Chapter 6: Empirical Results

Up to this point, I have defined a set of key terms and created a scheme for understanding how these key terms relate to each other. This scheme was summarized in the form of a diagram which I have called The Matrix (see chapter 3). The Matrix is a two-by-two table which permutes every combination of citizen, alien, resident and nonresident to create four unique cases:
 
               1.   resident citizen 
               2.   resident alien 
               3.   nonresident citizen 
               4.   nonresident alien 
 
As a body of law, the Internal Revenue Code (IRC) and its regulations together require all "citizens" and all "residents" of the United States** to pay taxes on their worldwide incomes. This requirement applies to three of the four cases shown above, namely, resident citizens, resident aliens and nonresident citizens. In the fourth case, nonresident aliens only pay tax on income which is effectively connected with a U.S.** trade or business, and on income from sources within the U.S.** (like Frank Brushaber's dividend). Their tax liability is succinctly summarized by the Code itself. Note how the relevant Code section utilizes the phrase "includes only" as follows:
 
     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**. 
                                     [IRC 872(a), emphasis added] 
 
This may sound all well and good, in theory. How does it work in practice? With so many words to document the recipe for pudding, how does the pudding taste? Two case histories provide the necessary proof.

Case 1

Figure 1 shows a letter which an American Citizen sent to the District Director of the Internal Revenue Service in Ogden, Utah. This letter was prepared in response to an unsigned letter from the IRS, requesting that he file a 1040 Form.


 
December 5, 1990 
District Director 
Internal Revenue Service 
Ogden, Utah 84201 
 
Re: NRA SSN #___-__-____

On or about December 1, 1990, I received an unsigned document claiming that you have not received the tax return 1040, and requesting that the form 1040 be filed. I have enclosed a copy of that request. I know of no such code that requires me to file a "tax return 1040". If you know of such a code, please identify that code for me.

I have enclosed a copy of the letter that I have sent to the Director of the Foreign Operations District, concerning this matter.

In researching the revenue code book which your people kindly supplied to me, I discovered that only an "individual" is required to file a tax return (26 USC 6012) and then only under certain circumstances. In looking at Section 7701(a)(1) of the code, I discovered that the term "individual" is defined as a "person". Then, in checking under 7701(a)(30), I discovered the definition of a "United States person" as meaning a "citizen of the United States", "resident of the United States", "domestic corporation", "domestic partnership" and a "domestic trust or estate". There is no INDIVIDUAL defined under 7701(a)(30) and therefore I cannot be an "individual" within the meaning of 7701(a)(1) and/or 26 USC 6012.

As well, the Supreme Court in the case of Wills vs Michigan State Police, 105 L.Ed.2d 45 (1989) made it perfectly clear that I, the sovereign, cannot be named in any statute as merely a "person", or "any person". I am a member of the "sovereignty" as defined in Yick Wo vs Hopkins, 118 U.S. 356 and the Dred Scott case, 60 U.S. 393.

Therefore and until you can prove otherwise, I am not a "taxpayer", nor an "individual" that is required to file a tax return. Please forward to me a letter stating that I am not liable for this tax return, or produce the documentation that requires me to file the "requested" tax return.

If you have any questions concerning this letter, you may write to me at the address shown below. Please sign all papers so that I know who I am dealing with. Until such a time as I hear from you or your office, I will take the position that I am no longer liable for filing the return. Failure to respond will be taken as meaning that you have "acquiesced" and that, from this date forward, the doctrine of "estoppel by acquiescence" will prevail.

