IRS EXPOSED!

So you thought the IRS was created to collect taxes in the 50 States. Think

again! According to this very telling historical information the IRS has no

jurisdiction over the 50 Several States and was actually formed to

administer tax collections for Washington D. C, Puerto Rico and other

insular possessions of the United States ONLY!

DISCLAIMER

The following information was provided with the signatory's permission for

you to review via the internet. This document was presented in court by the

Defendant listed when he was challenged by the IRS. The judge in the case

read the Defendant's Notice document and dismissed the case.

We have not fully verified the accuracy of the citations within this

document. It is presently being reviewed by competent legal counsel. You are

responsible to verify any and all information for your own use.

Public Notice

This memorandum will be construed to comply with provisions necessary to

establish presumed fact (Rule 301, Federal Rules of Evidence, and attending

State rules) should interested parties fail to rebut any given allegation or

matter of law addressed herein. The position will be construed as adequate

to meet requirements of judicial notice, thus preserving fundamental law.

Matters addressed herein, if not rebutted, will be construed to have general

application. A true and correct copy of this Public Notice is on file with

and available for inspection at the newspaper responsible for publishing the

instrument as legal notice. The memorandum addresses the character of the

Internal Revenue Service and other agencies of the Department of the

Treasury, and legal application of the Internal Revenue Code.

I. IRS Identity & Principal of Interest

In 1953, the Internal Revenue Service was created by the stroke of a pen

when the Secretary of the Treasury changed the name of the Bureau of

Internal Revenue (T.O. No. 150-29, G.M. Humphrey, Secretary of the Treasury,

July 9, 1953). However, no congressional or presidential authorization for

making this change has been located, so the source of authority had to

originate elsewhere. Research to which IRS officials have acquiesced

suggests that the Secretary exercised his authority as trustee of Puerto

Rico Trust #62 (Internal Revenue) (see 31 USC § 1321), and as will be

demonstrated, the Secretary does, in fact, operate as Secretary of the

Treasury, Puerto Rico.

The solid link between the Internal Revenue Service and the Department of

the Treasury, Puerto Rico, was first published in the September 1995 issue

of Veritas Magazine, based on research by William Cooper and Wayne Bentson,

both of Arizona. In October, a criminal complaint was filed in the office of

W.A. Drew Edmondson, attorney general for Oklahoma, against an Enid-based

revenue officer, and in the time since, IRS principals have failed to refute

the allegation that IRS is an agency of the Department of Treasury, Puerto

Rico. In November, criminal complaints were filed simultaneously with the

grand jury for the United States district court for the District of Northern

Oklahoma, Tulsa and the office of Attorney General Edmondson, and both the

office of the United States Attorney and IRS principals have yet to rebut

the allegations in that instance (UNITED STATES OF AMERICA vs. Kenney F.

Moore, et al. 95 CR-129C). By consulting the index for Chapter 3, Title 31

of the United States Code, one finds that IRS and the Bureau of Alcohol,

Tobacco and Firearms are not listed as agencies of the United States

Department of the Treasury. The fact that Congress never created a "Bureau

of Internal Revenue" is confirmed by publication in the Federal Register at

36 F.R. 849-890 [C.B. 1971 - 1.698], 36F.R. 11946 [C.B.1971-2.577], and 37

F.R. 489-490; and in Internal Revenue Manual 1100 at 1111.2.

Implications are condemning both to IRS and third parties who knowingly

participate in IRS-initiated scams: No legitimate authority resides in or

emanates from an office which was not legitimately created and/or ordained

either by state or national constitutions or by legislative enactment. See

variously. United States v. Germane, 99 U.S. 508 (1879), Norton v. Shelby

County, 118 U.S. 425, 441, 6 S.Ct. 1121 (1866), etc., dating to Pope v.

Commissioner, 138 F.2d 1006, 1009 (6th Cir. 1943); where the state is

concerned, the most recent corresponding decision was State v. Pinckney, 276

N.W.2d 433,436 (Iowa 1979).

Another direct evidence of fraud is found at 27 CFR § 1, which prescribes

basic requirements for securing permits under the Federal Alcohol

Administration Act. The problem here is that Congress promulgated the Act in

1935, and the same year, the United States Supreme Court declared the Act

unconstitutional. Administration of the Act was subsequently moved offshore

to Puerto Rico, along with the Federal Alcohol Administration, and operation

eventually merged with the Bureau of Internal Revenue, Puerto Rico, which

until 1938, along with the Bureau of Internal Revenue, Philippines, created

by the Philippines provisional government via Philippines Trust #2 (internal

revenue) (see 31 USC § 1321 for listing of Philippines Trust #2 (internal

revenue), administered the China Trade Act (licensing & revenue collection

relating to opium, cocaine & citric wines).

This line will be resumed after examining additional evidences concerning

IRS and Commissioner of Internal Revenue authority. Further verification

that IRS does not have lawful authority in the several States is found in

the Parallel Table of Authorities and Rules, beginning on page 751 of the

1995 Index volume to the Code of Federal Regulations. It will be found that

there are no regulations supportive of 26 USC §§ 7621, 7801, 7802 & 7803

(these statute listings are absent from the table). In other words, no

regulations have been published in the Federal Register, extending authority

to the several States and the population at large. (1) to establish revenue

districts within the several States, (2) extending authority of the

Department of the Treasury [Puerto Rico] to the several States, (3) giving

authority to the Commissioner of Internal Revenue and assistants within the

several States, or (4) extending authority of any other Department of

Treasury personnel to the several States.

Authority of the Internal Revenue Service, via the Commissioner of Internal

Revenue, is convoluted in regulations, but makes an amount of sense by

citing various regulations pertaining to the Service and application of the

Commissioner's authority. General procedural rules at 26 CFR § 601.101(a)

provide a beginning-point: (a) General. The Internal Revenue Service is a

bureau of the Department of the Treasury under the immediate direction of

the Commissioner of Internal Revenue. The Commissioner has general

superintendence of the assessment and collection of all taxes imposed by any

law providing internal revenue. The Internal Revenue Service is the agency

by which these functions are performed...

