Time: Thu Mar 27 06:00:14 1997
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Date: Thu, 27 Mar 1997 05:59:10 -0800
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From: Paul Andrew Mitchell [address in tool bar]
Subject: SLS: SNET: Is The IRS Code Constitutional? (fwd)
<snip>
>SearchNet's SNETNEWS Mailing List
>
>Lets start with the Constitution of the United States:
>
>ARTICLE I, Section 2, Clause 3 -
>
>Representatives [and direct taxes] {Altered by 16th Amendment}
>shall be apportioned among the several States which may be included
>within this Union, according to their respective numbers, [which
>shall be determined by adding the whole number of free persons,
>including those bound to service for a term of years, and excluding
>Indians not taxed, three-fifths of all other persons.] {Altered by
>14th Amendment} The actual enumeration shall be made within three
>years after the first meeting of the Congress of the United States,
>and within every subsequent term of ten years, in such manner as
>they shall by law direct. The number of Representatives shall not
>exceed one for every thirty thousand, but each State shall have at
>least one Representative; and until such enumeration shall be
>made, the State of New Hampshire shall be entitled to choose three,
>Massachusetts eight, Rhode Island and Providence Plantations one,
>Connecticut five, New York six, New Jersey four, Pennsylvania
>eight, Delaware one, Maryland six, Virginia ten, North Carolina
>five, South Carolina five, and Georgia three.
>
>ARTICLE 1, Section 9, Clause 4 -
>
>[No capitation, or other direct tax shall be laid unless in
>proportion to the census or enumeration herein before directed to
>be taken.] {Altered by 14th Amendment}
>
>AMENDMENT XVI - Passed by Congress July 2, 1909. Ratified February
>3, 1913.
>
>The Congress shall have power to lay and collect taxes on incomes,
>from whatever sources derived, without apportionment among the
>several States, and without regard to any census or enumeration.
>---
>
>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.
>
>UNITED STATES CODE
> TITLE 26 - INTERNAL REVENUE CODE
> Subtitle A - Income Taxes
> CHAPTER 1 - NORMAL TAXES AND SURTAXES
> PART I - 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 statue --ONLY-- is the
>law, they would most likely consider that the words in the title of
>Part 1 imposed an income tax on individuals.
>---
> ' 1. Tax imposed.
>
> (a) Married individuals filing joint returns and surviving
> spouses
> There is hereby imposed on the taxable income of -
> (1) every married individual (as defined in section
> 7703) who makes a single return jointly with
> his spouse under section 6013, and
> (2) every surviving spouse (as defined in section 2(a)),
> a tax determined in accordance with the following
> table:
>
> (b) Heads of households
> There is hereby imposed on the taxable income of every head of
> a household (as defined in section 2(b)) a tax determined in
> accordance with the following table:
>
> (c) Unmarried individuals (other than surviving spouses and
> heads of households)
> There is hereby imposed on the taxable income of every
> individual (other than a surviving spouse as defined in
> section 2(a) or the head of a household as defined in
> section 2(b)) who is not a married individual (as defined
> in section 7703) a tax determined in accordance with the
> following table:
>
> (d) Married individuals filing separate returns
> There is hereby imposed on the taxable income of every married
> individual (as defined in section 7703) who does not make a
> single return jointly with his spouse under section 6013, a
> tax determined in accordance with the following table:
>
> (e) Estates and trusts
> There is hereby imposed on the taxable income of -
> (1) every estate, and
> (2) every trust, taxable under this subsection a tax
> determined in accordance with the following table:
>
><etc.>
>---
>
>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 realized 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 is
>imposed on "taxable income," NOT on people, and therefore does not
>conflict with the constitutional limitations prohibiting direct
>taxation of the people.
>
>UNITED STATES CODE
> TITLE 26 - INTERNAL REVENUE CODE
> Subtitle F - Procedure and Administration
> CHAPTER 61 - INFORMATION AND RETURNS
> Subchapter A - Returns and Records
> PART II - TAX RETURNS OR STATEMENTS
> Subpart B - Income Tax Returns
>
>' 6012. Persons required to make returns of income
> (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
> gross income which equals or exceeds the
> exemption amount ....
