notice also that this
interpretation flatly contradicts the actual IRC definition:
(9) United States. -- The term "United States" when used in
a geographical sense includes only the States and the
District of Columbia.
[26 U.S.C. 7701(a)(9), emphasis added]
The term "States" is very different from the term "United
States". And, of course, the corresponding definition of "State"
makes absolutely no mention of any Union States:
(10) State. -- The term "State" shall be construed to
include the District of Columbia, where such construction is
necessary to carry out provisions of this title.
[26 U.S.C. 7701(a)(10)]
Moving on to the Cumulative Supplement for the U.S.C.S.
Lawyers Edition, we find a similar pattern. Here, we find one
revenue ruling concerning a "foreign estate", and four citations
to "resident and nonresident alien", two of which are "TC Memos",
one of which is a "Private Letter Ruling", and one of which is a
"Revenue Ruling". These are not exactly sterling authorities!
One of these citations concerned a former official of a foreign
government that was overthrown while he was in the "United
States" under diplomatic passport. Another concerned a "US
citizen who obtained a US passport before moving to a foreign
country". Another concerned a spouse's election to be treated as
a resident alien under IRC 7701(b). The last citation is worth
investigating:
Status of trust as foreign trust turns upon whether trust is
comparable to nonresident alien individual; trust
established and administered under laws of foreign country
whose trustee is a foreign entity and whose corpus is
located in a foreign country is nonforeign trust even though
trust is grantor trust and its income is taxable to grantor
who is United States citizen. Rev Rul 87-61, 1987-2 CB 219.
[emphasis added]
It would be revealing to examine the details about the trust
in question, i.e., what was the "foreign country" under the laws
of which the trust was established and administered. If it was a
Union State, we have a bingo. Who or what was the "foreign
entity" trustee? Where exactly was the "corpus" located? Notice
the term "nonforeign"; I presume this means "domestic", based on
the IRC definition of "foreign" at 7701(a)(5) (i.e., not
domestic). Finally, notice that there is a "grantor" who is a
"United States citizen"; this status appears to be the only
mention of any nexus with the federal zone (if any).
Item #3: United States Code Annotated (U.S.C.A.)
Again, an identical pattern is found in the annotated
version of the United States Codes. Here, we do find an
interesting exception to the general rule for the federal zone,
i.e., a Guam corporation is "foreign" for federal income tax
purposes:
Guam is not a "territory" within meaning of this section
defining domestic corporation as one created or organized in
United States or under laws of United States or of any state
or territory, and Guam is considered a possession so that
its corporations are foreign for federal income tax
purposes. Sayre & Co. vs Riddell, C.A. Guam, 1968, 395 F.2d
407.
Notice how carefully they skirt the general issue of
exclusive legislative jurisdiction by ruling that Guam is a
"possession", and "possessions" were not mentioned in the IRC's
definition of "domestic" at that time ("or Territory" was deleted
in 1977). In other words, in 1968 the definition of "domestic"
mentioned "United States", and "any State or Territory". Since
Guam was found to be a "possession" and not the "United States",
not a "State" and not a "Territory", it was not domestic and
therefore foreign. This is a fascinating little intricacy in
this semantic jungle.
The only other citation of any interest is the 1944 case
which interpreted the meaning of "includes". I consider this
decision to be erroneous, for reasons which I explain in detail
in Chapter 12 of The Federal Zone, third edition. Specifically,
in formal English, a noun is either a person, a place, or a
thing. The IRC specifically defines a trust to be a "person" as
opposed to a "place" or a "thing" (see IRC 7701(a)(1)). The
clarification of "includes" at IRC 7701(c) specifically states
that this term shall not be deemed to exclude other things
otherwise within the meaning of term defined; notice that
"persons" and "places" are conspicuously absent from this
clarification of "includes". Therefore, a "trust" cannot be a
thing otherwise within the definition of "transferee" because a
trust is a person, by definition, and a "transferee" is not a
person because it is not mentioned in the IRC definition of
"person". I know this may sound strained, but the IRC definition
of "person" clearly embraces only an individual, a trust, estate,
partnership, association, company or corporation; moreover,
there is ample evidence that the IRC does obey strictly the rules
of formal English grammar.
That's it! Now, don't you get the feeling, as I do, that
they are trying their best to avoid these crucial distinctions
between "foreign" and "domestic"? In light of the clarity which
is found in Black's definitions of foreign and domestic
corporations, I would be hard pressed to demonstrate a clear and
consistent pattern among these sparse authorities, many of which
are not even courts. John, I am forced to conclude that some (if
not all) of these cases were contrived, and that a thorough set
of consistent Court authorities is very conspicuous for its
absence.
Item #4: McKinley vs United States of America, S.D. Ohio, 1992
Time permitting, I will try my best to analyze the
unpublished cases which you generously provided to me. For now,
I will take a brief look at McKinley because it will be
published, and because there is so little in this decision which
is relevant to The Federal Zone, i.e.:
The Court takes judicial notice that while Ohio is a
sovereign state, it is nevertheless part of the United
States and Ohio residents are also residents of the United
States and are subject to taxation. The Court finds the
plaintiffs to be residents of the United States and not non-
resident aliens.
[emphasis added]
I guess this Court failed to read Hooven or the
corresponding definitions of "United States" in Black's. More
importantly, this decision flatly contradicts the definition of
"United States" at IRC 7701(a)(9). Sure, Ohio is part of the
"United States" if "United States" means the several States of
the Union. However, the IRC says that "United States" (when used
in a geographical sense) includes only the District of Columbia
and the States, and "State" shall be construed to include the
District of Columbia (and nothing else)! Since singular and
plural are interchangeable (per Title 1), since "include" is not
found in the clarification of "includes" and "including" at
7701(c), and since 7701(c) mentions only "things" and not
"persons" or "places", we are entirely justified in arguing that
the term "United States" at 7701(a)(9) omits any mention of the
Union States because they were intended to be omitted. The rules
of statutory construction support this inference, as do the
changes to 7701(a)(9) & (10) that resulted from the Alaska and
Hawaii Omnibus Acts: Alaska and Hawaii were removed from the IRC
definition of "State" when they joined the Union (of freely
associated compact states). So, as pro bono judge of the
Sovereign Electrical Circuit of Justice, I hereby reverse the
holding in McKinley vs United States of America and remand with
instructions to take explicit judicial notice of the legislative
history of IRC 7701(a)(9), in addition to the well established
rules of statutory construction (see Sutherland, for example).
Item #5: Notes on Decisions re: 1:6:2 and Null and Void Lloyd
These cases are either favorable or neutral. Lloyd, you are
a sitting duck. Notice also the careful IRC distinction between
"Secretary of the Treasury" and "Secretary" at 7701(a)(11). At
first glance, this is bad news for our 7401 challenge, but closer
examination reveals the following:
(A) In General. -- The term "or his delegate" --
(i) when used with reference to the Secretary of the
Treasury, means any officer, employee, or agency of the
Treasury Department duly authorized by the Secretary of
the Treasury directly, or indirectly by one or more
redelegations of authority, to perform the function
mentioned or described in the context;
Even though IRC 7401 utilizes the term "Secretary", which
means the Secretary of the Treasury or his delegate, the term "or
his delegate" means an officer, employee or agency duly
authorized by the Secretary of the Treasury either directly, or
indirectly by one or more redelegations of authority. In other
words, Lloyd Bentsen must be in the loop, either directly, or
indirectly by one or more redelegations of authority. So, it
looks as if Null and Void Lloyd remains in a heap'a trouble; his
colorable acts will spread through the Treasury Department like a
computer virus, infecting everything they touch. We should get
an expert on delegation of authority to see what, if any,
redelegations originated from Nicholas Brady and whether they
remain valid and in force after Bentsen's reign began.
Enough for now. I know you have nothing else to do but read
these technicalities. The devil is always in the details.
Sincerely yours,
/s/ Mitch Modeleski, Founder
Account for Better Citizenship
enclosures
copy: Mitchell Beals
(great first name)
c/o P. O. Box 6189
San Rafael
California Republic
Postal Code 94903-0189/TDC
February 8, 1993
John Voss, Director
N.C.B.A.
c/o P.O. Box 2255
Longmont, Colorado
Postal Code 80502/tdc
Dear John:
In my letter to you of February 7, my memory failed me when
I referred to Title 28; the correct reference was Title 8 (I got
one number right). I tracked it down today for you, because I am
convinced that one of the "unpublished" cases which you recently
sent to me is completely wrong for ruling that Union States are
not "foreign countries" for purposes of the IRC. Enclosed is
stunning proof of my position from American Jurisprudence. I
picked up the trail in Ballentine's Law Dictionary, Third
Edition, where it defines "sovereign state" as follows:
In the United States, each state constitutes a discrete and
independent sovereignty, and consequently the laws of one
state do not operate of their own force in any other state.
16 AmJur J2d, "Conflict of Laws", Section 4.
[Ballentine's Law Dictionary, Third Edition]
I had to go hunting for the corresponding section in Am Jur,
because the reference to Section 4 is a typographical error. I
found what I was looking for at Section 2 instead. The key is to
understand that the IRC is a "municipal law" as far as income
taxation is concerned (see Conclusions in The Federal Zone):
"... [T]he several states ... are otherwise, at least so far
as private international law is concerned, in the same
relation as foreign countries13. The great majority of
questions of private international law are therefore subject
to the same rules when they arise between two states of the
Union as when they arise between two foreign countries, and
[continued ...]
____________________
Footnotes:
13. Hanley vs Donoghue, 116 U.S. 1, 29 L.Ed 535, 6 S.Ct 242
Stewart vs Thomson, 97 Ky 575
Emery vs Berry, 28 NH 473
in the ensuing pages the words "state," "nation," and
"country" are used synonymously and interchangeably, there
being no intention to distinguish between the several states
of the Union and foreign countries by the use of varying
terminology.
[16 Am Jur 2d, "Conflict of Laws", Section 2]
Notice, in particular, the comment in footnote 11:
In the sense of public international law, the several states
of the Union are neither foreign to the United States nor
are they foreign to each other, but such is not the case in
the field of private international law. Robinson vs Norato,
71 RI 256, 43 A2d 467, 162 ALR 362.
Not to be outdone, Black's Sixth Edition chimed in with the
following similar message:
The term "foreign state," as used in a statement of the rule
that the laws of foreign nations should be proved in a
certain manner, should be construed to mean all nations and
states other than that in which the action is brought; and
hence one state of the Union is foreign to another, in the
sense of that rule.
[Black's Law Dictionary, Sixth Edition]
Further stunning proof of The Federal Zone thesis is found
in the Immigration and Nationality Act (see attached), where
Congress slipped by including a key exception in its statutory
definition of "State" at 8 USC 1101(a)(36). Prior to an
amendment in 1987, this definition included the language "(except
as used in section 310(a) of title III [8 USCS Section
1421(a)])". At that time, Section 1421(a) of Title 8 referred to
courts "in any State" and "all courts of record in any State". I
failed to pull the current text of 1421(a), but the current
1101(a)(36) removed the exception clause! I would bet that
1421(a) now has a special definition for the term "State",
because 1421(a) must be talking about courts of the Union States.
For corroboration, I have enclosed a page from the California
State Constitution (1879), wherein California Superior Courts are
given clear original jurisdiction to naturalize and "to issue
papers therefor".
Sincerely yours,
/s/ Mitch Modeleski, Founder
Account for Better Citizenship
enclosures: photocopies of evidence
c/o P. O. Box 6189
San Rafael
California Republic
Postal Code 94903-0189/TDC
February 1, 1993
Rich Pralle, CFS
R D P & Associates
100 Brush Creek Road, #105
Santa Rosa, California Republic
Postal Code 95404/tdc
Dear Rich:
I may have misunderstood something which you said about the
Internal Revenue Code. Am I correct in remembering you say that
IRC 6672 concerned "withholding agents"? When I returned home, I
looked up this section:
Section 6672. Failure to Collect and Pay Over Tax,
or Attempt to Evade or Defeat Tax
(a) General Rule. -- Any person required to collect,
truthfully account for, and pay over any tax imposed by this
title who willfully fails to collect such tax, or truthfully
account for and pay over such tax, or willfully attempts in
any manner to evade or defeat any such tax or the payment
thereof, shall, in addition to other penalties provided by
law, be liable to a penalty equal to the total amount of the
tax evaded, or not collected, or not accounted for and paid
over. No penalty shall be imposed under section 6653 or
part II of subchapter A of chapter 68 for any offense to
which this section is applicable.
[26 U.S.C. 6672, emphasis added]
As you can see, there is no explicit mention of "withholding
agents" in IRC 6672. The section to which I was referring in our
conversation was IRC 7701(a)(16):
(16) Withholding Agent. -- The term "withholding agent"
means any person required to deduct and withhold any tax
under the provisions of section 1441, 1442, 1443, or 1461.
[26 U.S.C. 7701(a)(16), emphasis added]
Sections 1441, 1442 and 1443 are too long to reproduce here.
Their headings provide some indication of their contents:
Section 1441. Withholding of Tax on Nonresident Aliens
Section 1442. Withholding of Tax on Foreign Corporations
Section 1443. Foreign Tax-Exempt Organizations
The following is the entire text of IRC 1461. This section
is important because it specifically makes "withholding agents"
liable for the taxes they deduct and withhold:
Section 1461. Liability for Withheld Tax
Every person required to deduct and withhold any tax under
this chapter is hereby made liable for such tax and is
hereby indemnified against the claims and demands of any
person for the amount of any payments made in accordance
with the provisions of this chapter.
[26 U.S.C. 1461, emphasis added]
In other words, the persons from whom they withhold are not
liable for the taxes which they withhold. That is to say,
nonresident aliens are not liable for the taxes that are withheld
from the dividends they receive from stock issued by domestic
corporations (see Treasury Decision 2313).
So, we can link 1461 and 6672 because withholding agents are
liable for the taxes they deduct and withhold, i.e., they are
required to collect and pay over the tax imposed by 1461
(combining the language of 6672 and 1461); if they don't pay the
taxes they deduct and withhold, then they would be liable to the
penalty defined in 6672.
Our research indicates that "withholding agents" are the
only ones who are specifically made liable by the IRC for the
payment of income taxes. If you can find another IRC section
which specifically makes anyone else liable for the payment of
income taxes, I would appreciate getting the exact citation from
you.
On another subject, I have several serious problems with the
T.A.G. flyer entitled "Are You Really Liable?" One excerpt from
this flyer reads:
Section 7701(a)(1) defines the term person as:
"The term 'person' shall be construed to mean and
include an individual, a trust, estate, partnership,
association, company or corporation."
Well now, that certainly seems easy enough and section
7701(a)(1) makes no mention of the term "U.S. Individual".
Now, look at section 7701(a)(30):
"The term 'United States person' means -
(A) a citizen or resident of the United States,
(B) a domestic partnership,
(C) a domestic corporation, and
(D) any estate or trust ...."
There is no mention of the term "U.S. Citizen";
"Individual", or "U.S. Individual".
...
Assuming the term "U.S." means United States, then the 1040
would be for a "United States Individual", the 1120 for a
"United States Corporation".
In my opinion, this sequence of logic is misleading. The
flyer assumes that the term "U.S. means United States". Fair
enough. If it doesn't mean "United States", the flyer does not
tell us what else it might mean. So, for purposes of this
analysis, the term "U.S." means "United States".
However, the flyer also states that there is no mention of
the term "U.S. Citizen". This is technically correct, because
the IRC never utilizes a capital "C" when it refers to "citizens
of the United States" or "United States citizens" (except when a
capital "C" is required in the first word of a sentence or
heading). This is misleading, because the same flyer quotes
section 7701(a)(30) which does mention "citizen or resident of
the United States", i.e., "citizen of the United States" or
"resident of the United States".
The flyer also states that there is no mention of the term
"Individual" or "U.S. Individual". Again, this is technically
correct, because the IRC utilizes the lower-case "i" when it
refers to individuals. But, for similar reasons, the flyer is
misleading because "citizens of the United States" and "residents
of the United States" are among the "individuals" to whom the IRC
refers. This is so because "person" means and includes an
"individual"; it also means and includes a trust, estate,
partnership, association, company or corporation. Therefore, an
"individual" is a person in the same way that a horse is an
animal; moreover, using permissible substitution, the term
"United States person" means and includes a "U.S. individual".
The "U.S. individuals" to whom the IRC refers are the "citizens
of the United States" and "residents of the United States". This
can be confirmed at 26 CFR 1.1-1 et seq.
For similar reasons, I also consider the following excerpt
of the flyer to be misleading and erroneous:
At section 6011, when required by regulations prescribed by
the Secretary any person made liable for any tax imposed by
this title ... shall make a return. Did the Secretary
prescribe by regulations that a citizen of the United States
was liable for filing? No, of course not.
[emphasis added]
Here's the corresponding section of the CFR:
1.6011-1 General requirement of return, statement, or list.
(a) General rule. Every person subject to any tax, or
required to collect any tax, under Subtitle A of the Code,
shall make such returns or statements as are required by the
regulations in this chapter. The return or statement shall
include therein the information required by the applicable
regulations or forms.
Another important regulation is the following:
1.6012-1 Individuals required to make returns of income.
(a) Individual citizen or resident --
(1) In general. Except as provided in subparagraph
(2) of this paragraph, an income tax return must be
filed by every individual ... for each taxable year
beginning after December 31, 1972, during which he
received $750 or more of gross income, if such
individual is:
(i) A citizen of the United States, whether residing
at home or abroad,
(ii) A resident of the United States even though not a
citizen thereof ....
So, I think the T.A.G. flyer is entirely wrong when it
states that "of course" the Secretary has "not" prescribed by
regulations that a citizen of the United States was liable for
filing. I have just proven that the Secretary has prescribed
regulations which require a "citizen of the United States" to
make an income tax return, provided that his "gross income"
exceeds the specified dollar threshold. The computation of gross
income for nonresident aliens is defined at IRC 872(a); in most
situations, that computation results in a gross income of zero.
