July 2, 1996
K. J. Sawyer, District Director
Arkansas-Oklahoma District
Internal Revenue Service
55 N. Robinson
Oklahoma City, Okla. 73102
PURPOSE: Formal protest of assessment &
administrative collection of alleged tax obligations.
AUTHORITY: 26 CFR § 601.106
SUBJECT: "Income tax" (1040 Return);
administrative assessment & collection initiatives.
Specifically, reference calendar years 1988 through
1995.
COMPLAINING PARTY: Joe Victim & Shirley Victim,
SSN [100-00-0000 & 200-000-0000]
ENCLOSURES: Victim power of attorney to Dan Meador; Dan Meador
declaration of representation; IRS/IRC-related Public Notice
memorandum, published first in Thayer County, Nebraska, June 12,
1996; photocopies of IRS-generated assessment Forms 4549-CG for
1993 & 1994.
Dear Director Sawyer:
On behalf of Mr. & Mrs. Victim, please consider this a
formal protest and four-square challenge to Internal Revenue
Service administrative assessment and collection initiatives
allegedly pertaining to income and related tax prescribed in
Subtitles A & C of the Internal Revenue Code (Vol. 68A, Statutes
at Large, 1954, as amended in 1986 and since).
At the onset, Mr. refuses Service administrative collection
initiatives undertaken by way of Subtitle F authority as fraud,
and thus claims the right to recourse, whether civil or criminal,
on the following basis, provided at 26 U.S.C. § 7851(a)(6)(A):
(A) GENERAL RULE - The provisions of subtitle F shall take
effect on the day after the date of enactment of this title
and shall be applicable with respect to any tax imposed by
this title.
All administrative assessment and collection actions will be
construed as being under color of law to the point you produce
certified proof that Title 26 of the United States Code has been
enacted as positive law.
Please be advised that constitutional matters are or may be
at issue (§ 601.106(b)), but they are not the exclusive grounds
for the protest and, if necessary, subsequent appeal.
You will note that Mr. & Mrs. Victim made certain
stipulations in their power of attorney conveyed to me. The power
of attorney provides the factual basis for this protest, and any
subsequent appeal, criminal complaint or civil initiative. Should
Service principals fail to rebut any of the stipulated matters of
fact set out by Mr. & Mrs. Victim, they will be construed as
presumed fact for all legal purposes. The stipulations are as
follows:
Conveyance of this power of attorney incorporates the
following stipulations: We are Citizens of the Oklahoma
republic, one of the several States party to the
Constitution for the United States of America, We are not
Fourteenth Amendment citizens of the United States, and we
are not residents of the geographical United States, as
defined in the Internal Revenue Code; we do not reside or
have abode on a federal enclave under Congress' legislative
jurisdiction, as identified at 18 U.S.C. § 7(3); we are not
"employees" (officers, agents or employees of the United
States, as identified at § 3401(c) of Vol. 68A, Statutes at
Large); we are not "employers" (§ 3401(d)); we are not
agents of a United States agency responsible for withholding
and paying over tax withheld from wages, salaries, etc., or
required to file tax reports for the same, and are therefore
not "persons liable" under provisions relating to Subtitles
A & C of the Internal Revenue Code; we are not engaged in a
United States trade or business, as the term is defined in
the Internal Revenue Code; and we are not now nor have we
ever been engaged in transactions and services, and do not
produce or distribute objects of Subtitles D & E excise
taxes, or objects subject to excise tax imposed by United
States treaty.
Although examination of Individual Master File information
relating to people assailed by Service administrative assessment
and collection action frequently demonstrates that Service
personnel fraudulently classify people as "tax protesters"
engaged in illegal drug trade in the Virgin Islands, Cayman
Islands, etc., stipulations set out above rebut this presumption.
The rebuttal will serve as estoppel to any undisclosed
presumption made by Service personnel. This protest addresses
only federal tax prescribed in Subtitles A & C of the Internal
Revenue Code of 1954, as amended in 1986 and since (Vol. 68A of
the Statutes at Large; see also, Act of Oct. 22, 1986, P.L.
95-514, § 2, 100 Stat. 2095). Should you fail to immediately
disclose any other taxing authority presumed by the Service, the
stipulation of fact set out above will serve as a bar against any
other presumption, and will be construed as cause sufficient to
sustain charges of fraud and oppression under color of law should
Service allegations of federal tax obligations prove to be based
on anything other than tax prescribed in Subtitles A & C of the
Code.
The Director will please note that taxes collected by the
Internal Revenue Service are classified at 26 CFR § 601.106, as
follows:
(a) Principal divisions. Internal revenue taxes fall
generally into the following principal divisions:
(1) Taxes collected by assessment.
(2) Taxes collected by means of revenue stamps.
(b) Assessed taxes. Taxes collected principally by
assessment fall into the following two main classes:
(1) Taxes within the jurisdiction of the U.S. Tax
Court. These include:
(i) Income and profits taxes imposed by Chapters
1 and 2 of the 1939 Code and taxes imposed by
subtitle A of the 1954 Code, relating to income
taxes.
(ii) Estate taxes imposed by Chapter 3 of the 1939
Code and Chapter 11 of the 1954 Code.
(iii) Gift tax imposed by Chapter 4 of the 1939
Code and Chapter 12 of the 1954 Code.
(iv) The tax on generation-skipping transfers
imposed by Chapter 13 of the 1954 Code.
(v) Taxes imposed by Chapters 41 through 44 of
the 1954 Code.
