An Internet friend recently forwarded an article by Bill Cooper, published in the September 1995 issue of Veritas. The title is "B.A.T.F./IRS Criminal Fraud". Wayne Bentson of Arizona collaborated with Cooper, also of Arizona, to produce a documentary article that would spark revolution if syndicated media published it.

The Cooper article might have befuddled me when I first saw it the month it was published had it come out of the blue, but my wife and I had just finished what we called the "monster" tax index. Our index went through the Internal Revenue Code section-by-section, listing regulations as they appear in the Parallel Table of Authorities and Rules, then we tracked titles and listed headings for the regulations. Because of our index, I was able to verify many of Cooper's authorities without going to actual texts. What I found was that Cooper-Bentson conclusions were reinforced by the index.

One significant proof we had was that there are no implementing regulations for section 7621 of the Internal Revenue Code, which authorizes the President to establish revenue districts. Consequently, there are no revenue districts in States of the Union. The Cooper article explained why. With enactment of the Internal Revenue Code of 1954, Federal income tax administration had for all practical purposes been turned over to the Bureau of Internal Revenue, Puerto Rico, which in 1953, via executive name change, had become the Internal Revenue Service.

I might not take time to write this account, but an Illinois attorney and an Idaho United States Attorney put icing on the cake. The Internal Revenue Service is an agency of a government that is technically foreign to the United States, and the Department of Justice does not have authority to defend IRS personnel in civil or criminal matters. We'll elaborate on that good news later. Before detailing these revelations, I need to account for significant historical events.

There was a troubling void in Cooper-Bentson research. When Cooper wrote the article in 1995, he and Bentson hadn't found origins of the Bureau of Internal Revenue, Puerto Rico. I didn't find it until late 1998 even though I knew where to look when I read the Downs v. Bidwell decision in 1997. The first civil governor of Puerto Rico established five bureaus in the Puerto Rico Department of Treasury on May 1, 1900. The five bureaus were eventually merged to become the Bureau of Internal Revenue. Early Puerto Rican administrative acts and legislation were annually published in Senate Documents after 1900. Detailing evolution of the Bureau of Internal Revenue is simply a matter of sitting down with these dusty old books.

The acting Secretary of our Treasury changed the name of the Bureau of Internal Revenue to Internal Revenue Service in 1953 prior to implementation of the Internal Revenue Code of 1954. The new Code, which replaced the Internal Revenue Code of 1939, was based on Reorganization Plan 26 of 1950 and Reorganization Plan 1 of 1952, both effected by Harry Truman.

In his article, Cooper cited the Federal Register and the Internal Revenue Manual acknowledgement that Congress never created a Bureau of Internal Revenue. We have since located a decision where Supreme Court justices acknowledged that Congress never created a Bureau of Internal Revenue or Internal Revenue Service. Consequently, IRS has no lawful authority to enforce anything in the Union as Congress is charged with responsibility for establishing any government department or agency that the Constitution itself does not establish. If it isn't established by law enacted in compliance with the constitutionally prescribed legislative process, an agency doesn't legitimately exist. It has no lawful authority. Whatever it undertakes is de facto -- it may do one thing or another in fact, but all acts are without lawful authority.

In the historical account by the Commissioner of Internal Revenue published in the Federal Register and the Internal Revenue Manual, the Commissioner alleged that Congress intended to create a Bureau of Internal Revenue via 1862 legislation that established the Commissioner's office. But by reading the 1862 legislation, it is easy to see that Congress did what was intended. The act created the offices of assessor and collector, with one of each for each revenue district. Assessors and collectors were appointed in the fashion U.S. Attorneys are presently appointed. They were political patronage positions. The offices continued to exist until implementation of Reorganization Plan 26 of 1950.

In order to come to terms with what happened via the Truman reorganization plans, we need to review evolution of law relating to drugs and alcohol dating to the turn of the century. We will begin with termination of national alcohol prohibition, then take another step back to the time immediately following the Spanish-American War in 1898 and the Chinese Boxer Rebellion in 1900.