The fact that there are no regulations extending Commissioner of Internal

Revenue, or Department of the Treasury authority to the several States [26

USC § 7802(a)], has greater clarity in the light of the general merging of

functions between IRS and other agencies presently attached to the

Department of the Treasury. The Commissioner is given responsibility for

issuing rules and regulations for the Code at 26 CFR § 301.7805-1, with

approval of the Secretary, but there are no cites of authority for this CFR

subpart, whether Treasury Order, publication in the Federal Register, or

even statute cite. In other words, there is no actual or effective

delegation which vests the Commissioner with significant independent

authority which might be conveyed to IRS. BATF, Customs or any other

Department of the Treasury agency with respect to powers extending to or

affecting the several States and the population at large.

The link between IRS and the Bureau of Alcohol, Tobacco and Firearms is

significant as the tie with the Bureau of Internal Revenue, Department of

the Treasury, Puerto Rico, is through this door. Reorganization Plan No. 3

of 1940 Section 2, made the following change: § 2. Federal Alcohol

Administration The Federal Alcohol Administration, the offices of the

members thereof, and the office of the Administrator are abolished, and

their function shall be administered under the direction and supervision of

the Secretary of the Treasury through the Bureau of Internal Revenue in the

Department of the Treasury.

Again, the Federal Alcohol Administration Act of 1935 was declared

unconstitutional in 1935, and the operation thereafter transferred off shore

to Puerto Rico. The name of the Bureau of Internal Revenue was changed to

the Internal Revenue Service in 1953 (cite above), then the Bureau of

Alcohol, Tobacco and Firearms, a division of the Internal Revenue Service,

was seemingly separated from IRS ( T.O. 120-01, June 6, 1972).

In relevant part, the order reads as follows:

1. The purpose of this order is to transfer, as specified herein, the

functions, powers and duties of the Internal Revenue Service arising under

law relating to Alcohol, Tobacco, Firearms and Explosives including the

Alcohol, Tobacco, and Firearms division of the Internal Revenue Service, to

the Bureau of Alcohol, Tobacco and Firearms herein after referred to as the

Bureau which is hereby established. The Bureau shall be headed by the

Director of the Alcohol, Tobacco and Firearms herein referred to as the

Director...

2. The Director shall perform the functions, exercise the powers and carry

out the duties of the Secretary and the administration and the enforcement

of the following provisions of law:

A. Chapters 51 and 52 and 53 of the Internal Revenue Code of 1954 and

Section 7652 and 7653 of such code insofar as they relate to the commodity

subject to tax under such chapters.

B. Chapter 61 to 80 inclusive to the Internal Revenue Code of 1954 insofar

as they relate to activities administered and enforced with respect to

chapters 51, 52, 53. (emphasis added)

Transfer of functions and duties of IRS to BATF relative to Internal Revenue

Code Subtitle F (chapters 61 to 80) is important where the instant matter is

concerned as the only regulations published in the Federal Register

applicable to the several States are under 27 CFR, Part 70 and other parts

of this title relating exclusively to alcohol, tobacco and firearms matters.

However, the charade doesn't end there. In Reorganization Plan No. 1 of 1965

(5 USC § 903), the original Bureau of Customs, created by Act of Congress in

1895, was abolished and merged under the Secretary of the Treasury. In a

Treasury Order published in the Federal Register of December 15, 1976, the

Secretary of the Treasury used something of a slight of hand to confuse

matters more by determining, "The term Director. Alcohol, Tobacco and

Firearms has been replaced with the term Internal Revenue Service."

Obviously, it is impossible to replace a person with a thing when it comes

to administrative responsibility. However, the order demonstrates that IRS

and BATF are one and the same, merely operating with interchangeable hats.

Therefore, definitions and designations applicable to one are applicable to

the other.

In definitions at 27 CFR § 250.11, the following provisions are found:

Revenue Agent. Any duly authorized Commonwealth Internal Revenue Agent of

the Department of the Treasury of Puerto Rico.

Secretary. The Secretary of the Treasury of Puerto Rico.

Secretary or his delegate. The Secretary or any officer or employee of the

Department of the Treasury of Puerto Rico duly authorized by the Secretary

to perform the function mentioned or described in this part.

In the absence of any other definition describing revenue officers and

agents, the Secretary, or the Department of the Treasury, definitions above

are uniformly applicable to all IRS and BATF departments, functions and

personnel. In fact, it will be found that even petroleum tax prescribed in

Subtitle D of the Internal Revenue Code applies only to United States

territorial jurisdiction exclusive of the several States and to imported

petroleum. BATF has authority only with respect to firearms, munitions,

etc., produced outside the several States and the first sale of imports. The

two delegations of authority to the Commissioner of Internal Revenue thus

far located tend to reinforce conclusions set out above.

Treasury Department Order No. 150-42, dated July 27, 1956, appearing in at

21 Fed. Reg. 5852, specifies the following:

The Commissioner shall, to the extent of the authority vested in him,

provide for the administration of United States internal revenue laws in the

Panama Canal Zone, Puerto Rico and the Virgin Islands.

On February 27, 1986 (51 Fed. Reg. 9571), Treasury Department Order No.

150-01 specified the following:

The Commissioner shall, to the extent of authority otherwise vested in him

provide for the administration of the United States internal revenue laws in

the U.S. Territories and insular possessions and other authorized areas of

the world.

To date only three statutes in the Internal Revenue Code of 1986, as

currently amended, have been located that specifically reference the several

States, exclusive of the federal States (District of Columbia, Puerto Rico,

Guam, the Virgin Islands, etc.): 26 USC §§ 5272(b), 5362(c) & 7462.

The first two provide certain exemptions to bond and import tax requirements

relating to imported distilled spirits for governments of the several States

and their respective political subdivisions, and the last provides that

reports published by the United States Tax Court will constitute evidence of

the reports in courts of the United States and the several States. None of

the three statutes extend assessment or collections authority for IRS or

BATF within the several States.

