Time: Tue Jun 03 10:20:25 1997
by primenet.com (8.8.5/8.8.5) with SMTP id GAA04430
for [address in tool bar]; Tue, 3 Jun 1997 06:03:39 -0700 (MST)
Date: Tue, 03 Jun 1997 06:03:04 -0700
To: pmitch@primenet.com
From: Paul Andrew Mitchell [address in tool bar] (by way of Paul Andrew Mitchell [address in tool bar])
Subject: SLS: force and effect of regulations in CFR
[This text is formatted in Courier 11, non-proportional spacing.]
MEMO
TO: John Voss, Director, N.C.B.A.
other interested parties
FROM: John E. Trumane
Account for Better Citizenship
DATE: June 9, 1992
SUBJECT: Do the regulations in 26 CFR
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 the IRC makes nobody liable for
federal income taxes.
This argument was defeated by reference to clear sections of
the IRC 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 CFR 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 CFR 1.1-1(b)]
# # #
========================================================================
Paul Andrew, Mitchell, B.A., M.S. : Counselor at Law, federal witness
email: [address in tool bar] : Eudora Pro 3.0.2 on Intel 586 CPU
web site: http://www.supremelaw.com : library & law school registration
ship to: c/o 2509 N. Campbell, #1776 : this is free speech, at its best
Tucson, Arizona state : state zone, not the federal zone
Postal Zone 85719/tdc : USPS delays first class w/o this
========================================================================
Return to Table of Contents for
Supreme Law School: E-mail