Frank Brushaber's "gross income" was not zero because he received
a dividend from a "U.S. corporation", namely, the Union Pacific
Railroad Company. It was a U.S. corporation because it was
incorporated by Congress.
Finally, I realize that the California voter registration
form does say "For U.S. Citizens Only" in red letters across the
top of the form. However, the affidavit on that registration
form is the statement that matters:
READ THIS STATEMENT AND WARNING PRIOR TO SIGNING
I am a citizen of the United States and will be at least 18
years of age at the time of the next election. I am not
imprisoned or on parole for the conviction of a felony. I
certify under penalty of perjury under the laws of the State
of California that the information on this affidavit is true
and correct.
WARNING
Perjury is punishable by imprisonment in state prison for
two, three or four years. Section 126 Penal Code
[emphasis in original]
I contend that the "citizen of the United States" to which
this form refers is the same "citizen of the United States" to
which the Internal Revenue Code refers, to which the Code of
Federal Regulations refers, and to which the so-called Fourteenth
Amendment refers. If you are interested, we have now located two
Utah Supreme Court cases which struck down the so-called
Fourteenth Amendment. The language of Section 1 of that
amendment is almost identical to the definition of "citizen" that
is found in 26 CFR 1.1-1(c). Given that the so-called Fourteenth
Amendment was never properly approved and adopted, the earliest
definition of "citizen of the United States" that we have been
able to find in law is found in the 1866 Civil Rights Act.
Thanks for your consideration.
Sincerely yours,
/s/ Mitch Modeleski, Founder
Account for Better Citizenship
copy: Rleen Joy
Don Fletcher
c/o P. O. Box 6189
San Rafael, California
Postal Zone 94903-0189/TDC
December 22, 1992
Andrew Melechinsky
Constitutional Revival
P. O. Box 3182
Enfield, Connecticut
Postal Zone 06083/tdc
Dear Andy:
Thanks very much for your unsigned note, postmarked December
16, 1992. In response to my previous question concerning 1:8:17
in the U.S. Constitution, you wrote the following:
Answer. It is self evident that no state or any other
governing body is authorized to make laws for the District
of Columbia or other enclaves which belong to the United
States. It should be obvious that this provision of the
Constitution was designed to make Congress the equivalent to
the Enfield Town Council or the Podunk Board of Selectmen
for the purpose of governing those areas.
[my emphasis]
I couldn't agree more with your answer. In fact, it is
uncanny how close our thinking is on this question. In my
research and writings, I often refer to Congress as "City Hall"
for the federal zone. In other words, if Congress wants to pass
a "dog leash" law for D.C., it is authorized to do so by 1:8:17
in the Constitution. This dog leash law would apply only inside
D.C., and nowhere else, right?
Now, let's use a similar example, only this time let's
incorporate a tax in our example. Let's say that Congress wants
to tax the sale of dog leashes inside D.C. This is an excise
tax, right? Congress is empowered to levy excise taxes, right?
But, here's the rub: must the tax rate be uniform throughout the
50 States?
Wait a minute, you ask, the question of uniformity only
applies to federal excises levied inside the 50 States. This tax
on the sale of dog leashes only applies inside the District of
Columbia. The 50 States are irrelevant to the application of
this tax and, therefore, the issue of uniformity is also
irrelevant, is it not? Such an excise tax need not be uniform
throughout the 50 States, because it has no application anywhere
inside the 50 States. It is a "municipal" tax. No State or any
other governing body is authorized to levy such a tax inside
D.C., just as Congress is not authorized to levy such a tax
outside D.C. and inside the 50 States.
The key court decision on this question is Downes vs
Bidwell, which is one of The Insular Cases, as they are called.
You might also read the several articles which appeared in the
Harvard Law Review on these cases. I have enclosed a memo which
I wrote some time ago on exclusive authority as applied to direct
taxes.
You also wrote that "it takes a wild imagination to
visualize the District of Columbia as a second 'United States'.
Even if it was, it would still be subject to the constraints of
the Bill of Rights." Let's postpone correspondence on the Bill
of Rights until you and I can clarify our respective positions on
federal taxing authority, OK? In this context, the key question
is this: are federal municipal taxes subject to the uniformity
and apportionment rules found in the Constitution? My answer is
this: no, because those restrictions only apply to federal laws
which are levied inside the 50 States. One of the Supreme
Court's best statements on this dual or heterogeneous attribute
of federal laws is the following excerpt from the Hooven case:
... [T]he United States** may acquire territory by conquest
or by treaty, and may govern it through the exercise of the
power of Congress conferred by Section 3 of Article IV of
the Constitution ....
In exercising this power, Congress is not subject to the
same constitutional limitations, as when it is legislating
for the United States***. ... And in general the guaranties
[sic] of the Constitution, save as they are limitations upon
the exercise of executive and legislative power when exerted
for or over our insular possessions, extend to them only as
Congress, in the exercise of its legislative power over
territory belonging to the United States**, has made those
guaranties [sic] applicable.
[Hooven & Allison Co. vs Evatt, 324 U.S. 652 (1945)]
[emphasis added]
Now, let's imagine, just for the sake of argument, that the
income tax provisions in the Internal Revenue Code are municipal
statutes, which are "not subject to the same constitutional
limitations" which apply when Congress "is legislating for the
[50] United States" of America. You will notice that the IRC's
petroleum taxes are uniform throughout the 50 States, and in
those provisions the term "State" is defined to include the 50
States. However, when it comes to the graduated income tax, the
term "State" is defined to include only the District of Columbia
(and none of the 50 States). Isn't this odd? Not really, when
you realize that the graduated income tax is, indeed, a municipal
statute which is unaffected by the uniformity and apportionment
restrictions in the Constitution, for the reasons discussed
above.
Last but not least, we have in America a government of the
"United States" and a government of each of the several States;
each has citizens of its own. Therefore, we have State Citizens,
and we have federal citizens (also known as "citizens of the
United States"). See the Cruikshank case for the seminal
authority on this dual citizenship. Now, the exercise of State
Citizenship is an unalienable right, endowed by the Creator (see
the Declaration of Independence). But, and this is important,
even crucial to the issue of taxation, federal citizenship is a
statutory privilege, the exercise of which can be taxed with an
excise tax without uniformity throughout the 50 States. The term
"citizen of the United States" was first expressed in law by the
Civil Rights Act of 1866. Some people say that it was put into
the Constitution by the so-called 14th Amendment, but we have now
located two (2) Utah Supreme Court cases which held that the
Amendment was not properly ratified. Therefore, the status of
"United States citizen" is at best the creation of Congressional
legislation -- endowed by Congress and NOT by the Creator.
So, think of federal citizens as citizens of the federal
zone. The taxation of their incomes is a municipal excise tax,
just like the tax on dog leashes discussed above. The "income"
is not the subject of the tax; the subject of the tax is the
exercise of the statutory privilege known as federal citizenship
(also known as "U.S. citizenship"). The "income" is simply the
measure of the tax.
I hope I have made some sense out of the jungle of legal
jargon and double-talk which gets in the way of clear thinking on
this subject. Admittedly, the whole situation is made immensely
complicated by the deliberate vagueness and confusion which were
incorporated into Title 26 and its regulations in the CFR. But,
I am confident we have now proven that the graduated income tax
provisions of Title 26 are municipal statutes which apply only to
the federal zone (e.g. federal employees) and to the citizens of
that zone, no matter where they might "reside". In fact, to be a
"resident" of California, strictly speaking, means that one is a
federal citizen who resides outside the federal zone and inside
California. Technically speaking, a State Citizen does not
"reside" in the State of his domicile.
I would appreciate getting your written comments on all the
above. In the meantime, thanks for your continuing work to
benefit the Freedom Movement in America today.
Sincerely yours,
/s/ Mitch Modeleski, Founder
Account for Better Citizenship
c/o P. O. Box 6189
San Rafael, California
Postal Zone 94903-0189/TDC
November 4, 1992
Karl Loren, Author
1831 North Bel Aire Drive
Burbank, California Republic
Postal Zone 91504/tdc
Dear Karl:
Thank you for the complimentary copy of Verity, Volume 2,
Number 10, dated November 1, 1992. Although I do not care to get
embroiled in the trust controversy described in this issue of
Verity, your newsletter does contain the following paragraphs
which, in my humble opinion, contain serious errors. Numbers in
[brackets] are my paragraph numbers, for ease of reference:
[1] We in the United States tax U.S. Citizens on their
income whether they live in the U.S. or in a foreign
country. We tax those U.S. Citizens, regardless of
residence, on their income whether they received it from
within the United States or from outside the United States.
[2] We even go so far as to tax aliens who reside within
the United States -- on their income from either within the
U.S. or outside the U.S.
[3] A U.S. Supreme Court case [Cook v. Tait, 265 U.S. 47
(1924)] requires the U.S. Citizen abroad to pay taxes in the
U.S.
[4] The Supreme court ruled in this case that the United
States has the power to tax its citizens on their worldwide
income solely by reason of their citizenship.
[5] "No other major country in the world taxes its
nonresident citizens on their foreign-source incomes at all"
according to Marshall J. Langer, Professor of Law, Miami
University, author of Practical International Tax Planning.
There is even a tax law that makes it illegal to change your
U.S. citizenship for the purpose of avoiding taxes! [citing
IRC Section 877(a)]
[6] We even go so far as to tax nonresident aliens who
reside outside the U.S., but who receive income FROM within
the United States. [citing IRC Sections 871(a) and 871(b)]
[7] But, the IRS certainly does not try to collect income
taxes from a nonresident alien who receives his ONLY income
from sources without the United States.
[8] It would be ludicrous to even pause to consider the
possibility of the United States claiming tax jurisdiction
over a nonresident alien earning income from a non-US
Source!
I am somewhat chagrinned to be writing this letter in the
first place, because you purchased The Federal Zone some months
ago, and your written communications to me seemed to imply that
you understood, and agreed with, the book. The above quoted
paragraphs from Verity, dated November 1, 1992, now leave me
wondering just how much of The Federal Zone you actually read and
understood. Let me proceed with an analysis of your statements,
paragraph-by-paragraph:
[1] The Internal Revenue Code (26 USC) and the regulations
which promulgate that Code (26 CFR) do not impose federal
income taxes on "U.S. Citizens". The regulations at 26 CFR
1.1-1(b) and (c) state that income tax liability is imposed
on the worldwide income of "citizens of the United States"
and "residents of the United States". In English, there is
a world of difference between a proper noun and a common
noun. Proper nouns are capitalized; common nouns are not.
If you think this distinction is irrelevant or merely
academic, then it is now incumbent upon you to carry the
burden of finding and demonstrating one single reference to
"U.S. Citizens" in the IRC and its regulations. References
to "Citizen" or "Citizens" in the first word of a sentence,
or in paragraph headings, do not count, because formal
English requires that terms in such grammatical positions be
capitalized.
Moreover, the Hooven case quoted and discussed in The
Federal Zone proves that the term "United States" has at
least three different meanings in law. This fact is
supported by the same meanings which are found in Black's
Law Dictionary, Sixth Edition. The late John Knox once
confided to me that the Solicitor General in De Lima vs
Bidwell actually argued that the term "United States" has at
least five (5) different meanings in the Constitution. I am
also told that James Madison anticipated the ambiguity found
in the term "United States", and documented this ambiguity
in his notes on the Constitutional Convention. These notes
were reportedly published in 1840, but to date I have been
unsuccessful in locating a copy of these notes. Your
paragraph [1] is ambiguous for failing to define precisely
which of these several meanings you are utilizing. This is
crucial because you make the all-important distinction
between income derived from sources within the "United
States" and income derived from sources without the "United
States". A precise definition of "United States" is
therefore pivotal to any and all discussions of federal tax
law.
Moreover, the 50 States are considered to be "foreign
countries" with respect to the "United States", for purposes
of federal taxation, because the regulations clearly define
the "United States" to be the territory over which the
federal government has exclusive rights. This is the very
same term that is found in 1:8:17 in the Constitution and
for this reason "exclusive" is also a pivotal term. The 50
States of the Union retain all rights not reserved by the
people and not explicitly enumerated for the federal
government by the Constitution (see the 9th and 10th
Amendments for proof).
[2] Again, this paragraph fails to provide a precise
definition of "United States". Moreover, it makes reference
to "aliens" who "reside within the United States". If you
study IRC 7701(b)(1)(B) very carefully, you will discover
that an "alien" is an individual who is not a "citizen of
the United States" and a "nonresident" is an individual who
is not a "resident of the United States (within the meaning
of subparagraph (A)". IRC 7701(b)(1)(A) is important
because it defines the three tests which distinguish
"resident aliens" from "nonresident aliens". These three
tests are the only ways in which an "alien" can be a
"resident alien". Therefore, these three tests define
"residence" for purposes of federal income taxation. See
also IRS Publication 519: "For tax purposes, an alien is an
individual who is not a U.S. citizen." Therefore, a State
Citizen who is not also a federal citizen is an alien for
federal tax purposes. Your paragraph [2] is vague and
therefore void.
[3] Again, you make reference to a "U.S. Citizen". See
discussion of paragraph [1] above.
[4] Now you make reference to the "United States", "its
citizens" and "their citizenship". Oddly, this paragraph is
grammatically and legally correct, because the Congress does
have exclusive legislative jurisdiction over its own federal
citizens, no matter where on planet Earth they may "reside".
The enclosed materials go into great depth to explain the
distinction between federal citizens and State Citizens, so
I won't belabor this distinction here. It is important to
realize that the distinction between these two classes of
citizenship is as important and fundamental as the
distinction between the State and federal governments. See
the Cruikshank case, K. Tashiro vs Jordan, and Ex parte
Knowles for proof. The Slaughter House Cases are the
seminal decisions in this area. If you fail to educate
yourself about this important legal history, you will
continue to propagate the kind of confusion which is evident
in Verity for November 1, 1992.
[5] Here again you are back on track, but it is not clear
whether you are back on track knowingly and intentionally,
or not. Congress has authority to tax its own federal
citizens, wherever they reside and wherever the source of
their income. Therefore, "resident citizens" and
"nonresident citizens" are treated the same in federal tax
law because the worldwide income of both groups is taxed.
Your paragraph [5] does make a grievous error, however, by
stating that the tax law makes it illegal to change your
"U.S. citizenship" for the purpose of avoiding taxes. Your
paragraph [5] then cites IRC 877(a). This is not what
Section 877(a) says, nor is expatriation made illegal by any
subparagraphs of Section 877. Read them! IRC 877 merely
discusses the rules which shall govern federal tax liability
when expatriation occurs. It does not outlaw expatriation!
[6] This paragraph is also correct on its face, but it too
suffers for lacking a precise definition of "United States"
and "U.S." Sections 871(a) and 871(b) are governed by the
statutory definition of "United States" that is found at IRC
7701(a)(9). This definition, in turn, is governed by the
statutory definition of "State" that is found at IRC
7701(a)(10). IT IS VERY IMPORTANT TO TAKE CAREFUL NOTE OF
THE EXACT WORDING OF 7701(a)(10):
The term "State" shall be construed to include the
District of Columbia, where such construction is
necessary to carry out the provisions of this title.
[emphasis added]
Now, it is true that the terms "includes" and
"including" are qualified by IRC 7701(c), but notice that
"include" is not qualified by IRC 7701(c). This may seem
like nit-picking, but the published rules of statutory
construction do apply here. Specifically, the rule of
inclusio unius est exclusio alterius (the inclusion of one
is the exclusion of others) states that an irrefutable
inference must be drawn that what is omitted or excluded
from a statutory definition was intended to be omitted or
excluded. The term "include" is excluded from 7701(c). The
term "California" is excluded from 7701(a)(10). Therefore,
all by itself, this rule of statutory construction allows us
to infer that "include" is not expansive and "California" is
excluded from the statutory definition of "State" found at
7701(a)(10).
There are other rules of statutory construction which
produce the same result, e.g., ejusdem generis (the federal
zone and the 50 States are not in the same general class of
entities because the 50 States are members of the Union,
while the areas within the federal zone are not). Now the
burden is upon you to prove otherwise. Don't forget that
any doubt must be resolved in favor of those upon whom the
tax is sought to be laid; the Supreme Court has said so,
more than once!
[7] The IRS most certainly does try to collect income taxes
from nonresident aliens who receive their ONLY income from
sources without the "United States". For purposes of income
taxation, the "United States" as defined in the IRC is no
larger than the territory over which Congress exercises
exclusive legislative authority, i.e., the federal zone. If
you study Treasury Decision 2313 carefully, you will come to
discover that Frank Brushaber was classified by the Treasury
Department as a nonresident alien. His court documents
prove that he claimed to be a State Citizen who lived and
worked in New York City. Therefore, State Citizens who are
not also federal citizens are "nonresident aliens" as far as
federal income taxes are concerned. How many millions of
Americans have been victimized by the deliberate and
criminal confusion which has been fostered by vague and
ambiguous terms in the IRC? I say at least 100 million,
counting all those who have paid income taxes and passed
away since 1913.
[8] It certainly is ludicrous for the "United States" to
claim tax jurisdiction over nonresident aliens who earn
income from "non-US" sources, but IT makes this claim all
the time. By IT I mean the authority granted to Congress by
1:8:17 and 4:3:2 in the U.S. Constitution, which authority
MUST be lawfully delegated to the Internal Revenue Service
(a private mercantile organization which collects interest
payments for the Federal Reserve banks).
The evidence is overwhelming that Congress simply does
not have exclusive legislative authority over the 50 States.
The study entitled "Jurisdiction Over Federal Areas Within
the States" makes this case over and over and over. At last
count, this study cites more than 700 federal and state
court cases which all found the same thing: Congress does
not enjoy exclusive legislative jurisdiction inside the
boundaries of the 50 States until and unless a State
Legislature cedes its sovereign jurisdiction to Congress,
and does so for a specific parcel of land (called an
"enclave").