IRS is contracted to provide collection services for the Agency for

International Development, and case law demonstrates that the true

principals of interest are the International Monetary Fund and the World

Bank (Bank of the United States v. Planters Bank of Georgia, 6 L.Ed (Wheat)

244; U.S. v. Burr, 309 U.S. 242; see 22 USCA § 286, et. seq.).

In other words, IRS seemingly provides collection services for undisclosed

foreign principals rather than collecting internal revenue for the benefit

of constitutional United States government operation. To date, IRS

principals have failed to dispute the published Cooper/Bentson allegation

that the agency, via these foreign principals, funded the enormous tank and

military truck factory on the Kama River, Russia. The Internal Revenue

Service, a foreign entity with respect to the several States, is not

registered to do business in the several States.

II. Preservation of Due Process Rights

The Internal Revenue Service has for years been protected by statutory

courts both of the United States and the several States, with the latter

operating in the framework of adopted uniform laws which ascribe a federal

character to the several States. Both operate under the presumption of

Congress' Article IV jurisdiction within the geographical United States (the

District of Columbia, Puerto rico, etc.). both accommodate private

international law under exclusively United States treaties on private

international law, and both operate in the framework of admiralty rules to

impose Civil Law (see both majority & dissenting opinions variously, Bennis

v. Michigan, U. S. Supreme Court No. 94-8729, March 4, 1996), which is

repugnant to both state and national constitutions (see authority of

Department of Justice as representative of the "Central Authority"

established by U.S. treaties on private international law at 28 CFR § 0.49;

also, "conflict of law" as a subcategory to "statutes" in American

Jurisprudence).

However, this house of cards will shortly fall as Cooperative Federalism,

known as Corporatism well into the 1930s, has been thoroughly documented and

is rapidly being exposed via state and United States appellate courts and in

public forum. In reality, the Internal Revenue Code preserves due process

rights, but the statute has been dormant until recently:

[Sec. 7804(b)] (b) PRESERVATION OF EXISTING RIGHTS AND REMEDIES. - Nothing

in Reorganization Plan Numbered 26 of 1950 or Reorganization Plan Numbered 1

of 1952 shall be considered to impair any right or remedy, including trial

by jury, to recover any internal revenue tax alleged to have been

erroneously or illegally assessed or collected, or any penalty claimed to

have been collected without authority, or any sum alleged to have been

excessive or in any manner wrongfully collected under the internal revenue

laws. For the purpose of any action to recover any such tax, penalty, or

sum, all statutes, rules, and regulations referring to the collector of

internal revenue, the principal officer for the internal revenue district,

or the Secretary, shall be deemed to refer to the officer whose act or acts

referred to in the preceding sentence gave rise to such action. The venue of

any such action shall be the same as under existing law.

The reorganization plans of 1950 & 1952 were implemented via the Internal

Revenue Code of 1954, Volume 68A of the Statutes at Large, and codified as

title 26 of the United States Code. Savings statutes have been in place

since the beginning, but generally not understood by the general population

or the legal profession. The statute set out above is easier to comprehend

when references are consolidated. Further, the dependent clause "including

trial by jury" relates to a constitutionally-assured right, not a remedy, so

it should be moved to the proper location in the sentence.

Finally, the matter of venue is important as "existing law" is

constitutional and common law indigenous to the several States. In the

absence of legitimate federal law which extends to the several States, those

who operate under color of law, engage in oppression, extortion, etc., are

subject to the foundation law of the States. Venue is determined by the law

of legislative jurisdiction. Citing "including trial by jury" preserves the

full slate of the process rights included in Fourth, Fifth, Sixth, Seventh

and Fourteenth Amendments to the Constitution for the united States of

America and corresponding provisions in constitutions of the several States.

The example represents the class.

Additionally, note that, (1) actions may issue against bogus assessments as

well as collections, and (2) § 7804(b), unlike § 7433, does not presume that

the complaining party is a "taxpayer". Finally, there is 26 CFR, Part 1

regulatory support for § 7804 where there are no regulations published in

the Federal Register in support of § 7433 (see Parallel Table of Authorities

and Rules, beginning on page 751 of the Index volume to the Code of Federal

Regulations). Therefore, § 7804(b) preserves rights and determines the

nature of civil actions for remedies in the several States.

When straightened out, applicable portions of § 7804(b) reads as follows:

Nothing in [the Internal Revenue Code] shall be considered to impair any

right, [including trial by jury], or remedy, to recover any internal revenue

tax alleged to have been erroneously or illegally assessed or collected...

The venue of any such action shall be the same as under existing law.

The necessity of due process is implicitly preserved by 28 USC § 2463, which

stipulates that any seizure under United States revenue laws will be deemed

in the custody of the law and subject solely to disposition of courts of the

United States with proper jurisdiction. In other words, even if IRS had

legitimate authority in the several States, the agency would of necessity

have to file a civil or criminal complaint prior to garnishment, seizure or

any other action adversely affecting the life, liberty or property of any

given person, whether a Fourteenth Amendment citizen-subject of the United

States or a Citizen principal of one of the several States.

Due process assurances in the Fifth and Fourteenth Amendment do not

equivocate - administrative seizures without due process can be equated only

to tyranny and barbarian rule. Further, even regulations governing IRS

conduct acknowledge and therefore preserve Fifth Amendment assurances at 26

CFR § 601.106(f)(1). (1) Rule 1. An exaction by the U.S. Government, which

is not based upon law, statutory or otherwise, is a taking of property

without due process of law, in violation of the Fifth Amendment to the U.S.

Constitution. Accordingly, and Appeals representative in his or her

conclusions of fact or application of the law, shall hew to the law and the

recognized standards of legal construction. It shall be his or her duty to

determine the correct amount of the tax, with strict impartiality as between

the taxpayer and the Government, and without favoritism or discrimination as

between taxpayers. Even officers, agents and employees of United States

agencies are assured due process where garnishment is concerned (5 USC §

5520a), so the notion that IRS has authority to execute garnishment and

other seizures via the private sector without due process is clearly absurd.

