"The art of taxation consists in so plucking the goose as to obtain the largest possible amount of feathers with the smallest possible amount of hissing."
[Jean B. Colbert]

If you are going to be successful challenging illegal levies and liens of the IRS, then you must be able to either defend yourself in court at no expense, or have a warchest stashed away that the IRS can’t pillage when they begin the collection process.  That way, you will have the financial means to hire an attorney if you need one.  Therefore, it’s probably a good idea to keep cash stashed in an account in a friend or family member’s name who isn’t legally connected with you, such as a wife, where they could get to community property in her name.  Alternatively, you could keep your warchest in an offshore account or in gold or silver not in any bank or safe deposit box but safe and hidden from access by others.

The chief vehicle the IRS uses to maintain people’s fear and needless compliance is unlawful liens and levies.  Liens and levies are defined in chapter 8 of this book.  Basically, liens and levies are claims upon the property of a person based either on the operation of law or of contract.  In the case of tax collection, lawful liens and levies result from the lawful completion of the assessment process and the completion by the revenue officer of a valid form 23C Assessment Certificate.  To be valid, this form must be signed by an authorizing official, usually the revenue officer who is dealing with your situation.  Most revenue officers are very reluctant to sign one of these forms for personal income taxes under Subtitle A of the Internal Revenue Code because:

• There is no statute authorizing them to do an assessment for income taxes found in Subtitles A of the Internal Revenue Code.  We covered this earlier in section 5.4.2 of the Great IRS Hoax  book.
• There is no statute making any American Citizen liable for the payment of income taxes.  We covered this in section 5.6.5 of the Great IRS Hoax book.
• The only types of valid levies and liens are those issued with a judicial warrant of distraint that can only be issued and signed by a judge.
• If they institute collection action absent a valid levy or lien, they can be prosecuted under 26 U.S.C. Section 7214.  for unlawful taking of taxes and extortion under the color of law if they sign the assessment form.  We cover this later in section 6.8.1 of the Tax Fraud Prevention Manual.

Revenue officers will therefore frequently try to issue the form without a signature.  If the taxpayer isn’t aware of the law or never requests a copy of the completed 23C Certificate of Assessment form following a tax examination or final determination or prior to the commencement of collection activity, then he is often deceived into believing that an invalid assessment is actually a valid one, and is terrorized into paying a tax he doesn’t owe..

After the completion of the valid Form 23C Assessment Certificate, the IRS then must produce a tax lien, from which levies may then be instituted against the person they allege is liable for tax.  Absent the lien, levies cannot be issued.  We know from reading Chapter 5 of the Great IRS Hoax, however, that NO NATURAL PERSON can be liable for personal income taxes under subtitles A and C.  In many cases, IRS will attempt to institute collection activity absent any assessment.  You won’t even know this unless you ask them for evidence of an assessment.  Below are some important constraints on levies you should know about:

• According to 26 U.S.C. §6532(a)(1), if the IRS institutes a levy, then you have up to 9 months from the date of the levy to file a suit in federal court to stop the levy.
• Continuing levies can only be instituted on federal payments, not payment of private employers to their employees, according to 26 U.S.C. 6331(h)
• Levies may only be instituted on “taxpayers”, who are persons “liable for” tax, according to 26 U.S.C. §6331(e).  “nontaxpayers” may not be levied upon.  Note that there is no statute making anyone liable for Subtitle A income taxes.
• Continuing wage levies may not exceed 15 percent of a person’s salary.  See 26 U.S.C. §6331(h)(1).
• Social Security benefits may not be levied, in accordance with 42 U.S.C. §407(a).

