Chapter 7: Inside Sources

Frank Brushaber was taxed on a dividend he received from the stock of a domestic corporation. Remember, the term "domestic" in this context means "inside" the federal zone. The dividend came, therefore, from a "source" that was situated inside this zone. The exact legal meaning of the term "source" has been the subject of much debate, both inside and outside the federal courts. I would not presume to be the one who settles this debate once and for all, least of all in the few pages dedicated to this chapter. It is important to understand that the Brushaber Court's decision turned, in large part, on a determination of the "source" of the dividend which Frank Brushaber received. That source was a domestic corporation which had been chartered by Congress to build a railroad and telegraph through the Utah Territory. As such, it was an "inside source" -- a source that was situated inside the federal zone.

Frank Brushaber's income was "unearned" income. This means that he did not exchange any of his labor in order to receive the dividend paid to him by the Union Pacific Railroad Company. Earned income, on the other hand, is income which is derived from exchanging labor for something of value, like money. Also beyond the scope of this chapter are the sad debate, and considerable mass of IRS-sponsored confusion, that surround the legal definition of "income". Author Jeffrey Dickstein has done an extremely thorough job of documenting the history of judicial definitions of the term "income". Many of those definitions are in direct conflict with each other, but all Supreme Court decisions on the question have been completely consistent with each other. In Appendix J of this book, you will find one of our formal petitions to Congress in which are summarized a number of rulings on this issue by the Supreme Court and by lower courts which concur. If you must also review the courts which do not concur, you gluttons for punishment should buy Dickstein's great book on the subject.

Back to sources. IRS Publication 54 explains in simple terms that: "The source of earned income is the place where you perform the services." I always enjoyed it when Sister Theresa Marie would tell our third-grade class that the whole world is divided into persons, places and things. How I long for those simpler days! The courts have used the technical term "situs" instead of "place" as follows:

     We think  the language  of the statutes clearly demonstrates
     the intendment  [sic] of  Congress that the source of income
     is the situs of the income-producing service.

           [C.I.R. vs Piedras Negras HB Co., 127 F.2d 260 (1942)]
                                                 [emphasis added]

It is useful to repeat the section of the Internal Revenue Code (IRC) which was quoted in the last chapter. Specifically, 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]

The term "gross income" is crucial, because it is the quantity which triggers the filing requirement. It is like a threshold, or so we are told by august members of the black robe like Judge Eugene Lynch of the Federal District Court in San Francisco. Section 6012 of the IRC reads, in pertinent part:
     General Rule. --  Returns with respect to income taxes under
     subtitle A shall be made by the following:

     (1)(A)    Every individual having for the taxable year gross
               income  which  equals  or  exceeds  the  exemption
               amount ...

     except that  subject to  such conditions,  limitations,  and
     exceptions and  under such  regulations as may be prescribed
     by the  Secretary, nonresident  alien individuals subject to
     the tax  imposed by section 871 ... may be exempted from the
     requirement of making returns under this section.

                                              [IRC 6012(a)]
                                                 [emphasis added]

Section 6012 is a pivotal section, if only because the IRS is now citing this section (among others) as their authority for requiring "taxpayers" to make and file income tax returns. As you can plainly read with your own eyes, nonresident alien individuals may be exempted from the requirement of making returns. Diving into the many thousands of regulations which have been "prescribed by the Secretary" is also beyond the scope of this book. For now, realize that the regulations do exist and that the quantity "gross income" for nonresident aliens includes only two things: (1) gross income derived from sources within the United States** and (2) gross income that is effectively connected with a U.S.** trade or business. That's it!

You will note that the statute and its regulations make frequent use of the terms "within" and "without", in order to contrast the two terms as antonyms, or opposites. In this context, the term "within" is synonymous with "inside"; the term "without" is synonymous with "outside". "Within" and "without" are antonyms. And the term "antonym" is an antonym for a synonym! ("Good grief," declared Charlie Brown.) Thus, if you are outside the federal zone, you are "without" the United States** in the languid language of federal tax law. (Languid: drooping or flagging from, or as if from exhaustion.) Can we ever get along "without" the United States**?