In the English-American lineage, due process has always been deemed to mean

trial by jury under rules of the common law indigenous to the several

States, the de jure people of America are not subject to admiralty or

administrative tribunals. Where officer, agents and employees of the

Internal Revenue Service are concerned, there can be no plea of ignorance

concerning the necessity of due process as the Handbook for Revenue Agents,

at paragraph 332: (1), provides the following: During the course of

administratively collecting a tax, an occasion may arise where service of a

levy or a notice of levy is not adequate to seize the property of a

taxpayer. It cannot be emphasized too strongly that constitutional

guarantees and individual rights must not be violated. Property should not

be forcibly removed from the person of the taxpayer. Such conduct may expose

a revenue officer to an action in trespass, assault and battery, conversion,

etc.

The provision acknowledges the Supreme Court decision in Larson v. Domestic

and Foreign Commerce Corp. 337 U.S. 682 (1949). In sum, the mandate for due

process, meaning initiatives through judicial courts with proper

jurisdiction is clearly antecedent to imposition of administratively-issued

liens, except where licensing agreements obligate assets, or seizures,

whether by garnishment, attachment of bank accounts, administrative seizure

and sale of real or private property, or any other initiative that

compromises life, liberty or property.

III. Current Internal Revenue Code & Internal Revenue Code of 1939 Are Same

Consult 26 USC §§ 7851 & 7852 to verify that the Internal Revenue Code of

1954, as amended in 1986 and since, simply reorganized the Internal Revenue

Code of 1939. Read § 7852(b) & (c), then read the balance of §§ 7851 & 7852

for best comprehension.

The importance of making this connection rests on the fact that the Internal

Revenue Code of 1939 was merely codification of the Public Salary Tax Act of

1939. There was no general income tax levied against the population at large

in 1939 or since. The Public Salary Tax Act of 1939, which in the Internal

Revenue Code of 1939 incorporated the Social Security tax activated after

1936, was premised on the notion that working for federal government is a

privilege. Income and related taxes prescribed in Subtitles A & C of the

current Internal Revenue Code have never been mandatory for anyone other

than officers, agents and employees of the United States, as identified at

26 USC § 3401(c), and agencies of the United States, identified at §

3401(d), particularized at 5 USC §§ 102 & 105. The privilege tax is an

excise rather than direct tax - the Sixteenth Amendment, fraudulently

promulgated in 1913, did not alter or repeal Constitutional provisions which

require all direct taxes to be apportioned among the several States

(Constitution Article I §§ 2,3, & 9.4).

In Eisner v. Macomber, 252 U.S. 189 (1918), Coppage v. Kansas, 236 U.S. 1,

and numerous decisions since, the United States Supreme Court has repeatedly

affirmed that for purposes of income tax, wages and other returns from

enterprise of common right are property, not income. In fact, returns from

enterprise of common right are fundamental to all property, and the sanctity

is preserved as a fundamental common law principle dating to signing of the

Magna Charta in 1215. The nature of Subtitles A & C taxes is revealed at 26

CFR § 31.3101-1: "The employee tax is measured by the amount of wages

received after 1954 with respect to employment after 1936..." In other

words, the wage is not the object, but merely the measure of the tax. This

verbiage constitutes so much legalese in an effort to circumvent the duck

test, but the fact that taxes collected by the Internal Revenue Service fall

into the excise category was confirmed by the Comptroller General's report

following the initial effort to audit IRS (GAO/T-AIMD-93-3). It is further

suggested at 26 CFR § 106.401(a)(2), where the regulation concedes that,

"The descriptive terms used in this section to designate the various classes

of taxes are intended only to indicate their general character..."

By referencing the Parallel Table of Authorities and Rules, cited above, it

is found that the definition of "gross income" is still preserved in Section

22 of the Internal Revenue Code of 1939, thus cementing the link between the

Code of 1939 and Subtitles A & C of the Code of 1954, as amended in 1986 and

since. The Internal Revenue Code of 1939 merely codified the Public Salary

Tax Act of 1939.

This link is further confirmed in Senate Committee On Finance and House

Committee On Ways and Means reports No. H.R. 8300 (1954, Internal Revenue

Code), in which § 22 of the Internal Revenue Code of 1939 and § 61 of the

Internal Revenue Code of 1954 (current code) were solidly linked. Both

reports stipulate that the current definition of "gross income" is intended

to be Constitutional. This intent is articulated at 26 CFR § 1.61-1(a):

"Gross income means all income from whatever source derived, unless excluded

by law." An "Act of Congress" is policy, not law, and per definition located

in Rule 54, Federal Rules of Criminal Procedure, has only local application

in the District of Columbia and other United States territories and insular

possessions unless general application is manifestly expressed: Rule 54(c) -

"Act of congress' includes any act of Congress locally applicable to and in

force in the District of Columbia, in Puerto Rico, in a territory or in an

insular possession." Where the Internal Revenue Code of 1954 is concerned

(Vol. 68A, Statutes at Large, p. 3), the legislation is in fact styled, "An

Act" "To revise the internal revenue laws of the United States." As

demonstrated above, wages and other returns from enterprise of common right

are exempt from direct tax by fundamental law, and the regulation for the

current Internal Revenue Code definition for "gross income" clearly

articulates the fundamental law exemption.

The exemption as it pertains to the several States is demonstrated by

referencing the Parallel Table of Authorities and Rules (Index volume to the

CFR. p. 751 of the 1995 edition): There are 26 CFR, Part 1 regulations

listed for 26 USC §§ 61 & 62, the latter being the definition for adjusted

gross income, but there is no 26 CFR, Part 1 or 31 regulations for 26 USC §

63, the definition for taxable income. While definitions for gross and

adjusted gross income are clearly antecedent to the definition of taxable

income, they have no legal effect if there is no taxing authority - adjusted

gross income which is not taxable within the several States is of no

consequence where the federal tax system is concerned. Further, on

examination of 26 CFR § 1.62-1, pertaining to "adjusted gross income," it is

found that subsections (a) & (b) are reserved so the published regulation is

incomplete, with "temporary" regulation § 1.62-IT serving as the current

authority defining "adjusted gross income."