To collect, the IRS will first send a deficiency notice to the taxpayer, who then is requested to pay the tax bill.  If the bill isn’t paid, they will issue a collection notice to the taxpayer where they must by law offer an opportunity to the taxpayer to have what is called a Collection Due Process hearing.  IRS form 121523 must be submitted by the person to formally request the hearing.  The request for the CDP hearing must occur no later than 30 days after receipt of the Notice and Demand for payment.  The IRS likes to complicate getting a CDP by by saying that the form 12153 submitted by the taxpayer did not have a date on it and so they will then claim that it was submitted outside the window so they don't have to provide a due process hearing.  This form, as a matter of fact, is the ONLY IRS FORM we have found that does not have a place to put a date!  That is why we emphasize adding a date field to the IRS form 12153 before submitting it and sending it via certified mail with a proof of service. 

After either the taxpayer declines the hearing or the hearings are completed, the IRS will normally issue a Notice of Levy to financial institutions who have assets of the taxpayer or the taxpayer’s employer.  They may also issue a lien on the real property of the taxpayer at the county courthouse.

The IRS often deceives financial institutions and county recorders throughout the nation into surrendering property of taxpayers by issuing  fraudulent “Notice of Levy” or lien documents.  These fraudulent Notices of Levy, printed on IRS Form 668-A(c)(DO) documents quote portions of 26 U.S.C. 6331 but conveniently leave out paragraph (a), which specifically says that the levy can only occur against employees of the federal government.  The clerks of employers and financial institutions who receive these levies usually have no legal training and will just surrender the money or property of the accused without asking even a single question.  They won’t even verify that the levy or lien is signed by a magistrate.  Oftentimes, they are threatened by the IRS with an audit or levy or seizure of their own if they don’t comply.  This weak link in our property rights is at the heart of how the IRS continues to successfully collect a tax that few Americans actually owe.  This unethical application of the tax laws is called violation of due process, and it is quite commonplace.  The federal courts, however, have said that the issue of a "Notice of Levy" does not constitute a valid levy.  Below is one example:

A "levy" requires that property be brought into legal custody through seizure, actual or constructive, levy being an absolute appropriation in law of property levied on, and mere notice of intent to levy is insufficient. United States v. O'Dell, 6 Cir., 1947, 160 F.2d 304, 307.  Accord, In re Holdsworth, D.C.N.J. 1953, 113 F.Supp. 878, 888; United States v. Aetna Life Ins. Co. of Hartford, Conn., D.C.Conn. 1942, 146 F.Supp. 30, 37, in which Judge Hincks observed that he could "find no statute which says that a mere notice shall constitute a 'levy.'" There are cases which hold that a warrant for distraint is necessary to constitute a levy.  Givan v. Cripe, 7 Cir., 1951, 187 F.2d 225; United States v. O'Dell, supra.  The Court of Appeals for the Third Circuit state in is opinion, 221 F.2d at page 642, "These sections [26 U.S.C. §§3690-3697] require that levy by a deputy collector be accompanied by warrants of distraint [issued by a judge in a legal proceeding]."  In re Brokol Manufacturing Co., supra.

I am constrained to conclude that a levy upon both tangible and intangible property under §3692 requires the execution of warrant for distraint and then effective only to amounts affixed thereon.  As noted above, the Court of Appeals for this Circuit declared when this matter was before it that §§3690-3697 "require that a levy by a deputy collector be accompanied by warrants of distraint."

The distress authorized by §3690 is different from anything know to the common law, both because it authorizes sale of the property seized, and because it extends to other personality than chattels.  By its very nature it requires that demands of procedural due process of law be rigorously honored. 
[Freeman v. Mayer, 152 F.Supp. 383 (1957)]

To make things worse, how many employees who have had their property rights violated by their employer would sue their employer for violation of due process?  Most people would be afraid they might be terminated if they did.  So people look the other way for fear of losing their job because they don’t want to look a gift horse in the mouth.  This is the unethical and insidious technique the IRS uses to continue its extortion and slavery.