Sincerely,

/s/ NRA

Figure 1: Letter to District Director


Note, in particular, his use of the key words "citizen of the United States**", "resident of the United States**", "domestic corporation", "domestic partnership", "domestic trust or estate" and "sovereign". He asserted his status by explicitly claiming to be a sovereign who was not the "person" defined at IRC 7701(a)(1), and who was not the "United States** person" defined at 7701(a)(30). The IRC defines "person" as follows:
 
     Person. --  The term "person" shall be construed to mean and 
     include  an   individual,  a   trust,  estate,  partnership, 
     association, company or corporation. 
                                                 [IRC 7701(a)(1)] 
 
 
The IRC defines "United States** person" as follows: 
 
     United States** person. -- 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  (other than  a foreign  estate or 
          foreign  trust,   within   the   meaning   of   Section 
          7701(a)(31)). 
                                                [IRC 7701(a)(30)] 
 
Again, note the use of the key words "citizen", "resident", "domestic", and "foreign" which have been highlighted for emphasis. These key words relate directly to The Matrix. The key words "domestic" and "foreign" relate directly to the boundaries of the federal zone, that is, the "United States**" as that term is defined in relevant sections of the United States Codes (USC). A domestic corporation is one which was chartered inside the federal zone. A foreign estate or foreign trust are foreign because they were established outside the federal zone. Without making these statements in so many words, our intrepid American's letter in Figure 1 can be used to draw the following inferences about his status with respect to the exclusive legislative jurisdiction of the "United States**":
 
     1.   He is a sovereign as defined by the Supreme Court 
     2.   He is not a citizen  of the United States** 
     3.   He is not a resident of the United States** 
     4.   He is not a domestic corporation 
     5.   He is not a domestic partnership 
     6.   He is not a domestic estate and 
     7.   He is not a domestic trust 
 
There is one important thing his letter did not state explicitly about him, and that is his status as a nonresident alien. Nevertheless, this inference can, in turn, be drawn from two of the above inferences: (2) he is not a citizen of the United States** and (3) he is not a resident of the United States**. As a human being, he is not an artificial "person" like a corporation, partnership, estate, or trust. If he is not a citizen of the United States**, then he is an alien. If he is not a resident of the United States**, then he is a nonresident. Therefore, he is a nonresident alien, according to the statute and its regulations.

Now, let's take the pudding out of the oven and see how it tastes. After taking some time to review his letter, the IRS addressed the following response to our intrepid American:


 
     Department of the Treasury 
     Internal Revenue Service 
     Ogden, UT 84201 
                                   In reply refer to:  9999999999 
                                   June 27, 1991  LTR 2358C 
                                   ___-__-____      8909  05 0000 
                                   Input Op:  9999999999    07150 
     To: NRA 
         Address 
         City, State Zip 
 
     Taxpayer Identification Number :  ___-__-____ 
                           Tax Form :  1040 
                         Tax Period :  Sep. 30, 1989 
       Correspondence Received Date :  June 13, 1991 
 
     Dear Taxpayer: 
 
     Based on  our information,  you are  no  longer  liable  for 
     filing this tax return.  We may contact you in the future if 
     issues arise  that need  clarification.   You do not need to 
     reply to this letter. 
 
                                   Sincerely yours, 
 
                                   /s/ J. M. Wood 
 
                                   Chief, Collection Branch 
 

Case 2

It would have been interesting to see what kind of response NRA would have received if he had stated explicitly his status as a nonresident alien. Based on what we know already about the law and its regulations, such an explicit statement might have expedited the processing of his letter. But hindsight is always 20/20. Fortunately, we do have another example where an American Citizen did just that, in response to a similar IRS request for a 1040 form. The following is the text of the IRS request:


 
     Department of the Treasury 
     Internal Revenue Service 
     Ogden, UT 94201 
                                   Date of this Notice:  08-19-91 
                                   Taxpayer Identification: (ssn) 
                                   Form:                     1040 
                                   Tax Periods:          12-31-89 
     To:  ARN 
 
         Your tax return is overdue -- Contact us immediately 
 
     We still  have not  received your tax return, Form 1040 U.S. 
     Individual Income Tax Return, for the year ending 12-31-89. 
 
     We must  resolve this matter.  Contact us immediately, or we 
     may take the following action: 
 
          1.   Summon you  to come in with your books and records 
               as provided  by Sections  7602  and  7603  of  the 
               Internal Revenue Code; 
 
          2.   Criminal  prosecution   that  includes   a   fine, 
               imprisonment, or  both, for  persons who willfully 
               fail  to   file  a   tax  return  or  provide  tax 
               information (Code Section 7203). 
 