(2) Taxes not within the jurisdiction of the U.S. Tax
Court. Taxes not imposed by Chapter 1, 2, 3, or 4 of
the 1939 Code or Subtitle A or Chapter 11 or 12 of the
1954 Code are within this class, such as:
(i) Employment taxes,
(ii) Various sales taxes collected by return,
(iii) Miscellaneous excise taxes collected by
return, and
(iv) Miscellaneous excise taxes collected by sale
of revenue stamps.
(3) The difference between these two main classes is
that only taxes described in subparagraph (1) of this
paragraph, i.e., those within the jurisdiction of the
Tax Court, may be contested before an independent
tribunal prior to payment. Taxes of both classes may be
contested by first making payment, filing claim for
refund, and then bringing suit to recover if the claim
is disallowed or no decision is rendered thereon within
six months.
(c) Stamp taxes. Taxes collected by means of revenue stamps
may in special circumstances be collected by assessment, but
references hereinafter to the assessment process do not
contemplate taxes ordinarily collectible by means of stamps,
except as specially stated. For provisions special to taxes
collected by means of revenue stamps, see § 601.404. Taxes
collectible by assessment may be collected by suit without
assessment, but this is seldom done.
[32 FR 15990, Nov. 22, 1967, as amended at 35 FR 7111, May
6, 1970; 46 FR 26053, May 11, 1981]
Where the instant matter is concerned, the tax or taxes at
issue will be construed to be in the jurisdiction of the United
States Tax Court, as specified in provisions of 26 CFR §
601.106(b)(1). The Victims have stipulated that they are not
engaged in any taxable activity classified under 26 CFR §
601.108(a)(2), and all Service correspondence to date is
suggestive of the United States Tax Court having jurisdiction
over tax at issue.
It is convenient that the Secretary chose this means for
classifying taxes prescribed in the Internal Revenue Code as
jurisdiction of the United States Tax Court, as well as all other
courts, is coextensive with whatever legislative matters the
court is authorized to rule on. In other words, all legislation
is territorial in nature, and the authority of any given court is
therefore premised on the law of legislative jurisdiction -- the
authority of a court cannot exceed the territorial bounds under
jurisdiction of the legislative body responsible for the
legislation. Therefore, application of taxes identified under
jurisdiction of the United States Tax Court (26 CFR §
601.106(b)(1)), inclusive of taxes at issue in the instant matter
under Subtitles A & C of the Internal Revenue Code, do not exceed
the territorial jurisdiction of the Tax Court.
The Director will note that Internal Revenue Code statutes
pertaining to the United States Tax Court are listed in Title 26
of the United States Code, Chapter 76C, §§ 7441-7487.
Please reference the Parallel Table of Authorities and
Rules, beginning on page 751 of the 1995 Index volume to the Code
of Federal Regulations: None of these statutes are listed in the
Table, which means that there are no regulations published in the
Federal Register which extend authority of the Court to the
several States and the population at large. In fact, the only
statute in this group which even references the several States is
§ 7462, with the statute specifying that the Tax Court will
publish reports and the reports will be construed as prima facie
evidence of publication in courts of the United States and the
several States. There is no regulation prescribing judicial
authority of the United States Tax Court within the several
States.
Next the Director will please reference the Administrative
Procedures Act (5 U.S.C. §§ 552 et seq.), and the Federal
Register Act (44 U.S.C. §§ 1501 et seq.) for provisions requiring
regulations, delegations of authority, etc., to be published in
the Federal Register if they have general application within the
several States and to the population at large. Where regulations
and delegations are not published in the Federal Register,
application is solely to agencies of the United States and
officers, agents and employees of the United States (44 U.S.C. §
1505(a)). For verification that each agency must publish its own
regulations, consult Title 1 of the Code of Federal Regulations,
Chapter 1, and where agencies of the Department of the Treasury
are concerned, consult 26 CFR § 601.601. You will also please
note that matters reflected in the Code of Federal Regulations
are due judicial notice, and publication in the Federal Register
is prima facie evidence of original documents (44 U.S.C. §§ 1507
& 1510). Therefore, the Table of Authorities and Rules published
in the Index volume to the Federal Register warrants judicial
notice, and where the instant matter is concerned, administrative
notice, and will be presumed to be accurate until proven
otherwise. The implication is that the United States Tax Court
does not have jurisdiction in the several States or to the
population at large, and as a consequence, taxes classified as
being under jurisdiction of the United States Tax Court have
application only as prescribed at 44 U.S.C. § 1505(a): Taxes
prescribed in Subtitles A & C of the Internal Revenue Code apply
only to agencies of the United States and officers, agents and
employees of the United States, as demonstrated in §§ 3401(c) &
(d) of Vol. 68A of the Statutes at Large, and as particularly
demonstrated in 26 CFR § 31.0.
The character and territorial jurisdiction of the United
States Tax Court is affirmed in The United States Government
Manual for 1995/96 under the subheading, "Special Courts" (see
pp. 78 & 79). In relative part, the Manual relates the following:
United States Tax Court This is a court of record
under Article I of the Constitution of the United States (26
U.S.C. 7441). Currently an independent judicial body in the
legislative branch, the court was originally created as the
United States Board of Tax Appeals, an independent agency in
the executive branch, by the Revenue Act of 1924 (43 Stat.
336) and continued by the Revenue Act of 1926 (44 Stat.
105), the Internal Revenue Codes of 1939, 1954, and 1986.
The name was changed to the Tax Court of the United States
by the Revenue Act of 1942 (56 Stat. 957), and the Article I
status and change in name to United States Tax Court were
effected by the Tax Reform Act of 1969 (83 Stat. 730)...