>---
>
>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 who 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, 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.
>
>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 which equals or exceeds the exemption amount
>..." 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."
>
>UNITED STATES CODE
> TITLE 26 - INTERNAL REVENUE CODE
> Subtitle A - Income Taxes
> CHAPTER 1 - NORMAL TAXES AND SURTAXES
> Subchapter E - Accounting Periods and
> Methods of Accounting
> PART I - ACCOUNTING PERIODS
>
>' 441. Period for computation of taxable income
> (a) Computation of taxable income
> Taxable income shall be computed on the basis of the
> taxpayer's taxable year.
> (b) Taxable year
> For purposes of this subtitle, the term ''taxable year''
> means -
> (1) the taxpayer's annual accounting period, if it is a
> calendar year or a fiscal year;
> (2) the calendar year, if subsection (g) applies;
> (3) the period for which the return is made, if a return
> is made for a period of less than 12 months; or
> (4) in the case of a FSC or DISC filing a return for a
> period of at least 12 months, the period determined
> under subsection (h).
>
><etc.>
>---
>
>Note that Section 441 defines this 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."
>
>Going further, we determine the definition of the term,
>"taxpayer." "Taxpayer" is also a legal term defined in the IRC.
>
>UNITED STATES CODE
> TITLE 26 - INTERNAL REVENUE CODE
> Subtitle F - Procedure and Administration
> CHAPTER 79 - DEFINITIONS
>
>' 7701. Definitions
> (a) (14) Taxpayer
> The term ''taxpayer'' means any person subject to any internal
> revenue tax.
>---
>
>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." The IRC also defines a
>"person."
>
>' 7701. Definitions
> (a) (1) Person
> The term ''person'' shall be construed to mean and include an
> individual, a trust, estate, partnership, association, company
> or corporation.
>---
>
>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 US 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 US 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," 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.
>
>UNITED STATES CODE
> TITLE 26 - INTERNAL REVENUE CODE
> Subtitle A - Income Taxes
> CHAPTER 1 - NORMAL TAXES AND SURTAXES
> Subchapter B - Computation of Taxable Income
> PART I - DEFINITION OF GROSS INCOME,
> ADJUSTED GROSS INCOME, TAXABLE
> INCOME, ETC.
>
>' 61. Gross income defined
> (a) General definition
> Except as otherwise provided in this subtitle, gross income
> means all income from whatever source derived, including
> (but not limited to) the following items:
> (1) Compensation for services, including fees,
> commissions, fringe benefits, and similar items;
> (2) Gross income derived from business;
> (3) Gains derived from dealings in property;
> (4) Interest;
> (5) Rents;
> (6) Royalties;
> (7) Dividends;
> (8) Alimony and separate maintenance payments;
> (9) Annuities;
> (10) Income from life insurance and endowment contracts;
> (11) Pensions;
> (12) Income from discharge of indebtedness;
> (13) Distributive share of partnership gross income;
> (14) Income in respect of a decedent; and
> (15) Income from an interest in an estate or trust.
>---
>
>The claim 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
>penalties 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 Constitution
>of the united States -- 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, these are the observation 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 penalties 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 facie
>evidence (evidence with 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 conflict."
>
>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 "wilful failure to file" are pressed,
>the defendant is tried as a "taxpayer," not as an individual
>possessing 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 for CONSTRUCTIVE FRAUD needed for
>retroactive revocation and repudiation of all previously executed
>IRS documents to prevent their use as prima facie evidence in bout
>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
>--
>Tony Sgarlatti
>
>tonys@the-truth.org
>Lots of IRS protester links -
>http://www.future.net/~thetruth/
>The Million Dollar Internet Experiment -
>http://www.future.net/~thetruth/million.html
>
>"What luck for rulers that men do not think."
> -- Adolf Hitler
>
>-> Send "subscribe snetnews " to majordomo@world.std.com
>-> Posted by: tfs@adc.com (Tony F Sgarlatti)
>
>
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