At this point in the game, Karl, you can no longer
claim ignorance of this massive body of case law. Congress
cannot impose a direct tax on State Citizens unless that tax
is duly apportioned. The earnings of State Citizens are
exempt from taxation by the fundamental law. The
apportionment rule is found in the fundamental law, but
there are no apportionment provisions anywhere in the
Internal Revenue Code. The burden is now upon you to prove
otherwise!
A man with your intelligence should not hesitate to admit
that the ambiguities in Title 26 had to be intentional. We know
that the Treasury Department can be clear when it needs to be
clear. The most important ambiguity is found in the several
meanings of "State" and "United States" in the statute and its
regulations. There is an obvious reason why the definitions are
not crystal clear and completely unambiguous, and that reason is
MONEY. A crystal clear and completely unambiguous definition of
federal income tax jurisdiction would limit the definition of
"United States" to the federal zone and no more. There is a
massive amount of case law which proves that Congress does not
exercise exclusive legislative jurisdiction upon any of the
Citizens or the territory of the 50 States.
In support of all my observations above, I have enclosed for
your information the drafts of several chapters from the third
edition of The Federal Zone, which has not yet been published. I
strongly encourage you to devour this material, and also the
court cases and other publications cited therein. If you persist
in claiming that there is nothing to be made of difference
between "Citizens" and "citizens", particularly in the face of
all the evidence which I am now sharing with you, then I will be
forced to conclude that you and I going in opposite directions.
At the very least, I will be forced to conclude that your
understanding of federal tax law does not warrant the high costs
you are charging for your trust advisory services.
Sincerely yours,
/s/ Mitch Modeleski, Founder
Account for Better Citizenship
enclosures
c/o USPS P. O. Box 6189
San Rafael, California
Postal Code 94903-0189/TDC
October 1, 1992
Hi John,
I've continued to think about De Ganay vs Lederer, 250 U.S.
376. Here's a decision table to help us organize our thoughts.
It is not necessarily rigorous or exhaustive, but provides a
useful framework. For what it's worth, this table distinguishes
stockholder dividends from corporate profits, as follows:
Case 1:
Both stockholder and corporation are overseas.
Plaintiff Defendant 16th Result
overseas overseas yes Congress cannot tax at all because
NRA corp. both are beyond its jurisdiction.
overseas overseas no Congress cannot tax at all because
NRA corp. both are beyond its jurisdiction.
The decisive factor here is territorial jurisdiction. The 16th
Amendment is irrelevant.
Case 2:
Corporation is chartered by a Union State (a/k/a "State corp.").
The tax on stockholder dividends is a "direct" tax, per Pollock.
Plaintiff Defendant 16th Result
overseas State yes Congress can tax without apportionment
NRA corp. because stockholder is not protected by
the Constitution.
overseas State no Congress can tax without apportionment,
NRA corp. because stockholder is not protected by
the Constitution.
State State yes Congress can tax without apportionment
Citizen corp. if both are inside a Union State.
State State no Congress cannot tax without apportion,
Citizen corp. Congress can tax with apportion,
if both are inside a Union State.
The decisive factor here is the protection afforded by the
applicable Constitution(s), if any. Note that a ratified 16th
Amendment makes a difference for State Citizens, but not for
overseas NRA's.
Case 3:
Corporation is chartered by a Union State (a/k/a "State corp.").
The tax on corporate profits is always an "indirect" tax:
Plaintiff Defendant 16th Result
either State yes Congress can tax if tax is uniform and
NRA corp. corporation is inside a Union State.
either State no Congress can tax if tax is uniform and
NRA corp. corporation is inside a Union State.
The decisive factor here is that profit generation by State
corporations is a revenue-taxable activity because corporations
are privileged creations of government (they enjoy the privilege
of limited liability). The tax rates must be uniform, however.
Case 4:
Corporation is chartered inside federal zone (a/k/a "domestic").
The tax on corporate profits is always an indirect tax.
Plaintiff Defendant 16th Result
either domestic yes inside federal zone, Congress can tax
NRA corp. without uniformity or apportionment
either domestic no inside federal zone, Congress can tax
NRA corp. without uniformity or apportionment
The decisive factor here is that profit generation by "domestic"
corporations is a revenue-taxable activity because these
corporations are privileged creations of Congress. Tax rates
need not be uniform or apportioned; only majority rule needs to
be satisfied.
Summary
Thus, if my analysis of corporate profits is correct, the
16th Amendment is not relevant, even if the corporation is
chartered by a Union State. Congress is free to define a tax on
corporate profit as an excise tax, and Congress need only satisfy
the uniformity rule if the corporation is chartered by a Union
State. Congress need only satisfy majority rule if the
corporation is chartered inside the federal zone (see Chapter 13,
3rd edition).
The situation is a bit different if the subject is
dividends. The status of dividend recipients then becomes
relevant, as does the ratification of the 16th Amendment. I
distinguish dividends from profits because they can be taxed
separately. There is no compelling logical reason why dividend
payors must be held liable for the tax on dividends; dividend
recipients could be designated the liable party (if not the
withholding agent).
So, the De Ganay case does not represent a threat to the
thesis of The Federal Zone after all. This is so because the
dividend recipient was unprotected by the Constitution and the
corporation was engaged in a privileged, revenue-taxable
activity, even if it was chartered by the Commonwealth of
Pennsylvania.
If this analysis does anything, it reveals a need to
distinguish overseas NRA's (like Emily De Ganay) from State
Citizens (like Frank R. Brushaber). The current Internal Revenue
Code does not make this distinction, however.
Sincerely yours,
/s/ Mitch Modeleski, Founder
Account for Better Citizenship
Conklin Rebuttal (briefly)
by
Mitch Modeleski, Founder
Account for Better Citizenship
July 4, 1992
Liability of Individuals
Conklin is saying that nobody is made liable for income taxes.
His ad in The Connector of May 1992 stated: "My name is Bill
Conklin and I have searched the Internal Revenue code for twelve
years: it is my opinion after extensive research that there is
no statute that makes anyone liable for the income tax ..."
[emphasis added]. This statement is wrong; "withholding agents"
are specifically made liable by Sections 1441 and 1461 of the
Internal Revenue Code (IRC).
Effect of Regulations
Conklin has written privately that Congress cannot promulgate
regulations which exceed the statute and that a regulation cannot
exceed the limitations created by the statute. The preponderance
of case law proves that the regulations in 26 CFR do have the
force and effect of law. See 2 Am Jur 2d, Section 289 et seq.
See also the Federal Register Act and Administrative Procedure
Act. The regulations in 26 CFR are not so easily swept away.
In re: Becraft
This is not a good decision because Becraft's research concludes
that only "aliens here and citizens abroad" are liable for
federal income taxes. This conclusion is easily disproven by 26
CFR 1.1-1(b), one of the key regulations which define the income
tax liability of individuals:
In general, all citizens of the United States**, wherever
resident, and all resident alien individuals are liable to
the income taxes imposed by the Code whether the income is
received from sources within or without the United States**.
[26 CFR 1.1-1(b), emphasis added]
Moreover, that court reduced Becraft's argument to one elemental
proposition, and rejected it for "absurdity" and "frivolity":
The Sixteenth Amendment does not authorize a direct
non-apportioned income tax on resident United States
citizens [sic] and thus such citizens are not subject to the
federal income tax laws. We hardly need comment on the
patent absurdity and frivolity of such a proposition.
Well, the Brushaber decision found otherwise. Moreover, the
Becraft court uses the term "resident United States citizen",
which manifests a lack of understanding of the relevant
regulations and their legislative history. The citizen/alien
dimension is a birth status (or naturalization status). The
resident/nonresident dimension is a location status. The term
"resident United States citizen" only makes sense if one intends
to distinguish it from "nonresident United States citizen",
"resident alien" and "nonresident alien". The Becraft court
would benefit enormously by mastering The Matrix as explained in
The Federal Zone. Their failure to define terms is a serious, if
not fatal flaw.
U.S. vs Collins
* By citing Collins as an authority for defeating The Federal
Zone thesis, Conklin confuses judicial jurisdiction with
legislative jurisdiction. The two are obviously different:
district court jurisdiction is created by statute,
legislative jurisdiction is created by the Constitution.
* Collins ruled: "The argument that the sixteenth amendment
does not authorize a direct, non-apportioned tax on United
States citizens similarly is devoid of any arguable basis in
law" [emphasis added]. This statement is demonstrably false
because the Brushaber decision supports this argument.
* Collins also ruled: "For seventy-five years, the Supreme
Court has recognized that the sixteenth amendment authorizes
a direct nonapportioned tax upon United States citizens
throughout the nation, not just in federal enclaves, see
Brushaber ...." Brushaber is NOT an authority for this
statement; Brushaber ruled that income taxes are indirect
taxes and the only effect of the 16th Amendment was to
overturn the Pollock principle. Read it!
The existence of one or more apparently unfavorable cases does
not invalidate The Federal Zone (see Unfavorable Case Law below).
Sixteenth Amendment
Most federal courts refuse to recognize the mountain of material
evidence which impugns the ratification of the so-called 16th
Amendment. However, the judge in U.S. vs Benson admitted, on the
record, that there is no law if Bill Benson is correct. By
citing Collins, Conklin is siding with irresponsible judges who
label the evidence a "political" question. Well, it wasn't a
"political" question in the years immediately after the amendment
was "declared" ratified. Both the Collins and Becraft decisions
are badly defective because they attempt to sustain the obvious
fiction that there is no material evidence against the 16th
Amendment. Mr. Conklin needs to choose between fact and fiction.
(Racing firemen don't stop for curb dogs.)
Treasury Decision 2313
This Treasury Decision is crucial evidence that The Federal
Zone's status and jurisdiction arguments are valid. Frank
Brushaber declared himself to be a citizen of the State of New
York, and a resident of the Borough of Brooklyn, in the City of
New York. Both the federal courts and the Treasury Department
found that Frank Brushaber was a NONRESIDENT ALIEN, according to
their own rules! The Secretary of the Treasury had no basis for
extending T.D. 2313 to those who were not parties to the
Brushaber case. Frank Brushaber did err in assuming that his
defendant was a foreign corporation; the Union Pacific Railroad
Company was a domestic corporation, because it was originally
created by an Act of Congress. Conklin has neglected to mention
T.D. 2313 anywhere in his published and private communications.
The Three United States
The Hooven case is standing authority for the fact that the term
"United States" has three separate meanings, all different from
each other. Federal courts had an excuse before this decision;
but after Hooven, courts have no excuse for failing to specify
which of these three meanings they intend, with each and every
use of the term. This lack of specificity leads to uncertainty,
which leads in turn to court decisions which are also void for
vagueness. The 6th Amendment guarantees our right to ignore
vague and ambiguous laws, and this must be extended to vague and
ambiguous case law. Moreover, Hooven is also standing authority
for the principle of territorial heterogeneity, an important
theme in The Federal Zone which Conklin ignores almost
completely. Similarly, Conklin has failed even to mention "The
Insular Cases" or to deal with the obvious relevance of Downes vs
Bidwell, namely, excise uniformity doesn't rule inside the
federal zone; the majority rules inside the federal zone.
Knowledge of the Book
Conklin has not purchased The Federal Zone, and has yet to admit
that he has even read the book. The failed ratification of the
Sixteenth Amendment figures prominently in the book's main logic.
Territorial heterogeneity is a theme which Conklin ignores almost
completely. The "void for vagueness" doctrine affords all of us
an opportunity to agree, on the vagueness at least. If the
statute is clear, then why did Conklin fail to find the sections
that make withholding agents liable? He had 12 years, and he
still missed them. The Spreckels case ruled that "doubt is to be
resolved in favor of those upon whom the tax is sought to be
laid." Wigglesworth ruled that, in case of doubt, statutes
levying taxes "are construed most strongly against the
Government, and in favor of the citizen". The continuing debate
on all sides is important empirical proof that the IRC should be
nullified for vagueness. If the Supreme Court cannot be clear,
then nobody can; and their titles are Justice.
Unfavorable Case Law
The existence of one or more apparently unfavorable cases does
not invalidate The Federal Zone, particularly when those cases
are predicated on rebuttable assumptions (like the 16th
Amendment, or "clarity" in the statute, or arbitrary definitions
of "income"). The book proves that chaos exists in the relevant
federal cases: the Supreme Court has clearly contradicted itself
when defining the effects of a ratified 16th Amendment. "The
devil can quote scripture for his purpose," wrote William
Shakespeare. With courts in conflict, one can cite authorities
for either side of any such unresolved debates. The Prince of
Darkness is also the Prince of Lies.
Private Law
There are many mysteries which are amazingly clarified by The
Federal Zone, including the "private law" nature of the IRC. The
IRC is a municipal statute for the federal zone. Congress is the
sovereign municipal authority for the federal zone. If Congress
had intended the IRC to apply to all 50 States, Title 26 would
have need to be enacted into positive, "public" law. It was not.
(For details, see Super Gun by Lori Jacques, pages 74-81.)
Uniform Commercial Code
The UCC is precisely on point, because federal tax returns are
"foreign bills of exchange" which are subject to rules,
regulations and case law which have built up around the UCC. The
50 States are "foreign" to each other, just as each is foreign to
the federal zone (see In re Merriam). The UCC has explicit
provisions for reserving the unalienable rights of those who
enter such contracts, including but not limited to the right to
due process and the immunity against self-incrimination.
Moreover, the UCC has a guarantee that statutes must be construed
in harmony with the Common Law. The U.S. Constitution is the
last vestige of the Common Law at the federal level.
The Smoking Gun
The Federal Zone documents the "smoking gun" -- awesome proof
that the vagueness, deception, confusion and jurisdictional
ambiguities in Title 26 were intentional.
MEMO
TO: John Voss, Director, N.C.B.A.
other interested parties
FROM: Mitch Modeleski, Founder
Account for Better Citizenship
DATE: June 9, 1992
SUBJECT: Do the regulations in 26 C.F.R.
have the force and effect of law?
The debate fostered by the claims on N.C.B.A.'s $50,000 Reward
appears to have reached the following point of departure:
Mr. Conklin has argued that Title 26 makes nobody liable for
federal income taxes.
This argument was defeated by reference to clear sections of
Title 26 which make "withholding agents" liable for federal
income taxes.
I do not as yet know if Mr. Conklin is a withholding agent.
In a private communication, Mr. Conklin has also argued that
the regulations in 26 C.F.R. create no liability because "a
regulation cannot exceed the limitations created by the
statute."
The purpose of the remainder of this memo is to cite some of the
case law which is relevant to the questions of validity, and of
the legal force and effect, of regulations promulgated by the
Secretary of the Treasury. The attached abstracts from American
Jurisprudence reveal a substantial body of case law which is not
always entirely consistent on this question. For example:
A regulation cannot supply omissions of the statute.
[2 Am Jur 2d, Section 289]
-but-
A regulation which fulfills the purpose of the law cannot be
said to be an addition to the law.
[ibid., Section 300]
The following are notable excerpts from the attached Am Jur
sections that deal with the effect and validity of rules:
Rules, regulations, and general orders enacted by
administrative agencies pursuant to the powers delegated to
them have the force and effect of law. [page 119]
There have been applied to administrative regulations the
principles that everyone is presumed to know the law or that
ignorance of the law is no excuse, and the courts will take
judicial notice of them. [page 120]
... [T]here is no violation of the Federal Constitution in
an act of Congress which provides for a defense to an action
under the statute based on good faith reliance upon any
administrative regulation .... [page 120]
Administrative regulations are held to be "laws" for various
purposes, including jurisdiction of courts and criminal
liability. If Congress imposes criminal sanctions for
disobedience of regulations, it can hardly be contended that
such regulations are not a "law" for the purposes of the
Criminal Code. [page 121]
Compliance with valid administrative regulations is
compliance with law, as has been held where it was sought to
induce actions contrary to the regulations or to impose
liability for actions which accorded with regulations.
[page 122]
Valid administrative rules or regulations are generally
regarded as legislative enactments, and have the same effect
as if enacted by the legislature. They have the force of a
statute and the same effect as if part of the original
statute. They become integral parts of the statutes,
particularly where they are legislative in nature -- that
is, are called for by the statute itself. [page 122]
While in the strict sense of the term an administrative
regulation is not actually a "statute" but is at most an
offspring of a statute, a regulation may be deemed to come
within the term "statute." [page 123]
...[R]ules and regulations will be upheld where they are
within the statutory authority of the agency and reasonable,
... they must be sustained unless unreasonable and plainly
inconsistent with the statute. [page 123]
Only when discretion has been arbitrarily exercised,
resulting in injustice or unfairness, do the courts
intervene to strike down a rule promulgated by the proper
agency designed to give appropriate effect to the provisions
of the act involved. [page 124]
Administrative regulations which go beyond what the
legislature can authorize are void and may be disregarded.
[page 124]
Regulations which are legislative in character should not be
overruled by the courts unless clearly contrary to the will
of the legislature. [page 124]
Thus there are applicable the rules in regard to presumption
of validity and partial or entire invalidity; and, just as
in individual cases hardship and loss may flow from
legislative acts which are nevertheless valid, so
administrative regulations may also operate. [page 125]
Administrative rules and regulations, to be valid, must be
within the authority conferred upon the administrative
agency. A rule or regulation which is broader than the
statute empowering the making of rules, or which oversteps
the boundaries of interpretation of a statute by extending
or restricting the statute contrary to its meaning, cannot
be sustained. [page 127]
They are valid and binding only when they are in furtherance
of the intention of the legislature as evidenced by its
acts, and a regulation, valid when promulgated, becomes
invalid upon the enactment of a statute in conflict with the
regulation. However, an administrative regulation will not
be considered as having been impliedly annulled by a
subsequent act of the legislature unless the two are
irreconcilable, clearly repugnant, and so inconsistent that
they cannot have concurrent operation. [page 127]
Administrative regulations which go beyond what the
legislature has authorized, which violate the statute, or
which are inconsistent or out of harmony with the statute
conferring the power, have been said to be void. [page 128]
... [A]dministrative regulations, to be valid, are required
to be appropriate, reasonable, or not inconsistent with law.