The importance of "within" and "without" cannot be emphasized too much. In the context of everything we now know about jurisdiction within the federal zone, these terms are crucial to understanding the territorial extent of the IRC. To underscore this point, consider IRC Section 862(a), entitled "Income from Sources Without the United States**":

     (a)  Gross Income from Sources without United States**. --

          The following items of gross income shall be treated as
          income from sources without the United States**: ...

          (3)  compensation  for   labor  or   personal  services
               performed without the United States**.

                                              [IRC 862(a)-(a)(3)]
                                                 [emphasis added]

Now, turn to IRS Form 1040NR. A copy of this form is found in Appendix K (not in electronic version). The "NR" stands for "NonResident". Nonresident aliens file this form to report and pay tax on gross income as defined in IRC Section 872(a). On page one of the 1990 version of this form, there is a block of line items numbered 8 thru 22. These items are summed to produce a total on line 23. "This is your total effectively connected income," states the form. Now, turn the form clockwise 90 degrees. Note, in particular, the phrase near the left margin of page one which reads:

Income Effectively Connected With U.S.** Trade/Business

If you are a nonresident alien and you have no income which is effectively connected with a U.S.** trade or business, then you can, in good conscience, put a big fat ZERO on line 23. But, this is not the whole story. On page 4 of Form 1040NR, there is a table for computing "Tax on Income Not Effectively Connected with a U.S.** Trade or Business". What would this be?

Recall IRC Section 872(a), quoted above. The only other component of gross income for nonresident aliens is income which is derived from sources within the United States**, like Frank Brushaber's stock dividend. Lo and behold, this table itemizes such things as dividends, interest, royalties, pensions, and annuities. These are all items of unearned income, that is, profits and gains derived from U.S.** sources other than compensation for labor or personal services performed "within" the United States**. The total tax is computed and entered on line 81 of Form 1040NR. Unfortunately, true to form, line 81 in this table says that "This is your tax on income not effectively connected with a U.S.** trade or business." This is very deceptive. Remember, gross income for nonresident aliens includes only two kinds of gross income:

     (1)  gross income  derived from  sources within  the  U.S.**
          which is  not effectively connected with a U.S.** trade
          or business and

     (2)  gross income  which is  effectively connected  with the
          conduct of  a  trade  or  business  within  the  United
          States**

Line 81 of Form 1040NR is referring to the first kind of gross income, namely, gross income which is "not effectively connected with a U.S.** trade or business". The second kind of gross income is entered on page 1 at line 23 of this form. Again, it's simple when you know enough to decode the Code. It's also very easy to get confused when the confusion is intentional. ("Encode" and "decode" are antonyms, by the way.)

Unfortunately, the filing requirements for nonresident aliens are not as straightforward as you might think, because the regulations contain certain rules that are not found in the Code itself, and the Code is frequently vague. To understand these requirements, the regulations must be reviewed as they apply to your particular situation. A brief overview is in order.

If you are a nonresident alien with no gross income from sources within the U.S.**, and with no U.S.** trade or business, is it a good idea to file a 1040NR with zeroes everywhere? No, it is not. The main reason is that filing any 1040 form can provide the IRS with a legal reason to presume that you are a "taxpayer", as that term is defined in the IRC. A later chapter of this book will explore the "law of presumption" in some detail. Your filed return can be used as evidence that you are a taxpayer, that is, one who is subject to any internal revenue tax because you are engaged in a "revenue taxable activity". A U.S.** trade or business is a revenue taxable activity. Thus, a key issue for nonresident aliens is whether or not they are engaged in any U.S.** trade or business. The CFR regulations say this about the filing requirement for nonresident aliens:

     ... [E]very  nonresident alien individual ... who is engaged
     in a  trade or  business in  the United  States at  any time
     during the  taxable year  or who has income which is subject
     to taxation under Subtitle A of the Code shall make a return
     on Form  1040NR.  For this purpose it is immaterial that the
     gross income  for the  taxable year is less than the minimum
     amount specified  in section  6012(a) for  making a  return.
     Thus, a  nonresident alien  individual who  is engaged  in a
     trade or  business in the United States** at any time during
     the taxable year is required to file a return on Form 1040NR
     even though

     (a)  he has  no income  which is  effectively connected with
          the conduct  of a  trade  or  business  in  the  United
          States**,

     (b)  he  has  no  income  from  sources  within  the  United
          States**, or

     (c)  his income  is exempt  from income  tax by reason of an
          income tax convention or any section of the Code.