The Tax Court tries and adjudicates controversies
involving the existence of deficiencies or overpayments in
income, estate, gift, and generation-skipping transfer taxes
in cases where deficiencies have been determined by the
Commissioner of Internal Revenue. It also hears cases
commenced by transferees and fiduciaries who have been
issued notices of liability by the Commissioner ....
... All proceedings are public and are conducted judicially
in accordance with the court's Rules of Practice and the
rules of evidence applicable in trials without a jury in the
U.S. District Court for the District of Columbia...
Clearly, the United States Tax Court is an administrative
law court, which while conferred Article I status, operates under
Congress' Article IV legislative jurisdiction in the geographical
United States (see territorial bounds under Congress' Article IV
§ 3.2 legislative jurisdiction, page 75 of the Manual, and 18
U.S.C. § 7, with § 7(3) prescribing territorial jurisdiction
within the several States; also, 4 U.S.C. 110(d) & (e)). The
last paragraph from the Manual cite reproduced above clearly
demonstrates that the United States Tax Court is incompetent at
law and is therefore not an Article III judicial court ("... All
proceedings ... are conducted ... in accordance with ... the
rules of evidence applicable to trials without a jury in the U.S.
District Court for the District of Columbia...). Congress'
Article IV legislative jurisdiction is disclosed by way of
attaching the United States Tax Court to rules of the U.S.
District Court for the District of Columbia, which is a federal
State within the definition of "State" prescribed in the Internal
Revenue Code and the Buck Act (26 U.S.C. § 7701(a)(10); 4 U.S.C.
§ 110(d)).
Where jurisdiction of the United States Tax Court is clearly
limited to the geographical United States, inclusive of the
District of Columbia, Puerto Rico, Guam, the Virgin Islands,
etc., application of taxes prescribed in Subtitles A & C of the
Internal Revenue Code is clearly limited to the geographical
United States under Congress' Article IV legislative
jurisdiction. This jurisdiction is exclusive of the several
States and the population at large, save as applicable to federal
enclaves ceded to the United States for constitutional purposes
(18 U.S.C. § 7(3)).
The approximate territorial jurisdiction of the United
States Tax Court is articulated in the Buck Act at 4 U.S.C. §
110:
(d) The term "State" includes any Territory or possession
of the United States.
(e) The term "Federal area" means any lands or premises
held or acquired by or for the use of the United States or
any department, establishment, or agency of the United
States; and any Federal area, or any part thereof, which is
located within the exterior boundaries of any State, shall
be deemed to be a Federal area located within such State.
The Director will note that Mr. & Mrs. Victim have
stipulated that they are Citizens of Oklahoma and that they have
abode in the Oklahoma republic, they are not Fourteenth
Amendment citizens or residents of the geographical United
States, and they are not officers, agents or employees of the
United States. The Director will also note that Oklahoma is not a
"State", as defined at 4 U.S.C. § 110(d) or 26 U.S.C. §
7701(a)(10). Therefore, they are not subject to tax prescribed in
Subtitles A & C of the Internal Revenue Code either by
territorial application, or as provided in Vol. 68A, Statutes at
Large, the Internal Revenue Code:
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 or
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.
For further details concerning who is liable for tax
prescribed in Subtitles A & C of the Internal Revenue Code,
please reference item #4 in the enclosed memorandum: The
Employer or Agent is Liable (p. 4 & 5). All matters set forth in
item #4 of the memorandum will be construed as applicable where
the instant matter is concerned.
Next is the matter of Internal Revenue Service authority:
The following provision is found at 26 CFR § 601.101:
(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 instant concern is authority of the Internal Revenue
Service, via the Commissioner, in the several States. There are a
couple of significant clues in the Code of Federal Regulations
which shed light on the matter. At 26 CFR § 301.7805-1, the
following is found:
§ 7805-1 Rules and regulations
(a) Issuance. The Commissioner, with the approval of the
Secretary, shall prescribe all needful rules and regulations
for the enforcement of the Code (except where this authority
is expressly given by the Code to any person other than an
officer or employee of the Treasury Department), including
all rules and regulations as may be necessary by reason of
any alteration of law in relation to internal revenue.
The more revealing truth concerning authority of the
Commissioner, and the Internal Revenue Service, is found at 26
CFR § 601.601:
§ 601.601 Rules and regulations.
(a) Formulation. (1) Internal revenue rules take various
forms. The most important rules are issued as regulations
and Treasury decisions prescribed by the Commissioner and
approved by the Secretary or his delegate.
In other words, the Commissioner of Internal Revenue is not
the delegate of the Secretary of the United States Department of
Treasury. If a delegation of authority with general application
existed, there would be no reason for the Commissioner to seek
approval of the Secretary for proposed regulations, and certainly
no need to seek approval of the Secretary's delegate. This notion
is further confirmed by the two delegations to the Commissioner
thus far located. The first is Treasury Delegation Order No. 150-
42, dated July 27, 1956:
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.
The second is Treasury Department Order No. 150-01, dated
February 27, 1986:
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.