Temporary regulations have no legal effect. Definitions at § 3401, Vol. 68A

of the Statutes at Large (the Internal Revenue Code of 1954), make it clear

that, (§ 3401(a)(A)), "a resident of a contiguous country who enters and

leaves the United States at frequent intervals...," is a nonresident alien

of the United States (citizens and residents of the several States

included), and the exclusion from "wages" extends even to citizens of the

United States who provide services for employers "other than the United

States or an agency thereof" (§ 3401(a)(8)(A)).

IV. The Employer or Agent is Liable

Volume 68A of the Statues at Large, the Internal Revenue Code of 1954, makes

it perfectly clear who is "liable" for payment of Subtitles A & C taxes:

SEC.3504. ACTS TO BE PERFORMED BY AGENTS : In case a fiduciary agent, or

other person has the control, receipt, custody, or disposal of, or pays the

wages of an employee or group of employees, employed by one or more

employers, the Secretary of his delegate, under regulations prescribed by

him, is authorized to designate such fiduciary, agent, or other person to

perform such acts as are required by employers under this subtitle and as

the Secretary or his delegate may specify. Except as may be otherwise

prescribed by the Secretary of his delegate, all provisions of law

(including penalties) applicable in respect to an employer shall be

applicable to a fiduciary, agent, or other person so designated, but, except

as so provided, the employer for whom such fiduciary, agent, or other person

acts shall remain subject to the provisions of law (including penalties)

applicable in respect to employers.

The liability is further clarified at Vol. 68A. Sec. 3402(d):

(d) TAX PAID BY RECIPIENT - If the employer, in violation of the provisions

of this chapter, fails to deduct and withhold the tax under this chapter,

and thereafter the tax against which such tax may be credited is paid, the

tax so required to be deducted and withheld shall not be collected from the

employer, but this subsection shall in no case relieve the employer from

liability for any penalties or additions to the tax otherwise applicable in

respect to such failure to deduct and withhold.

These provisions from Vol. 68A of the Statutes at Large comply with and

verify liability set out at 26 CFR, Part 601, Subpart D in general. Further,

territorial limits of application are made clear by the absence of

regulations supporting 26 USC §§ 7621, 7802, etc. which are the statutes

authorizing establishment of internal revenue districts and delegations of

authority to the Commissioner of Internal Revenue and assistants. The fact

that the liability falls to the "employer" [26 USC § 3401(d)] and/or his

agent, with no compensation for serving as "tax collector", narrows the

field to federal government entities as "employers" if for no other reason

than the population at large is not subject to the edict of government

officials. As a matter of course, government cannot compel performance where

the general population is concerned. The subject class that has "liability"

for Subtitles A & C taxes is the "employer" or his agent, fiduciary, etc. as

specified above.

The matter is further clarified in Section 3401 & 3404 of Vol. 68A, Statutes

at Large:

SEC.3403. LIABILITY FOR TAX. The employer shall be liable for the payment of

the tax required to be deducted and withheld under this chapter, and shall

not be liable to any person for the amount of any such payment.

SEC.3404. RETURN AND PAYMENT BY GOVERNMENTAL EMPLOYER If the employer is the

United States, or a State, Territory, or political subdivision thereof, or

the District of Columbia, or any agency or instrumentality of any one or

more of the foregoing, the return of the amount deducted and withheld upon

any wages may be made by any officer of employee of the United States, or of

such State, Territory, or political subdivision, or of the District of

Columbia, or of such agency or instrumentality, as the case may be, having

control of the payment of such wages, or appropriately designated for that

purpose.

The territorial application, and limitations, is made clear by definitions

in Title 26 of the Code of Federal Regulations as follows: § 31.3121(3)-1

State, United States, and citizen. (a) When used in the regulations in this

subpart, the term "State" includes the District of Columbia, the

Commonwealth of Puerto Rico, the Virgin Islands, the Territories of Alaska

and Hawaii before their admission as States, and (when used with respect to

services performed after 1960) Guam and American Samoa. (b) When used in the

regulations in this subpart, the term "United States", when used in a

geographical sense, means the several states (including the Territories of

Alaska and Hawaii before their admission as States), the District of

Columbia, the Commonwealth of Puerto Rico, and the Virgin Islands. When used

in the regulations in this subpart with respect to services performed after

1960, the term "United States" also includes Guam and American Samoa when

the term is used in a geographical sense. The term "citizen of the United

States" includes a citizen of the Commonwealth of Puerto Rico or the Virgin

Islands, and, effective January 1, 1961, a citizen of Guam or American

Samoa. Definition of the terms "includes" and "including" located at 26 USC

§ 7701(c) provides the limiting authority which the above definitions,

beyond constructive applications are subject to:

(c) INCLUDES AND INCLUDING. - The terms "includes" and "including" when used

in a definition contained in this title shall not be deemed to exclude other

things otherwise within the meaning of the term defined.

Two principles of law clarify definition intent: (1) The example represents

the class, and (2) that which is not named is intended to be omitted, in the

definitions of "United States" and "State" set out above, all examples are

of federal States, and are exclusive of the several States, with the

transition of Alaska and Hawaii from the included to the excluded class

proving the point. This conclusion is reinforced by the absence of

regulations which extend authority to establish revenue districts in the

several States (26 USC § 7621), authority for the Department of the Treasury

[Puerto Rico] in the several States (26 USC § 7801), and no grant of

delegated authority for the Commissioner of Internal Revenue, assistant

commissioners, or other Department of the Treasury personnel (26 USC § 7802

& 7803).