                                          [26 CFR 1.6012-1(b)(1)]
                                                 [emphasis added]

Thus, the gross income "threshold" defined in the filing requirement at IRC 6012(a) is not relevant if a nonresident alien is engaged in any U.S.** trade or business. Conversely, the rules are somewhat different if a nonresident alien is not engaged in any U.S.** trade or business. The regulations have this to say about a nonresident alien in the latter situation:
     A nonresident alien individual ... who at no time during the
     taxable year is engaged in a trade or business in the United
     States** is  not required  to make  a return for the taxable
     year if  his tax  liability for  the taxable  year is  fully
     satisfied by  the withholding of tax at source under Chapter
     3 of the Code.

                                          [26 CFR 1.6012-1(b)(2)]
                                                 [emphasis added]

If a nonresident alien has no U.S.** trade or business and no tax liability that required withholding (such as U.S.** source income), then a return is not required. If you are a nonresident alien and you remain in doubt as to whether or not you are required to file a Form 1040NR, you might begin by reading all the rules found in the Instructions for Form 1040NR. In general, the instructions are much easier to read than the regulations, but also understand that the regulations have the force of law and the instructions do not. The instructions for form 1040NR address the question of who must file as follows:
     Use Form  1040NR if  any of the four conditions listed below
     and on page 2 applies to you:

     1.   You were  a nonresident  alien engaged  in a  trade  or
          business in  the United  States** during 1990. You must
          file Form 1040NR even if:

          a.   none of your income came from a trade or businesss
               conducted in the United States**,

          b.   you have no income from U.S.** sources, or

          c.   your income is exempt from U.S.** tax.

          In any  of the  above three  cases, do not complete the
          schedules for  Form 1040NR.   Instead, attach a list of
          the kinds  of exclusions  you claim  and the  amount of
          each.

     2.   You were  a nonresident alien not engaged in a trade or
          business in the United States** during 1990 with income
          on which not all U.S.** tax that you owe was withheld.

     3.   You represent  a deceased  person who would have had to
          file Form 1040NR.

     4.   You represent an estate or trust that would have had to
          file Form 1040NR.

                           [Instructions for Form 1040NR, page 1]

Now, what is a "trade or business" within the United States**? Author and legal scholar Lori Jacques has concluded that the meaning of a "trade or business" is confined to performing the functions of a public office. This conclusion is supported by an explicit definition of "trade or business" that is found in the IRC itself:
     Trade or  Business. -- The term "trade or business" includes
     the performance of the functions of a public office.

                                                [IRC 7701(a)(26)]

The Informer has come to the same conclusion, after years of research. All of this "trade or business" activity, thus defined, boils down to one simple thing: government employment. If you work for the federal government, even if you are a nonresident alien, the Congress reserves the power to define that work as a "privilege", the exercise of which Congress can tax. The measure of that tax is the amount of income derived. Author Lori Jacques summarizes government employment as follows:
     It appears  that the federal income tax is the graduated tax
     on income  effectively connected  with  a  U.S.**  trade  or
     business as  described in  IR  Code  Sec.  871(b)  which  is
     government employment.   Remember the nonresident alien does
     not pay tax on non U.S.** source income.  If the nonresident
     alien signs  a Form  W-4 he  is obviously  presumed to  be a
     government employee with "effectively connected income."

         [United States Citizen vs National of the United States]
                                        [page 39, emphasis added]

Another competent author and IRS critic, Frank Kowalik, has also arrived at similar conclusions about the "taxability" of employment with the federal government. In his thorough book entitled IRS Humbug, IRS Weapons of Enslavement, Kowalik argues with exhaustive proof that a tax "return" is really just a kickback. Government employees are expected to return or "kick back" some of their earnings to the Treasury, in obvious and grateful tribute to the great giver of all federal privileges, Uncle Sam. Kowalik's arguments and accompanying complaints are so persuasive that Rep. Jack Brooks, Chairman of the House Judiciary Committee, has scheduled Kowalik's request for redress as Petition No. 107. In a personal letter to me, Frank Kowalik wrote the following:
     I read  with interest  your Redress  (12-24-90)  to  Barbara
     Boxer.   I also  delivered a  Redress to Congress making Tom
     Foley, House  Speaker, my  personal representative.  My book
     "IRS Humbug"  was an  exhibit in this Redress.  Jack Brooks,
     Chairman of  the House  Judiciary Committee, was among those
     copied.  From his letter (copy attached) my Redress has been
     referred to  the Committee  on the Judiciary as Petition No.
     107.   As I  understand it,  it will be heard in the session
     after the  holidays.   I also  provide information  on  "IRS
     Humbug" that  covers the fact that federal income tax is not
     a tax  on labor.   It  is a  kickback  program  between  the
     federal government and its employees.