In 1933, the Twenty-first Amendment repealed the Eighteenth, which terminated national prohibition. Each State of the Union was thereafter free to determine whether or not to continue prohibition. However, Federal agencies continued to enforce state liquor laws to the point of the Constantine decision in December 1935. In the decision, Supreme Court justices said that once the Eighteenth Amendment was repealed, State and Federal agencies ceased to have concurrent jurisdiction for enforcement of alcohol-related laws as the Eighteenth Amendment contained the concurrent jurisdiction grant of authority. Once the amendment was repealed, concurrent jurisdiction was repealed.

Until summer 1935, the Feds enforced 1926 prohibition law. The 1926 law was replaced by the Federal Alcohol Administration Act of 1935. In the wake of the Constantine decision, a director was appointed, but the Federal Alcohol Administration was never staffed. Then via Reorganization Plan 3 of 1940, administration of the Federal Alcohol Administration Act was transferred to the Bureau of Internal Revenue, predecessor of the Internal Revenue Service.

As the Cooper article suggested, BIR, Puerto Rico and/or BIR, Philippines had already effected encroachment into the Union via China Trade Act legislation, which implemented maritime (customs) laws relating to trade in opium, cocaine and citric wines. The first drug-related law significantly affecting the Union was passed in 1914, then with the 1918 amendment, Federal agencies began zealously enforcing drug laws in the several States even though they applied only to international trade.

Timing was ideal. Significant political mobilization was responsible for the alcohol prohibition amendment, so Federal enforcement agencies took advantage of considerable empathy for purging any kind of intoxicating substance. In his letter supporting the 1940 Reorganization Plan, Roosevelt acknowledged that BIR had been enforcing provisions of the Federal Alcohol Administration Act anyway, so formal transfer of responsibility didn't effect significant change. BIR, Puerto Rico, and possibly BIR, Philippines, had been engaged in covert operations in the several States for at least two decades prior to transfer of administration of the Federal Alcohol Administration Act.

This is an important point that can be framed by a question: Has the Constitution been amended to impose national prohibition against drugs classified as controlled dangerous substances? If it required an amendment to impose national prohibition against alcohol, and alcohol prohibition was repealed when the amendment was repealed, it would obviously take a constitutional amendment to impose national drug prohibition. No such amendment exists. Yet approximately 60% of our Federal prisoners, and 35-40% of our State prisoners, are incarcerated for drug-related offenses. This usurpation of power is responsible for unlawful incarceration of at least a million Americans.

Via the Spanish-American War, United States Government strengthened her global empire position in the Atlantic and Pacific, then following the Boxer Rebellion, we joined hands with Britain, Germany and other maritime interests to carve up China for purposes of drug trade. Via the China Trade Act in 1904, Congress enacted domestic legislation that for all practical purposes monopolized importation of opium and cocaine, both of which have important medicinal as well as recreational uses.

Some time before Cooper wrote his article, I read the 1992 New York v. United States decision. In the decision, Justice Sandra Day O'Connor used the term "Cooperative Federalism".

My response was "What the devil is Cooperative Federalism?"

The next time I saw formal use of the term was in the title of an article in the 1992 edition of The Book of the States. In the meantime, I ran across the "Federalism" executive order Ronald Reagan executed. William Jefferson Clinton keeps trying to liberalize the Federalism executive order to further Federal encroachment, but he is getting considerable resistance. This particular executive order is simply a policy statement. It doesn't meet publishing requirements of section 301 of title 3 of the United States Code and the Federal Register Act, so it has intragovernmental application only (See 5 U.S.C. § 301 for limitations). While practice is something else, Mr. Reagan's Federalism executive order ideally preserves the clear line between State and Federal authority, while Mr. Clinton, it seems, would brazenly crash the Tenth Amendment barrier.

Although the second is a redundancy, let's address the Federalism/Cooperative Federalism scheme through two constitutional questions: Have Article I § 8, clauses 5 & 6 and Article I § 10, paragraph one of the Constitution been repealed or amended? Has the Constitution been amended to effect prohibition against opium, cocaine, and other such substances?

We'll follow those questions with two more: Do we have gold and silver coin as our national monetary system? Do we have national prohibition against drugs?