V. Lack of Regulations Supporting General Application of Tax

Here again, the Parallel Table of Authorities and Rules is useful as it

demonstrates that Subtitles A & C taxes do not have general applications

within the several States and to the population at large. The regulation for

26 USC § 1 refers to 26 CFR § 301, but that amounts to a dead end - there is

no regulation under 26 CFR Part 1 or 31 which would apply to the several

States and the population at large. Further, there are no supportive

regulations at all for 26 USC §§ 2 & 3, and of considerable significance, no

regulations supporting corporate income tax 26 USC § 11, as applicable to

the several States. Where the instant matter is concerned, regulations

supporting 26 USC § 6321, liens for taxes and § 6331, levy and distraint,

are under 27 CFR, Part 70. The importance here is that Title 27 of the Code

of Federal Regulations is exclusively under Bureau of Alcohol, Tobacco and

Firearms administration for Subtitle E and related taxes. There are no

corresponding regulations for the Internal Revenue Service, in 26 CFR, Part

1 or 31, which extend comparable authority to the several States and the

population at large.

The necessity of regulations being published in the Federal Register is

variously prescribed in the Administrative Procedures Act, at 5 USC § 552 et

seq. and the Federal Register Act, at 44 USC § 1501 et seq. Of particular

note, it is specifically set our at 44 USC § 1505(a), that when regulations

are not published in the Federal Register, application of any given statute

is exclusively to agencies of the United States and officers, agents and

employees of the United States, thus once again confirming application of

Subtitles A & C tax demonstrated above. Further, the need for regulations is

detailed in 1 CFR, Chapter 1, and where the Internal Revenue Service is

concerned 26 CFR § 601. 702.

The need for regulations has repeatedly been affirmed by the Supreme Court

of the United States as stated in California Bankers Ass'n. v. Schultz, 416

U.S. 21, 26, 94 S.Ct. 1494, 1500, 39 L.Ed.2d 812 (1974): Because it has a

bearing on our treatment of some of the issues raised by the parties, we

think it important to note that the Act's civil and criminal penalties

attach only upon violation of regulations promulgated by the Secretary; if

the Secretary were to do nothing, the Act itself would impose no penalties

on anyone... The government argues that since only those who violate

regulations may incur civil and criminal penalties it is the regulations

issued by the Secretary of the Treasury and not the broad, authorizing

language of the statute, which is to be tested against the standards of the

4th Amendment. Because there is a citation supporting these statutes

applicable under Title 27 of the Code of Federal Regulations, it is

important to point out that, "Each agency shall publish its own regulations

in full text." [1 CFR § 21.21(c)], with further verification that one agency

cannot use regulations promulgated by another at 1 CFR § 21.40. To date, no

corresponding regulation has been found for 26 CFR, Part 1 or 31, so until

proven otherwise, IRS does not have authority to perfect liens or prosecute

seizures in the several States as pertaining to the population at large.

VI. Misapplication of Authority

Regulations pertaining to seized property are found at 26 CFR § 601.326:

Part 72 of Title 27 CFR contains the regulations relative to the personal

property seized by officers of the Internal Revenue Service or the Bureau of

Alcohol, Tobacco and Firearms as subject to forfeiture as being used, or

intended to be used, to violate certain Federal Laws; the remission or

mitigation of such forfeiture; and the administrative sale or other

disposition, pursuant to forfeiture, or such seized property other than

firearms seized under the National Firearms Act and firearms and ammunition

seized under title 1 of the Gun Control Act of 1968. For disposal of

firearms and ammunition under Title 1 of the Gun Control Act of 1968, see 18

U.S.C. 924(d). For disposal of explosives under Title XI of Organized Crime

Control Act of 1970, see 18 U.S.C. 844(c).

The only other comparable authority thus far found pertains to windfall

profits tax on petroleum (26 CFR § 601.405), but once again, application is

not supported by regulations applicable to the several States and the

population at large.

Where the provision for filing 1040 returns is concerned, the key regulatory

is at 26 CFR § 601.401(d)(4), and this application appears related to

"employees" who work for two or more "employers", receiving foreign-earned

income effectively connected to the United States. The option of filing a

1040 return for refund is mentioned in instruction applicable to United

States citizens and residents of the Virgin Islands, but to date has not

been located elsewhere. Reference OMB numbers for § 601,401, listed on page

170, 26 CFR, Part 600-End, cross referenced to Department of Treasury OMB

numbers published in the Federal Register. November 1995, for foreign

application.

The fact that 1040 tax return forms are optional and voluntary, with special

application, is further reinforced by Delegation Order 182 (reference 26 CFR

§§ 301.6020-1(b) & 301.7701). The Secretary or his delegate is authorized to

file a Substitute for Return for the following Form 941 (Employer's

Quarterly Federal Tax Return); Form 720 (Quarterly Federal Excise Tax

Return); Form 2290 (Federal Use Tax Return on Highway Motor Vehicles); Form

CT-1 (Employer's Annual Railroad Retirement Tax Return); Form 1065 ( U.S.

Partnership Return of Income); Form 11-B (Special Tax Return-Gaming

Services); Form 942 (Employer's Quarterly Federal Tax Return for Household

Employees); and Form 943 (Employer's Annual Tax Return for Agricultural

Employees).

The "notice of levy" instrument forwarded to various third parties is not a

"levy" which warrants surrender of property. The Internal Revenue Code, at §

6335(a), defines the "notice" instrument by use -notice is to be served to

whomever seizure has been executed against after the seizure is effected. In

short, the notice merely conveys information, it is not cause for action.

The term "notice" is clarified by definition in Black's Law Dictionary, 6th

Edition, and other law dictionaries. Use of the "notice of levy" instrument

to effect seizure is fraud by design. Proper use of the "notice" process,

administrative garnishment, et al. is specifically set out in 5 USC § 5514,

as being applicable exclusively to officers, agents and employees of

agencies of the United States [26 USC § 3401(c)]. Even then, however, the

process must comply with provisions of 31 USC § 3530(d), and standards set

forth in §§ 3711 & 3716-17. In accordance with provisions of 26 CFR Part

601, Subpart D, the employer, meaning the United States agency the employee

is employed by, is responsible for promulgating regulations and carrying out

garnishment. Even if IRS was the agency responsible for collecting from an

"employee," due process would be required, as noted above, so authority to

collect would ensue only after securing a court order from a court of

competent jurisdiction, which in the several States would mean a judicial

court of the State. In law, however, there is no authority for securing or

issuing a Notice of Distraint premised on non-filing, bogus filing, or any

other act relating to the 1040 return. See United States v. O'Dell, Case No.