     To prevent  these actions,  file your  tax return  today and 
     attach your  payment for any tax due.  Even if you can't pay 
     the entire  amount of  tax you owe now, it is important that 
     you file  your tax return today.  Pay as much as you can and 
     tell us  when you  will pay  the rest.   We  may be  able to 
     arrange for  you to pay in installments.  Detach and enclose 
     the form  below with  your return.   To expedite processing, 
     use the enclosed envelope. 
 
     If you  are not  required to  file or have previously filed, 
     please contact us at the phone number shown above. 
 
     [unsigned] 
 
 

I always enjoy it very much when the IRS states that "you can pay in installments". Somebody should write to them and recommend that they consider augmenting their "Services" by implementing a layaway plan. They may even have a special form for this very thing: Service Augmentation Request Form (RF) #6666666, kind of like their "internal" Form 4685, as described on page 34 of the IRS Printed Product Catalog, Document 7130:
 
          Form 4685     41890S     (Each) 
          News Clipping Mounting Guide 
          This guide sheet is used for mounting news clippings 
          for submittal to the National Office. 
          C:PA:L  Internal Use 
 
Now, our second intrepid American, coded with the initials ARN (Non Resident Alien abbreviated backwards) also took it upon himself to respond in writing. This time, however, he wrote the following words right on the IRS letter and sent it back to them, certified mail, return receipt requested, on September 13, 1991:
 
     PLEASE BE  ADVISED that  ARN is  a non-resident alien of the 
     United States**,  never having  lived,  worked,  nor  having 
     income from  any source  within the  District  of  Columbia, 
     Puerto Rico,  Virgin Islands,  Guam, American  Samoa or  any 
     other Territory within the United States**, which entity has 
     its origin  and jurisdiction  from  Article  1,  Section  8, 
     Clause 17 of the U.S. Constitution.  Therefore, he is a non- 
     taxpayer outside of the venue and jurisdiction of 26 U.S.C. 

This response gets right to the point. In his first sentence, ARN is explicit and unequivocal about his status as a nonresident alien with respect to the United States**. He has never lived or worked in the United States**. He has never had income from any source inside ("within") the District of Columbia, Puerto Rico, Virgin Islands, Guam, American Samoa, or any other Territory within the United States**. He exhibits his knowledge of the relevant authority for "internal" revenue laws by correctly citing Article 1, Section 8, Clause 17 (1:8:17) of the U.S. Constitution. Lastly, he concludes that he is a "non-taxpayer" who is outside the "venue" and jurisdiction of 26 U.S.C. (Title 26, United States Code).

English Philosopher William of Occam (1300-1349) put it succinctly when he said:

"The simplest solution is the best."

Contrast this, the simplest of statements, with the dictionary definition of "Occam's razor", as it is called:

 
     Occam's razor   n   [William  of Ockham]:   a scientific and 
     philosophic rule  that entities  should  not  be  multiplied 
     unnecessarily which  is interpreted  as requiring  that  the 
     simplest of  competing theories  be preferred  to  the  more 
     complex or  that explanations of unknown phenomena be sought 
     first in terms of known quantities. 
 
                            [Webster's New Collegiate Dictionary] 
                                            [G. & C. Merriam Co.] 
                                        [Springfield, Mass. 1981] 
 
I wonder if the people who write for G. & C. Merriam Company also obtain supplementary compensation for services performed inside the exclusive legislative jurisdiction of the federal democracy of the United States** (i.e., moonlight in the federal zone).

Exactly two weeks later, ARN received the following letter from J. M. Wood, signed with "hand writing" that lines up perfectly with the same signature received by NRA. Could it have been a computer signature?