A rule or regulation which is within the broad rulemaking
powers commonly conferred on administrative agencies will be
sustained by the courts. [page 128]
... [A] regulation which fulfills the purpose of the law
cannot be said to be an addition to the law. Before a rule
or regulation may be declared void it must be definitely in
excess of the scope of authority, or plainly or palpably
inconsistent with law. [page 129]
... [A]n administrative agency may not create a criminal
offense or any liability not sanctioned by the lawmaking
authority, especially a liability for a tax or inspection
fee. [page 129]
... [I]ssuance of regulations is in effect exercise of
delegated legislative power. [page 770]
Administrative Procedure Act ... and Federal Register Act
... set up procedure which must be followed in order for
agency rulings to be given force of law. [page 770]
Contents of Federal Register are judicially noticed and may
be cited by volume and page number. [page 772]
... [F]ederal courts are required to take judicial notice of
contents of Federal Register. [page 772]
Code of Federal Regulations being nothing more than
supplemental edition of Federal Register, court is entitled
to take judicial notice of cited regulation in brief of
prosecution[,] and conviction of defendant thereon is not
precluded by government's failure to introduce such
applicable section in evidence. [page 772]
Court was required to take judicial notice of the Federal
Register and the Code of Federal Regulations. [page 772]
In closing, the following excerpt from an unpublished treatise by
attorney Lowell Becraft is extremely relevant to the force and
effect of regulations:
CONSTRUCTION OF REGULATIONS
In 5 U.S.C., section 301, heads of Executive
departments are given authority to make and publish
regulations. It has been previously demonstrated how the
current federal income tax laws in question today relate
back to the 1916 income tax act. Section 15 of that act
defined the terms "State" and "United States" in clear
jurisdictional terms. All income tax acts passed by
Congress have authorized the Secretary of the Treasury to
promulgate regulations, which he has done since the first
income tax act in 1913. All of the income tax regulations
published since January 28, 1921, have defined the people
subject to the tax as "citizens of the United States subject
to its jurisdiction." Thus, this phrase has been a part of
the regulations for some 67 years, and applied to the 1918,
1921, 1924, 1926, 1928, 1932, 1934, 1936 and 1938 acts, as
well as the 1939 and 1954 Codes.
The Secretary of the Treasury and the United States are
firmly bound by these prior regulations as well as the
current Treasury Regulation 1.1-1(c), which defined the
subject of the current tax as a "citizen subject to its
jurisdiction." A long line of Supreme Court cases holds
that an executive department head such as the Secretary of
the Treasury is bound by the regulations he so promulgates
and publishes ....
And the Supreme Court has found that regulations
consistently promulgated in the same language for repeatedly
re-enacted laws are very significant. In Old Colony R. Co.
v. Commission of Internal Revenue, 284 U.S. 552, 52 S.Ct.
211 (1932), the Supreme Court held that such regulations are
given an implied legislative approval:
"The repeated re-enactment of a statute without
substantial change may amount to an implied legislative
approval of a construction placed upon it by executive
officers," 284 U.S., at 557
[emphasis added]
This brings us to the following regulation; it mentions liability
explicitly:
In general, all citizens of the United States, wherever
resident, and all resident alien individuals are liable to
the income taxes imposed by the Code whether the income is
received from sources within or without the United States.
[26 C.F.R. 1.1-1(b)]
MEMO
TO: John Voss, Director
National Commodity and Barter Association
FROM: Mitch Modeleski, Founder
Account for Better Citizenship
DATE: June 7, 1992
SUBJECT: Federal Income Tax Liability
As distinct from the regulations published in 26 C.F.R.,
does the Internal Revenue Code itself specifically make anybody
liable for federal income taxes? Answer: a "withholding agent"
is specifically named as a "person" who is made liable for such a
tax. The proof is found in the combination of Sections 1441 and
1461 of the IRC, as follows:
Section 1441. Withholding of Tax on Nonresident Aliens.
(a) General Rule. -- Except as otherwise provided in
subsection (c), all persons, in whatever capacity acting ...
having the control, receipt, custody, disposal, or payment
of any of the items of income specified in subsection (b)
(to the extent that any of such items constitutes gross
income from sources within the United States), of any
nonresident alien individual or of any foreign partnership
shall ... deduct and withhold from such items a tax equal to
30 percent thereof, except that in the case of any item of
income specified in the second sentence of subsection (b),
the tax shall be equal to 14 percent of such item.
Section 1461. Liability for Withheld Tax.
Every person required to deduct and withhold any tax under
this chapter is hereby made liable for such tax and is
hereby indemnified against the claims and demands of any
person for the amount of any payments made in accordance
with the provisions of this chapter.
[emphasis added]
Therefore, if Bill Conklin is a withholding agent, then he is
liable for the federal income tax on the amount he withholds.
The question now becomes: Is Bill Conklin a withholding agent?
Yes or No? It is impossible to answer this question from your
$50,000 Reward advertisement, and I cannot tell from any of the
written communications I have received from him to date.
Now, permit me to specify the conditions under which Bill
Conklin would actually be liable for such a tax, by using a
practical and realistic example. Let us say that Bill Conklin
has a good friend named Sam who is an Air Force budget analyst.
This friend is responsible for a government research budget,
which provides grants for research in various areas of human
resources. Sam is impressed with Bill Conklin's knowledge of the
IRC. With Bill's consent, Sam agrees to hire Bill under contract
to the Air Force to provide tax consulting to other Air Force
budget analysts like Sam. When Bill gets this money, he calls
his colleague Mitch to help him work on this project, and agrees
to pay Mitch a flat rate of $60 per hour from the research grant.
Mitch, by the way, is a nonresident alien, as confirmed by a
recent formal affidavit served on the Secretary of the Treasury.
Having accepted funds from the Air Force, Bill is thereby
receiving money from a source that is "inside the United States".
Rather than paying Mitch the full $60 per hour, the statute
requires Bill to withhold 30 percent from Mitch's wages, per
Section 1441 of the IRC. Moreover, Bill Conklin is the "person"
who is liable for this tax, not Mitch. However, Mitch would be
required to file a "return" on Form 1040NR, because he had "gross
income" as defined in Section 872(a), to show that the tax had
already been withheld and therefore paid. The tax is actually
paid by the "person made liable", that is, Bill Conklin.
Now, to elaborate this example just a little more, Bill
hires two more people, both of whom declare themselves to be
"United States citizens" and both of whom complete and sign a
valid W-4 certificate. By law, Bill is also required to act as
their "withholding agent", albeit at rates that are different
from the flat 30 percent levied against the gross income of
nonresident aliens. Graduated tax rates are applied to their
taxable income. Once again, as their withholding agent, Bill is
also liable for the amounts which he withheld from their pay, as
authorized by W-4 certificates that were lawfully and validly
executed. The tax is actually paid by the "person made liable",
that is, Bill Conklin.
Incidentally, the above Sections are listed in the IRC
definition of "withholding agent", as follows:
(16) Withholding Agent. -- The term "withholding agent"
means any person required to deduct and withhold any tax
under the provisions of section 1441, 1442, 1443, or 1461.
[26 U.S.C. 7701(a)(16)]
[emphasis added]
John, maybe I should withdraw my original claim and submit
another one for the full $50,000 amount. This is my formal
notice to you that I have reserved my right to do so, even though
and regardless of the fact that I have already filed one claim
for $1 of this reward.
As I write this, I must add that my colleague John C. Alden
just now informed me that recent N.C.B.A. literature admits that
withholding agents are specifically defined by statute to be
liable for federal income taxes. For the record, I have not yet
read your literature on this subject, and honestly heard about
the literature for the first time from John C. Alden.
Thank you very much for your consideration.
Sincerely yours,
/s/ Mitch Modeleski, Founder
Account for Better Citizenship
copies: John Pleasant
Brett Brough
other interested parties
MEMO
TO: John C. Alden, M.D.
FROM: Mitch Modeleski, Founder
Account for Better Citizenship
DATE: June 7, 1992
Let's combine two recent analyses into one: the "liability"
question and The Matrix "chain" of logic.
It is interesting that the only "person" actually made liable by
the statute is a withholding agent.
When you go to the sections listed in the definition of
"withholding agent", the term "nonresident alien" is mentioned.
When you go to the definition of "nonresident alien", the term is
defined as "not a citizen" and "not a resident".
The terms "citizen" and "resident" are entirely dependent on the
meaning of "United States".
The definition of "United States" is dependent on the meaning of
"District of Columbia" and the "States".
The definition of "States" is dependent on the meaning of the
"District of Columbia" and "include". And so on.
Notice how the thread from "liability" takes you right back down
the same path already traversed in my original claim to the
$50,000 reward. It's like a pile of spaghetti, only the strands
merge.
That is, "include" may be expansive, but it can only encompass
territory over which the "United States" is sovereign.
For purposes of acquiring citizenship at birth, a person is born
subject to the jurisdiction of the "United States" if his birth
occurs in territory over which the "United States" is sovereign
(from Am Jur).
We end up at the same place -- sovereignty -- which vaults us
into the domain of the study entitled Jurisdiction over Federal
Areas within the States (see Chapter 11 and also Becraft's
excellent brief on jurisdiction).
As you may already know, there is a large number of cases which
define the res judicata of sovereignty. We are right where we
want to be!
MEMO
TO: John C. Alden, M.D.
FROM: Mitch Modeleski, Founder
Account for Better Citizenship
DATE: May 28, 1992
SUBJECT: Sovereignty and The Matrix
I want to try some logic on you; it's an extension of the
matrix logic discussed in The Federal Zone. Let's use the
following schema, in order to develop a "chain" of logic:
c a
+---------+
R | Rc | Ra | R
|----+----|
N | Nc | Na | N
+---------+
c a
Use capital letters to identify one matrix dimension, and small
letters to identify the other matrix dimension.
Now, take an index card and cover up row 1 (the "Resident"
row). This leaves only row 2 (the "Nonresident" row), columns 1
and 2. If you are a "Nonresident", then it is important to know
whether you are a "citizen" or not. If you are a "citizen", then
you are an "Nc" and you pay tax on your worldwide "income". If
you are not a "citizen", then you are an "alien" and you are an
"Na". The definition of "citizen" is therefore pivotal.
Now, move the index card so it covers only column 2 (the
"alien" column). Whether you are a "Resident" citizen ("Rc") or
a "Nonresident" citizen ("Nc"), you are still a "citizen" and you
pay tax on your worldwide "income" regardless of where you
"Reside". The definition of "citizen" is again pivotal.
Once again, move the index card so it covers only row 2 (the
"Nonresident" row). Whether you are a Resident "citizen" ("Rc")
or a Resident "alien" ("Ra"), you are still a "Resident" and you
pay tax on your worldwide "income" regardless of your status.
Now the definition of "Resident" becomes pivotal.
Finally, move the index card so it covers only column 1 (the
"citizen" column). If you are an "alien", then it is important
to know whether you are a "Resident" or not. If you are a
"Resident", then you are an "Ra" and you pay tax on your
worldwide "income". If you are not a Resident, then you are an
"Na". The definition of "Resident" is again pivotal.
We deduce from the above that the definitions of "citizen"
and "Resident" are both pivotal. Are these two definitions
related in any way? Yes, they both refer to the same thing,
namely, the "United States". If you are not a "citizen" of the
"United States", then you are an alien with respect to the
"United States". If you are not a "Resident" of the "United
States", then you are a Nonresident with respect to the "United
States". The definitions of "citizen" and "Resident" thus pivot
around the same term: "United States".
Although Becraft's essay does an excellent job of describing
the jurisdiction of the "United States", it lacks the necessary
rigor to define precisely the status of its "citizens". As a
result, his discussion of tax "subjects" is vague and confusing
(e.g., "aliens here, citizens abroad"). This is surprising,
since our logic proves that the terms "citizen" and "Resident"
both pivot around the meaning of "United States", the
jurisdiction of which Becraft appears to understand quite well,
but the citizens of which Becraft appears to misunderstand. His
confusion might have been eliminated by better research into the
exact definition of "citizen".
Compare his discussion of tax "subjects" with the key we
have found in American Jurisprudence:
"A person is born subject to the jurisdiction of the United
States, for purposes of acquiring citizenship at birth, if
his birth occurs in territory over which the United States
is sovereign ...."
I keep coming back to this statement, because it is so clear and
unequivocal. It's too bad that Becraft didn't quote this
definition and incorporate it into his treatise. A "citizen of
the United States" is a person who was either born or naturalized
in the "United States" and is also subject to its jurisdiction.
Thus, you are a "citizen of the United States" if you were born
in the "United States" and you are subject to its jurisdiction.
You are also a "citizen of the United States" if you were
naturalized in the "United States" and you are subject to its
jurisdiction. Pure logic allows for the following two
permutations: (1) you were born in the "United States" but you
are not now subject to its jurisdiction and (2) you were
naturalized in the "United States" but you are not now subject to
its jurisdiction. "Expatriation" is the legal way of accounting
for these two permutations.
There are three official definitions of "United States",
only two of which are singular nouns (the nation and the federal
zone). Using grammatical rules, the term "its jurisdiction" can
only apply to the nation or to the federal zone, but not to the
50 States (because the 50 States are plural). So, we have to
choose between the nation and the federal zone, and the best way
to do so is to understand the meaning of "sovereign" as used
above. The terms "citizen" and "Resident" pivot around the
meaning of "United States", and the term "United States" pivots
around the meaning of "sovereign". Clearly, that territory over
which the "United States" is sovereign becomes logically and
absolutely fundamental to the whole discussion.
Having come this far, the door is now open to Becraft's
excellent treatise on jurisdiction, and to the myriad of cases
which define the territory over which the "United States" is
sovereign. The cases all demonstrate that this territory does
NOT include the 50 States. (I am not aware of a single case
which found otherwise.) Therefore, the term "United States" is
NOT the nation in this context, because the 50 States belong,
without question, to the nation. The logic is not only correct;
it also conforms to the intent of the Constitution.
c/o USPS P. O. Box 6189
San Rafael, California
Postal Code 94903-0189/TDC
May 18, 1992
Charles L. Harrison
Corresponding Secretary
Monetary Realist Society
P. O. Box 31044
St. Louis, Missouri
Postal Code 63131/TDC
Dear Charles:
I am writing in response to a statement that is made in your
bulletin for April 1992 in the article entitled "He Didn't Do It;
I Saw Him with My Own Eyes!". This article makes the following
statement:
"... the XVIth Amendment was never properly ratified by the
states, and thus, there IS no income tax!"
This statement is incorrect because it is a non sequitor.
Enclosed please find a collection of essays which examine this
notion in depth. With all due respect to authors Benson and
Beckman, and to the leaders of Patriot groups around the country,
this assertion is not only misleading, but also the cause of much
unnecessary confusion among the membership, and would-be
membership, of these groups. I believe that, if you take the
time to review the logic in the enclosed papers, you will come to
see why there can be an income tax without the 16th Amendment.
In "The Insular Cases" that were decided at the turn of the
century, 12 years prior to the so-called 16th Amendment, the
Supreme Court gave its blessing to a doctrine which I have called
"territorial heterogeneity" in my recent book entitled The
Federal Zone. In exercising its exclusive authority over the
federal zone, Congress is not subject to the same constitutional
limitations that exist inside the 50 states. Specifically,
Congress is not required to apportion direct taxes levied inside
the federal zone, with or without a 16th Amendment.
For reasons like this, the areas that are inside and outside
the federal zone are heterogeneous with respect to each other.
This difference results in a principle of territorial
heterogeneity: the areas within (or inside) the federal zone are
subject to one set of rules; the areas without (or outside) the
federal zone are subject to a different set of rules. The
Constitution rules outside the zone and inside the 50 States.
The Congress rules inside the zone and outside the 50 States.
The 50 States are, therefore, in one general class, because
all constitutional restraints upon Congress are in force
throughout the 50 States, without prejudice to any one State.
The areas within the federal zone are in a different general
class, because these same constitutional restraints simply do not
limit Congress inside that zone. This principle of territorial
heterogeneity is documented in detail in Chapters 12 and 13 of
The Federal Zone: Cracking the Code of Internal Revenue. It
stems from our pivotal finding that Title 26 is a "municipal
statute", the territorial extent of which is the federal zone.
Congress is the "City Hall" for the federal zone.
Now, there certainly are a host of reasons to believe that a
failed 16th Amendment nullifies the federal income tax. Among
these reasons are statements in the Federal Register by
Commissioners of Internal Revenue, and other written
communications which have issued from the Internal Revenue
Service over the years, that the 16th Amendment is the federal
government's general authority to tax the incomes of individuals
and corporations. If you are building a reliance defense, the
Federal Register statements are certainly a good place to start,
because of the legal status extended to notices that are
published therein.
Nevertheless, given the huge mass of evidence which
seriously impugns its ratification, in the face of which Congress
has now fallen silent, the act of declaring the 16th Amendment
ratified was an act of outright fraud by Secretary of State
Philander C. Knox in the year 1913. Therefore, it is not
surprising that succeeding officials in the federal government,
like Donald C. Alexander in the year 1974, might also be victims
of this fraud, because the work of Benson and Beckman was not
published until the year 1985. It is entirely possible that IRS
officials were acting in good faith when they told America, for
so many years, that the 16th Amendment was their required
authority. That's how sinister Knox's fraud actually was.
However, a failed 16th Amendment does not mean that Congress now
has no authority whatsoever to levy direct taxes on incomes,
particularly when those incomes derive from sources that are
situated inside territory over which Congress has exclusive
legislative jurisdiction, i.e., the federal zone.
I sincerely hope that this letter, and the enclosed
materials, do provide you with a satisfactory clarification of
the 16th Amendment and the real constitutional implications of
its failure to be ratified. Thank you for your consideration.
Sincerely yours,
/s/ Mitch Modeleski, Founder
Account for Better Citizenship
enclosures
Memo
TO: Friends, Neighbors, Colleagues
and all interested people
FROM: Mitch Modeleski, Founder
Account for Better Citizenship
DATE: April 8, 1992
SUBJECT: The "Key"
In the course of doing further research for the next edition
of The Federal Zone, I was directed by the work of author Lori
Jacques to investigate the reference work American Jurisprudence.
