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Date: Fri, 14 Nov 1997 06:12:22 -0800
To: (Recipient list suppressed)
From: Paul Andrew Mitchell [address in tool bar]
Subject: SLS: IRS Code (fwd)

>                   Is IRS Code Constitutional?
>                       by John L. Sasscer
>     Most people are surprised when they learn that the U.S. 
>Supreme Court has ruled that the taxing limitation in Article 1, 
>Section 2, Clause 3; and Article 1, Section 9, Clause 4 of the 
>U.S. Constitution prohibiting the federal government from 
>imposing any tax directly on the people, are still in effect and 
>that the 16th Amendment did not nullify those limitations nor 
>authorize any direct tax on the people.
>     After learning this and the fact that an income tax is an 
>excise tax on government granted privileges, they frequently 
>assume that the Internal Revenue Code is unconstitutional because 
>they believe that it imposes the income (excise) tax on 
>individuals and requires them to file returns.  Such a conclusion 
>is in error on both points; the Code is constitutional because it 
>does NOT impose an income tax on individuals nor does it require 
>them to file income tax returns, despite the general 
>misconceptions held by most lawyers, accountants, tax advisers, 
>and patriots. 
>     Such mistaken ideas about the Internal Revenue Code (IRC) 
>are understandable, for the IRC is a masterpiece of deception 
>drawn up by attorneys for the IRS and designed to mislead 
>citizens into believing that the IRC requires individuals to file 
>income tax returns and pay income tax.  In many parts of the IRC, 
>what is NOT said is even more important than what IS said.  The 
>authors of the IRC apparently knew that most people would impart 
>meanings to various sections that are not stated in the law by 
>jumping to conclusions based on popular mistaken ideas.
>     Subtitle A is the part of the Code that relates to income 
>taxes, and Section 1, titled "Tax imposed," is listed under Part 
>1 of Subtitle A, "titled" -- "TAX ON INDIVIDUALS." Unless the 
>reader understands that the "title" of a section is not law, and 
>that the wording of the body of the statute -- ONLY -- is the 
>law, they would most likely consider that the words in the title 
>of Part 1 imposed an income tax on individuals.
>     In all of the various parts of Section 1 (which imposes the 
>tax), it is stated that the tax is imposed on "taxable income," 
>not on individuals.  Furthermore, there is no provision under 
>Subtitle A or anywhere else in the IRC that makes individuals 
>liable for (subject to) the income tax or requires them to pay 
>it.  This omission is not generally recognized unless one 
>realizes that in order for individuals to be required to pay an 
>income tax, there must be a provision of the law that 
>specifically states that the tax is imposed on them.
>     Without such a provision, individuals are not subject to the 
>tax, and are not required to pay it.  It is very clear that the 
>tax in Subtitle A is imposed on "taxable income." NOT on people, 
>therefore it does not conflict with the constitutional 
>limitations prohibiting direct taxation of the people and on this 
>basis, it is constitutional.
>     It is important for people to understand Section 6012, which 
>is one of the most deceptive sections of the IRC.  It is titled, 
>      "(a) 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 a gross 
>income of $1,000 or more ..."
>     Since this section applies only to those who might be 
>required to make returns "with respect to income taxes under 
>Subtitle A," it therefore applies to only those individuals on 
>whom the tax might be imposed under Subtitle A.  Since Subtitle 
>A, as previously shown, imposes no tax on any individuals, there 
>are no individuals against whom Section 6012 can be applied.  The 
>logic of this wording in Section 6012 is apparent, since 
>individuals are not subject to the income tax under Subtitle A, 
>they are not required to make returns under Section 6012.
>     Next, notice that in Section 6012 the word "shall" is used, 
>not the word "required," even though the word "required" is used 
>frequently throughout the IRC.  Shall generally has a mandatory 
>meaning, but courts have ruled that it must mean the same as the 
>word "may" when necessary to avoid a "constitutional conflict." 
>As an example, if an individual were required to make a return, 
>thereby forcing him to disclose information from his private 
>papers, it would violate his right to privacy secured by the 4th 
>Amendment of the Bill of Rights of the United States 
>Constitution, thus creating a "constitutional conflict."
>     Also, compelling an individual to disclose information that 
>could be used against him criminally would violate his 5th 
>Amendment right NOT to be required to be a witness against 
>himself, thus operating to create another "constitutional 
>conflict." Therefore, since Section 6012 (a) states that 
>individuals "shall" make returns, it is clear that the making of 
>such returns by individuals is not required by law, but is a 
>voluntary action.  Again we see that these words in the IRC are 
>constitutional because they do not conflict with [the] 
>individual's constitutionally secured rights. 
>     Reading on in Section 6012 we see that the provisions just 
>discussed apply to only those individuals "having for the taxable 
>year a gross income of $1,000 or more ..." Since an individual 
>must have a taxable year in order to be subject to Section 6012 
>(a), it is necessary to understand the meaning of "taxable year." 
>"Taxable year" is a legal term that is defined in IRC Section 441 
>as being the period of time for which a "taxpayer's" taxable 
>income is computed.  Nowhere in Section 441, or anywhere else in 
>the IRC, is there any wording indicating that an individual has a 
>"taxable year."
>     Now in order to expose the continuing deception, we must 
>determine the definition of the term, "taxpayer." "Taxpayer" is 
>also a legal term defined in the IRC in section 7701 (a)(14).  