Liens and levies issued by the IRS absent a court order are both a type of distraint, which is defined as follows:

distraint:  the act or process of distraint, whereby a person (the DISTRAINOR), without prior court approval, seizes the personal property of another located upon the distrainor's land in satisfaction of a claim, as a pledge for the performance of a duty, or in reparation of an injury.  Where goods are seized in satisfaction of a claim, the distrainor can hold the goods until the claim is paid and, failing payment, may sell them in satisfaction.  Originally, distress was a landlord's remedy (see lien [LANDORD'S LIEN], 324 A.2d 102, 104) and was distinguishable from attachment, which is a court-ordered seizure of goods or property.  The persons whose goods are distrained upon has recourse against the wrongful distrainor in replevin.

Distraint has been superseded in most states of the United States by statutory provisions for debt collection, the enforcement of security interests, and landlord-tenant relations.

The important phrase from above is “without prior court approval”.  The supreme Court, in the case of Flora v. United States, 362 U.S. 145, (1959) has stated that our tax system is based on voluntary compliance and not distraint:

“Our system of taxation is based upon voluntary assessment and payment, not upon distraint.”

This indicates that IRS actions to lien or levy the property of taxpayers are not allowed absent a court order, but the IRS continues to flagrantly violate due process anyway.  How do they do it?  They use a combination of “official immunity” and ignorance and apathy of the abused Citizen to perpetuate this fraud.  Another reason why people continue to tolerate this is because of the high cost of litigating to defend their rights.  After the IRS STEALS their money, they can’t afford to defend their legal rights because they can’t afford a high-priced lawyer.  For instance, many people, after having been the subject of an IRS lien or levy, will just throw up their hands and say something like:

“No matter what I lose, because it would cost me more to hire a lawyer to litigate to defend my rights than it would to just pay the tax.”

This kind of thinking and tolerance of gross abuse by the government has to be eliminated if things will ever get better!

Any claim arising under internal revenue laws of the United States is inchoate (unperfected) until there is a judgment from a court of competent jurisdiction. If a claim is contested, IRS and Government of the United States must secure a judgment lien in compliance with 28 U.S.C. §3201. To that point, any notice of federal tax lien an IRS officer or agent files is an uttered instrument – it isn’t worth the paper it is written on. Nor can IRS personnel unilaterally garnish wages, bank accounts and other financial assets via notice of levy. The trick here is that IRS personnel issue notices of levy for administrative garnishment, but they forget to include a properly executed IRS Form 2159 Payroll Deduction Agreement. See § 4075.50 of Part 3, Chapter 4000 of Title 1 of the Treasury Financial Manual. The administrative offset program is authorized by 31 U.S.C. §3711; it applies only to government agencies and personnel.

Virtually all IRS seizures are predicated on 26 U.S.C. §7302, property used in violation of internal revenue laws. The seizures are governed by Delegation Order #157, 26 U.S.C. § 403, and Rule 41 of the Federal Rules of Criminal Procedure. IRS also enforces Title 18 money laundering statutes under Delegation Order #158. Both are based on the underlying presumption that the seized property was used in conjunction with or was the fruit of drug-related commercial crimes listed in 26 U.S.C. § 403. All federal government seizures, whether by IRS or any other government agency, are predicated on the presumption of admiralty jurisdiction and the venue of such authority is exclusively special territorial and maritime jurisdiction defined at 18 U.S.C. §7. Any seizure on land requires trial by jury for condemnation and forfeiture.