I was delighted to find a definition which provides the "key" we
have all been looking for. This key provides yet more dramatic
support for the major jurisdictional thesis of The Federal Zone,
namely, that the Internal Revenue Code is a municipal statute and
"citizens of the United States" are those who are born or
naturalized into this municipal jurisdiction. Congress is the
"City Hall" for the federal zone. Read the following very
carefully:
Sec. 1420. -- Who is born in United States and subject to
United States jurisdiction
A person is born subject to the jurisdiction of the United
States, for purposes of acquiring citizenship at birth, if
his birth occurs in territory over which the United States
is sovereign, even though another country provides all
governmental services within the territory and the territory
is subsequently ceded to the other country. [!!!]
[3A Am Jur 2d, page 1419]
Note that the term "United States" is used in its singular
sense, that is, "... territory over which the United States is
sovereign". This is crucial evidence to support my argument that
the term "United States", as used in Title 26, refers to the
second of three official definitions of that term by the U.S.
Supreme Court. Note, in particular, the pivotal word
"sovereign", which controls the entire meaning of this passage.
The federal zone is the area over which Congress is sovereign;
it does not include the 50 States because Congress is not
sovereign over the 50 States. Chapter 11 in The Federal Zone is
dedicated to discussing sovereignty in depth. My thesis is
bolstered even further by the qualifying phrase "... even though
... the territory is subsequently ceded to the other country."
Governmental sovereignty over any territory is relinquished when
that territory is ceded to another country, but not before. (See
Chapter 11 for details.) An area of land joins the federal zone
if and only if one of the 50 States cedes that land to Congress.
Now refer to the definition of "citizen of the United
States" as published in the Code of Federal Regulations for Title
26, the Internal Revenue Code:
(c) Who is a citizen. Every person born or naturalized in
the United States and subject to its jurisdiction is a
citizen.
[26 CFR 1.1-1(c)]
[emphasis added]
Notice the singular sense of "its jurisdiction" in this
regulation. If a person is naturalized in the "United States",
he is automatically "subject to its jurisdiction", because the
Constitution authorizes Congress to legislate rules for
immigration and naturalization. On the other hand, a person is
born "subject to its jurisdiction" if his birth occurs in
territory over which the "United States" is sovereign.
Therefore, a person is born subject to the jurisdiction of the
"United States" if his birth occurs inside the federal zone.
Notice also that the letter "c" in "citizen" is in lower
case. This is the case that is used in the word "citizen"
throughout the Internal Revenue Code and throughout the
regulations. Those who argue against the upper/lower case
distinction are overlooking this remarkable consistency, spanning
more than 8,000 pages of law and regulations. Such amazing
consistency could never have happened by accident; the odds
against such an accident are astronomical. We must discount all
references to "Citizen" in the first word of any sentence,
because English grammar requires that it be capitalized in that
position. The other occurrences of "Citizen" are found in the
first word of heading phrases, for example:
(b) Citizens or residents of the United States liable to
tax.
[26 CFR 1.1-1(b)]
Whatever ambiguity this usage may create is totally
eliminated by the statutory definition of "United States" in
Title 26. It is now conclusive that the term "United States", as
defined in Title 26, is the federal zone.
The above citation from American Jurisprudence is the key we
have all been looking for: it is succinct, unequivocal, and
razor sharp. It is the key which unlocks the chains that bind
our freedom, the chains which now belong on the Congress of
[belonging to] the united States of America.
Account for Better Citizenship
c/o USPS Post Office Box 6189
San Rafael, California Republic
c/o USPS P. O. Box 6189
San Rafael, California
Postal Code 94903-0189/TDC
April 7, 1992
Free State Constitutionists
P. O. Box 3281
Baltimore, Maryland
Postal Code 21228/TDC
Dear Free State Constitutionists:
I have recently received from you a document entitled:
WE CHALLENGE ANYONE TO DISPROVE
THESE FACTS ABOUT INCOME TAX LAW
I hereby accept this challenge, in good faith and with a sincere
intent to get to the bottom of this mess we call federal income
taxation. A document very similar to yours has been disseminated
by the Save-A-Patriot Fellowship for some years.
Your document is erroneous because it is based on obsolete
technology and an evident failure to penetrate the intentional
deceptions which are built into the Internal Revenue Code and its
regulations. See enclosed documents. For example, your Fact #1
states:
RESIDENTS OF THE STATES OF THE UNION ARE NOT REQUIRED BY LAW
TO FILE FORMS 1040 AND THEY ARE NOT LIABLE FOR THE PAYMENT
OF A TAX ON "INCOME" UNLESS THEY ARE WITHHOLDING AGENTS.
This statement is erroneous because all "U.S. citizens" are
liable for federal taxes on their worldwide income, regardless of
where they "reside" and even if they are "residents of the
States". I assume by "States" you mean the 50 States of the
Union. See 26 CFR 1.1-1 et seq. Congress has the power to
delegate to the Secretary of the Treasury the authority to issue
regulations which have the force and effect of law. Therefore,
it is somewhat misleading to argue that the statute does not
contain this or that specific provision when the regulations do.
Moreover, if a "resident of the States" should receive
dividends from stocks and/or interest from bonds issued by
"domestic" corporations, the income derived therefrom would be
included in the quantity "gross income" as defined at 26 U.S.C.
872(a). The payor of the dividends or interest is the
"withholding" agent, not the recipient. This is explained
clearly in Treasury Decision 2313. Frank Brushaber declared
himself a citizen of the State of New York, and a resident of the
Borough of Brooklyn, in the city of New York. As such, T.D. 2313
designated him a nonresident alien. Any other allegations about
his citizenship and residence assume facts that were not in
evidence.
For your information, I have enclosed a number of other
letters, and a memorandum to individuals at the Save-A-Patriot
Fellowship. I have heard nothing from them in response to my
memorandum.
I have also enclosed an order form for my recently published
book entitled The Federal Zone: Cracking the Code of Internal
Revenue. The following succinct statement is directly over the
target (which explains to me why we are getting so much flak
about our understanding of the statute and its regulations):
3A Am Jur 1420, Aliens and Citizens, explains: "A Person is
born subject to the jurisdiction of the United States, for
purposes of acquiring citizenship at birth, if his birth
occurs in territory over which the United States is
sovereign ..."
[quoted in A Ticket to Liberty, November 1990, page 32]
This statement, in and of itself, has enough power to unlock the
entire puzzle of federal income taxation. When you understand
sovereignty as it applies to federal and State jurisdiction, you
will own the key. And then you can share this key with others.
You would expect the government to create a flood of propaganda
and other diversions in order to distract everyone from the core
of their deception. This core is found in the statutory
definitions of "State" and "United States".
The constitutional authority for Title 26 is 1:8:17 and
4:3:2. The Supreme Court gave its blessing to a legislative
democracy inside the federal zone in the case of Downes vs
Bidwell (see enclosed). Accordingly, within the federal zone,
Congress is not restrained by the apportionment rule for direct
taxes, nor by the uniformity rule for indirect taxes. The
"majority" rules inside the federal zone, not the constitution.
Sincerely yours,
/s/ Mitch Modeleski, Founder
Account for Better Citizenship
enclosures
c/o USPS P. O. Box 6189
San Rafael, California
Postal Code 94903-0189/TDC
March 27, 1992
Bill Conklin
N.C.B.A.
8000 E. Girard Avenue, Suite 215
Denver, Colorado
Postal Code 80231/TDC
Dear Bill:
This is my sincere attempt to claim the $50,000 Reward which
you have recently publicized in newspapers around the country.
Before I detail my claim, I wish to express my solemn intent to
rebate $49,999 back to the N.C.B.A., in the event that I earn the
reward. Thus, you will owe me $1.00 if I win, and I will gladly
pay you $1.00 if I lose. By the way, who are the judges in this
contest? Are they unbiased? Are they federal?
1. What statute makes Bill Conklin liable to pay an income tax?
Before I can address this question, I need to know your
answers to the following two questions:
(a) Are you a "citizen of the United States"?
(b) Are you a "resident of the United States"?
If your answer to either of these questions is YES, then you are
liable for federal taxes on the income which you derive from
worldwide sources, as follows:
In general, all citizens of the United States, wherever
resident, and all resident alien individuals are liable to
the income taxes imposed by the Code whether the income is
received from sources within or without the United States.
... As to tax on nonresident alien individuals, see
sections 871 and 877.
[26 CFR 1.1-1(b)]
If you have any question as to the meaning of the term "citizen
of the United States", then base your answer on the following
definition:
Every person born or naturalized in the United States and
subject to its jurisdiction is a citizen.
[26 CFR 1.1-1(c)]
If you are not a "citizen of the United States", then you
are an alien with respect to the "United States". If you have any
question as to the meaning of "resident alien", then base your
answer on the following definition:
Definition of Resident Alien and Nonresident Alien. --
(1) In General. -- For purposes of this title (other than
subtitle B) --
(A) Resident Alien. -- An alien individual shall be
treated as a resident of the United States with
respect to any calendar year if (and only if) such
individual meets the requirements of clause (i),
(ii), or (iii):
(i) Lawfully Admitted for Permanent Residence.
-- Such individual is a lawful permanent
resident of the United States at any time
during such calendar year.
(ii) Substantial Presence Test.
-- Such individual makes the election
provided in paragraph (3).
(iii) First Year Election.
-- Such individual makes the election
provided in paragraph (4).
[26 USC 7701(b), emphasis added]
If you are not resident, then you are nonresident.
Accordingly, if you are not a "citizen of the United States" and
you are not a "resident of the United States", then you are a
"nonresident alien" by definition:
(B) Nonresident Alien. -- An individual is a
nonresident alien if such individual is neither a
citizen of the United States nor a resident of the
United States (within the meaning of subparagraph
(A)). [see above]
[26 USC 7701(b), emphasis added]
If you are a nonresident alien as defined, then you are
liable for federal taxes on your "gross income" as defined:
(a) General Rule. -- In the case of a nonresident alien
individual, except where the context clearly indicates
otherwise, gross income includes only --
(1) gross income which is derived from sources within
the United States and which is not effectively
connected with the conduct of a trade or business
within the United States, and
(2) gross income which is effectively connected with
the conduct of a trade or business within the
United States.
[26 USC 872(a)]
If you are unclear what is meant by the term "United
States", you may utilize the general definition found in the
Internal Revenue Code, as follows:
(9) United States. -- The term "United States" when used in
a geographical sense includes only the States and the
District of Columbia.
[26 USC 7701(a)(9)]
If you are unclear what is meant by the term "States" in
this definition of "United States", you may utilize the
definition found in the Internal Revenue Code, as follows:
(10) The term "State" shall be construed to include the
District of Columbia, where such construction is
necessary to carry out provisions of this title.
If you are unclear about the operative meaning of the term
"include" in the above definition of "State", you may utilize the
following clarification of the terms "includes" and "including",
as follows:
(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.
[26 USC 7701(c)]
You will note that the term "include" is not mentioned in the
definition of "includes" and "including" at 7701(c). However,
words importing the plural include and apply to the singular form
of those words:
Section 1. Words denoting number, gender, and so forth.
In determining the meaning of any Act of Congress, unless
the context indicates otherwise -- words importing the
singular include and apply to several persons, parties or
things; words importing the plural include the singular;
[1 USC 1]
Thus, the definition of "State" also applies to the meaning
of "States", and the definition of "includes" also applies to
"include". The phrase "It includes ..." is singular in syntax;
the phrase "they include ..." is plural in syntax. Thus, the
term "include" when used in Title 26 shall be deemed to include
other things otherwise within the meaning of the term defined.
Therefore, the meaning of "State" is not restricted to the
District of Columbia. To determine what other things are
otherwise within the meaning of the term defined, see the
following:
(g) United States. The term "United States" when used in a
geographical sense includes any territory under the
sovereignty of the United States. It includes the
states, the District of Columbia, the possessions and
territories of the United States, the air space over
the United States, and the seabed and subsoil of those
submarine areas which are adjacent to the territorial
waters of the United States and over which the United
States has exclusive rights, in accordance with
international law, with respect to the exploration and
exploitation of natural resources.
[26 CFR 1.911-2(g)]
Thus, based upon the preceding, you may define the "United
States" to consist only of the following constituent components:
(1) District of Columbia ......................... Federal State
(2) Commonwealth of Puerto Rico .................. Federal State
(3) Virgin Islands ............................... Federal State
(4) Guam ......................................... Federal State
(5) American Samoa ............................... Federal State
(6) Northern Mariana Islands ................ Federal Possession
(7) Trust Territory of the Pacific Islands .. Federal Possession
Inclusive of the aforementioned Federal States and Federal
Possessions, "exclusive federal jurisdiction" also extends
over all Places purchased by the Consent of the Legislature
of one of the Fifty States, in which the Same shall be, for
the Erection of Forts, Magazines, Arsenals, dock-Yards, and
other needful Buildings.
[see 1:8:17 and 4:3:2 in U.S. Constitution]
Therefore, you may, as I have done, define the territory
under the sovereignty of the "United States" to consist of the
District of Columbia, the federal territories and possessions,
and the enclaves ceded to Congress by acts of State Legislatures
(such as military bases and the like). I have coined the term
"Federal Zone" to refer to all territory which is under the
sovereignty of the "United States". This interpretation conforms
to the second of three Supreme Court definitions of the term
"United States", as follows:
The term "United States" may be used in any one of several
senses. It may be merely the name of a sovereign occupying
the position analogous to that of other sovereigns in the
family of nations. It may designate the territory over
which the sovereignty of the United States extends, or it
may be the collective name of the states which are united by
and under the Constitution.
[Hooven & Allison Co. vs Evatt, 324 U.S. 652]
[emphasis added]
To summarize, you are liable for federal taxes on income
derived from worldwide sources if you are either a "citizen of
the United States" or a "resident of the United States" as those
terms are defined above. If you are neither, then you are a
nonresident alien and, as such, you are liable for federal taxes
on all income which is derived from sources within the United
States (as defined above), and on all income which is effectively
connected with the conduct of any "United States" trade or
business. For example, if you are employed by the federal
government, your pay comes from a source inside the United States
(as defined). Similarly, if you receive dividends from bonds
issued by the federal government, or by corporations chartered in
the District of Columbia (i.e., "domestic" corporations), this
"income" derives from a source that is within the United States
(as defined) and it is taxable. See Treasury Decision 2313 for a
clarification of the taxability of bond interest and stock
dividends issued by domestic corporations to nonresident aliens.
If you are unclear as to the meaning of the term "income",
please understand that the Supreme Court has instructed Congress
it cannot by any definition it may adopt conclude the matter (of
defining income), because Congress cannot by legislation alter
the Constitution, from which alone it derives its power to
legislate, and within whose limitations alone that power can be
lawfully exercised. Even though the 16th Amendment was never
ratified and the word "income" is not found in the Constitution,
Congress has continued to obey this prohibition. Nevertheless,
the Supreme Court has issued numerous official definitions of the
term "income", perhaps the most famous of which is the decision
which issued this prohibition, namely, Eisner vs Macomber, 252
U.S. 189. The Supreme Court has had to define "income" so many
times, it decided that the definition was finally settled in
Merchant's Loan & Trust vs Smietanka, 255 U.S. 509.
Finally, the 16th Amendment is not the constitutional
authority for Title 26. That authority issues from 1:8:17 and
4:3:2 in the U.S. Constitution. Title 26 is a "municipal"
statute which is not affected by either the apportionment rule or
the uniformity rule in the Constitution. Think of Congress as
"City Hall" for the federal zone. Congress has exclusive
legislative authority within the federal zone (see Downes vs
Bidwell, 182 U.S. 244, which is discussed in the attached
memorandum to staff members of the Save-A-Patriot Fellowship).
The operant "rule" that applies to Title 26 is majority rule. If
you want to change Title 26, then change the composition of the
Senate and House of Representatives.
2. How can Bill Conklin file a tax return without waiving his
Fifth Amendment protected Rights?
Sign your name with the following phrase above your
signature:
with explicit reservation of all my unalienable rights and
without prejudice to any of my unalienable rights UCC 1-207
In order to inform the world as to the meaning of this phrase,
you may opt to attach an explanation like the following:
My use of the phrase "WITH EXPLICIT RESERVATION OF ALL MY
RIGHTS AND WITHOUT PREJUDICE UCC 1-207" above my signature
on this document indicates: that I explicitly reject any and
all benefits of the Uniform Commercial Code, absent a valid
commercial agreement which is in force and to which I am a
party, and cite its provisions herein only to serve notice
upon ALL agencies of government, whether international,
national, state, or local, that they, and not I, are subject
to, and bound by, all of its provisions, whether cited
herein or not; that my explicit reservation of rights has
served notice upon ALL agencies of government of the
"Remedy" they must provide for me under Article 1, Section
207 of the Uniform Commercial Code, whereby I have
explicitly reserved my Common Law right not to be compelled
to perform under any contract or commercial agreement, that
I have not entered into knowingly, voluntarily, and
intentionally; that my explicit reservation of rights has
served notice upon ALL agencies of government that they are
ALL limited to proceeding against me only in harmony with
the Common Law and that I do not, and will not accept the
liability associated with the "compelled" benefit of any
unrevealed commercial agreements; and that my valid
reservation of rights has preserved all my rights and
prevented the loss of any such rights by application of the
concepts of waiver or estoppel.
Put simply, if you are signing a tax return, you are
entering a commercial agreement with the "United States".
Government officials are bound by the Uniform Commercial Code to
preserve your rights unless you waive any of them with knowingly
intelligent acts, done with sufficient awareness of the relevant
circumstances and consequences (see Brady vs U.S., 397 U.S. 742,
748 (1970)). This places government officials on notice that
they must disclose in advance all terms and conditions attached
to that commercial agreement. Your explicit reservation of
rights prevents the loss of any of your rights, including your
Fifth Amendment protected right against self-incrimination, by
application of the concepts of waiver or estoppel.