10188, Sixth Circuit Court of Appeals, March 10, 1947. In G.M. Leasing Corp.

v. United States, 429 U.S. 338 (1977), the United States Supreme Court held

that a judicial warrant for tax levies is necessary to protect against

unjustified intrusions into privacy. The Court further held that forcible

entry by IRS officials onto private premises without prior judicial

authorization was also an invasion of privacy.

VII. Liability Depends on a Taxing Statute

General demands for filing tax returns, productions of records, examination

of books, imposition and payment of tax, etc., are of no consequence to the

point a taxing statute (1) defines what tax is being imposed, and (2) the

basis of liability. In other words, even if the Internal Revenue Service was

a legitimate agency of the United States Department of the Treasury and had

authority in the several States, the Service would have to be specific with

respect to what tax was at issue and would have to demonstrate the tax by

citing a taxing statute with the necessary elements to establish that nay

given person was obligated to pay, any given tax. This mandate has been

clarified by the court numerous times, with the matter definitively stated

by the Tenth Circuit Court of Appeals in United States v. Community TV inc.,

327 F.2d 797, at p. 800 (1964): Without question, a taxing statute must

describe with some certainty the transaction, service, or object to be

taxed, and in the typical situation it is construed against the Government,

Hasset v. Welch, 303 U.S. 303, 58 S.Ct. 559, 82 L.Ed. 858. In other words,

to the point Service personnel produce the statute which mandates a certain

tax and which specifies "...the transaction, service, or object to be

taxed...," the burden of proof lies with the Government, with the

consequence being that no obligation or civil or criminal liability can

ensue to the point a taxing statute that meets the above requirements is in

evidence. This conclusion is supported by the statute which provides the

underlying requirements for keeping records, making statements, etc.,

located at 26 USC § 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. Whenever in the judgement of

the Secretary it is necessary, he may require any person, by notice served

upon such person, or by regulations, to make such returns, render such

statements, or keep such records, as the Secretary deems sufficient to show

whether or not such person is liable for tax under this title. The only

records which an employee shall be required to keep under this section in

connection with charged tips shall be charge receipts, records necessary to

comply with section 6053(c), and copies of statements furnished by employees

under section 6053(a). The control statute for Subtitle F. Chapter 61,

Subchapter A, Part 1, concerning records, statements, and special returns,

clearly returns the matter to the "employee" defined at § 3401(c), and the

"employer" defined at § 3401(d). In general, however, (1) the Secretary must

provide direct notice to whomever is required to keep books, records, etc.,

as being the "person liable," or (2) specify the person liable by

regulation. In the absence of notice by the Secretary, based on a taxing

statute which makes such a person liable according to provisions stipulated

in United States v. Community TV Inc., Hassett v. Welch, and other such

cases, or regulations which specifically set establish general liability,

there is no liability. Sec. 6001 also exempts "employees" from keeping

records except when tips and the like are concerned.

This is consistent with constructive demonstration that "employers" rather

than "employees" are required to file returns, as opposed to paying deducted

amounts as income tax returns, constructively demonstrated in a previous

section of this memorandum and specifically articulated in 26 CFR § 601.104.

Clarification via 26 USC § 6053(a) is as follows:

(a) REPORTS BY EMPLOYEES - Every employee who, in the course of his

employment by an employer, receives in any calendar month tips which are

wages (as defined in section 3121(a) or section 3401(a) or which are

compensation (as defined in section 3231(e)) shall report all such tips in

one or more written statements furnished to his employer on or before the

10th day following such month. Such statements shall be furnished by the

employee under such regulations, at such other times before such 10th day,

and in such form and manner, as may be prescribed by the Secretary.

Unraveling § 6001 straightens out the meaning of § 6011, which requires

filing returns, statements, etc., by the person made liable (§ 3401(d)), as

distinguished from the person required to make return (payments) at § 6012

(§ 3401(c)).

Even though a person might be a citizen or resident of the United States

employed by an agency of the United States, and thereby be required to

return a prescribed amount of United States-source income, he is not the

person liable under § 6011 and attending regulations. The "method of

assessment" prescribed at 26 USC § 6303 is therefore dependent on the taxing

statute and must rest on authority specifically conveyed by a taxing statute

which prescribes liability where the Secretary (1) has provided specific

notice, including the statute and type of tax being imposed, or (2) supports

assessment by regulatory application. In the absence of one or the other, an

assessment by the Secretary is of no consequence as it is not legally

obligating. The requirement for the Secretary to provide notice to whomever

is responsible for collecting tax, keeping records, etc., is clarified at 26

CFR § 301.7512-1, particularly (a)(1)(i), relating to "employee tax imposed

by section 3101 of chapter 21 (Federal Insurance Contributions Act)," and

(a)(1)(iii), relating to "income tax required to be withheld on wages by

section 3402 of chapter 24 (Collection of Income Tax at Source on Wages)..."

The person liable is the employer or the employer's agent, and of particular

significance, it is this "person" who is subject to civil and particularly

criminal penalties (26 CFR § 301.7513-1(f); 26 CFR §§ 301.7207-1 &

301.7214-1, etc.). Officers and employees of the United States are

specifically identified as being liable at 26 USC § 301.7214-1. The matter

of who is required to register, apply for licenses, or otherwise collect

and/or pay taxes imposed by the Internal Revenue Code is ultimately and

finally put to rest under "Licensing and Registration", 26 USC §§

301.7001-1, et seq. Each of the categories so addressed has liability based

on some particular taxing statute which creates liability.