Authority conveyed via these two orders, in conjunction with
provisions of 26 CFR §§ 301-7805-1(a) & 601.601(a), reinforces
evidence found in the Parallel Table of Authorities and Rules
(cited earlier): There are no implementing regulations listed
for 26 U.S.C. §§ 7621, 7801, 7802 & 7803. Which is to say, there
is no regulatory authority for the Service to establish revenue
districts in the several States; the Department of the Treasury
has no authority in the several States; the Commissioner of
Internal Revenue and assistant commissioners have no authority in
the several States; and no other Department of the Treasury
personnel have authority in the several States. The fact that
Congress never created a Bureau of Internal Revenue, predecessor
to the Internal Revenue Service, speaks to the character of the
Service as an agency of the Department of the Treasury, Puerto
Rico rather than an agency of the United States Department of the
Treasury (see Federal Register at 36 F.R. 849-890 [C.B. 1971 -
1.698], 36 F.R. 11946 [C.B. 1971 - 2,577], and 37 F.R. 489-490;
Internal Revenue Manual 1100 at 1111.2; IRS is not listed as an
agency of the United States Department of Treasury in the table
of contents for Chapter 3, Title 31 of the United States Code).
Reference item #1 of the enclosed Public Notice memorandum
(pp. 1 & 2) for further details implicating the Internal Revenue
Service as an agency of the Department of the Treasury, Puerto
Rico, serving as a collection agency for undisclosed foreign
principals, namely, the International Monetary Fund and the so-
called World Bank. Since Congress never created a Bureau of
Internal Revenue, predecessor to the Internal Revenue Service,
the agency has no legitimate authority for the United States.
Additionally, the Internal Revenue Service is not registered to
conduct business in the several States, so even if the Service
was legitimately an agency of the United States Department of the
Treasury, authority would extend only to federal enclaves subject
to Congress' Article IV legislative jurisdiction (see 18 U.S.C. §
7(3) & 4 U.S.C. § 110(d) & (e)). Therefore, there are most
certainly civil and criminal implications for Service personnel
under territorial and judicial applications of 26 U.S.C. §
7804(b) (see item #2 of the enclosed Public Notice memorandum).
Matter concerning the necessity of due process presented in
item #2 of the enclosed memorandum is hereby incorporated as
effective in this instrument.
The Director will note that Rule I governing consideration
of appeals officers specifically acknowledges Fifth Amendment due
process rights, and officers and agents of the Service cannot use
the shield of ignorance where due process rights are concerned as
the Handbook for Revenue Agents, at paragraph 332(1), issues
specific warning concerning due process rights, citing authority
of Larson v. Domestic and Foreign Commerce Corp. 337 U.S. 682
(1949).
Jurisdiction and venue matters are antecedent to all other
considerations as no act, ruling or decision made by de facto
authority, whether government or otherwise, is of any lawful
effect (Wortham v. Walker, 128 S.W.2d 1138). Therefore, unless
and until you establish the lawful character of the Internal
Revenue Service and authority applicable to the several States,
Service personnel responsible for initiatives which have
adversely affected the Victims will be considered unregistered
foreign agents who represent and provide services for undisclosed
foreign principals, subject to criminal prosecution for treason.
There are certain other matters which need to be addressed
so this will be done as expeditiously as possible:
Notice of Deficiency/Statutory Assessments
Please reference item #7 of the Public Notice memorandum,
page 6: 26 U.S.C. § 6001 requires that the Secretary provide
notice to whoever is liable for any given tax prescribed by the
Internal Revenue Code either by direct notice or by regulation.
You will please provide either (1) notice provided directly by
the Secretary to Mr. & Mrs. Victim, or (2) cite the general
application regulation which makes Mr. & Mrs. Victim liable for
any given tax prescribed by the Internal Revenue Code.
Next, you will please specify the taxing statute which
describes the transaction, service or object to be taxed (United
States v. Community TV, Inc., 327 F.2d 797 F.2d 797, at page 600
(1964), Hassett v. Welch, 303 U.S. 303, 58 S.Ct. 559, 82 L.Ed.
858; see p. 6 of Public Notice memorandum).
You will please provide a certified copy of a properly
executed Form 23C, which provides legal authority for the Service
to collect any given tax from Mr. & Mrs. Victim.
Next, please reference item #8, page 7 of the Public Notice
memorandum: Proper assessment and collection of taxes prescribed
in the Internal Revenue Code must comply with procedure
prescribed by statute, with administrative sequence beginning
with 26 U.S.C. § 6001, then running the appropriate course
through §§ 6201, 6212, 6213, 6303 and 6331 (Rodriguez v. United
States 629 F.Supp 333 (N.D. Ill. 1986)). You will note in the
Public Notice memorandum that there are no implementing
regulations for any of these statutes under 26 CFR, Part 1 or 31
(see Parallel Table of Authorities and Rules, cited above, for
verification). Statutes in this group which do have regulations
have application under Title 27 of the Code of Federal
Regulations, particularly Part 70. The Director will note that
Title 27 of the United States Code and the Code of Federal
Regulations are under exclusive administrative authority of the
Bureau of Alcohol, Tobacco and Firearms as relates to Subtitle E
taxes and related matters. This authority is exclusive of IRS
jurisdiction relating to Subtitle A & C tax. Therefore, you will
please demonstrate Service personnel compliance with the
prescribed assessment and collection process, and provide
implementing regulations applicable to the several States and the
population at large, Mr. & Mrs. Victim in particular.
Particulars of assessment from 26 CFR, Part 301
§ 301.6201-1 Assessment authority.
(a) In general. The district director is authorized and
required to make all inquires necessary to the determination
and assessment of all taxes imposed by the Internal Revenue
Code of 1954 or any prior internal revenue law ....
(1) Taxes shown on return. The district director or the
director of the regional service center shall assess all
taxes determined by the taxpayer or by the district director
or the director of the regional service center and disclosed
on a return or list.