Finally, per 28 USC 1746, if you are a nonresident alien,
you should modify the perjury jurat on all IRS forms by
indicating that you are making your affirmation "without the
United States, under the laws of the United States of America".
I have attached the operative statute, for your information.
Note also the Form 1040X and 1040NR instructions for foreign
addresses. If you do not follow these instructions, the "United
States" is entitled to presume that you have a "domestic" address
and that you are, therefore, "resident" in the "United States" as
defined.
If you have any questions about the above, and/or you wish
additional clarification, please don't hesitate to contact me in
writing at the above address. Copies of The Federal Zone:
Cracking the Code of Internal Revenue have already been forwarded
to John Voss, Sharon Voss, and Brett Brough. Much additional
clarification of my answers in this letter can be found in that
book.
Thank you very much for your interest in Title 26.
Sincerely yours,
/s/ Mitch Modeleski, Founder
Account for Better Citizenship
enclosures
copies: John Voss
John Pleasant
Brett Brough
c/o USPS P. O. Box 6189
San Rafael, California
Postal Code 94903-0189/TDC
March 29, 1992
The Sovereign Advisor
Common-Law Service Center HQ
3rd Judicial District
564 La Sierra Drive, Suite 187
Sacramento, California Republic
Dear Sovereign Advisor:
I was very happy to receive a complimentary copy of The
Sovereign Advisor recently from a friend and colleague in the
freedom movement. Please accept my qualified praise for your
first edition, the December Issue "91". I am writing to share
with you some of the many thoughts which occurred to me as I was
reading this first issue.
First of all, I am alarmed by what I consider to be a
glaring contradiction which is evident in your newsletter. On
page 2 in the article entitled "5, 4, 3, 2, 1, Liftoff!", you
state:
There are several groups out there that are deliberately
trying to keep you within the system by claiming you are an
American Citizen, this is a false and misleading term. ...
Now if you are or claim to be an American Citizen and you
are located within any one of the states of the union you
are a federal citizen, subject to the municipal laws of the
district of columbia [sic].
On page 6, in the article entitled "Is the United States
Guilty of Genocide?", you state:
The State of California was required to have its own
Citizens, who were first, State Citizens, then as a
consequence of State Citizenship were American Citizens,
known as Citizens of the United States, (Capitol [sic] "C")
there were [sic] no specific class as this, but for
traveling and protection by the United States government
while out of the country, they were generally called
Citizens of the United States. (capital "C")
It is difficult enough to identify oneself with the freedom
movement in the United States of America without also having to
reconcile the positions of various organizations which contradict
each other. It is entirely impossible to reconcile those
sections of your newsletter which flatly contradict each other.
Second, the former paragraph quoted above states that there
are several groups "out there" that are deliberately trying to
keep us within the system by claiming that we are American
Citizens. I strongly object to this statement, for several
reasons. Your statement implies that you are privy to the
motivations of individuals and groups who make this claim, when
you are not. Unless people have actually revealed their
motivations to you, I don't see how you can be so privy to those
motivations. Such a statement in your newsletter suggests a
desire on your part to convince readers that you have all the
answers, and that others in the freedom movement do not. This
sounds more like crass commercial advertising than serious legal
scholarship, and it does serious damage to your overall
credibility.
I, for one, have been known to utilize the term "American
Citizen" and I have not done so with the purpose of keeping
myself and others "within the system" as you put it. If I am not
an American, then I do not know what I am. I have also
distributed a great deal of written materials, among them an
affidavit of revocation, which utilizes the term "American
Citizen" by defining it clearly to mean a "free sovereign natural
born Citizen per 2:1:5 in the U.S. Constitution". I would
certainly hope that you would have the courtesy to extend your
respect to any of us who take the time to define our terms with
care, and not accuse us of trying to keep people "in the system",
even though our choice of definitions may not agree with yours.
Since our nation has been known as the United States of
America at least since the U.S. Constitution was ratified, your
definition of "American Citizens" as federal citizens is
misleading and confusing. There is a popular, colloquial sense
in which we are ALL Americans. I would hesitate to recommend
that any Americans stop using that term to identify themselves,
particularly when The Sovereign Advisor obviously cannot make up
its own mind about the meaning of "American Citizens".
Elsewhere in your newsletter, you state:
An American Citizen is an Indian who leaves the reservation;
a U.S. Citizen residing outside the District of Columbia in
one of the federal judicial districts; an alien residing in
one of the several states; a State Citizen residing outside
of the several states of the union.
In this statement, did you mean to say that an American Citizen
is a "U.S. Citizen" or a "U.S. citizen"? Your use of the phrase
"residing outside the District of Columbia" is also confusing.
The distinction that is made between the terms "resident" and
"nonresident" at 26 U.S.C. 7701(b)(1) suggests that one can be
either a "U.S. Citizen" or a "U.S. citizen", regardless of
whether one is a "resident" in the District of Columbia or not.
One attribute is a birth status; the other attribute is a
location status. Note, in particular, your own citation of Cook
vs Tait, which stated that "citizens of the United States
wherever they are resident" are subject to the income tax, which
is based upon citizenship of the United States. The phrase
"wherever they are resident" is very revealing in this context.
Title 26, Section 7701(b)(1)(B) makes it very clear that one
is an "alien" with respect to the "United States" if and only if
one is not a "citizen of the United States". You have used the
term "alien" without defining it, and without proper citations in
case law. (See Treasury Decision 2313.) The definition found in
Title 26 makes it very clear that one is an alien if and only if
one is not a "citizen of the United States". Therefore, the term
"alien" as defined encompasses all of the following: State
Citizens, Citizens of foreign countries like France, and beings
from other planets. Very simply, you are an "alien" if you are
not a "citizen", and you are a "nonresident" if you are not a
resident (see 26 U.S.C. 7701(b)(1)(A)-(B)).
Allow me to offer the following clarifications. I define an
"American Citizen" to mean a sovereign State Citizen. (You are
free to disagree with this definition, but bear with me for the
moment, please.) As such, a sovereign State Citizen is
identifiable by the term "U.S. Citizen", which is an abbreviated
way of saying "Citizen of the United States of America", or
"Citizen of one of the 50 States of the Union". The term "United
States" in this context means the 50 States of the Union, united
by the Constitution.
A sovereign State Citizen is not a "citizen of the United
States" (which is another way of saying "U.S. citizen") because
the "United States" in this context means the subjects and
jurisdiction over which Congress has exclusive legislative
authority. In order to solve a very large number of terminology
problems, I refer to this jurisdiction as "The Federal Zone",
namely, the areas of land over which the Congress has exclusive
legislative authority. These areas of land consist of the
District of Columbia, the federal territories and possessions,
and all federal enclaves ceded to Congress by acts of the State
Legislatures. The authority to have exclusive jurisdiction over
these areas of land issues from 1:8:17 and 4:3:2 in the U.S.
Constitution. You may choose to disagree with this
interpretation of the term "exclusive", but in doing so you are
disagreeing with the Supreme Court of the United States (see
Downes vs Bidwell, 182 U.S. 244 (1901)). The authority for Title
26 is not the so-called 16th Amendment, despite statements to
that effect which have been published in the Federal Register by
former Commissioners of Internal Revenue.
Accordingly, an "alien residing in one of the several
states" is a "nonresident alien" with respect to the "United
States" as defined in Title 26, that is, with respect to The
Federal Zone, if he was born in one of the 50 States. An "alien
residing in one of the several states" is a "resident alien" with
respect to the "United States" as defined by Title 26, i.e., with
respect to The Federal Zone, if he was born in a foreign country
like France and he was lawfully admitted for permanent residence.
Notice the phrase "lawfully admitted for permanent residence".
Birth status and location status create four different cases:
resident citizen, nonresident citizen, resident alien, and
nonresident alien.
Congress has jurisdiction over immigration and
naturalization; Congress does not have jurisdiction over
sovereign State Citizens, because They created the Constitution,
and the Constitution created Congress. I presume that you are
using the term "several states" to mean the 50 States, even
though you have not capitalized the word "states". I prefer to
use the lower-case "states" to refer to federal territories and
possessions and upper-case "States" to refer to the 50 Sovereign
Members of the Union.
The phrase "State Citizen residing outside of the several
states of the union" is also ambiguous, because it does not
identify whether this "State Citizen" is residing inside The
Federal Zone, or inside a foreign country like France. It makes
a difference. If this "State Citizen" resides inside The Federal
Zone, then he is a "resident alien" by definition (see
substantial presence test at 7701(b)(1)(A)). If he resides
inside a foreign country like France, then he is a "nonresident
alien" with respect to The Federal Zone, but he is still a
"Citizen of the United States of America" and, as such, Congress
does have jurisdiction over him as long as he resides therein.
He could request the protection of the U.S. State Department, for
example, by seeking help from an American embassy, and his status
as a "Citizen of the United States of America" would entitle him
to that protection.
Finally, I am very concerned about the poor state of
grammar, spelling and punctuation in your newsletter. Any
organization which claims to know a technical subject like law,
and which claims to know it well enough to publicize a newsletter
on a specialized aspect of law, should be willing to embrace the
minimum standard for language accuracy. You have made a big
issue of upper and lower case letters, then you refer to the seat
of government and "the municipal laws of the district of
columbia". When the District of Columbia is obviously at issue
here, you should know better than to refer to the first letter in
"Citizen" as "Capitol C", when the correct term is "capital C".
Then you refer to "capital C" immediately after referring to
"Capitol C". (Is it possible that your staff is infiltrated?)
The Congress conducts its business in the "Capitol" building;
upper case letters are referred to as "capital" letters. If you
are attempting to write in an expository style, then do
everything to insure that your exposition is clear, unequivocal
and precise. Otherwise, you run the risk that a competing group
will criticize you for being motivated by an intent to equivocate
in your newsletter, when you are not so motivated (as far as I
can tell).
Please accept these criticisms in the constructive spirit in
which they are made. The issues which you have raised in your
newsletter are just too terribly important to risk any loss of
credibility through contradictions and substandard English. Our
language is rich and powerful enough to accommodate the most
exacting requirements of any discipline.
Sincerely yours,
/s/ Mitch Modeleski, Founder
Account for Better Citizenship
c/o USPS P. O. Box 6189
San Rafael, California
Postal Code 94903-0189/TDC
March 17, 1992
Louis Watson
International Tax Technology
16776 Bernardo Center Drive, #203
San Diego, California Republic
Postal Code 92128/TDC
Dear Lou:
Thank you for the time and energy that went into your
presentation in Sparks, Nevada last Friday evening. I have been
debating whether or not to write you about my experience there.
Since I am still thinking about it, now four days later, I am
taking the chance that you will read this letter with an open
mind and an honest interest in what I have to say.
Please bear in mind that, at least twice during your
lecture, you invited the audience to challenge anything you were
saying. Unfortunately for me, when I took you up on your offer,
your response was anything but receptive. In fact, after my
first question, your volume increased dramatically and your tone
of voice became defensive and harsh. It is for this reason that
I feel I am taking a chance that you may not read this letter
with an open mind and an honest interest in what I have to say.
Let me begin with a somewhat technical point which, as it
turns out, is representative of the many problems we all
experience with Title 26. As you already know, the word
"include" and its several variations are utilized in many key
definitions within the IRC. After much research and writing on
the subject, I personally believe that it begs the question to
make our point with a partial quotation from Black's Law
Dictionary. If it does anything, such a partial reading exposes
our own biases, more than anything else. Fortunately, we can't
afford, nor do we need bias to win our argument with the IRS and
to convince the general public of the validity of our position.
The following is the complete definition of "include" from
Black's, Sixth Edition:
Include. (Lat. inclaudere, to shut in, keep within.) To
confine within, hold as in an inclosure, take in, attain,
shut up, contain, inclose, comprise, comprehend, embrace,
involve. Term may, according to context, express an
enlargement and have the meaning of and or in addition to,
or merely specify a particular thing already included within
general words theretofore used. "Including" within statute
is interpreted as a word of enlargement or of illustrative
application as well as a word of limitation.
[emphasis added]
Notice, in particular, that this definition permits both the
expansive as well as the restrictive meanings. For this reason,
it is misleading to quote only the first definition, "to confine
within ...", when we attempt to decipher the IRC definitions of
"State" and "United States". Moreover, the statute itself
manifests an expansive intent when it defines "includes" and
"including" as follows:
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.
[26 USC 7701(c)]
I find it quite fascinating that the word "include" is not
mentioned in this definition. Are we therefore justified in
arguing that "includes" and "including" are expansive, but
"include" is restrictive? This is not an idle question, because
the word "include" is used in the definition of "State" at
7701(a)(10), and the word "includes" is used in the definition of
"United States" at 7701(a)(9). Black's doesn't help us here,
because it embraces both the expansive and restrictive meanings.
How do we resolve this ambiguity?
One could argue that "includes" is the singular form of the
verb, while "include" is the plural form of the verb. For
example, the sentence "It includes ..." has a singular subject
and a singular predicate. The sentence "They include ..." has a
plural subject and a plural predicate. An entry in the Code of
Federal Regulations of 1961 explains how plural forms include the
singular, and vice versa:
170.60 Inclusive language.
Words in the plural form shall include the singular and vice
versa, and words in the masculine gender shall include the
feminine as well as trusts, estates, partnerships,
associations, companies, and corporations.
[26 CFR 170.59, revised as of January 1, 1961]
On the basis of this regulation, therefore, one is justified
in arguing that "include" is also expansive because it is merely
the plural form of "includes", which is expansive per 7701(c). I
believe that this same rule is found in Title 1 of the U.S. Code,
but I can't quite put my finger on the citation just now.
It would be nice if this were the end of the story, but
unfortunately for us, it is not. There are other published rules
which produce different results. One well established rule of
statutory construction is the rule of inclusio unius est exclusio
alterius. Black's defines this rule as follows:
Inclusio unius est exclusio alterius. The inclusion of one
is the exclusion of another. The certain designation of one
person is an absolute exclusion of all others. ... This
doctrine decrees that where law expressly describes
particular situation to which it shall apply, an irrefutable
inference must be drawn that what is omitted or excluded was
intended to be omitted or excluded.
Now, the word "include" is omitted from the expansive
definition of "includes" and "including" found at 7701(c), is it
not? Using the above rule, we are permitted to draw an
irrefutable inference that the word "include" was omitted or
excluded because it was intended to be omitted or excluded.
Well, if "include" is not among the list of terms which are to be
given an expansive meaning, can we infer therefrom that it must
be given a restrictive meaning instead? If so, why?
Another rule which raises even more questions is the
"ejusdem generis" canon, defined in Black's Sixth Edition as
follows:
Under "ejusdem generis" canon of statutory construction,
where general words follow the enumeration of particular
classes of things, the general words will be construed as
applying only to things of the same general class as those
enumerated.
[emphasis added]
Is California in the same general class as the District of
Columbia? Is Puerto Rico in the same general class as
California? One of the major points of my book is to distinguish
the 50 States from the federal zone by using a principle which I
call "territorial heterogeneity". The 50 States are in one
general class, because of the Constitutional restraints under
which Congress must operate inside those 50 States. The areas
within the federal zone are in a different general class, because
these same constitutional restraints simply do not limit Congress
inside that zone (see Downes vs Bidwell, 182 U.S. 244).
This line of reasoning allows for an expansive definition of
"include", but expansive only up to a point, and not beyond.
What is that point? Refer now, if you would, to the start of the
IRC section on definitions, which begins as follows:
When used in this title, where not otherwise distinctly
expressed or manifestly incompatible with the intent
thereof--
[26 USC 7701]
So, if an expansive definition of "include" results in
applying Title 26 to the 50 States, have we not produced a result
that is "manifestly incompatible with the intent thereof"? There
are no provisions for apportioning the direct taxes levied by
Title 26, and the Constitution still requires that direct taxes
be apportioned. This fact is dramatically reinforced by the
17,000 State-certified documents which have been assembled by Red
Beckman and Bill Benson to prove that the so-called 16th
Amendment was never ratified. It cannot have been the intent of
Title 26 to violate the Constitution. Just how do we resolve
this apparent conflict? You already know the answer: the
territorial scope of Title 26 is the federal zone; the political
scope of Title 26 is the set of persons who are "citizens" of
that zone (whether those persons are natural born, naturalized,
or "artificially born" per the 14th Amendment).
We could spend even more time reviewing the numerous
decisions of the Supreme Court which have adopted either
expansive or restrictive definitions of "include" and its many
variations in order to arrive at those decisions. I am now
convinced that this is a waste of time, because it doesn't settle
the debate; it only aggravates the debate. If I leave you with
any one single point, I want to stress that Title 26 utilizes
words that have a long, documented history of semantic confusion.
"Include" and its many variations are among those words:
This word has received considerable discussion in opinions
of the courts. It has been productive of much controversy.
[Treasury Decision 3980, Vol. 29]
[January-December, 1927, page 64]
[emphasis added]
Accordingly, I am delighted if you agree with the main
thesis of The Federal Zone, that is, the principle of territorial
heterogeneity. But I am also delighted if you disagree with this
thesis, because in doing so, your disagreement constitutes
undeniable proof of a parallel thesis of The Federal Zone,
namely, that Title 26 is null and void for vagueness. The "void
for vagueness" doctrine is deeply rooted in our right to due
process (under the Fifth Amendment) and our right to know the
nature and cause of an accusation (under the Sixth Amendment).
The latter right goes far beyond the contents of any criminal
indictment.
The right to know the nature and cause of an accusation
starts with the statute which any defendant is accused of
violating. A statute must be sufficiently specific and
unambiguous in all its terms, in order to define and give
adequate notice of the kind of conduct which it forbids. If it
fails to indicate with reasonable certainty just what conduct the
legislature prohibits, a statute is necessarily void for
uncertainty, or "void for vagueness" as it is usually phrased.
Any prosecution which is based upon a vague statute must fail
together with the statute itself. A vague criminal statute is
unconstitutional for violating the 6th Amendment.
For your information, I have enclosed some additional materials
which supplement the arguments I have made in this letter.