 
     Department of the Treasury 
     Internal Revenue Service 
     Ogden, UT 84201 
 
                                   In reply refer to:  9999999999 
                                   Sep. 30, 1991  LTR 2358C 
                                   ___-__-____       8902  30 000 
                                   Input Op:   9999999999   07150 
     To: ARN 
         Address 
         City, State Zip 
 
     Taxpayer Identification Number :  ___-__-____ 
                           Tax Form :  1040 
                         Tax Period :  Dec. 31, 1989 
       Correspondence Received Date :  Sep. 16, 1991 
 
 
     Dear Taxpayer: 
 
     Based on  our information,  you are  no  longer  liable  for 
     filing a tax return for this period.  If other issues arise, 
     we may  need to  contact you in the future.  You do not need 
     to reply to this letter. 
 
                                   Sincerely yours, 
 
                                   /s/ J. M. Wood 
                                   Chief, Collection Branch 
 

Now, that's what I call fast internal revenue service.

To give you some idea just how far we need to elevate the importance of status and jurisdiction, consider the following lengthy quotes from the written work of author, attorney at law and constitutional expert Jeffrey A. Dickstein. These quotes were buried deep among the footnotes at the end of chapters in his brilliant book entitled Judicial Tyranny and Your Income Tax:

The term "individual" which is used not only in Section 6012(a)(1) but also in Section 1 as the subject upon whose income the tax is imposed, is not defined in the Internal Revenue Code. It is, however, defined in the treasury regulations accompanying Section 1. The regulations make a distinction between "citizens" and "residents" of the United States**, and define a "citizen" as every person born or naturalized in the United States** and subject to its jurisdiction [ see 26 CFR Section 1.1-1 (a) - (c) ]. An extremely strong argument can be made that the federal income tax as passed by Congress and as implemented by the Treasury Department was only meant to apply to individuals within the "territorial or exclusive legislative jurisdiction of the United States**," as those individuals would be subject to the "jurisdiction of the United States**." These exclusive areas, per Article 1, Section 8, Clause 17, of the United States Constitution, are Washington, D.C., federal enclaves and United States** possessions and territories. Outside of these exclusive areas, state law controls, not federal law. Thus a State citizen, residing in a State, would not meet the two part test for being an "individual" upon whose income the tax is imposed by Section 1 of the Internal Revenue Code, and would not have the "status" of a "taxpayer." It is the official policy of the I.R.S. [Policy P-(11)-23] to issue, upon written request, rulings and determination letters regarding status for tax purposes prior to the filing of a return. On August 29, 1988, I requested such a "status determination" from the I.R.S. on behalf of one of my clients; as of the date of the publication of this book, the I.R.S. had still not responded. [Judicial Tyranny and Your Income Tax, pages 83-84]
Evidently, Dickstein was exposed to this particular argument by another attorney and constitutional expert, Lowell Becraft of Huntsville, Alabama. It is very revealing that Dickstein could justify the following observations even with a legal presumption that the Sixteenth Amendment had been ratified:
 
     ... Attorney Lowell Becraft of Huntsville, Alabama, has made 
     a powerful  territorial/legislative jurisdictional  argument 
     that under  the Supreme  Court's holding  in Brushaber,  the 
     income tax  cannot be  imposed anywhere  except within those 
     limited  areas  within  the  states  in  which  the  Federal 
     government has exclusive legislative authority under Article 
     I, Section  8, Clause 17, of the United States Constitution, 
     such as  on military  bases,  national  forests,  etc.,  and 
     within United  States territories, such as Puerto Rico, etc. 
     Indeed,  Treasury   Department  delegation  orders  and  the 
     language of  Treasury Regulation  26 C.F.R. Section 1.1-1(c) 
     fully supports Mr. Becraft's scholarly analysis. 
 