                      [personal communication, December 10, 1991]
                                                 [emphasis added]

Taken together, The Informer, Lori Jacques and Frank Kowalik appear unanimous in understanding the term "trade or business" to include only the performance of the functions of a public office. This conclusion is, of course, supported by the explicit definition of "trade or business" which is found in the IRC itself at Sec. 7701(a)(26). Note, however, that this definition does not say "includes only"; it says "includes".

Once again, we are haunted by the ambiguity that results from not knowing for sure whether "includes" is expansive or restrictive. If "includes" is restrictive, then The Informer, Lori Jacques, and Frank Kowalik are all correct about the inferences they have drawn from the statute and its regulations. If "includes" is expansive, however, then we have to look elsewhere for things that are "otherwise within the meaning of the term defined", that is, otherwise within the meaning of "U.S.** trade or business".

An expansive intent is manifested by the explicit definitions of "includes" and "including" that are found at IRC 7701(c). The issues of statutory construction that arise from these definitions of "includes" and "including" are so complex, a subsequent chapter of this book will revisit these terms in more detail. The conclusions in that chapter should already be obvious to you. For now, suffice it to say that the intended clarification at 7701(c) is anything but. The hired lawyers who wrote this stuff should have known better than to use terms that have a long history of semantic confusion. For this reason, and for this reason alone, I am now convinced that the confusion is inherent in the language chosen by these hired "guns" and is therefore deliberate.

There is evidence that the meaning of "trade or business" is not limited to the performance of the functions of a public office. The Code itself contains a second definition of "trade or business within the United States**" as follows:

     Trade or Business within the United States**. --

     For purposes  of this part, part II, and chapter 3, the term
     "trade or  business within the United States**" includes the
     performance of  personal services within the United States**
     at any time within the taxable year ....

                                                     [IRC 864(b)]
                                                 [emphasis added]

It is tempting to interpret this definition only "for purposes of this part, part II, and chapter 3". I will not take the bait, because it is more important to stay above a major addiction of the federal zone: obfuscation. You may have already begun to notice how frequently the IRC makes reference to other sections, subsections, subparts, subtitles, and subchapters. Sure, these other places in the law must be taken into account before the "performance of personal services" can be fully understood as defined. I can see that as well as anybody else. But two can play this game. Is there any reason in the statute to suspect that these remote references might not even be valid? First, read the following sub-statute within the statute, and then decide for yourself (go ahead, you have my permission):
     Construction of Title.

                         [Sec. 7806(b)]

     (b)  Arrangement  and  Classification.  --    No  inference,
          implication, or presumption of legislative construction
          shall be  drawn or  made by  reason of  the location or
          grouping of  any particular  section  or  provision  or
          portion of this title, nor shall any table of contents,
          table  of   cross  references,   or  similar   outline,
          analysis,  or   descriptive  matter   relating  to  the
          contents of  this title be given any legal effect.  The
          preceding sentence  also applies  to the side notes and
          ancillary tables  contained in  the various  prints  of
          this Act before its enactment into law.

                                    [IRC 7806(a), emphasis added]

Many people, unschooled in the finer points of statutory construction, interpret this section of the IRC to mean that the entire Code has no legal effect. However, a close reading reveals that this section is limited to tables of contents, tables of cross references, side notes, ancillary tables and outlines, in other words, everything but the meat of the Code. Nevertheless, notice the last sentence; it contains a rule which also applies the "preceding sentence" to the side notes and ancillary tables contained in the various prints of the Code before its enactment into law. So, the obvious question is this: has Title 26 been enacted into law? The shocking answer is: NO, it has not been enacted into positive law. In a preface dated January 14, 1983 and included in the 1982 edition of the United States Code, Speaker of the House Thomas P. O'Neill wrote the following:
     Titles 1,  3, ...  23, 28,  ... have been revised, codified,
     and enacted  into positive law and the text thereof is legal
     evidence  of   the  laws  therein  contained.    The  matter
     contained in  the other  titles of  the Code  is prima facie
     evidence of the laws.

