This document, together with the CD-ROM attached hereto, is Attachment #2 to the letter, dated May 10, 2004, from Robert L. Schulz to Treasury Secretary John Snow and Attorney General John Ashcroft.
The CD-ROM, attached to and made a part hereof, contains the full text of this document beginning with “Analysis of the Federal Income Tax Laws” on page 5, PLUS all the Statutes At Large, CFR regulations, Treasury Delegation Orders, court rulings and other documentary evidence referred to in this document.
All the information on the CD-ROM, with the exception of the Summary and the questions at the end, are the result of research by a highly qualified, licensed tax professional, who wishes to remain anonymous.
This Attachment provides irrefutable evidence in support of the People’s proposition that the Executive has been deliberately and fraudulently taxing the People in a way that violates the fundamental law and Supreme Court rulings. The Executive is clearly prohibited from doing what it is doing – taxing the salaries, wages and compensation of the working men and women of this country and forcing the business entities that utilize the labor of ordinary American citizens to withhold and turn over to the IRS a part of the earnings of those workers.
After the SUMMARY at the end of this document, there are five questions that the People demand be answered on July 19, 2004 in a recorded public forum at the National Press Club in Washington, DC. The questions are aimed at reconciling differences between Congressional mandates regarding the taxation of “income” and the current law enforcement practices of the Justice Department and the IRS.
The five questions are derived from the list of 537 questions contained in our Petition for Redress regarding the operation and enforcement of the federal “income” tax system.
This Attachment is to be read together with Attachment #1. At
the end of Attachment #1 are 38 questions aimed at reconciling the
difference between the Supreme Court’s explicit legal definition of the term
“income” and that utilized by the Executive branch in its enforcement of the
so-called “income tax”.
Overview of “Analysis of the Federal Income Tax Laws”
Attachment #2 is a profound, exhaustive compendium of new legal research that may well portend the end of the individual “income” tax system as we know it because it lays to rest, ANY claim the Government has made asserting there is a bona fide legal authority for taxing the wages and salaries of ordinary Americans. The compendium's key research claims are extensively documented with full citations and backed with annotated photocopies of original historical legal documents from the National Archives and other sources.
The research is a detailed examination of the authority to tax “incomes” from several frameworks, each leading to the inescapable, irrefutable conclusion that the federal government DOES NOT possess ANY legal authority -- statutory or Constitutional -- to tax the wages or salaries of American workers.
The research report is organized into several major segments that are outlined in the “Overview” immediately below. Each segment, taken alone or with the others, leads to a single conclusion: The income tax laws of the U.S. do not apply to ordinary Americans.
Central to this research are new revelations about revisions that were made to the Income Tax Law immediately following the January, 1916 Supreme Court Brushaber decision.
According to the report, in 1913, just months after the purported ratification of the 16th Amendment, Congress attempted to stretch the meaning of the legal term “income” beyond the meaning and intent of the framers of the 16th Amendment, as recorded in EVERY official and professional document of the era: congressional record, congressional reports, law reviews, journals of political science, newspapers of record and so forth.
In the Income Tax Act of 1913, Congress surreptitiously, by stealth and without authority, included an un-apportioned, direct tax on the salaries, wages and compensation of ordinary Americans and instituted withholding at the source.
However, in 1916, the Supreme Court brought the devilish action of Congress and the Executive branch to a screeching halt. The Supreme Court ruled in Brushaber (and the cases bundled with it), that wages are NOT income within the meaning of the 16th Amendment.
As the research documents, Congress was then forced to amend the Income Tax Act, to remove salaries, wages and compensation from the definition of taxable income, to outlaw the withholding of wages from the paychecks of citizens and to direct the Executive Department to refund all wages withheld. All this, of course was done to bring the law into compliance with Brushaber.
What the research also shows, however, was the dark side of the government – the reluctance of Congress to give up the tax potential of an un-apportioned, direct tax on labor (and the power and control that tax-money brings), and Congress’ willingness to deliberately obfuscate the law in order to perpetuate a fraud on the American people.
Clearly, as Phil Hart’s research demonstrates so well, the Supreme Court's decision in Brushaber substantially affected the government’s interpretation of the definition of “income” within the meaning of the fundamental law, and “to whom” and “where” the income tax could apply. The Brushaber Court specifically concluded that the 16th Amendment gave Congress no new powers of taxation, meaning direct taxes fell outside of the meaning of the 16th Amendment and still had to satisfy the fundamental criteria of apportionment.
As the research clearly proves, the Brushaber decision prompted Congress to revise the 1913 Act, and via Section 25 of the Federal Income Tax Act of 1916 (amended in 1917), Congress declared that the "income" subject to the 1913 Act was not the same “income” to be taxed under the 1916 Act. However, Congress did not go any further. What was the purpose of this change in the language, and by extension, its legal effect?
CONGRESS PURPOSELY AND DECEITFULLY DID NOT EXPLAIN WHAT WAS MEANT BY SECTION 25.
One theory of the meaning of Section 25 of the 1916 Act is based on LOCATION, that Section 25 removed the application of the un-apportioned direct “income” tax on salaries, wages and compensation of ordinary Americans living and working at home, leaving the application of the un-apportioned direct “income” tax on salaries, wages and compensation of non-resident aliens and American citizens living and working abroad.