VIII. The Necessity of Administrative Process

The requirement for a specific taxing statute, with 26 USC § 6001 clearly

providing the first leg in necessary administrative procedure to determine

liability, was addressed at length in Rodriguez v. United States, 629

F.Supp.333 (N.D. III. 1986). Presuming (1) the Secretary has provided the

necessary notice, or (2) a regulation prescribes general application which

makes any given person liable for a tax and requires tax return statements

to be filed, each step in administrative process prescribed by 26 USC §§

6201, 6212, 6213, 6303 and 6331 must be in place for seizure or any other

encumbrance to be legal. Here again, regulations published in the Federal

Register are significant, with provision of 5 USC § 552 et seq. 44 USC §

1501 et seq., 1 CFR, Chapter 1, and 26 CFR, Part 601 all supporting the

mandate for regulations to be published in the Federal Register before they

have general application. It will be noted by referencing the Parallel Table

of Authorities and Rules, beginning on page 751 of the 1995 Index volume to

the Code of Federal Regulations, that application by regulation to the

several States is only under Title 27 of the Code of Federal Regulations, or

that there are no regulations published in the Federal Register. The

following entries, or non-entries, are found: 26 USC § 6201 Assessment

authority 27 CFR, Part 70 26 USC § 6212 Notice of deficiency No Regulation

26 USC § 6213 Restrictions applicable to deficiencies petition to Tax Court

No Regulation 26 USC § 6303 Notice and Demand for Tax 27 CFR, Part 53, 70 26

USC § 6331 Levy and distraint 27 CFR, Part 70

The assessment authority under 26 USC § 6201, in relevant part as applicable

to Subtitles A & C taxes, are as follows:

(a) AUTHORITY OF SECRETARY - The Secretary is authorized and required to

make the inquiries, determination, and assessments of all taxes (including

interest, additional amounts, additions to the tax, and assessable

penalties) imposed by this title, or accruing under any former internal

revenue law, which have been duly paid by stamp at the time and in the

manner provided by law. Such authority shall extend to and include the

following:

(1) TAXES SHOWN ON RETURN - The secretary shall assess all taxes determined

by the taxpayer or by the Secretary as to which returns or lists are made

under this title.

(3) ERRONEOUS INCOME TAX PREPAYMENT CREDITS - If on any return or claim for

refund of income taxes under subtitle A there is an overstatement of the

credit for income tax withheld at the source, or of the amount paid as

estimated income tax, the amount overstated which is allowed against the tax

shown on the return or which is allowed as a credit or refund may be

assessed by the Secretary in the same manner as in the case of a

mathematical or clerical error appearing upon the return, except that the

provision of section 6231(b)(2) (relating to abatement of mathematical or

clerical error assessments) shall not apply with regard to any assessment

under this paragraph.

(b) AMOUNT NOT TO BE ASSESSED. - (1) ESTIMATED INCOME TAX - No unpaid amount

of estimated income tax required to be paid under section 6654 or 6655 shall

be assessed. (2) FEDERAL EMPLOYMENT TAX - No unpaid amount of Federal

unemployment tax for any calendar quarter or other period of a calendar

year, computed as provided in section 6157, shall be assessed.

(d) DEFICIENCY PROCEEDINGS - For special rules applicable to deficiencies of

income, estate, gift, and certain excise taxes, see subchapter B. The grant

of assessment authority with respect to taxes prescribed in Subtitles A & C

is limited to provisions set out above even where the Service might have

authority relating to those made liable for the tax, meaning the "employer"

specified at 26 USC § 3401(d).

Clearly, returns made either by the agent of the United States agency

required to file a return, or the Secretary, are to be evaluated

mathematically, and errors are to be treated as clerical errors, nothing

more. The Secretary has no authority to assess estimated income tax

(individual estimated income tax at § 6554; corporation estimated income tax

at § 6655), or unemployment tax (§ 6157). For all practical purposes, the

trail effectively ends here.

IX. The Impossibility of Effective Contract/Election

In order for there to be an opportunity for a nonresident alien of the

United States (a Citizen of one of the several States) to elect to be taxed

or treated as a citizen of resident of the United States, one or the other

of a married couple, or the single "individual" making the election, must be

a citizen or resident of the United States [26 USC § 6013(g)(3)].

Some party must in some way be connected with a "United States trade or

business" (performance of the function of a public office [26 USC §

7701(a)(26)]. A nonresident alien never has self-employment income [26 CFR §

1.1402(b)-1(d)] is liable for collection and payment of income tax (26 CFR §

1.1441-1).

And in order for real property to be treated as effectively connected with a

United States trade or business by way of election, it must be located

within the geographical United States [26 USC § 871(d)]. Provision cited

above preclude any and all legal authority for Citizens of the several

States, or privately owned enterprise located in the several States, to

participate in federal tax and benefits programs prescribed in Subtitles A &

C of the Internal Revenue Code and companion legislation such as the Social

Security Act which provide benefits from the United States Government, which

is a foreign corporation to the several States.

Summary & Conclusion

The memorandum is not intended to be exhaustive, but merely sufficient to

support causes set out separately. The most conspicuous conclusions of law

are that Congress never created a Bureau of Internal Revenue, the

predecessor of the Internal Revenue Service; Subtitles A & C of the Internal

Revenue Code prescribe excise taxes, mandatory only for employees of United

States Government agencies; the Internal Revenue Service, within the

geographical United States where the Service appears to have colorable

authority, is required to use judicial process prior to seizing or

encumbering assets; and the law demonstrates that people of the several

States, defined as nonresident aliens of the self-interested United States

in the Internal Revenue Code, cannot legitimately elect to be taxed or

treated as citizens or residents of the United States. If a Citizen of one

of the several States works for an agency of the United States or receives

income from a United States "trade or business" or otherwise effectively

connected with the United States, the employer or other third party

responsible for payment is made liable for withholding taxes at the rate of

30% or 14% depending on classification, and is thus "the person liable" and

may be subject to Internal Revenue Service initiatives, with administrative

initiatives, where seizure and/or encumbrance actions are concerned, subject

to judicial determination by courts of competent jurisdiction.

Under penalties of perjury, per 28 USC § 1746(1). I attest to the best of my

knowledge and understanding, all matters of law and fact presented herein

are accurate and true.

Original Signed by Leigh Peterson, Waddell

Date: May 23, 1996

c/o 1051 Aaron Road (Nondomestic U.S.)

Bowling Green, Kentucky [42101]

Phone (502) 843-2107

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