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Date: Fri, 14 Nov 1997 06:13:26 -0800
To: (Recipient list suppressed)
From: Paul Andrew Mitchell [address in tool bar]
Subject: SLS: Who is Liable? (fwd)

>                               Who Is Liable?
>                    by Lowell ("Larry") H. Becraft, Jr.
>The 1954 Internal Revenue Code (Title 26 United States Code) imposes a tax 
>upon various objects and then makes various persons liable for the 
>collection and payment of the tax.
>How the system operates is made clinically clear in Subtitle D and E of the 
>Internal Revenue Code (IRC).
>In Section 4071(a), a tax upon certain tires is imposed, and in Section 
>4071(b), the manufacturer, producer, or importer of the tires is made liable 
>for the tax.
>In Section 4161, a tax is imposed upon sport fishing equipment and in 
>Section 4162(c), the retailer of such equipment is made liable.
>Section 4371 imposes a tax upon foreign insurance instruments and Section 
>4374 makes liable anyone who makes, signs, issues, or sells the instruments.
>In addition to these expressly cited taxes, the IRC imposes many others and, 
>except for the tax on income imposes by Sections 1 and 11, there are always 
>provisions in the IRC stating that some class of person is liable for 
>payment of the tax.
>For the convenience of the reader who wants to check the IRC for a better 
>understanding of these facts, the table below lists sections of the IRC that 
>impose income taxes and the related sections stating who is liable for 
>payment of each tax.
>     Tax Imposed by Section:            Liability for Payment:
>     4971(a), (b)                       4971(a), (b)
>     4973(a)                            4973(a)
>     4974(a)                            4974(a)
>     4975(a), (b)                       4975(a), (b)
>     4978(c)                            4978(c)
>     4986(a)                            4986(b)
>     4995(a)(1)(A)                      4995(a)(1)(B)
>     5001(a)(1), (3)                    5005
>     5041                               5043
>     5051                               5054, 5061
>     5701                               5703
>     5811(a)                            5811(b)
>     5821(a)                            5821(b)
>      871(a)                            1461
>        1                               none
>       11                               none
>The sections listed on the last two lines of the table are all part of 
>Subtitle A, which contains the sections of the IRC that relate to income 
>tax.  Note that there is no section of the Internal Revenue Code imposing a 
>liability (requirement) for payment of the tax imposed on income Sections 1 
>and 11.
>Section 1 imposes a tax on taxable income of (possessed by) individuals, and 
>Section 11 imposes a tax on taxable income of (possessed by) corporations, 
>but there is no provision in Subtitle A or elsewhere in the IRC that imposes 
>a liability (requirement) upon anyone for payment for either tax.
>Section 871 of Subtitle A imposes a tax on the total amount received in the 
>form of interest, dividends, rents, salaries, wages, premiums, etc., from 
>sources within the United States by nonresident alien individuals.
>Section 881 of Subtitle A imposes a tax on the amount received from sources 
>within the United States in the form of interest, dividends, rents, 
>salaries, wages, premiums, etc., by a foreign corporation.
>There is, however, no section of Subtitle A making such nonresident alien 
>individuals or foreign corporations liable for payment of the tax.
>The liability for paying the taxes imposed by Sections 871 and 881 is 
>imposed in Section 1461, which states that the person (individual, trust, 
>estate, partnership, association, company, or corporation) required to 
>deduct and withhold those taxes is "made liable for the tax."
>Other than Section 1461, there is no section that imposes any liability on 
>anyone for payment of any tax under Subtitle A.
>Therefore, unless individuals are acting as agents of government by 
>withholding money from nonresident aliens or foreign corporations, there is 
>no requirement for them to pay the tax on income and therefore no 
>requirement for them to file returns.
>     Benefits Available to Aliens
>The purpose of the tax return is to enable the alien to claim benefits of 
>deductions and credits against taxes already withheld by the withholding 
>agent -- that individual, partnership, corporation, trust, bank, etc., 
>having custody, control, receipt, disposal, or making payment of income 
>items.  The return is required of the alien only in the sense that his 
>failure to file will result in the denial of benefits to him.
>The explanation of this fact is detailed at Section 874(a):
>     A nonresident alien individual shall receive the benefit of the 
>     deductions and credits allowed him in this subtitle only by filing or 
>     causing to be filed with the Secretary a true and accurate return ... 
>     (b) The benefit of the deduction for exemptions under section 151 may 
>     ... be received by a nonresident alien individual entitled thereto, by 
>     filing a claim therefore with the withholding agent.
>There is no such benefit available to United States citizens except those 
>having income derived from sources in possessions of the United States 
>[Title 26 USC 931(f)] and in Guam [Section 935(b)].  There is no statutory 
>provision for a United States citizen to file a return on income derived 
>from sources within the United States.  If Subtitle A of Title 26 should in 
>fact apply to United States citizens having income derived from sources 
>within the United States, such citizens would be denied equal protection 
>under a law that benefits only (a) aliens and foreign corporations having 
>income from sources within the United States and (b) United States citizens 
>having income from Guam and United States possessions.