Legal authority for issuance of liens and levies by the IRS comes from 26 U.S.C. Section 6331.  Typically, when the IRS issues a “Notice of Levy”, they will quote this section in the Notice of Levy.  Older versions of the “Notice of Levy” were issued with a quote of the entire section.  The IRS more recently eliminated 26 U.S.C. Section 6331(a) from their “Notice of Levy”.  Below is a quote of that section:

26 U.S.C., Subchapter D - Seizure of Property for Collection of Taxes

Sec. 6331. Levy and distraint

(a) Authority of Secretary

If any person liable to pay any tax neglects or refuses to pay the same within 10 days after notice and demand, it shall be lawful for the Secretary to collect such tax (and such further sum as shall be sufficient to cover the expenses of the levy) by levy upon all property and rights to property (except such property as is exempt under section 6334) belonging to such person or on which there is a lien provided in this chapter for the payment of such tax. Levy may be made upon the accrued salary or wages of any officer, employee, or elected official, of the United States, the District of Columbia, or any agency or instrumentality of the United States or the District of Columbia, by serving a notice of levy on the employer (as defined in section 3401(d)) of such officer, employee, or elected official. If the Secretary makes a finding that the collection of such tax is in jeopardy, notice and demand for immediate payment of such tax may be made by the Secretary and, upon failure or refusal to pay such tax, collection thereof by levy shall be lawful without regard to the 10-day period provided in this section.

(b) Seizure and sale of property

The term ''levy'' as used in this title includes the power of distraint and seizure by any means. Except as otherwise provided in subsection (e), a levy shall extend only to property possessed and obligations existing at the time thereof. In any case in which the Secretary may levy upon property or rights to property, he may seize and sell such property or rights to property (whether real or personal, tangible or intangible).

It’s quite plain why the IRS removed paragraph (a) from their Notice of Levy, because it clearly states that only employees or officers of the United States Government may be levied!  That’s right, the IRS is NOT authorized to levy private citizens who are not officers or “employees” of the United States government.  Incidentally, even the term “employee” isn’t what you think it is:

26 C.F.R. §31.3401(c ) Employee: "...the term [employee] includes officers and employees, whether elected or appointed, of the United States, a [federal] State, Territory, Puerto Rico or any political subdivision, thereof, or the District of Columbia, or any agency or instrumentality of any one or more of the foregoing.  The term 'employee' also includes an officer of a corporation."

Quite a scam, huh?  What can we do about this?  Get informed!  Before you attempt to deal with an IRS collection action, we recommend reading the following IRS forms and publications, all of which are available on our website at https://famguardian.org/TaxFreedom/FormsInstr.htm:

• IRS Publication 594:  What You Should Know About the IRS Collection Process
• IRS Publication 1660: Collection Appeal Rights
• IRS Publication 5:  Your Appeal Rights and How to Prepare a Protest if You Don’t Agree
• IRS Form 12153:  Request for Collection Due Process Hearing

After you read these very short publications and forms, we should then ensure that we understand the legal and administrative process the IRS must follow and nailing their butt in the act as they try to illegally enforce the lien or levy.  Below is a summary of that process:

 

The weak point in the above process where freedom fighters fall down is they don’t request a due process hearing within 30 days after receiving the notice and opportunity for hearing.  That is why we, as a standard practice, automatically request a due process hearing in every paper we file with the IRS involving a tax return that they decide to contest.  It covers your butt and gives you an out.  If the IRS misses or  overlooks the automatic request or doesn’t honor it, then it’s their fault not the person’s.

The illegal point in the process above, and the point where our Fourth Amendment due process protections are violated, is at steps 13 and 14.  Here is what the annotated Fourth Amendment says about the seizure of property (see https://caselaw.lp.findlaw.com/data/constitution/amendment04/02.html):