Notice that Title 26 is clearly missing from the list of titles which have been enacted into positive law. This fact can also be confirmed by examining the inside cover page of any volume of the United States Codes in any law library. There you will find that Title 26 is missing the asterisk "*" which indicates that the title has been enacted into positive law. The implications of this finding can be found in Subtitle F, Subchapter B, which deals with effective dates and related provisions. There the general rule for provisions of subtitle F reads as follows:
     General Rule.  -- The  provisions of  subtitle F  shall take
     effect on  the day after the date of enactment of this title
     and shall  be applicable  with respect to any tax imposed by
     this title.

                              [IRC 7851(a)(6)(A), emphasis added]

Believe it or not, subtitle F contains all the enforcement provisions of the IRC, such as filing requirements, assessment and collection, liens, levies and seizures. In other words, the enforcement provisions of the Internal Revenue Code have still not taken effect because, as of this writing, Title 26 has still not been enacted. If you don't mind getting frustrated, notice also that section 7851 is also part of subtitle F!

If the statute itself is entirely too frustrating to decipher, it is no wonder why the IRS has published literally hundreds of instruction booklets and official IRS "Publications" to help "clarify" the myriad rules and forms. At last count, there were more than 5,000 IRS forms in the IRS Printed Product Catalog quoted elsewhere in this book. To conclude our discussion of "U.S.** trade or business", you might want to obtain a copy of IRS Publication 519, U.S. Tax Guide for Aliens. This 40-page booklet expresses the English language in words that are much easier to understand than the statute itself. It even has its own Index. Be forewarned, however, that official IRS "Publications" do not have the force of law because they have not been published in the Federal Register, nor do any of them display control numbers and expiration dates issued by the Office of Management and Budget (OMB). (If the IRS makes an error, it's not their fault anyway.) Publication 519 has this to say about a trade or business inside the United States**:

     Trade or Business

     Whether you are engaged in a trade or business in the United
     States** depends  on the  nature of  your activities.    The
     discussions that  follow will help you determine whether you
     are engaged in a trade or business in the United States**.

     Personal Services

     If you  perform personal  services in the United States** at
     any time  during the  tax year,  you usually  are considered
     engaged in  a trade or business in the United States**.  You
     are engaged in a trade or business in the United States** if
     you  perform   services  in   this   country   and   receive
     compensation such  as wages,  salaries, fees, tips, bonuses,
     honoraria, or commissions.

                     [Publication 519: U.S. Tax Guide for Aliens]
                                                         [page 8]

Back to sources one more time. (It's so easy to get sidetracked by some remote code reference that has no legal effect!) The interested reader and intrepid investigator will be happy to know that there are literally "oodles" of regulations which go into details, great and small, about the life and times of Mr. and Mrs. Nonresident Alien. Here is a blockbuster for which I am eternally grateful to Tarzan The Informer for weeding out of the jungle of slippery lines and double negatives:
     Nonresident aliens.   A  nonresident alien  individual never
     has self-employment  income.    While  a  nonresident  alien
     individual who  derives income  from  a  trade  or  business
     carried on  within the  United States**,  Puerto  Rico,  the
     Virgin Islands,  Guam, or  American Samoa (whether by agents
     or employees,  or by  a partnership of which he is a member)
     may be  subject to  the applicable  income tax provisions on
     such income,  such nonresident  alien individual will not be
     subject to  the tax on self-employment income, since any net
     earnings which  he may  have  from  self-employment  do  not
     constitute self-employment.

                                            [26 CFR 1402(b)-3(d)]
                                                 [emphasis added]

A nonresident alien individual never has self-employment income. I agree completely with The Informer: "never" always means never.