§ 301.6203-1 Method of assessment
The district director and the director of the regional
service center shall appoint one or more assessment
officers. The district director shall also appoint
assessment officers in a Service Center servicing the
district. The assessment shall be made by an assessment
officer signing the summary record of assessment. The
summary record, through supporting records, shall provide
identification of the taxpayer, the character of the
liability assessed, the taxable period, if applicable, and
the amount of the assessment. The amount of the assessment
shall, in the case of tax shown on a return by the taxpayer,
be the amount so shown, and in all other cases the amount of
the assessment shall be the amount shown on the supporting
list or record. The date of the assessment is the date the
summary record is signed by an assessment officer. If the
taxpayer requests a copy of the record of assessment, he
shall be furnished a copy of the pertinent parts of the
assessment which set forth the name of the taxpayer, the
date of assessment, the character of the liability assessed,
the taxable period, if applicable, and the amounts assessed.
(emphasis added)
Considering these provisions, it is necessary for the
Service to comply with demands for authority set out above.
Without providing proper documentation, under certified signature
of a properly authorized Service office (GS-12 or above), those
responsible for issuing assessments, whether by way of original
substitute return or statutory additions, have failed to comply
with regulatory mandates and therefore have operated under color
of law to impose unauthorized tax and/or penalties.
It appears that penalties assessed against the Victims issue
under 26 U.S.C. § 6651(a)(1) and/or § 6654. The Victims rebut
this authority as Internal Revenue Manual 5400 at 546(19) denies
use of noncompliance penalty statutes absent a court
determination on the underlying issue, i.e., whether or not the
Victims were ever required to file a return. The Director will
also note that the above provision specifies that according to
Department of the Treasury Order 120-01, all of the statutes
utilized by IRS to date for the additions to tax are only penalty
statutes for failing to file and fraud relating to an activity
under Alcohol, Tobacco and Firearms. This is clarified at 26
U.S.C. § 6651(a)(1):
To file a return required under authority of subchapter A of
Chapter 61 (other than part III thereof), Subchapter A of
Chapter 51 (relating to distilled spirits, wines, and beer),
or of Subchapter A of Chapter 52 (relating to tobacco,
cigars, cigarettes, and cigarette papers and tubes) or of
Subchapter A of Chapter 53 (relating to machine guns and
certain other firearms), on the date prescribed therefor
(determined with regard to any extension of time for
filing), unless it is shown that such failure is due to
reasonable cause and not due to willful neglect, there shall
be added to the amount required to be shown as tax on such
return 5 percent for each additional month or fraction
thereof during which such failure continues, not exceeding
25 percent in the aggregate.
According to 26 U.S.C. § 6211, the Service, which appears to
be one and the same as the Bureau of Alcohol, Tobacco and
Firearms, can only issue deficiencies on Subtitles A and B of
Chapters 41, 42, 43 and 44. Further, Delegation Order No. 77
authorizes only deficiencies on Subtitle A, B or Chapter 41, 42,
43, or 44 taxes and not with any deficiency under employment
taxes found in Subtitle C. Further, Delegation Order No. 24
grants authority to require records to be kept only to the
Assistant Commissioner (International) and District Directors in
established internal revenue districts (per lack of regulations
for 26 U.S.C. § 7621, this authority does not extend to the
several States), and in general the authority applies only under
27 CFR, Part 70. The Service's only record to date pertaining to
the Victims reflects pursuit of Subtitle C, Chapter 24
Withholding from source of the Income Tax. In the absence of
statutory, regulatory or delegation authority for assessments
against the Victims, the matter is foreclosed as fraud,
extortion, oppression, and bogus claims of authority under color
of law. Where the instant matter is concerned, the Service cannot
claim authority other than as relates to Subtitle A & C tax
collected under Subtitle C authority without first overcoming the
Victims' estoppel with concrete proof that they are engaged in
some exclusively United States or offshore activity subject to
Subtitle E excise tax or tax imposed by United States treaty.
However, this inconsistency would be construed as fraud by intent
as at all times Service-issued instruments have reflected that
the type of tax being assessed and the object of collection is
"income" and related tax prescribed by Subtitles A & C of the
Internal Revenue Code (Vol. 68A of the Statutes at Large, as
amended in 1986 and since).
Further, 26 CFR § 301.6020 does not authorize preparation of
Form 1040 or 1040A (original or amended 1040 returns). Treasury
Delegation Order 182 is made pursuant to 26 USCS § 6020(b), which
is reproduced below within 26 USCS § 6020(a) bounds:
(a) Preparation of Return by Secretary. -- If any person
shall fail to make a return required by this title or by
regulation prescribed thereunder, but shall consent to
disclose all information necessary for the preparation
thereof, then, and in that case, the Secretary may prepare
such return, which, being signed by such person, may be
received by the Secretary as the return of such person.
(b) Execution of Return by Secretary. --
(1) Authority of Secretary to Execute return. -- If any
person fails to make any return required by any internal
revenue law or regulation made thereunder at the time
prescribed therefor, or makes, willfully or otherwise, a
false or fraudulent return, the Secretary shall make such
return from his own knowledge and from such information as
he can obtain through testimony or otherwise.
(2) Status of Returns. -- Any return so made and subscribed
by the Secretary shall be prima facie good and sufficient
for all legal purposes.
The Secretary is authorized to prepare a return and execute
it if he follows the rules: He can prepare a return provided the
"taxpayer" consents to disclose the information and subsequently
signs the return, as detailed in 26 USCS 6020(a), or he can
prepare a return and sign it provided he has personal knowledge
of the facts and/or information which would be admissible in a
court of law. But he cannot exceed statute and regulatory
authority, which doesn't extend to the family of 1040 forms,
inclusive of original and amended 1040 and 1040A return report
forms (see Delegation Order 182, Service Center Collection Branch
Procedures Manual 5400-33 at page 5400-541, section 5474.5 for
application).