                    [Judicial Tyranny and Your Income Tax, p. 33] 
 
After publishing Judicial Tyranny, Jeffrey Dickstein made an absolutely stunning presentation to Judge Paul E. Plunkett in defense of William J. Benson before the federal district court in Chicago. From the transcript of that hearing, it is obvious that Dickstein had continued to distill his vast knowledge even further, by isolating the following essential core:
 
     The statutes  are in  the Internal  Revenue Code.   I submit 
     they mean something different if the Sixteenth Amendment was 
     ratified than  they do  if the  Sixteenth Amendment  was not 
     ratified.   If the Sixteenth Amendment was ratified it means 
     you can  go into  the states  and collect  this  direct  tax 
     without apportionment.   If  it's not  ratified you can't go 
     into the  states and do that.  And since Pollock says it's a 
     direct tax,  what other  connotation can  you  give  to  the 
     statutes?   The connotation  that makes it constitutional is 
     that it  applies everywhere  except within  the states    -- 
     which would  be where?   On  army bases,  federal  enclaves, 
     Washington, D.C., the possessions and the territories. 
 
           [You Can Rely On The Law That Never Was!, pages 20-21] 
                                                 [emphasis added] 
 
Sometimes, the answer is staring us right in the face. In retrospect, I dedicate this chapter to Jeffrey Dickstein and Larry Becraft, who have done so much to bring the truth about our federal government into the bright light of day. Jeff and Larry, we have only ourselves to blame for not paying closer attention to your every words.

In the passage quoted above from pages 83 and 84 of Judicial Tyranny, author Dickstein refers to IRS Policy #P-(11)-23, from the official Internal Revenue Manual (IRM). This "policy" reads as follows:

 
     RULINGS, DETERMINATION LETTERS, AND CLOSING AGREEMENTS AS TO 
     SPECIFIC ISSUES 
 
     P-(11)-23  (Approved 6-14-87) 
 
     Rulings and determination letters in general 
 
          Rulings  and   determination  letters   are  issued  to 
     individuals  and   organizations  upon   written   requests, 
     whenever appropriate  in the  interest of wise and sound tax 
     administration, as  to their  status for tax purposes and as 
     to the  tax effect  of their  acts or transactions, prior to 
     their filing  of returns  or  reports  as  required  by  the 
     revenue laws.   Rulings  are issued  only  by  the  National 
     Office.   Determination letters  are issued only by District 
     Directors and  the  Director  of  International  Operations. 
     Reference to  District Director  or district office in these 
     policy statements  also includes  the office of the Director 
     of International Operations.                [emphasis added] 
 
This IRS "policy", as published in their Internal Revenue Manual, prompted the National Commodity and Barter Association in Denver, Colorado, to draft the following example of a request letter, updated by this author for extra clarity and authority:
 
                    EXAMPLE OF REQUEST LETTER 
 
     Director of International Operations 
     Foreign Operations Division 
     Internal Revenue Service 
     11601 Roosevelt Boulevard 
     Philadelphia, Pennsylvania 19422 
 
     Dear Director: 
 
          My research  of the  Internal Revenue  Code and related 
     Regulations  has  left  me  confused  about  my  status  for 
     purposes of Federal Income Taxation. 
 
          Pursuant to  I.R.M. Policy  #P-(11)-23,  "upon  written 
     request" I can obtain from your office a determination of my 
     status for purposes of Federal Income Taxation. 
 
          This is  my written, formal request for a determination 
     letter as to my status for Federal Income Tax purposes. 
 
          Please take note that your determination letter must be 
     signed under penalty of perjury, per IRC Section 6065. 
 
          If this  is not  the  proper  format  for  making  this 
     request, please send me the proper format with instructions. 
 
          If I  do not  receive a  determination letter  from you 
     within 30  days, I will be entitled to presume that I am not 
     subject to any provisions of the IRC, Titles 26 or 27. 
 
     Sincere yours, 
     /s/ John Q. Doe 
     all rights reserved 
 
What is the lesson in all of this? At the end of Chapter 1, I expressed my intention to elevate status and jurisdiction to the level of importance which they have always deserved. I am by no means and in no way advising any Americans to utter, or to sign their names on, any statements which they know to be false. On the contrary, it is fair to say that I have been criticized more often in life for being too honest. If you are a nonresident alien with respect to the federal zone, then say so. If you are not a nonresident alien with respect to the federal zone, then think about changing your status. You can if you want to, because involuntary servitude is forbidden everywhere in this land. It's the Supreme Law!
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