The point of this chapter is to stress the extreme importance of understanding "sources" as they affect the nonresident alien like you and me. Remember how Frank Brushaber ultimately lost his bid to the Supreme Court of the United States. He received a dividend that was issued by a "domestic" corporation. Even though he was found to be a nonresident alien with respect to the United States**, his dividend was found to be unearned income from a source inside the United States**, inside the federal zone. The Informer nicely summarizes the overall situation as follows:

     YOU ARE NOT TAXABLE IF YOU ARE:

          ITEM 1:   a non  resident alien NOT carrying on a trade
                    or business  with the  U.S.** or  State of  a
                    Union State;

          ITEM 2:   a non resident alien NOT making source income
                    from within the United States**;

          ITEM 3:   a non  resident alien NOT having a trademark,
                    patent, or copyright;

          ITEM 4:   a non resident who is NOT a fiduciary, so you
                    cannot be  a person of incidence with respect
                    to a person of adherence;

     then the  income tax  is  not  imposed,  under  subtitle  A,
     chapter 1  on  a  non  resident  alien.    So  you  fit  the
     description under 26 USC Sections 2(d) and 872.

                                    [Which One Are You?, page 24]
                                           [emphasis in original]

The complex issues of patents, trademarks, copyrights and fiduciaries are beyond the scope of this book. My "sources" tell me that The Informer is writing another book, hopefully to clarify some of the legal in's and out's of being a fiduciary. Author Lori Jacques has arrived at a remarkably similar conclusion about nonresident aliens. The first person "I" in the following excerpt is author Jacques:
     It  is  conclusive  the  Department  of  Treasury,  Internal
     Revenue Service, has no authority within the several states,
     it is  just as  conclusive that  any  income  deriving  from
     within  the  jurisdiction  of  the  national  government  is
     taxable to  the person  receiving it.  The treasury decision
     on Brushaber confirms that.

     The  tax   on  the   nonresident  alien   conforms  to   all
     constitutional provisions:

     1.   Uniform taxation  of 30% on unearned income from U.S.**
          sources.

     2.   No reporting  of private  information  as  the  tax  is
          withheld at  source or  else the government has all the
          information of  amount it  has paid  -- just return the
          receipt to prove the tax was paid.

     3.   Graduated taxation  on income  received from  trade  or
          business  conducted   within   the   United   States**,
          permitted because  only the  states are  parties to the
          compact    guaranteeing    unalienable    rights    and
          uniform/apportioned taxation.   The  federal areas  are
          always exempt from laws guaranteeing equal treatment.

     4.   No public  notice has  been published  in  the  Federal
          Register  since  state  citizens,  nonresident  to  the
          United States**  as defined,  are not  affected by  the
          delegation of authority orders.

     After the  evidence is  in, I  now believe  that  under  the
     internal revenue  law I  am a  "national" and  a nonresident
     alien to  federal jurisdiction  who  has  no  U.S.**  source
     income nor  any effectively  connected income  with a U.S.**
     trade or business for which I am liable to render a return.

         [United States Citizen vs National of the United States]
                                        [page 44, emphasis added]

This lengthy excerpt does an excellent job of summarizing a mountain of earnest legal research and writing by author and scholar Lori Jacques. My hat's off to you, Lori, for doing a "totally boss" and uniquely thorough job. I take issue only with your statement above that "the Internal Revenue Service has no authority within the several States." Without clarifying the tax liability that attaches to income from "inside sources", this statement could be misleading. Remember that Frank Brushaber's liability attached to income from such a source. The Informer has accurately qualified the precise extent of federal tax jurisdiction within the 50 States of the Union as follows:
     Yes, the IRS can go into the States of the Union by Treasury
     Decision Order,  to  seek  out  those  "taxpayers"  who  are
     subject to  the tax, be they a class of individuals that are
     United States** citizens, or resident aliens.  They also can
     go after  nonresident aliens  that are  under the regulatory
     corporate jurisdiction of the United States**, when they are
     effectively connected  with a  trade or  business  with  the
     United States** or have made income from a source within the
     United States**  that they  have entered  into an  agreement
     with, for then they are in the state of the forum.

                                    [Which One Are You?, page 98]
                                                 [emphasis added]

For the reader who is motivated to investigate the question of "inside sources" in greater detail, Appendix V in this edition of The Federal Zone contains an Affidavit of Applicable Law. This affidavit contains numerous citations to IRC sections which are pertinent to the crucial distinction between "inside" sources and "outside" sources. This same affidavit can be used formally to deny specific liability for federal income taxes during any given calendar year(s).

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