Sincerely yours,
/s/ Mitch Modeleski, Founder
Account for Better Citizenship
enclosures
copies: Chris Wilder
Michael Thomas
Red Beckman
c/o USPS P. O. Box 6189
San Rafael, California
Postal Code 94903-0189/TDC
July 24, 1991
Church of Scientology International
6331 Hollywood Boulevard, Suite 1200
Los Angeles, California Republic
Postal Code 90028/TDC
Dear Church of Scientology:
Please accept my sincerest praise for the courage and
dedication you have shown by publishing a full-page advertisement
in the July 3, 1991 issue of USA Today. Your ad, "We Believe A
Fair Tax Is Worth Fighting For", was very professional, very
informative, and very convincing.
I am writing to take issue with the contents of paragraph
three of that ad, which reads:
This door opened a crack in 1913 with the passage of the
16th Amendment to the Constitution, which allowed an income
tax to be instituted. This door has since swung wide and
Americans again are subjected to an unfair tax system.
Attached please find a copy of my letter dated March 1, 1991
to Mr. David Miscavige, author of the article "Freeing the U.S.
From the IRS" which appeared in Freedom magazine, May 31, 1990.
In my letter to Mr. Miscavige, I did my best to explain briefly
how the 16th Amendment was never ratified; it was merely
"declared" ratified by Secretary of State Philander C. Knox in
the year 1913, in the face of serious evidence impugning the
entire ratification process.
Moreover, Congress never "passed" the 16th Amendment,
because Congress has never been empowered to amend the
Constitution. Congress merely passed "resolutions" proposing
that the State legislatures ratify the text of a proposed
amendment. Since three-fourths of the States failed to ratify
the text of the proposed amendment, the proposal never became a
law. Therefore, as law-abiding Americans, we must act as if "the
bill never became a law and was as completely a nullity as if it
had been the act or declaration of an unauthorized assemblage of
individuals," to quote an Illinois State court.
This issue is not a minor legal technicality. It is
misleading to publish a statement that "the 16th Amendment was
passed in 1913," without also referring to documented historical
facts which prove that the proposed amendment was simply not
ratified. This issue is a major constitutional question. If any
attempt to amend the Constitution fails to obey the rules for
amending that document, which rules are found in the Constitution
itself, then the text of that attempt cannot in any way be
considered a part of the Constitution and must be considered null
and void.
The United States Constitution is the supreme law of the
land, and any statute, to be valid, must be in agreement with it,
and therefore with all relevant provisions for amending it. It
is impossible for both the Constitution and a law violating it to
be valid; one must prevail. That "one" is the Constitution.
This is succinctly stated as follows:
The general rule is that an unconstitutional statute, though
having the form and name of law, is in reality no law, but
is wholly void and ineffective for any purpose; since
unconstitutionality dates from the time of its enactment,
and not merely from the date of the decision so branding it.
An unconstitutional law, in legal contemplation, is as
inoperative as if it had never been passed. Such a statute
leaves the question that it purports to settle just as it
would be[,] had the statute not been enacted.
Since an unconstitutional law is void, the general
principles follow that it imposes no duties, confers no
rights, creates no office, bestows no power or authority on
anyone, affords no protection, and justifies no acts
performed under it ....
A void act cannot be legally consistent with a valid one.
An unconstitutional law cannot operate to supersede any
existing valid law. Indeed, insofar as a statute runs
counter to the fundamental law of the land, it is superseded
thereby.
No one is bound to obey an unconstitutional law, and no
courts are bound to enforce it.
[Sixteenth American Jurisprudence]
[Second Edition, Section 177]
[emphasis added]
I invite you also to review the enclosed letter to the
Save-A-Patriot Fellowship, in which I stress the legal importance
of being historically correct about the so-called "16th
Amendment". The preponderance of historical evidence proves that
the proposal to amend the Constitution failed to obtain the
approval of 36 States, and as such never achieved the status of a
ratified Amendment and never became an Article of that
Constitution. It is not now a law, and never was a law, not in
this country, not in all of recorded history, not on this planet.
Thank you for your consideration.
Sincerely yours,
/s/ Mitch Modeleski, Founder
Account for Better Citizenship
c/o USPS P. O. Box 6189
San Rafael, California
Postal Code 94903-0189/TDC
March 1, 1991
Mr. David Miscavige, Chairman
Religious Technology Center
c/o Freedom Magazine
6331 Hollywood Blvd., Suite 1200
Los Angeles, California Republic
Postal Code 90028-6329/TDC
Dear Mr. Miscavige:
I enjoyed reading your article entitled "Freeing the U.S.
From the IRS" which appeared in the May 31, 1990 issue of Freedom
magazine.
The article cites numerous excellent reasons for abolishing
federal income taxes. I agree with every one of your
conclusions. I cannot, however, agree with all of your "facts".
Specifically, in your first paragraph, you write,
Since 1913, when an income tax was made possible by the
passage of the 16th Amendment, Americans have faced a filing
deadline 78 times. When the constitutional amendment was
passed, voters were promised this new tax would be fairly
administered.
I cannot agree with this statement, because the evidence
which is available to me indicates that the 16th Amendment was
never lawfully ratified. It was merely "declared" ratified by
the U.S. Secretary of State in 1913, Philander Knox, in the face
of serious evidence impugning the entire ratification process.
Enclosed please find a detailed summary of the evidence
against the 16th Amendment, and a brief analysis of the legal and
economic implications of acting on these facts. That is, as
law-abiding Americans, we must act as if "the bill never became a
law and was as completely a nullity as if it had been the act or
declaration of an unauthorized assemblage of individuals", to
quote an Illinois State court.
I would enjoy hearing from you on this important question.
Sincerely yours,
/s/ Mitch Modeleski, Founder
Account for Better Citizenship
c/o USPS P. O. Box 6189
San Rafael, California
Postal Code 94903-0189/TDC
April 10, 1991
Dr. Lois Callahan, President
College of San Mateo
1700 West Hillsdale Boulevard
San Mateo, California Republic
Postal Code 94402/TDC
Dear Dr. Callahan:
I am writing to file a formal complaint against the offices
of television station KCSM, which are located in Building 9 on
your campus.
Last evening, I personally witnessed an act of political
censorship by the staff of station KCSM. My colleague, Mr.
Godfrey Lehman, had previously received a written invitation to
appear on the KCSM program "Legal Currents" at 7:30 p.m. The
scheduled topic was "Income Tax Filing: What are your rights?
Where will the money go?" In addition to a cover letter, the
invitation included two maps with directions to KCSM offices, a
temporary parking permit, and wardrobe guidelines. I personally
drove Mr. Lehman and accompanied him to this scheduled event.
After our arrival, the second scheduled guest arrived, Mr.
Larry Wright, Public Affairs Officer with the Internal Revenue
Service in San Francisco. Upon learning of KCSM's plans to air
the two guests together, Mr. Wright objected to the presence of
Mr. Lehman on the same program. He cited what he termed a long-
standing policy of the IRS to avoid all confrontations over the
tax law outside the court room. A KCSM staff member was also
present to hear Mr. Wright's objections. This staff member tried
in vain to persuade the IRS agent to modify his position.
At this point, the KCSM staff member left the room in order
to obtain a decision from her management. She returned some
minutes later to inform all of us that Mr. Wright would be
allowed to appear on the program, but that Mr. Lehman would not
be allowed to appear on the program. At this point, Godfrey
Lehman and I obtained permission to view the "Legal Currents"
program on a television monitor which was already installed in
the office where we had been meeting. The aired program offered
no explanation for Mr. Lehman's absence, offered no apology for
the abrupt change of scheduled programming, and made no reference
whatsoever to Mr. Godfrey Lehman, despite the fact he had already
informed numerous colleagues of his scheduled appearance.
Now that I have summarized the relevant facts of this event,
I wish to express my outrage at such a blatant act of political
censorship by the management of television station KCSM. When a
private Citizen is flatly denied access to public broadcast
media, while government agents are allowed to prevail, do we not
thereby undermine the very foundations of our constitutional
republic? Have we not emphatically and dramatically denied that
Citizen his right to freedom of speech, a right which is
explicitly guaranteed by the First Amendment to the Constitution
of the United States? Even if the station can be persuaded at
some future date to abide by some "equal time doctrine", how can
we begin to assess the real damage to that Citizen's precious
civil rights? When government distortion and intimidation are
sponsored without challenge, are we not paving a sure path away
from educated electorates, in the direction of police state
tactics and totalitarian control?
I am asking these questions because I require answers to
these questions. Is it, or is it not the policy of the
administration of the College of San Mateo to encourage this
brand of media censorship? on the campus of a public educational
institution? in the offices of a publicly licensed broadcast
station? Are you now aware that government "public relations"
agents have been allowed to prevail over the written invitation
to a private Citizen, a published author and a recognized
constitutional authority on the federal tax law?
I would greatly appreciate your immediate attention to this
important matter. If I can assist you in any way to investigate
this incident, please don't hesitate to contact me.
Sincerely yours,
/s/ Mitch Modeleski, Founder
Account for Better Citizenship
copy: Board of Trustees,
San Mateo County Community College District
c/o USPS P. O. Box 6189
San Rafael, California
Postal Code 94903-0189/TDC
March 18, 1991
Mr. Peter Gabel, President
New College of California
50 Fell Street
San Francisco, California Republic
Postal Code 94102/TDC
Dear Mr. Gabel:
I was shocked to read the recent San Francisco Chronicle
article about the threatened IRS seizure of one of your classroom
buildings. With this letter, I hope to make you fully aware of
the powerful forces which can be made available to defend your
college against this unjust and illegal attack. Permit me to get
right to the major points:
Our research into the U.S. Constitution, Congressional
taxing powers, and the Internal Revenue Service has uncovered a
mountain of material evidence which supports the following
conclusions:
1. Wages are not taxable income, as the term is clearly
and consistently defined by several key decisions of
the U.S. Supreme Court that remain in force today.
2. The U.S. Constitution authorizes Congress to levy
"direct taxes" on private property, but only if those
taxes are apportioned across the 50 States.
3. The IRS now enforces the collection of "income taxes"
as direct taxes without apportionment, and cites the
16th Amendment for its authority to do so.
4. The 16th Amendment, the so-called "income tax"
amendment, was never lawfully ratified by the required
36 States, but was declared ratified by the U.S.
Secretary of State in the year 1913.
5. The 16th Amendment could never have done away with the
apportionment rule for any direct taxes if it never
became a law in the first place.
The documentary substantiation for these conclusions is
found in the attached formal petition, dated December 24, 1990,
to Congresswoman Barbara Boxer, my Representative in the Congress
of the United States. Rep. Boxer has, to date, failed to respond
to this formal petition. For this reason, we have recently filed
a formal Request for Investigation by the Marin County Grand
Jury, a copy of which is attached for your review. We have
requested the Marin County Grand Jury:
1. to investigate possible obstruction of justice and
misprision of felony by Rep. Barbara Boxer for her
failure, against a spoken promise before hundreds of
witnesses at Pt. Reyes Station on August 22, 1990, to
examine the material evidence of felony fraud when U.S.
Secretary of State Philander C. Knox declared the 16th
Amendment ratified,
2. to subpoena or otherwise require Representative Boxer
to explain, under oath, why she and her staff have
failed to answer our formal, written petition for
redress of this major legal grievance with agents of
the federal government,
3. to review the material evidence against the so-called
16th Amendment which we have assembled and are prepared
to submit in expert testimony, under oath, to the Marin
County Grand Jury.
Mr. Gabel, we have developed a network of constitutional and
legal experts whose resources can be made available to assist you
on very short notice. As you can infer for yourself from the
attached materials, we see the IRS attack on your college as an
illegal and unconstitutional act by an agency of the Federal
Reserve System. This attack is designed to harass and intimidate
an educational institution dedicated to the goals of social
responsibility and progressive change. These goals are inimical
to the purposes for which the IRS was established. You must
fully appreciate that the Internal Revenue Service is not a
service to the American people. It is not a service to the U.S.
Government. It is a service to the Federal Reserve System, which
is not an agency of the federal government.
After you have had a chance to review this letter and its
attachments, may I recommend that we meet privately to discuss
your situation and to consider the several ways in which we can
bring our collective expertise to bear upon it. For example, I
am ready on short notice to present the results of our research
in a guest lecture to your law students and faculty, at no charge
to the College. Similarly, I am prepared to share with you the
material evidence against the 16th Amendment which I currently
hold in my possession. I should think that a fight for the very
survival of your college would provide an excellent motivation
for one exciting moot courtroom drama for all faculty members,
students, and staff.
Please feel free to call me at your earliest convenience.
If I have not heard from you by this coming Friday, I will
contact your office by telephone to discuss this letter and
hopefully arrange a meeting. Thank you very much for your
consideration, and good luck!
Sincerely yours,
/s/ Mitch Modeleski, Founder
Account for Better Citizenship
attachments
copies: selected colleagues
c/o USPS P. O. Box 6189
San Rafael, California
Postal Code 94903-0189/TDC
March 25, 1991
Marion McEwen
FIJA California
24828 Canyon View Court
Hayward, California Republic
Postal Code 94541/TDC
Dear Marion:
I obtained your name and address from the Special Conference
Issue of The FIJA Activist. I am writing you to request any
advice or assistance you may be able to provide to me in a matter
of utmost importance to the general welfare of all American
Citizens.
In the summer of 1990, I personally received material
evidence that the 16th Amendment, the so-called income tax
amendment, was never lawfully ratified. This evidence indicates
that the act of declaring the 16th Amendment "ratified" was an
act of outright fraud by then Secretary of State Philander C.
Knox. In August of 1990, I brought this evidence to the
attention of Congresswoman Barbara Boxer, my representative in
the Congress of the United States. In front of several hundred
witnesses at a community meeting sponsored by Rep. Boxer, she did
agree to examine the evidence to which I refer. During the next
several months, I heard nothing from Rep. Boxer's office on this
matter.
In December of 1990, I personally prepared a formal, written
petition to Rep. Barbara Boxer, reminding her of her promise to
examine the material evidence against the 16th Amendment, and
reminding her also of her solemn oath of office, by which she
swore to uphold and defend the Constitution of the United States.
A copy of this formal, written petition is enclosed, for your
review. To date, I have received no responses from Rep. Boxer
nor from any of her staff on this matter.
Accordingly, on March 11, 1991, I filed a formal Request for
Investigation by the Marin County Grand Jury. As stated in the
summary section of our completed form, we requested the Grand
Jury to do the following:
1. investigate possible obstruction of justice and
misprision of felony by Rep. Barbara Boxer for her
failure, against a spoken promise before hundreds of
witnesses, to examine the material evidence of felony
fraud when U.S. Secretary of State Philander C. Knox
declared the 16th Amendment ratified,
2. to subpoena or otherwise require Rep. Boxer to explain,
under oath, why she and her staff have failed to answer
our formal, written petition for redress of this major
legal grievance with agents of the federal government,
3. to review the material evidence against the so-called
16th Amendment which we have assembled and are prepared
to submit in expert testimony, under oath, to the Marin
County Grand Jury.
In a written response dated March 13, 1991, the Marin County
Grand Jury declined to proceed with an investigation. Their
reasons were stated as follows:
In the panel's opinion that subject matter was not within
its jurisdiction. We serve in a watchdog manner over local
public departments and agencies. As a result of Proposition
115 this Grand Jury is apparently relegated to civil
matters, whereas indictment and accusation cases are to be
handled by a special criminal Grand Jury.
These reasons were cited, despite a recent newspaper article
which described the Grand Jury as follows:
The Grand Jury operates under the auspices of the Superior
Court and has the authority to investigate the personnel and
operations of any county, city or local government agency as
well as the conduct of any elected, appointed or hired
official.
[Coastal Post, March 4, 1991, p. 3, emphasis added]
I do understand from your newsletter that there is a
parallel FIGJA (grand jury) organization. Because I intend to
write to them directly, I would appreciate it very much if you
could do more than merely refer this letter to them. For
example, I would be very interested to know if there is any way I
can successfully persuade the Marin County Grand Jury to
reconsider their decision to decline the investigation which I
have requested.
Please understand that I have no personal vendetta against
Rep. Boxer, nor do I wish to create an embarrassing situation for
her. I agree with her positions on a number of important public
policy issues, and wish her the best of luck in her bid for a
seat in the Senate of the United States. Nevertheless, she is my
elected Representative in the Congress of the United States, and
the First Amendment to the U.S. Constitution does guarantee my
right to petition the Government for a redress of grievances.
If Rep. Boxer has anyone to fear, it is Rep. Boxer herself.
If she or her staff have, in fact, chosen to ignore this matter,
then she is failing to do the job she was elected to do, and she
may in fact be guilty of obstructing justice and misprision of
felony (see attached).
For your information, I am also planning to write to
Supervisor Gary Giacomini of the Marin County Board of
Supervisors. In the March 11, 1991 issue of the Coastal Post,
Supervisor Giacomini was quoted to say:
"It's a bad time for us that are in government with no money
coming from Washington or the State. Nineteen years ago
when I got started, the federal government paid 34 percent
of the county budget. Now they pay 7 percent. There are
dues to pay for the deficit in Washington and dues to pay
for war," he explained.
[emphasis added]
To many, there is little if any connection between federal
income taxes and the current fiscal squeeze on state and local
governments, or the poor state of the national economy in
general. On the contrary, the research I have done during the
past 9 months now convinces me that the connection is direct.
Federal income taxes are used to make interest payments to the
Federal Reserve banks, and their collection agency is the
Internal Revenue Service. The IRS is not a service to the people
of the United States. It is not a service to the government of
the United States. It is a service to the Federal Reserve
System, a private credit monopoly described as "one of the most
corrupt institutions the world has ever known" by Congressman
Louis T. McFadden, Chairman of the U.S. Banking and Currency
Commission for some 22 years. Witness McFadden's statement
published in the Congressional Record of June 10, 1932:
Mr. Chairman, we have in this country one of the most
corrupt institutions the world has ever known. I refer to
the Federal Reserve Board and the Federal Reserve banks.
The Federal Reserve Board, a Government board, has cheated
the Government of the United States and the people of the
United States out of enough money to pay the national debt.