>According to that Section, the legal term "taxpayer" does NOT 
>mean "any person who pays taxes," but is defined as: " ... any 
>person subject to any internal revenue tax." In IRC Section 7701 
>(a)(1) the legal term "person"is defined as meaning not only an 
>individual, but also a corporation.
>     Because the U.S. Constitution forbids direct taxation of the 
>people, Subtitle A does not make individuals subject to the 
>federal income (excise) tax; therefore, according to the law, 
>individuals are not "taxpayers" in respect to the income tax.  
>Since according to Section 441, only "taxpayers" have a "taxable 
>year" and individuals do not, then it is clear that Section 6012 
>(a) applies to "taxpayers" only and that it does not require 
>returns to be made by individuals because they are not subject to 
>the federal income (excise) tax under Subtitle A.  Once more, we 
>see that the wording in Section 6012 is constitutional because it 
>does not apply to individuals.
>     When reading Section 6012 (a) without careful analysis the 
>strange words "having income" are generally interpreted as 
>meaning "receiving income." However, if one understands the 
>definition of "income" as stated by the U.S. Supreme Court, the 
>words are not strange.  The Court in the case of Merchants Loan $ 
>trust Co. v. Smietanka [255 U.S. 509], ruled that the term 
>"income" must be given the same definition in all income tax laws 
>enacted by Congress under the 16th Amendment that it had under 
>the Corporation Tax Act of 1909, which imposed a tax on profits 
>of corporations.
>     In the decision of the case of Eisner v. Macomber [252 U.S. 
>207], the Supreme Court stated that "income" under the 16th 
>Amendment means a "gain" or "profit." The Court stated in the 
>Eisner decision that Congress has no power to define "income," so 
>it has no power to change or enlarge the definition of "income" 
>established by the Supreme Court.  Therefore, Congress has no 
>power to enact any statute changing or enlarging the Court's 
>definition of "income" (profits or gains of corporations) and it 
>has no power to include other items as being "income."
>     Despite these facts, IRS spokesmen consistently misinterpret 
>Section 61 (a), of the IRC, by claiming that the 15 items listed 
>in that Section are defined as items of "income," when they are 
>in fact, items of source (corporate gross receipts).  Gross 
>receipts (sources) are NOT profits or gains (income); but if 
>gross receipts are entered as "income," on an income tax return, 
>they are then considered to be "income" to the "taxpayer" who 
>files the return, signed "under penalty of perjury."
>     The exchange of an individual's labor for wages, salaries, 
>commissions, fees, etc, is an equal exchange of his property 
>(labor) for other property (money in the form of wages, salaries, 
>commissions, fees, etc.) of equal value and there is no profit or 
>gain in the transaction.  Such an individual is not one "having 
>income" (possessing a corporate profit or gain), so we see that 
>Section 6012 (a) does not apply to individuals just because they 
>work for a living -- a God given Right secured by the U.S. 
>Constitution, or because they are engaged in other activities of 
>common right.  Therefore, there is no conflict with the 
>Constitution on these points that should make Section 6012 (a) 
>unconstitutional.  The IRC imposes requirements on "taxpayers" 
>only -- not on individuals.
>     In conclusion, this writer submits the following 
>observations on this subject:
>          1.  When an individual voluntarily files his first 
>income tax return (voluntary compliance) showing a tax is due 
>from him (self-assessment), signed "under penalty of perjury," 
>(Federal law under 28 USC 1746 makes unsworn statements, 
>certified under penalty of perjury, equal in legal force to a 
>sworn statement or notarized affidavit) he unknowingly 
>established prima face evidence (evidence which which, if 
>unexplained or uncontradicted, is sufficient to sustain a 
>judgement in favor of the issue which it supports, but which may 
>be contradicted by other evidence) that he is subject to the 
>income tax and that he is in the legal status of a "taxpayer" 
>(any person subject to any internal revenue tax).
>          2.  In relation to federal income (excise) tax, a 
>"taxpayer" is considered to be in the same legal status as a 
>corporation, which is a government created "person" that is 
>subject to the direction and control of the government.  A 
>"taxpayer," like a corporation, has "privileges" only and has no 
>constitutionally secured individual rights with which a mandatory 
>interpretation of the word "shall" could create a "constitutional 
>          Thus, a "taxpayer" can be required to file an income 
>tax return and/or do whatever else IRS regulations require him to 
>do relative to federal excise taxes.
>          3.  When criminal charges for "willful failure to file" 
>are pressed, the defendant is tried as a "taxpayer," not as an 
>individual posessing all of his constitutionally secured rights.  
>Because of the defendant's previously filed returns being put 
>into evidence without challenge, a judge can consider the 
>defendant to be a "taxpayer" and therefore instruct the jury that 
>the defendant is required to file income tax returns.
>     If, however, an individual's income tax returns were filed 
>because he was deceived into believing that, as an individual, he 
>was required -- by law -- to file an income tax return and pay 
>income tax, he could have grounds of CONSTRUCTIVE FRAUD needed 
>for retroactive revocation and repudiation of all previously 
>executed IRS documents to prevent their use as prima facie 
>evidence in both civil and criminal proceedings.  Prima facie 
>evidence can be challenged and overcome by positive action 
>explaining and contradicting such evidence.
>     [Edited from `Freedom League Newsletter', March 1986]

Paul Andrew Mitchell, Sui Juris      : Counselor at Law, federal witness 01
B.A.: Political Science, UCLA;   M.S.: Public Administration, U.C.Irvine 02
tel:     (520) 320-1514: machine; fax: (520) 320-1256: 24-hour/day-night 03
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_____________________________________: Law is authority in written words 09
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