This, it is argued by anonymous, is the reason that not a single federal income tax act since 1916 has ever mentioned the imposition of an un-apportioned direct “income” tax on the salaries, wages and compensation of citizens "at home," although the same acts repeatedly mention citizens abroad and particularly those in the insular possessions.
Evidence of this solely external, “locational” application of the un-apportioned direct “income tax” on salaries, wages and compensation is demonstrated by the report in several ways. First, the research shows the IRS Commissioner has been delegated via Treasury Delegation Orders (TDO), published in the Federal Register, authority to administer an un-apportioned direct tax on salaries, wages and compensation only in the area external to the boundaries of the 50 states of the Union. If the Commissioner has been delegated authority to administer an un-apportioned direct tax on salaries, wages and compensation in the area internal to the boundaries of the 50 states of the Union, that authority has not been published in the Federal Register and is a secret, so it could not concern American citizens "at home," without violating their due process Rights.
Further, while federal income tax returns are allegedly required to be filed at IRS service centers, the Administrative Procedures Act demands that any part of an agency's field structure that affects the domestic American public must be published in the Federal Register. The absence of publication in the Federal Register of these extremely important parts of the IRS field structure further indicates that the service centers do not legally affect the domestic American public and can, therefore, be ignored by the ordinary American wage earner living and working at home.
But perhaps the most compelling proof of the “locational” application of the federal income tax, according to the research report, is derived from analysis of the IRS' compliance with the Paperwork Reduction Act. The federal “income” tax is purportedly imposed via Section 1 of the IRC. But the "information collection request" applicable to the Subtitle A income tax is NOT as one would expect -- Form 1040, but rather Form 2555, entitled "Foreign Earned Income." Further as shown by the OMB control number assigned to 26 C.F.R. § 1.6091-3, the specific tax return required to be filed at service centers is Form 1040NR. And a "TIN" can only be obtained by a non-resident alien, according to Form W-7.
Another theory of the meaning of Section 25 of the 1916 Act is that Congress was forced by Brushaber to classify people, distinguishing between aliens and citizens, imposing no un-apportioned direct tax on the salaries, wages and compensation of American citizens, no matter where they live and work, but authorizing an un-apportioned direct tax on the salaries, wages and compensation on resident aliens working here and on employees of the federal government who voluntarily agreed to labor for the government.
Countering the “location” theory and in support of this “classification” theory is the argument that the fundamental law prohibits the imposition of an un-apportioned tax directly on the salaries, wages and compensation of American citizens, no matter where they may be living and working, and there is no Supreme Court ruling that an un-apportioned tax can be imposed directly on the salaries, wages and compensation of American citizens living and working abroad.
This new research cohesively documents a decades-long paper trail of federal legislation, administrative regulations and orders, and court documents that disturbingly, never make reference to the tax liability of Americans living and working within the boundaries of the several states of the Union.
Additional topics in the Attachment address the disquieting lack of statutorily required publication of documents that establish the jurisdiction of the IRS, that document the structure and location of the IRS organization and its operations, and that formally delegate legal authority from the Secretary of Treasury to the IRS Commissioner to collect a tax on the salaries, wages and compensation of ordinary Americans.
The Administrative Procedure Act requires the IRS, Social Security Administration and Department of Treasury to publish in the Federal Register the details of their organizational structure and delegated authority regarding the collection of any tax on the salaries, wages and compensation of ordinary Americans, living and working at home. The APA requires publication of all legal matters that are of "general applicability and legal effect." This new research proves the IRS, SSA and Treasury have routinely ignored these explicit legal requirements, meaning the People are not compelled to comply with attempts by the Executive to tax their salaries, wages and compensation.
The research contains a full chronology of Treasury Delegation Orders, Tax Acts and assorted documents that show IRS and Treasury have NO authority to enforce the income tax laws in the fifty states against ordinary Americans. The research also establishes how the IRS has blatantly evaded the Congressional mandates of the Paperwork Reduction Act which provides the legal cross-reference “links” between official U.S. Government forms, (such as Form 1040) and the regulations which require their use by law.
The research includes historical key word “indexes” from the Federal Register, IRS Cumulative Bulletins, and private code publishers like West Publishing all showing virtually NO legal references to American “citizens” with regard to the U.S. Internal Revenue laws.
The research contains a decade worth of Form 1040 Instruction
booklets, each one failing to provide any specific instruction that
requires reporting domestic wages as “gross income”.
In short, this research compendium contains never before examined legal documents that irrefutably establish that the texts of the Revenue Acts authored by the U.S. Congress (the Statutes At Large) were changed in 1916 to specifically EXCLUDE the taxing of wages and salaries of ordinary American citizens in order to comply with the Supreme Court's holding in Brushaber.
Additionally, this research documents IRS's open refusal (or
inability), to file in the Federal Register any number of statutorily
required legal documents formally establishing its legal authority (such
as Treasury Delegation Orders), and its refusal (or inability) to
comply with the statutory requirements of the Administrative Practices Act
and the Paperwork Reduction Act. This evidence indicates beyond refutation,
that the IRS does NOT possess ANY legal authority to enforce any direct
tax on wages (including Social Security taxes), against ordinary,
NOTE: This page is an OVERVIEW of the research contained in Attachment #2.