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






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