Obviously, the Federal Reserve Act of 1913, as amended, is patently unconstitutional. At least it is if it applies to the Union. But it might not be if it applies to United States Government itself and territories and insular possessions of the United States. Likewise, Federal drug laws might be legitimate if they apply to the District of Columbia and insular possessions of the United States. It is here that Congress has plenary or near-absolute power. And we can lengthen the list. The Federal Alcohol Administration Act is legitimate in Puerto Rico, but not Oklahoma. Likewise, the Social Security Act of 1935 is legitimate in Puerto Rico, the Virgin Islands, etc., but not in Kansas. Also in 1935, the Supreme Court judicially condemned Congress' first effort to implement a national social welfare program. When the Social Security Act was subsequently enacted, it applied only to the District of Columbia, the territories of Alaska and Hawaii, and insular possessions such as Puerto Rico that were not incorporated in the constitutional scheme.

Definitions of "State", "United States" and "citizen" in Part 31.3121(e)-1 in title 26 of the Code of Federal Regulations clearly prescribe geographical limits where the Social Security Act is applicable. These definitions demonstrate that the Social Security Act was applicable in Alaska and Hawaii while they were territories, but no longer applied when they were respectively admitted to the Union. It has never lawfully applied to States of the Union admitted prior to 1935.

While in the grips of the thirties great depression, State officials were hell-bent on accommodating destruction of the American democratic republic and liberties attending the free enterprise system. At the January 1937 general conference of the Council of State Governments, delegates from a majority of our state legislatures endorsed the Declaration of Intergovernmental Dependence. The declaration formalized what was already a working arrangement. Elected and appointed state officials embraced the Federal dole system, and by setting up the infrastructure, provided a forum for state governing bodies to determine what Federal encroachment they would accommodate. The intergovernmental dependence declaration is published in Book 2, Volume 2 of The Book of the States.

Here are more relevant questions: Does the executive branch have legislative authority? Can the President unilaterally repeal law once Congress has formally enacted it?

Via Reorganization Plan 3 of 1940, Roosevelt reassigned duties of the Federal Alcohol Administration to BIR, thereby abolishing the agency Congress established by law in 1935, then via Reorganization Plan 26 of 1950, Truman abolished offices of internal revenue assessors and collectors that existed since 1862 legislation. But these draconian changes shouldn't adversely affect the American people at large: Since implementation of the Internal Revenue Code of 1954, there have been no Federal internal revenue districts in the several States. The Internal Revenue Code limits IRS assessment and collection activity to whatever revenue districts are established under authority of 26 U.S.C. § 7621. A vast majority of Internal Revenue Code taxing authority is geographically limited to the District of Columbia and insular possessions of the United States, exclusive of States of the Union.

In 1998, I solved another mystery: Via Executive Order #10289, as amended, the President authorized the Secretary of the Treasury to establish revenue districts under authority of section 7621 of the Internal Revenue Code. Although section 7621 isn't listed in the Parallel Table of Authorities and Rules, E.O. #10289 is. The implementing regulation is Part 101 of title 19 of the Code of Federal Regulations. The regulation establishes customs collection offices in each State of the Union; it does not establish internal revenue districts. A note at Part 301.7621-1 of title 26 of the Code of Federal Regulations confirms that E.O. #10289 is the only authority for establishing revenue districts.

"So what are these people doing in Oklahoma and other States of the Union?" is an obvious question.

The Federal tax mystery is resolved to a certain extent by understanding that there is another application other than the geographical. That is, many of these reorganization plans, executive orders, etc. (executive legislation) are intragovernmental in nature. The application is to government agencies and personnel, not the general population. This is where Chapter 24 of the Internal Revenue Code contributes to understanding: Withholding from wages, salaries and tips is authorized for government agencies, not private enterprise. The Federal Reserve System board of governors and Federal Reserve regional banks collectively and individually serve as "fiscal agent" of United States Government. As if by magic, they launder "public money" (revenue and obligations of United States Government, commonly known as "credit") in such a fashion that the sleight of hand is more bizarre than the Federal tax system. But that goes beyond the scope of this article.