Should the Director fail to rebut particulars set out in
this section, matters of fact and law set out herein will be
construed as presumed fact, and will be construed as sufficient
cause to secure appropriate remedies by whatever means.
Defective & Fraudulent Notice of Federal Tax Lien
The definition of "Security interest", located at 26 CFR §
301.6323(h)-1(a), provides a beginning-point for this section:
(a) Security interest -- (1) In general. The term
"security interest" means any interest in property acquired
by contract for the purpose of securing payment or
performance of an obligation or indemnifying against loss or
liability...
In the absence of a contract, the only lawful way to acquire
a security interest in something belonging to another party is by
judgment issued via a court of competent jurisdiction (see 26 CFR
§ 301.6323(h)-1(g)). In the absence of such a judgment, any claim
of a security interest (notice of federal tax lien) must be
premised on a preexisting contract (license) which sets forth
certain obligations and the objects which are encumbered by the
contract. This will be found to be the case where the instant
matter is concerned as the only published regulation which
extends the authority of 26 U.S.C. § 6321, et seq. (lien for tax)
and § 6331, et seq. (levy and distraint) is under 27 CFR, Part
70, relating to tax prescribed in Subtitle E of the Internal
Revenue Code (alcohol, tobacco & firearms). Administration of
these taxes is under the exclusive authority of the Bureau of
Alcohol, Tobacco and Firearms, exclusive of Internal Revenue
Service administration of Subtitle A & C taxes. The property
subject to forfeiture where the "license" agreement is concerned
is listed at 26 U.S.C. § 7301, with property subject to
forfeiture when used in violation of internal revenue laws at §
7302. In other words, the original lien by contract, as a
condition of licensing, applies only to those things used in the
manufacture and distribution of the object of the tax, and the
object itself, with criminal liability expanded under 26 CFR §
601.326:
§ 601.326 Seizure and forfeiture of personal property
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, of 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 under the National Firearms Act, see 28 U.S.C.
5872(b). 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).
[38 FR 4969, Feb. 23, 1973, as amended at 45 FR 7256, Feb.
1, 1980]
Notices of federal tax lien issued by revenue officers and
various other Service personnel are nonspecific with respect to
what is encumbered, and it fails to reflect that the encumbrance
is premised on a contract or judgment. Where there is no
provision for such encumbrance under Subtitles A & C of the Code,
the Notice of Federal Tax Lien is obviously fraud when it is
premised on alleged "income tax" obligations unless a judgment is
in place. Where the Victims are concerned, this is not the case
-- there is no judgment, and the Victims' proclamation of status
set out earlier forecloses contractual obligations under Subtitle
E and/or United States treaties.
Next, notice of federal tax lien instruments are clearly
fraudulent under the Four Corners Doctrine: A notice of federal
tax lien must be sufficient on its face for a court to determine
the existence or nonexistence of a lien. In other words, the
document must cite the taxing authority which authorizes
contractual obligations or reference a judgment issued by a court
of competent jurisdiction.
Note in the left documentation column on the Notice of
Federal Tax Lien that "1040" is listed where the column heading
specifies "Kind of Tax". The "1040" is a reporting form, not a
type of tax. In order for the notice of federal tax lien form to
be properly completed, the column would have to reflect the
taxing statute applicable to whoever the assessment is issued
against (26 U.S.C. § 6001 requiring regulations or direct notice;
see mandate for taxing statute, per United States v. Community
TV, Inc., 327 F.2d 797, at p. 800 (1964); Hassett v. Welch, 303
U.S. 303, 58 S.Ct. 559, 82 L.Ed 858). Use of "1040" is clearly
fraud.
Next, the "Date of Assessment" column is contemplative of an
actual assessment. Unless an assessment which complies with
provisions addressed above is in evidence, the date entered in
this column is fraudulent.
Next, the form must be certified:
26 U.S.C. § 6065
Except as otherwise provided by the Secretary, any return,
declaration, statement, or other document required to be
made under any provision of the internal revenue laws or
regulations shall contain or be verified by a written
declaration that it is made under the penalties of perjury.
26 CFR § 1.6065-1 Verification of returns
(a) Persons signing returns. If a return, declaration,
statement, or other document made under the provisions of
subtitle A or F of the Code, or the regulations thereunder,
with respect to any tax imposed by subtitle A of the Code is
required by the regulations contained in this chapter, or
the form and instructions, issued with respect to such
return, declaration, statement, or other document, to
contain or be verified by a written declaration that it is
made under the penalties of perjury, and such return,
declaration, statement, or other document shall be so
verified by the person signing it.
This requirement does not stand alone, as the Uniform
Federal Tax Lien Filing Act, adopted by 37 states since released
by the National Conference of Commissioners on Uniform State Laws
released it in 1978, clearly stipulates that (1) all notices of
federal tax lien will be filed with the proper office designed by
the States, and (2) the instrument must be certified by someone
who is authorized to make the filings.
Information on the Uniform Federal Tax Lien Filing Act is
located in West's Uniform Laws Annotated, Volume 7A, 1985 ed.,
Sec. 3, found on page 365 deals with execution of the notice of
federal tax lien. Execution requires certification by a properly
delegated official. Comment to this section states as follows:
"This section addresses only the validity of the filing and not
the validity of the lien."