Fourth Amendment Annotations

Searches and Seizures Pursuant to Warrant

Issuance by Neutral Magistrate .--In numerous cases, the Court has referred to the necessity that warrants be issued by a ''judicial officer'' or a ''magistrate.''[1]  ''The point of the Fourth Amendment, which often is not grasped by zealous officers, is not that it denies law enforcement the support of the usual inferences which reasonable men draw from evidence. Its protection consists in requiring that those inferences be drawn by a neutral and detached magistrate instead of being judged by the officer engaged in the often competitive enterprise of ferreting out crime. Any assumption that evidence sufficient to support a magistrate's disinterested determination to issue a search warrant will justify the officers in making a search without a warrant would reduce the Amendment to a nullity and leave the people's homes secure only in the discretion of police officers.''[2]  These cases do not mean that only a judge or an official who is a lawyer may issue warrants, but they do stand for two tests of the validity of the power of the issuing party to so act. ''He must be neutral and detached, and he must be capable of determining whether probable cause exists for the requested arrest or search.''[3]  The first test cannot be met when the issuing party is himself engaged in law enforcement activities,[4] but the Court has not required that an issuing party have that independence of tenure and guarantee of salary which characterizes federal judges. [5]  And in passing on the second test, the Court has been essentially pragmatic in assessing whether the issuing party possesses the capacity to determine probable cause. [6]

Did you notice above that seizure of property requires the issue of a warrant by a magistrate (a judge)?  Seldom if ever does the IRS respect this requirement, which is where most of our problems and due process violations happen.  Instead, the tables are turned in the courts so that the Citizen instead of the IRS needs the order of a judge to get his property back!  This creates a built-in prejudice, inconvenience, and cost against the Citizen in defending his property rights against plunder by the government.  If this one requirement for due process were properly observed by the IRS during the collection process, then there would be a lot more people who didn’t pay taxes and a lot fewer people scared of the IRS.  Consequently, the most fruitful area to focus on violations of the law by revenue officers is the violation of due process by illegal seizing or taking of property and fraud committed on the Notice of Levy.  Below is a holding of the Supreme Court along these lines in the case of Soldal v. Cook County, 506 U.S. 56 (1992):

The Court of Appeals understandably found it necessary to reconcile its holding with our recognition in the plain-view cases that the Fourth Amendment protects property as such. In so doing, the court did not distinguish this case on the ground that the seizure of the Soldals' home took place in a [506 U.S. 56, 67]  noncriminal context. Indeed, it acknowledged what is evident from our precedents - that the Amendment's protection applies in the civil context as well. See O'Connor v. Ortega, 480 U.S. 709 (1987); New Jersey v. T.L.O., 469 U.S. 325, 334 -335 (1985); Michigan v. Tyler, 436 U.S. 499, 504 -506 (1978); Marshall v. Barlow's, Inc., 436 U.S. 307, 312 -313 (1978); Camara v. Municipal Court of San Francisco, 387 U.S. 523, 528 (1967). 11  

…

The court seemingly construes the Amendment to protect only against seizures that are the outcome of a search. But our cases are to the contrary, and hold that seizures of property are subject to Fourth Amendment scrutiny even though no search within the meaning of the Amendment has taken place. See, e.g., Jacobsen, 466 U.S., at 120 -125; Place, 462 U.S., at 706 -707; Cardwell, 417 U.S., at 588 -589. 13 More generally, an officer who happens to come across an individual's property in a public area could seize it only if Fourth Amendment standards are satisfied - for example, if the items are evidence of a crime or contraband. Cf. Payton v. New York, [506 U.S. 56, 69]   445 U.S., at 587 . We are also puzzled by the last sentence of the excerpt, where the court announces that the "usual rules" of the Fourth Amendment are inapplicable if the seizure is not the result of a search or any other investigative activity "precisely because there is no invasion of privacy." For the plain-view cases clearly state that, notwithstanding the absence of any interference with privacy, seizures of effects that are not authorized by a warrant are reasonable only because there is probable cause to associate the property with criminal activity. The seizure of the weapons in Horton, for example, occurred in the midst of a search, yet we emphasized that it did not "involve any invasion of privacy." 496 U.S., at 133 . In short, our statement that such seizures must satisfy the Fourth Amendment and will be deemed reasonable only if the item's incriminating character is "immediately apparent," id., at 136-137, is at odds with the Court of Appeals' approach.

[…]

Whatever its proper reading, we reaffirm today our basic understanding that the protection against unreasonable searches and seizures fully applies in the civil context.