Beginning with the Louisiana Purchase in 1803, all territorial acquisitions until the Spanish-American War were incorporated into the constitutional scheme. Whether the territory was acquired by purchase, conquest or otherwise, it was destined to become a State of the Union, and inhabitants of the territory were extended full constitutional rights and benefits. But when the King of Spain ceded Puerto Rico and the Philippines, these insular possessions were not incorporated in the constitutional scheme. In the Insular Tax Cases (1900-1904), the Supreme Court determined that these and other insular possessions are "foreign" to the United States and the several States party to the Constitution, and they are more on the order of British crown colonies than traditional territories of the United States.

Here it is useful to understand that Congress has schizophrenic characters: Congress may exercise only constitutionally enumerated powers where States of the Union are concerned, but has plenary or near-absolute power over land belonging to the United States. Under Article I, Section 8 of the Constitution, Congress exercises restrictive power in the Union, but may do anything not specifically prohibited by the Constitution in territory belonging to the United States. Thus, where Puerto Rico, the Virgin Islands, Guam and American Samoa are concerned, and the new arrival, the Northern Mariana Islands, Congress does as Congress pleases.

Some time after 1908 and before 1918, nonconstitutional insular possessions of the United States entered a political compact or alliance. The name of this alliance is the "United States of America", i.e., "Guam, U.S.A." on letterheads of the government of Guam. Cooper and Bentson tracked mutual assistance agreements among insular possessions that might provide a basis for this second "United States of America" confederation, but they didn't quite get to the meat of the matter.

When Timothy McCrory of Blackwell, Oklahoma and I first stumbled across evidence of this second United States of America in January 1997, the research community was plagued by myopia. States of the Union collectively are the United States of America. The possibility of there being a second United States of America was rejected by most researchers.

The Articles of Confederation in 1777 formally established the original United States of America, mentioned in the Preamble and Article II of the Constitution of the United States. But the Constitution creates and empowers a governmental entity designated and known as the United States. The only authority conferred to the United States of America, as a continuing public entity, is to elect the President and Vice President. When he takes his oath of office, the "President of the United States of America" becomes the "President of the United States". Article III, Section 1 of the Constitution establishes "The judicial Power of the United States," it doesn't vest authority in the United States of America, nor does it acknowledge the United States of America as a principal of interest.

Yet since approximately 1937, virtually all Federal civil actions and criminal prosecutions have been in the name and by authority of the "United States of America".

That isn't what law specifies. Section 3231 of title 18, the Criminal Code, section 1345 of title 28, the Civil Code, and section 7402 of the Internal Revenue Code, all specify that the "United States" is the proper principal of interest.

The only place we've found the "United States of America" as a principal of interest in the current edition of the United States Code is section 1001 of the Criminal Code, formerly 18 U.S.C. § 80 in the 1940 edition. Under this section, presently titled "statements and entries generally," the United States of America can be a principal of interest where there is fraud against a corporation in which the United States of America is a stockholder.

Beginning with 1918 legislation, the "United States" and the "United States of America" both appeared in the section, where the United States of America was not present in the 1908 statute. In Historical and Statutory notes following the current 18 U.S.C. § 1001, the reviser's note says the following about deletion of phrasing: "Words 'or any corporation in which the United States of America is a stockholder' in said § 80 [1940 edition] were omitted as unnecessary in view of definition of 'agency' in § 6 of this title."

By some quirk of tortured rationale, this come-lately United States of America is construed or defined as an "agency" of United States Government even though the U.S. Supreme Court judicially proclaimed that these constitutionally unincorporated insular possessions are "foreign" to the United States.

In the Interstate Agreement on Detainers Act, which most States of the Union have adopted, the "United States of America" is defined as a "State". The definition is at Article II(a), in Oklahoma Statutes, at section 1347 II(a) of title 22: "'State' shall mean a state of the United States; the United States of America; a territory or possession of the United States; the District of Columbia; the Commonwealth of Puerto Rico."