This in support, premised on a 1992 U.S. Supreme Court
decision:
We have stated time and again that courts must presume that
a legislature says in a statute what it means and means in a
statute what it says there. See, e.g. United States v. Ron
Pair Enterprises, Inc. 489 U.S. 235, 241-242, 109 S.Ct.
1026, 1030-1031 (1989); United States v. Goldenberg, 168
U.S. 95, 102-103, 18 S.Ct. 3, 4 (1897); Oneal v. Thornton,
6 Cranch 63, 68 (1810). When the words of a statute are
unambiguous, then, this first canon is also the last:
"judicial inquiry is complete." Rubin v. United States, 449
U.S. 424, 430, 101 S.Ct. 698, 701, (1981); see also Ron
Fair Enterprises, supra, 489 U.S., at 241, 109 S.Ct., at
1030. Connecticut National Bank v. Germain, 112 S.Ct. 1146,
1149 (1992).
Premises considered, notices of federal tax lien issued
against the Victims by Service personnel are fraud on their face,
failing to meet requirements of Internal Revenue Code statutes
and attending regulations, and State law. Premises considered,
any encumbrance of Victim assets effected by these bogus
instruments will be removed. Failure to comply will be construed
as sufficient cause to seek appropriate remedies.
Bogus Use of "Notice of Levy" and Levy instruments
Use of "notice of levy" instruments as the basis for
garnishment, third-party seizure, etc., is particularly
fraudulent as the "notice of levy" is defined by use at 26 U.S.C.
§ 6335(a):
(a) NOTICE OF SEIZURE. -- As soon as practicable after
seizure of property, notice in writing shall be given by the
Secretary to the owner of the property (or, in the case of
personal property, the possessor thereof), or shall be left
at his usual place of abode or business if he has such
within the internal revenue district where the seizure is
made. If the owner cannot be readily located, or has no
dwelling or place of business within such district, the
notice may be mailed to his last known address. Such notice
shall specify the sum demanded and shall contain, in the
case of personal property, an account of the property seized
and, in the case of real property, a description with
reasonable certainty of the property seized.
Clearly, notice is given after the fact, not as the vehicle
for seizure. Consult Black's Law Dictionary, 6th Edition, for the
legal definition of "notice", which corresponds with definition
by use set out above.
The next matter of some import is alleged authority for
administrative initiatives reflected on the back of the notice of
levy instruments: The Director will note that the various notice
of levy forms begin with 26 U.S.C. § 6331(b) where the general
authority paragraph is 26 U.S.C. § 6331(a). When properly read,
this dual-purpose general authority paragraph clearly addresses
BATF authority to collect Subtitle E and related taxes in the
first sentence, and "officers, agents and employees of the United
States" (see 26 U.S.C. § 3401(c) & (d)) in the second. In other
words, by design and common use, the notice of levy instruments
engage fraud by design. There is no provision for administrative
seizure without proper jeopardy assessment, supported by a court
order, even where a legitimate lien by way of contract under
provisions of Subtitle E is in existence.
Again, the Parallel Table of Authorities and Rules, cited
supra, lists only 27 CFR, Part 70 authority for 26 U.S.C. § 6331.
This is confirmed at 26 CFR § 601.326, which is in 26 CFR, Part
601, Subpart C, relating to distilled spirits, wines, etc., where
there are no corresponding provisions in Subpart D, relating to
employment and certain excise taxes.
As is the case with notices of federal tax lien, the notice
of levy and levy instruments list "1040" in the column which is
supposed to identify the "Kind of Tax" being collected, and the
"Date of Assessment" is fraud unless a properly executed
assessment is in evidence. Finally, in order to be an executable
instrument, levies and/or notices of levy must be certified, as
is the case for notices of lien and all other instruments issued
by Service personnel. Unless these instruments are issued under
sworn statement (under penalties of perjury, per 28 U.S.C. §
1746(1) or (2)), they are of no legal effect.
As something of a coup de grace, the Director will please
reference the statute which authorizes the Secretary to collect
payment for tax, located at 26 U.S.C. § 6311(a):
(a) Authority To Receive. -- It shall be lawful for the
Secretary to receive for internal revenue taxes, or in
payment for internal revenue stamps, checks or money orders,
to the extent and under the conditions provided in
regulations by the Secretary.
Once again, the Director will please reference the Parallel
Table of Authorities and Rules, beginning on page 751 of the 1995
Index volume to the Code of Federal Regulations, to find that
regulatory authority for receiving payment under internal revenue
laws of the United States is prescribed only under 27 CFR, Parts
19, 24, 25, 53, & 70. There is no authority under 26 CFR, Part 1
or 31. Therefore, any supposition of a taxing authority under
"1040" relating to income, employment and other tax prescribed in
Subtitles A & C of the Internal Revenue Code is defaulted for
something more than detail. There is no authority for the
Secretary to receive payment of taxes from within the several
States except as pertains to imports under Subtitle E and
conceivably under United States treaty authority.
Premises considered, the Director will examine all notice of
levy and levy instruments issued against the Victims, and if they
fail to comply with provisions of law, inclusive of due process
necessary to effect seizure (Fifth Amendment and corresponding
provisions of State constitutions), administrative collection
will immediately cease and all property will be returned.