>Indeed, if one such excluded United States citizen -- driven, say, by 
>patriotic fever -- should crave paying income taxes in spite of there being 
>no legal duty, but wished to moderate his passion by claiming benefits of 
>deductions, he would have to make his claim under a statute applicable only 
>to nonresident aliens.  In other words, to enjoy deductions while 
>patriotically paying income taxes, he must either give up his United States 
>citizenship and declare himself an alien, or make the false claim that his 
>income was earned in a posession of the United States.  In the one case he 
>surrenders the world's most valuable legal posession, in the other he 
>perjured himself.
>     Withholding Agents
>Liability is imposed when the nonresident alien individual files his claim 
>for benefits of deductions and allowances (his return) directly with the 
>Secretary or causes the exemption claim to be filed by the withholding agent 
>per Section 874.  When filing directly, the alien makes himself 
>constructively liable for the truth and accuracy of his return.  When 
>causing the return to be filed under Section 874, the alien causes the 
>liability for the withholding agent.  (The withholding agent is the only 
>citizen of the United States domiciled in the United States who may have 
>income derived from sources within the United States who is required to file 
>a return under Subtitle A, but it is not his return that must be filed, it 
>is the return of the alien whose income items he controls.)
>The actual imposition of statutory liability for a tax on income occurs in 
>Subtitle A of Title 26 at Section 1461:
>     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 persons for the amount of any payments 
>     made in accordance with the provisions of this chapter.
>The purpose of Section 1461 is to assure that the withholding agent for 
>nonresident aliens and foreign corporations timely and properly collects, 
>deducts allowances and exemptions from gross income, administers benefit of 
>deductions, and pays over to the Secretary those amounts of tax withheld.  
>The government indemnifies the withholding agent from any demands the alien 
>or foreign corporation might make upon him for a refund.
>Once made liable, the withholding agent (or the alien, if he takes it upon 
>himself to claim benefits by filing a return or exemption claim) become 
>subjects to the rules and regulations of the Secretary, as set forth in 
>Section 6001:
>     Every person liable for any tax imposed by this title, or for the 
>     collection thereof, shall keep such records, render such statements, 
>     make such returns and comply with such rules and regulations as the 
>     Secretary may from time to time prescribe ...
>The party made liable for the tax or its collection -- more often the 
>withholding agent agent than the alien -- is then required by the 
>Secretary's regulations to make a return or statements, as fixed at Section 
>     When required by regulations prescribed by the Secretary any persons 
>     made liable for any tax imposed by this title, or for the collection 
>     thereof, shall make a return or statement ...
>Finally, the base rate at which a return must be filed is established at 
>Section 6012:
>     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 ...
>Criminal liability attaches upon the alien when he files his own return and 
>attempts to lie or cheat the government out of its lawful revenues.  This is 
>tax evasion, a felony punished under Section 7201 of Title 26 USC.  But if 
>he merely fails to file a return, willfully or otherwise, he hurts no one 
>but himself.  He forfeits his right to claim benefits or deductions which he 
>is required to do if he wants the benefits.  Hence, the "requirement" to 
>file.  Only under the most perverted administration would the government 
>want an alien imprisoned for failing to demand money from the Treasury!
>The willful failure to file a return becomes criminal when done by the party 
>the alien has caused to file a return, namely, the withholding agent.  The 
>agent's failure to file is considerably more serious than the alien's, for 
>the agent's failure not only denies benefits to the alien and betrays the 
>fiduciary interest, but it also deprives the government of its lawful 
>The statute punishing the withholding agent made liable by the alien for 
>making returns and paying the tax withheld is Section 7203 of Title 26 USC:
>     Any person required under this title to pay any estimated tax or tax, 
>     or required by this title or by regulations made under authority 
>     thereof to make a return, keep any records, or supply any information, 
>     who willfully fails to pay such estimated tax or tax, make such return, 
>     keep such records, or supply such information, at the time or times 
>     required by laws or regulation, shall, in addition to other penalties 
>     provided by law, be guilty of a misdemeanor and, upon conviction 
>     thereof, shall be fined not more than $10,000 or imprisoned not more 
>     than one year, or both, together with the costs of prosecution.
>     Income Tax as a Direct Tax Not to be Laid Upon Inland Income of U.S. 
>     Citizens
>There is no responsibility to suggest why the internal revenue laws do not 
>impose a tax on the inland incomes of United States citizens, but there is a 
>need to offer the following suggestions to support the inescapable finding 
>that they do not.