Where United States Government has subject matter jurisdiction by virtue of a constitutionally enumerated power, Federal agencies and courts have territorial jurisdiction, commonly known as venue, within States of the Union. In this context, then, the "United States of America" is a unique and separate "State" within the framework of the Interstate Agreement on Detainers Act. The United States of America doesn't have any more territorial jurisdiction in Oklahoma and Texas than Kansas does. If and when it has a criminal cause of action against someone located in one of the several States, it must apply for extradition just as one State must apply for extradition from another. Aside from being a political alliance, it is a geographical alliance. It is this entity, that magically appeared between 1908 and 1918, that is the primary vehicle used for Federal encroachment. As we will shortly verify, the Internal Revenue Service is an agency of this come-lately United States of America, it is not an agency of United States Government.

We've engaged this exercise to frame two conclusions: The Internal Revenue Service is successor of the Bureau of Internal Revenue, Puerto Rico, and does not have lawful authority in States of the Union; and the United States of America is a political and geographical alliance foreign to the United States and States of the Union. We now have the stage set for our attorneys.

Diversified Metal Products, Inc. of Idaho received an Internal Revenue Service notice of levy for money the company allegedly owed to Steve Morgan. The notice was challenged, so rather than get caught in the middle, Diversified Metal's attorney, John M. Ohman, filed an impleader action in the District Court of the Seventh Judicial District of Idaho, in the Booneville County Magistrate Court (Case #CV93-4117). The disputed money was deposited with the court. Diversified Metal filed the impleader action to resolve the dispute between T-Bow Company Trust, the Internal Revenue Service, and Steve Morgan. The purpose of the litigation was to determine proper ownership of the money without Diversified Metal having liability exposure to IRS or Morgan.

In the complaint, Ohman set out statements of what he believed to be fact. Averment #4 is as follows: "Defendant Internal Revenue Service (IRS) is an agency of the United States government which has presented to Plaintiff a lien [actually, a notice of levy] against monies to which Steve Morgan, or presumably Defendant T-Bow Company Trust for him, may be entitled."

The United States Attorney for the district, Betty H. Richardson, answered on behalf of the Internal Revenue Service. In her response to Ohman's #4 averment, she made the following corrections: "Denies that the Internal Revenue Service is an agency of the United States Government but admits that the United States of America would be a proper party to this action…"

The Internal Revenue Service is not an agency of United States Government, but the United States of America would be a proper party to the action? Richardson was in a corner where she had to confess what Cooper, Bentson, and numerous other people have proven half a dozen different ways: Congress did not legislatively create a Bureau of Internal Revenue and the Philippines gained independence in 1946. That leaves only the Bureau of Internal Revenue, Puerto Rico as a legislatively created governmental entity. The Internal Revenue Service is successor by name change to BIR, Puerto Rico.

If the Internal Revenue Service is not an agency of United States Government, the United States obviously wouldn't be the principal of interest. Richardson glossed over her presentation, but she told the truth. The Internal Revenue Service operates as an agent of this come-lately geographical and political alliance known as the United States of America, Puerto Rico being a party to the compact.

On December 18, 1998, attorney Michael Bufkin of Dundee, Illinois sent a Freedom of Information Act request to the Internal Revenue Service asking for documentation of authority for the Department of Justice to defend IRS personnel in civil litigation and/or criminal prosecution. On August 2, 1999, Leslie Hayward, a Disclosure Program Assistant in the IRS national office, answered Bufkin as follows: "A search was performed with the Office of Tax Crimes (Criminal Investigation) and with the Assistant Chief Counsel (Disclosure Litigation) and we have no documents responsive to your request. However, you may forward a copy of your request to the U.S. Attorney General's Office within the Department of Justice."

In September, Bufkin sent the request to the Department of Justice, then on January 11, 2000, Thomas J. McIntyre, Chief of the Department of Justice Freedom of Information/Privacy Act Unit, made the following response: "We have conducted a search of the appropriate indices to Criminal Division records and did not locate any records responsive to your request."

In other words, Internal Revenue Service personnel constitute an endangered species. It might be necessary to roll them in sand to reduce the slime factor, but once you get hold well enough to usher them to jail or sue them in civil court, the Department of Justice and U.S. Attorneys have to watch from a respectful distance. IRS personnel are agents of a government foreign to the United States, and they do not have lawful access to government-funded defense when the Federalism scheme finally comes down around their ears. They are quite literally agents of a foreign government invading the several States of the Union.