Summary and Conclusion
Reference item #9 of the Public Notice memorandum to see
that there is no statutory authority for Citizens of the several
States to either elect or contract participation in federal tax
and benefits programs effected by the Internal Revenue Code and
other titles of the United States Code. Therefore, implied or
adhesion contracts effected against Mr. & Mrs. Victim are of no
lawful effect, because whatever colorable authority the Service
has in the continental United States does not extend to the
several States and the population at large:
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 or
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 U.S.C. §
6013(g)(3)). Some party must in some way be connected with a
"United States trade or business" (performance of the
functions of a public office (26 U.S.C. § 7701(a)(26)). A
nonresident alien never has self-employment income (26 CFR §
1.1402(b)-1(d)_. In the event that a nonresident alien is an
"employee" (26 U.S.C. § 3401(c), the "employer" (26 U.S.C. §
3401(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 U.S.C. § 871(d)).
Item #9 of the Public Notice memorandum, without alternative
statutory authority other than that cited, defaults even the
basis of lien authority (26 U.S.C. § 6321 et seq.) within the
several States without the Service securing judgment in favor of
the United States via a judicial court of the State. Therefore,
any encumbrance issued against Mr. & Mrs. Victim must be
terminated and vacated unless such a judicial award is entered
into evidence.
Please be advised that this protest, under authority cited
above, will be construed as adequate to abate and serve notice of
appeal relating to any and all "notice of lien" encumbrances (26
CFR § 301.6326-1) and/or "notice of levy" seizure of property (26
CFR § 6343-1(b)(2)). You will please immediately discontinue any
administrative assessment and/or seizure action in process, or
which Service personnel might be contemplating, to the point the
appeals process is complete, or if you fail to rebut matters
addressed in this instrument and the Public Notice memorandum,
until an appropriate offer in compromise can be executed. Should
you acquiesce to matters of law and fact presented in this
instrument and the Public Notice memorandum by failing to rebut
in a reasonable period of 30 days, Service liability will be
presumed and an appropriate offer in compromise will be forwarded
for your consideration.
Should you fail to comply with the demand to cease
administrative collection initiatives, including termination of
notice of lien instruments, garnishment or whatever other actions
Service personnel might have initiated, Mr. & Mrs. Victim reserve
the right to initiate criminal and/or civil complaints under the
following provisions and/or applicable provisions of State law:
18 USCA § 4 -- misprision of felony ....
18 USCA 242 -- definition and penalty for deprivation of
Citizen's rights under color of law ....
18 USCA 1621 -- criminal penalties for perjury of oath ....
18 USCA 871 -- criminal penalties for extortion via actual
or threatened force ....
18 USCS § 1341 -- mail fraud (frauds & swindles)
18 USCS § 2382 -- misprision of treason (failure to disclose
and acting on behalf of foreign principal & serving as
foreign agent) ....
18 USCS Appx. § 3C1.1, obstructing or impeding the
administration of justice ....
26 U.S.C. § 7206 -- fraud and false statements ... fine of
not more than $100,000 or imprisonment of not more than 3
years ....
26 U.S.C. § 7207 -- fraudulent returns, statements, or other
documents ... any person who willfully delivers or discloses
to the Secretary any list, return, account, statement, or
other document, known by him to be fraudulent or to be false
as to any material matter, shall be fined not more than
$10,000, or imprisoned not more than 1 year ....
26 U.S.C. § 7214(a) -- extortion, oppression, etc., by
revenue officers ....
26 U.S.C. § 7431 -- subject to the greater of $1,000 or
actual punitive damages for each unauthorized disclosure
action ....
28 USCA 1745 -- whoever willfully subscribes as true any
material matter which party does not believe to be true is
guilty of perjury and shall except as otherwise expressly
provided by law, be fined under this title or imprisoned not
more than five years, or both. This section is applicable
whether the statement or subscription is made within or
without the U.S. (28 U.S.C. § 1746(1) & (2)).
42 USCA § 1983 -- injury to Citizen's due process rights,
failure to uphold equal protection provisions (see notes
319, 337, concerning policy & custom; also, notes 333, 349,
350, 351, 352 & 355 ....)
42 USCA § 1985 -- where two or more conspire to act under
color of law to deprive American Citizen of constitutional
rights, all parties are subject to prosecution for
conspiracy (extortion).
42 USCA § 1986 -- anyone with knowledge of constitutional
infractions has a liability, where it is within their power,
to correct such wrong. Failure or neglect to correct results
in a year in jail and a $1,000 fine.
The appeal process, should you dispute matters of law and
fact, requires an administrative hearing. However, antecedent to
engaging an appeal, there must be contested matters of law and/or
fact. Should you acquiesce to matters of law and fact presented
in this instrument and the enclosed Public Notice memorandum,
administrative remedies will be deemed to have been exhausted,
with the Service having confessed liability. An offer in
compromise premised on that liability will be forwarded.
The Director will please note that in Bothke v. Flour
Engineers, 713, F.2d 1405 (1983), the U.S. Court of Appeals ruled
that if a "taxpayer" has informed an IRS agent that he believes
there is an error in assessment and the agent continues levy
action, without first determining if the taxpayer's argument has
merit, such agent loses his immunity. Additionally, the 5th
Circuit, in Hollingshead v. United States, 85-2 USTC 9772 (1985),
concluded that 26 U.S.C. § 7421 is a waiver of immunity by the
Government for a Citizen who claims that his or her property has
been subject to wrongful levy: "The government consents to be
sued when the IRS violates a congressionally-mandated procedure
during the administrative assessment [and] collection process."
The Director will also please consult provisions of 26 U.S.C. §
7804(b) to find that liability issues directly against Service
personnel for wrongful assessment and collections activity.
By my signature, I attest under penalties of perjury, per 28
U.S.C. § 1746(1), that to the best of my current knowledge and
understanding, all matters of law and fact set out herein are
accurate and true.
Regards,
Dan Meador
copies: Mr. & Mrs. Victim
# # #
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