>As was made clear in Senate Joint Resolutions 165 proclaiming on February 3, 
>1983 that 1983 was "The Year of the Bible", the founders of the United 
>States were deeply motivated by Biblical conviction and principle.  They 
>were not establishing a Roman or Babylonian empire, but a Christian 
>republic, in which no tax was collected, except by the citizen's direct 
>representative whose duties were subject to review every two years.  The 
>Constitution of the United States of America provides in Article 1, Section 
>8, clause 1; and the 16th Amendment that only:
>     Congress shall have the power to lay and collect taxes ...
>Yet taxes imposed under Title 26 are collected not by Congress but by the 
>Secretary of the Treasury, an executive officer under Article 2, Section 2, 
>clause 2 of the Constitution.
>The executive department has no more constitutional authority to collect a 
>tax than it has to lay a tax on the people of the United States.
>It might be argued that Congress has power to delegate the collection 
>authority.  That power was proposed in convention at Philadelphia on 
>September 14, 1787.  The proposition was that Congress, already authorized 
>to lay and collect, be given power to delegate the collection process "by 
>joint ballot" to a Treasurer (69th Congress, 1st Session, House Document No. 
>398: `Documents Illustrative of the Formation of the Union of the American 
>States', pp. 722, 723).
>Mr. Rutledge [sic] of South Carolina moved to strike out this power and let 
>the Treasurer be appointed "in the same manner with other officers", i.e. by 
>the President, pursuant to Article 2, Section 2, clause 2.  The 
>Massachusetts deputies, Gorham and King, opposed the motions, arguing the 
>the people were accustomed to treasurers being appointed by legislatures.  
>General Pinckney, also of South Carolina, stated that the Treasurer was 
>appointed by the legislature in his state, too, but that "The consequence is 
>that bad appointments are made and the legislature will not listen to the 
>faults of their own officer."  Gouverneur Morris of Pennsylvania agreed that 
>denying Congress the power to delegate to a Treasurer the authority for 
>collecting taxes would cause the Treasurer to be "more narrowly watched, and 
>more readily impeached."
>The motion to deny Congress the power to appoint a Treasurer was approved.  
>The nation's tax collector would be appointed "in the same manner with other 
>officers," by the President, with the advice and consent not of Congress, 
>but of the Senate alone.
>Any attempt by the President or his officer to collect a tax from a United 
>States citizen would be a violation of the citizen's right to tax collection 
>by elected representative, unless the citizen had brought himself into a 
>class over which the executive department could constitutionally exercise 
>jurisdiction.  That class was the alien national.
>The Supreme Court has never failed to declare that the income tax is an 
>indirect excise tax (see Springer v. United States, 102 US 586; Brushaber v. 
>Union Pacific Railroad Co., 240 US 16; Stanton v. Baltic Mining Co., 240 US 
>112).  Excise taxes are:
>     ... taxes laid upon the manufacture, sale or consumption of commodities 
>     within the country, upon licensed to pursue certain occupations and 
>     upon corporate privileges.  Flint v. Stone Tracy Co., 220 US 110.
>If the Constitution prohibits taxes collected from United States Citizens by 
>any department of government but the legislature, and if the income tax is 
>collected by the executive department (which department is authorized to 
>enforce the law of nations), then an income tax collected by the Secretary 
>of Treasury can only be an excise laid upon an alien's privilege of pursuing 
>an occupation or otherwise deriving gain within the United States while 
>remaining loyal to his foreign sovereign; or upon a foreign-based United 
>States citizen's privilege of enjoying income from sources without the 
>United States.
>If the Founding Fathers of this nation were, as the Congress jointly 
>resolved in 1983, motivated by Scripture, we would expect them to pattern 
>their systems of excises and duties after the Bible.  And so they did:
>     ... What thinkest thou, Simon? of whom do the kings of the earth take 
>     custom or tribute? of their own children, or of strangers?
>     Peter saith unto him, Of strangers.  Jesus saith unto him, Then are the 
>     children free.  [Matthew 17:25}
>Larry Becraft is an attorney from Huntsville, Alabama.
>This article is the result of Mr. Becraft, after a conversation with Leo 
>Masters.  It was put into its present form by F. Tupper Saussy and edited by 
>John Sasscer.  It is reprinted from `Reasonable Action', the newsletter of 
>Save-A-Patriot Fellowship.
>All who read this article are cautioned not to run down to the courthouse 
>and submit these findings of law and fact.  In most cases it would not help 
>due to the fact that prior actions were not based on this knowledge, and it 
>would most likely just create bad case law that can be used against others.
>[Reprinted from `Freedom League Newsletter', Aug/Sept 1987]

Paul Andrew Mitchell, Sui Juris      : Counselor at Law, federal witness 01
B.A.: Political Science, UCLA;   M.S.: Public Administration, U.C.Irvine 02
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_____________________________________: Law is authority in written words 09
As agents of the Most High, we came here to establish justice.  We shall 10
not leave, until our mission is accomplished and justice reigns eternal. 11
======================================================================== 12
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