The depredations and iniquities of the Federal Reserve Board
and the Federal Reserve banks acting together have cost this
country enough money to pay the national debt several times
over. This evil institution has impoverished and ruined the
people of the United States; has bankrupted itself, and has
practically bankrupted our Government. It has done this
through the defects of the law under which it operates,
through the maladministration of that law by the Federal
Reserve Board, and through the corrupt practices of the
moneyed vultures who control it.
Some people think the Federal Reserve banks are United
States Government institutions. They are not Government
institutions. They are private credit monopolies which prey
upon the people of the United States for the benefit of
themselves and their foreign customers; foreign and
domestic speculators and swindlers; and rich and predatory
money lenders. In that dark crew of financial pirates there
are those who would cut a man's throat to get a dollar out
of his pocket; there are those who send money into States
to buy votes to control our legislation; and there are
those who maintain an international propaganda for the
purpose of deceiving us and of wheedling us into the
granting of new concessions which will permit them to cover
up their past misdeeds and set again in motion their
gigantic train of crime.
The manipulations of the Federal Reserve System and their
effects on the entire American economy have been shrouded in
considerable secrecy for too many years now. This secrecy has
been a conscious and deliberate feature of its corrupting
influence on officials in all branches of the federal government.
To illustrate my point, I have now personally witnessed documents
which prove that a federal grand jury in Orem, Utah issued two
formal indictments against the Federal Reserve System, but those
indictments were subsequently obstructed by the Department of
Justice and by the Federal judiciary. These documents show that
the first indictment was issued on or about February 16, 1982.
The second indictment was issued on or about July 7, 1982. This
documentation can be made available to you upon request.
I sincerely hope that this letter has provided you with a
glimpse of just how serious and widespread a problem the
so-called 16th Amendment has created for millions of Americans, a
problem that now extends through two whole generations of our
brief history as a nation. As I myself have come to appreciate
the true essence of this problem, I have also come to the
conclusion that the millions of hard-working Americans burdened
by this scourge now deserve an honest explanation. This
explanation can only be forthcoming if we, the people, exercise
our unalienable right to correct a government which has now
drifted so far off course, it hardly resembles the constitutional
republic it was designed to be.
I do honestly believe that, whenever any form of government
becomes destructive of our rights, it is also our right to alter
or abolish it, and to institute a new government, laying its
foundation on such principles, and organizing its powers in such
form, as to us, the U.S., shall seem most likely to effect our
safety and our happiness.
To this end, I dedicate my life, my fortune, and my sacred
honor. Won't you please join me?
Sincerely yours,
/s/ Mitch Modeleski, Founder
Account for Better Citizenship
copy: Lowell A. Airola, Foreperson
Grand Jury of Marin County
Gary Giacomini, Member
Marin County Board of Supervisors
c/o USPS P. O. Box 6189
an Rafael, California
Postal Code 94903-0189/TDC
April 29, 1991
Dianne Bast
Heartland Institute
654 South Wabash, 2nd Floor
Chicago, Illinois
Postal Code 60605/TDC
Dear Dianne:
At the request of my colleague, Kirby Ferris, enclosed
please find a collection of papers and letters which summarize
our continuing research and political action with respect to the
16th Amendment and related subjects.
It has been difficult obtaining reliable information on the
Federal Reserve System, because this syndicate has been shrouded
in almost total secrecy since its creation. Even though I take
exception to the religious prejudice he sometimes exhibits,
author Eustace Mullins does appear to have the inside track on
the origins and development of this syndicate. In particular,
the enclosed quote from A Writ for Martyrs is the most succinct
statement of "The Problem" that I have been able to find
anywhere.
Interestingly, the enclosed quote by Eustace Mullins is
entirely consistent with statements by Beardsley Ruml in the
January 1946 issue of American Affairs magazine. Mr. Ruml,
Chairman of the Federal Reserve Bank of New York at that time,
was the person who devised the income tax withholding system. In
this article, he wrote,
By all odds, the most important single purpose to be served
by the imposition of federal taxes is the maintenance of a
dollar which has stable purchasing power over the years.
In other words, federal income taxation is the
counterbalance to the flood of paper money which pours into the
economy as the Fed creates it "out of thin air". Without this
counterbalance, inflation would skyrocket. "... [W]ithout the
use of federal taxation all other means of stabilization, such as
monetary policy and price controls and subsidies, are
unavailing," concluded Ruml [emphasis added].
What does all this mean? It means that income taxes have
nothing to do with the funding of government services. The
report of the Grace Commission confirmed the same finding. All
individual income tax revenues go to pay for interest on the
national debt, which debt is owed to a private credit monopoly
once described by Congressman Louis T. McFadden as "one of the
most corrupt institutions the world has ever known".
Therefore, as you study the many problems that exist with
the so-called "ratification" of the 16th Amendment, try to
realize the true motives which underpin the chicanery that
occurred in that ratification process. For example, the Governor
of the State of Arkansas vetoed the resolution to amend the
Constitution. The Kentucky Senate Journal recorded a vote of 9
FOR and 22 AGAINST the resolution. An Illinois State court ruled
that "it never became a law, and was as much a nullity as if it
had been the act or declaration of an unauthorized assemblage of
individuals." Nevertheless, the U.S. Secretary of State in the
year 1913, Philander C. Knox, "declared" it ratified anyway. It
is no coincidence that this act by Secretary Knox occurred in the
same year the Federal Reserve Act was passed by Congress.
For your information, I have also enclosed a copy of a
recent bibliography which we have assembled on the subjects of
income taxes, the 16th Amendment, and the Federal Reserve System.
These references are an excellent place to continue your
education. If there is anything else we can do for you, please
don't hesitate to contact us.
Sincerely yours,
/s/ Mitch Modeleski, Founder
Account for Better Citizenship
copy: Kirby Ferris
enclosures: bibliography
assembled papers
c/o USPS P. O. Box 6189
San Rafael, California
Postal Code 94903-0189/TDC
May 29, 1991
Producers
60 Minutes
524 West 57th Street
New York, New York
Postal Code 10019/TDC
Dear Producers:
I am writing this letter at the request of my colleague, Mr.
Godfrey Lehman. In his letter to you dated May 21, 1991, Godfrey
has already written an excellent summary identifying the major
problems which his research has discovered with federal income
taxes and the Internal Revenue Service.
Do you have any interest in developing a special segment to
discuss the mass of new evidence which now seriously impugns the
ratification of the 16th Amendment, the so-called income tax
amendment?
The material evidence in our possession proves that the 16th
Amendment was never lawfully ratified. This evidence indicates
that the act of declaring it "ratified" was an act of outright
fraud by Secretary of State Philander C. Knox in the year 1913.
You may already know that fraud has no statute of limitations.
To date, I have already filed four formal petitions for
redress of this major grievance with the Congress of the United
States. Three were addressed to Barbara Boxer, the
Representative for the Congressional district in which I reside.
The fourth petition was addressed to Rep. Dan Rostenkowski,
Chairman of the House Committee on Ways and Means. Copies of
these petitions are enclosed, for your review, in addition to a
collection of letters and other materials.
To many, there is little if any connection between federal
income taxes and the current fiscal squeeze on state and local
governments, or the disintegration of the national economy in
general. On the contrary, the research I have done during the
past year now convinces me that the connection is direct.
Federal income taxes are used to make interest payments to
the Federal Reserve banks, and their collection agency is the
Internal Revenue Service. The IRS is not a service to the people
of the United States. It is not a service to the government of
the United States. It is a service to the Federal Reserve
System, a private credit monopoly described as "one of the most
corrupt institutions the world has ever known" by Louis T.
McFadden, Chairman of the House Banking and Currency Committee,
1927-1933.
The manipulations of the Federal Reserve System and their
effects on the entire American economy have been shrouded in
considerable secrecy for too many years now. This secrecy has
been a conscious and deliberate feature of its corrupting
influence on officials in all branches of the federal government.
This secrecy has also made it very difficult to obtain
reliable information about the Federal Reserve. Even though I
take exception to the religious prejudice he sometimes exhibits,
author Eustace Mullins does appear to have the inside track on
the origins and development of this syndicate. In particular,
the enclosed excerpt from A Writ for Martyrs is the most succinct
statement of "The Problem" that I have been able to find
anywhere. In his recent book The Shadows of Power, author James
Perloff puts it this way:
The year 1913 was an ominous one -- there now existed the
means to loan the government colossal sums (the Federal
Reserve), and the means to exact repayment (income tax).
All that was needed now was a good reason for Washington to
borrow. In 1914, World War I erupted on the European
continent. America eventually participated, and as a result
her national debt soared from $1 billion to $25 billion.
I sincerely hope that this letter has provided you with a
glimpse of just how serious and widespread a problem the
so-called 16th Amendment has created for millions of Americans, a
problem that now extends through two whole generations of our
brief history as a nation. As I myself have come to appreciate
the true essence of this problem, I have also come to the
conclusion that the millions of hard-working Americans burdened
by this scourge now deserve an honest explanation. This
explanation can only be forthcoming if we, the people, exercise
our unalienable right to correct a government which has now
drifted so far off course, it hardly resembles the constitutional
republic it was designed to be.
Please feel free to contact me at any time concerning this
proposal for "60 Minutes" coverage of the 16th Amendment fraud.
Thank you very much for your consideration.
Sincerely yours,
/s/ Mitch Modeleski, Founder
Account for Better Citizenship
enclosures
c/o USPS P. O. Box 6189
San Rafael, California
Postal Code 94903-0189/TDC
May 29, 1991
Mr. Dennis Bernstein
Radio Station KPFA
2207 Shattuck Avenue
Berkeley, California Republic
Dear Mr. Bernstein:
Do you have any interest in developing a segment to discuss
the mass of new evidence which now seriously impugns the
ratification of the 16th Amendment, the so-called income tax
amendment?
The material evidence in our possession proves that the 16th
Amendment was never lawfully ratified. This evidence indicates
that the act of declaring it "ratified" was an act of outright
fraud by Secretary of State Philander C. Knox in the year 1913.
You may already know that fraud has no statute of limitations.
To date, I have already filed four formal petitions for
redress of this major grievance with the Congress of the United
States. Three were addressed to Barbara Boxer, the
Representative for the Congressional district in which I reside.
The fourth petition was addressed to Rep. Dan Rostenkowski,
Chairman of the House Committee on Ways and Means. Copies of
these petitions are enclosed, for your review, in addition to a
collection of letters and other materials.
To many, there is little if any connection between federal
income taxes and the current fiscal squeeze on state and local
governments, or the disintegration of the national economy in
general. On the contrary, the research I have done during the
past year now convinces me that the connection is direct.
Federal income taxes are used to make interest payments to
the Federal Reserve banks, and their collection agency is the
Internal Revenue Service. The IRS is not a service to the people
of the United States. It is not a service to the government of
the United States. It is a service to the Federal Reserve
System, a private credit monopoly described as "one of the most
corrupt institutions the world has ever known" by Louis T.
McFadden, Chairman of the House Banking and Currency Committee,
1927-1933.
The manipulations of the Federal Reserve System and their
effects on the entire American economy have been shrouded in
considerable secrecy for too many years now. This secrecy has
been a conscious and deliberate feature of its corrupting
influence on officials in all branches of the federal government.
This secrecy has also made it very difficult to obtain
reliable information about the Federal Reserve. Even though I
take exception to the religious prejudice he sometimes exhibits,
author Eustace Mullins does appear to have the inside track on
the origins and development of this syndicate. In particular,
the enclosed excerpt from A Writ for Martyrs is the most succinct
statement of "The Problem" that I have been able to find
anywhere. In his recent book Shadows of Power, author James
Perloff puts it this way:
The year 1913 was an ominous one -- there now existed the
means to loan the government colossal sums (the Federal
Reserve), and the means to exact repayment (income tax).
All that was needed now was a good reason for Washington to
borrow. In 1914, World War I erupted on the European
continent. America eventually participated, and as a result
her national debt soared from $1 billion to $25 billion.
I sincerely hope that this letter has provided you with a
glimpse of just how serious and widespread a problem the
so-called 16th Amendment has created for millions of Americans, a
problem that now extends through two whole generations of our
brief history as a nation. As I myself have come to appreciate
the true essence of this problem, I have also come to the
conclusion that the millions of hard-working Americans burdened
by this scourge now deserve an honest explanation. This
explanation can only be forthcoming if we, the people, exercise
our unalienable right to correct a government which has now
drifted so far off course, it hardly resembles the constitutional
republic it was designed to be.
Please feel to contact me at any time concerning this
proposal for KPFA coverage of the 16th Amendment fraud. Thank
you very much for your consideration.
Sincerely yours,
/s/ Mitch Modeleski, Founder
Account for Better Citizenship
enclosures
c/o USPS P. O. Box 6189
San Rafael, California
Postal Code 94903-0189/TDC
July 21, 1991
Ken Ellis
Maintenance Engineer
KPFA-FM 94.1
2207 Shattuck Avenue
Berkeley, California Republic
Postal Code 94704/TDC
Dear Ken:
I enjoyed our brief conversation after the last meeting of
the Free Enterprise Society in Berkeley. Enclosed is a copy of
my letter of May 29, 1991 to Dennis Bernstein.
For your information, Lewis vs United States, 680 F.2d 1239,
June 24, 1982 is the Ninth Circuit Court decision which proves
that the Federal Reserve is a private corporation.
Two full pages are dedicated to the details of this ruling
in Alan Stang's excellent book entitled Tax Scam, published by
Mount Sinai Press, P. O. Box 1220, Alta Loma, California 91701,
telephone (714) 980-3165. Stang's mailing address is 4770 West
Bellfort, #269, Houston, Texas 77035. Quoting Stang from page
232:
Mr. Lewis was hit by a truck owned by the Federal Reserve
Bank of San Francisco, so he sued. The trouble was that he
sued the U.S. government under the Federal Tort Claims Act,
in the belief that the bank is a government agency. The
Court ruled against Mr. Lewis, explaining that he had
mistakenly named the wrong defendant, that the government
had nothing to do with it -- and that Mr. Lewis should
have sued the Bank, which is a private corporation.
You know, if I wished to subvert the monetary system of any
country, I would arrange a secret meeting of finance moguls,
require all participants to use first names only, shield the
meeting from the scrutiny of press and public, draft legislation
which was too long for experts to understand without lengthy
study, and ram it thru Congress two days before Christmas, after
donating first class travel fare to all my opponents, glossing
over dozens of major differences between the House and Senate
versions, and scheduling a vote at 1:30 in the morning, after all
my opponents were scattered to the four winds.
Those who prefer to regard the events at Jekyll Island as an
unsubstantiated conspiracy appear, to me, very similar to those
who even now retain their belief that Lee Harvey Oswald was the
lone assassin of President Kennedy. If there were no conspiracy,
then why all the evidence indicating that there was? One can
argue that some author doesn't have his facts straight because
that same author harbors a prejudice or two, but to argue this
way in the face of incriminating facts really begs the question
that is raised by the facts themselves. The secrecy alone is
something which I personally find abhorrent to our principles of
due process, representative government, and freedom of the press.
If anyone can produce a credible challenge to the facts we
allege, then let's hear from them. Until then, the facts as we
know them speak for themselves. All by itself, the fraud
surrounding the 16th Amendment is substantiated by 17,000 State-
certified documents.
Isn't this mass of evidence enough to justify maybe even a
brief mention on a publicly funded radio station?
Sincerely yours,
/s/ Mitch Modeleski, Founder
Account for Better Citizenship
copy: Dennis Bernstein
interested colleagues
c/o USPS P. O. Box 6189
San Rafael, California
Postal Code 94903-0189/TDC
August 23, 1990
Editor
Point Reyes Light
P. O. Box 210
Pt. Reyes Station, California Republic
Postal Code 94956/TDC
Dear Editor:
On the evening of August 22, 1990, in Point Reyes Station,
Congresswoman Barbara Boxer publicly consented to inspect
personally the evidence against the 16th Amendment to the U.S.
Constitution (1913 Income Tax). This evidence shows that the
16th Amendment was fraudulently ratified. We applaud her courage
and her willingness to pursue the truth in this matter.
Six States are on official federal record as opposing the
16th Amendment. If we can prove to Representative Boxer that
seven additional States were so immersed in fraudulent procedures
as to nullify their ratification proceedings, we will have
produced a total of thirteen votes against the 16th Amendment.
Such proof will effectively nullify the Income Tax in the United
States of America, since 36 of 48 States were required to ratify
a constitutional amendment in 1913.
Needless to say, this is a mind-boggling assertion, but
fraud has no statute of limitations. We do not ask our neighbors
to take our claims lightly. We do want the opportunity to prove
our case to the American people. Therefore, we will publish the
document numbers that are pertinent in the "dirty seven" States
that we have identified. Each and every one of you will be able
to request your own certified copies of these documents from the
State houses of those seven States.
Remember that an income tax is absolutely unnecessary to
finance the U.S. government. From 1787 until 1942 (when the
income tax had reached a nominal 2 percent on corporations only)
our nation demonstrated unprecedented prosperity. Ironically,
the national debt has increased as income taxes have increased.
Before long, the interest on the national debt will exceed the
total income tax revenues collected by the federal government.
It doesn't take a genius to figure out what that means.
Not one penny of your Form 1040 check goes anywhere except
into the vaults of the private banks of the Federal Reserve
System (see report of the Grace Commission). Every penny of
income tax is diverted to pay interest to bankers on the money
they authorize the U.S. Treasury to print (i.e., create out of
thin air) as Federal Reserve Notes, and then LOAN to us! We
advise all American Citizens to pay very close attention as this
story unfolds. Imagine being able to raise your own personal
credit limit simply by raising your hand. The U.S. Congress does
it all the time when it passes laws to raise the federal debt
limit.
Again, our thanks to Congresswoman Barbara Boxer for her
willingness to keep an open mind and to seek the truth in this
matter.
Sincerely yours,
/s/ Mitch Modeleski, Founder
Account for Better Citizenship
[ Next Appendix | Table of Contents ]