The U.S. Supreme Court has also stated that you are entitled to a hearing before the taking of property:

“The right to a prior hearing has long been recognized by this Court [Supreme Court] under the Fourteenth and Fifth Amendments…[T]he court has traditionally insisted that, whatever its form, opportunity for that hearing must be provided before the deprivation at issue takes place.”
[Bell v. Burson, 402 U.S. 535, 542, Wisconsin v. Constantineau, 400 U.S. 433, Goldberg v. Kelly, 397 U.S. 254, Armstrong v. Manzo, 380 U.S. 551, United States v. Illinois Central R. Co.]

And the hearing must occur at a point where the deprivation of property can be prevented:

“If the right to notice and a hearing is to serve its full purpose, it is clear that it must be granted at a time when the deprivation can still be prevented.  At a later hearing, an individual’s possessions can be returned to him if they were unfairly or mistakenly taken in the first place.  Damages may even be awarded him for wrongful deprivation.  But no later hearing and no damage award can undo the fact that the arbitrary taking that was subject to the right of due process has already occurred.  This Court [the Supreme Court] has not embraced the general proposition that a wrong may be done if it can be undone.” 
[Stanley v. Illinois, 405 U.S. 645, 647, 31 L.Ed.2d 551, 556,.Ct. 1208 (1972)]

The traditional approach that revenue officers who are accused of violating due process will take is something like:

“We didn’t tell the employer to send the money and didn’t issue a valid levy, but only a Notice of Levy.  The employer, not us, is liable for violation of the rights of the taxpayer.  WE are scott free.”

How many people do you know who would sue their employer for violating their rights in honoring an improper IRS levy.  It takes a lot of guts to do this, but often it is your only recourse, unfortunately.  You can, however, prevent such a problem BEFORE it happens by taking the time to educate your employer to recognize a valid levy by demanding that it be signed by a magistrate.  This kind of proactive approach is usually far more effective than trying to pick up the pieces AFTER your employer made the mistake and garnished your wages illegally by honoring a bogus levy from the IRS.

One very effective technique to response to a Notice of Levy is to use the Privacy Act and Freedom of Information Act to request the basis for the assessment.  The Transaction Pocket Guide at the end of the latest version of the IRS 6209 manual says that a non master file must be created for each valid assessment not instituted by the “taxpayer”.  Treasury System of Records 26.009 is the data item or system of records used to make and record this assessment and this data item is listed in the Federal Register Part II, Vol. 63, No. 242, pages 69716 through 69929 of for the year 1998.  You can get this document using the FOIA request for your Master file provided in:

1. Section 3.15.5 of the Sovereignty Forms and Instructions Manual, Form #10.005  (OFFSITE LINK) book.
2. Section 14.5 of the FORMS section on this online version of the Sovereignty Forms and Instructions Manual.
3. IRS Freedom of Information Act (FOIA) Request, Form 03.014
   https://sedm.org/Forms/FormIndex.htm  (OFFSITE LINK)
4. IMF Decoding Freedom of Information Act Requests, Form #03.015
   https://sedm.org/Forms/FormIndex.htm (OFFSITE LINK)

Whenever any collection activity is instituted against you by the IRS, the best response is to do a Privacy Act Request for the “Original lien and the ‘non master file record’ under Treasury system of records 26.009 for the assessments related to all collection activity.”  The following resources tell you how to do a FOIA/Privacy Act request:

1. Section 2.5.4.5 of the Sovereignty Forms and Instructions Manual, Form #10.005  (OFFSITE LINK) book.
2. Section 4.5 of the INSTRUCTIONS section on this online version of the Sovereignty Forms and Instructions Manual.

For further very detailed legal research proving conclusively that the IRS may not legally lien or levy against the assets or wages of a private citizen, refer to the following article by Dan Meador entitled “Relation-Back Doctrine Condemns Administrative Tax Liens and Levies: