EDITORIAL:  The term "QED" used below stands for "Quod Erat Demonstrandum", and it means "that which was to be demonstrated".  This term is commonly used in the mathematical or scientific fields at the end of a proof to indicate that you have made all your points and demonstrated the conclusion or hypothesis that you said you would prove.

Having just completed the above paper, it occurred to me that it might be useful to summarize some of the main points covered, which go to prove that the usual interpretation of the Internal Revenue Code—both by the general public and probably a majority of researchers in the Patriot Movement—is not correct when it takes the term ‘United States,’ as used therein, to mean the whole nation, and the term ‘U.S. citizen,’ to refer to every American. Beliefs, as I have shown, which the government has done everything in its power to foster.

In my understanding, each of the twenty-one points, selected below, is prima facie evidence that the IRC does not refer to the 50 union states when employing the term ‘United States’—unless specifically stating that it is only doing so in that particular instance.

I have tried to make them somewhat self-contained, in the event that they were to be read first. A fair rebuttal, however, would have be of the full exposition of each position, and not of the synopses below.

All emphasis is added, except of code section titles, etc.

1. The Alaska and Hawaii Omnibus Acts, mandate that the IRC stop referring to Alaska and Hawaii as being ‘States,’ upon their being made states of the union. Therefore, 26 CFR 31.3121(e)-1 State, United States, and citizen [revised April 1, 1999] now reads: "(a) When used in the regulations in this subpart, the term ‘State’ includes the District of Columbia, the Commonwealth of Puerto Rico, the Virgin Islands, the Territories of Alaska and Hawaii before their admission as States…" They were previously, then, federal States, which is what the IRC said it applied to. Quod erat demonstrandum. (QED, ‘which was to be demonstrated.’)

2. The foregoing means that the IRC admits that it no longer applies to these two states—which, however, are constitutionally no different than the other 48 states. Therefore, the IRC applies to none of the 50 states. QED.

3. The findings of the Legislative Counsel and the Congressional Research Service, in reply to a request from Congresswoman Barbara Kennelly, state that: "The term state in 26 U.S. Code 3121 (e) specifically includes only the named territories and possessions of the District of Columbia, Puerto Rico, the Virgin Islands, Guam and American Samoa"—not the 50 states. QED.

4. Title 26 7621 Internal revenue districts reads: "(b) Boundaries.…[T]he President may subdivide any State or the District of Columbia, or unite into one district two or more States." This, of course, would be unconstitutional (4:3:1), if reference were being made to the 50 states. So, obviously, it is not. QED.

5. Note such instructions as this: "The term ‘United States’ means (but only for purposes of this subsection and subsection (a)) the fifty States and the District of Columbia." (Hawaii Omnibus Act, Section 29(d)(3).) Or this, from the Alaska Omnibus Act 14(d)(2): "and by striking out ‘continental United States’ in clause (ii) of such sentence and inserting in lieu thereof ‘United States (which for purposes of this sentence and the next sentence means the fifty States and the district of Columbia)’." In the middle of a paragraph, then, we are told that the U.S. means the 50 States…but, only for 2 sentences! On other occasions it doesn’t. QED.

6. The United States District Court case Burnett v. Commissioner, which held that Subtitle A taxes apply only to Washington, D.C. and the territories. They cited 26 USC 7701(a)(9), the IRC’s general definition of ‘United States,’ and 7701(a)(10), the definition of ‘State,’ interpreting them as in this paper. QED.

7. Only in the few instances that I mention in this paper is it stated that the term "‘United States’ means the 50 States…"—occasions which, unlike all others, clearly and obviously call for application to the whole nation. And, only on these occasions, incidentally, is the term ‘means’ used, rather than the term ‘includes.’

8. The January 1, 1961, revision of Title 26 CFR 170.59 states: "‘Includes’ and ‘including’ shall not be deemed to exclude things other than those enumerated [i.e., by the example given…by the class example] which are in the SAME GENERAL CLASS." Or, as TD 3980 (1927) puts it: "by introducing the specific elements constituting the enlargement." With the above in mind, look at the IRC’s general definition of ‘State’ at 26 USC 7701(a)(10): "The term ‘State’ shall be construed to include the District of Columbia…" Since the District of Columbia manifestly and incontestably can not be considered as being pari causa (on an equal footing and with equivalent rights) with the 50 states, it must, therefore, be a federal State. Being in a category separate from the union states, this definition, then, cannot be expanded to ‘include’ them. QED.

9. Therefore, when 26 USC 7701(a)(9) United States says that this term "includes only the States and the District of Columbia," the term ‘States’ must, perforce, mean the federal States. For, it cannot be making reference to the union states, as established, above. QED. (Most Americans would not guess that there are, or even could be, such things as federal States. But, Black’s Law Dictionary, 6th edition, clears this up, in the article ‘State.’ It differentiates two kinds. First, it designates: "The section of territory occupied by one of the United States." But, also, it refers to federal States: "Any [S]tate of the [District] United States, [comma, that means, here, ‘which is comprised of the following’] the District of Columbia, the Commonwealth of Puerto Rico, and any territory or possession subject to the legislative authority of the United States [and, therefore, not a union state]. Uniform Probate Code, 1-201(40)." (Emphasis added.) I deal with and document federal States not infrequently, in the instant paper.)

10. Title 28 1746, has two jurats: "(1) If executed without (outside) the United States: ‘I declare (or certify, verify, or state) under penalty of perjury under the laws of the United States of America that the foregoing is true and correct…’" and "(2) If executed within the United States, its territories, possessions, or commonwealths: ‘I declare (or certify, verify, or state) under penalty of perjury that the foregoing is true and correct…’" Note also that they left out ‘United States’ in the second oath, after including ‘the United States of America’ in the first one. Was this to avoid people questioning what the difference between them was? Nevertheless, the point remains that there is, here, a United States of America designated as being "without (outside)" the ‘United States.’ QED.

11. With three exceptions, noted in the paper, the use of ‘several States’ misleadingly implies that reference is being made to the union states. A perfect example of this is found in the Hawaii Omnibus Act: "Sec. 10. Section 2 of the Act of September 2, 1937 (50 Stat. 917), as amended, is further amended by striking out the words ‘; and the term "State" shall be construed to mean and include the several States and the Territory of Hawaii’." So, before Hawaii became a union state it was on a par with the ‘several States’… meaning that they must have been federal States. For a Territory could never be termed a State, in the same sense as Nebraska. QED.

12. It is instructive to follow the transmogrification of the general definition of ‘State,’ presently found at 26 USC 7701(a)(10). (Please excuse the long word, but it seems to fit the bill like no other. Webster’s New Collegiate Dictionary defines it as "to change or alter greatly and often with grotesque or humorous effect." You be the judge.) In 1873, its forerunner stated that it "shall be construed to include the Territories and the District of Columbia…" When Alaska was admitted to the union, in 1959, 7701(a)(10) State was amended by striking out "Territories’ and substituting "Territory of Hawaii," the only remaining incorporated Territory. A few months later, when Hawaii was admitted to statehood, this was amended by striking out "the Territory of Hawaii and." So now we simply have: "The term ‘State’ shall be construed to include the District of Columbia…" Patently, a federal State. QED. And, incidentally, this further substantiates and confirms the correct interpretation of the term ‘includes,’ for these cases it can be read in no other way than as being a term of restriction.

13. In section 7 of this paper I quote an alcohol and tobacco tax act, of 1868, which reads: "…and the word ‘State’ to mean and include a Territory and District of Columbia." So, here we have the federal States referred to openly and unmistakably. Furthermore, mean’ and ‘include’ are equated, which makes ‘include’ restrictive. This is bolstered in 12 USC 202 Definitions where it says: "the term ‘State’ means any State, [comma, that means, here, ‘which is comprised of the following’] Territory, or possession of [i.e., belonging to] the [District] United States…" ‘State,’ here, has to unquestionably indicate a federal State, because of the other sample examples, which are totally distinct from a union state and, therefore, cannot be in the same list with it. QED.

14. Title 28 5 United States defined reads: "The term ‘United States,’ as used in this title in a territorial sense, includes all places and waters, continental and insular, subject to the jurisdiction of the United States, except the Canal Zone." ‘Jurisdiction,’ here, is short for ‘complete or exclusive jurisdiction,’ as adequately documented in the instant paper. As it’s stated in the McCuller case: "land acquired for the United States and under its exclusive jurisdiction." See point 19 for more documentation of the fact that legislative jurisdiction means complete jurisdiction. QED.

15. It is more than noteworthy that lacking any statutory or regulatory authority in the 50 states, the IRS, BATF, and other alphabet soup agencies, can be required by law to apply for permission to enter these states, as registered foreign agents, pursuant to the Foreign Agents Registration Act of 1938. For they are operating under international law, not under the general, plenary powers of 4:3:2 of the U.S. Constitution, as would be the case were they in the federal zone, but rather under the specifically authorized enumerated special powers of 1:8. Does this seem like something that could happen in a single income tax jurisdiction? And look at Wyoming Sheriff Dave Mattis, who established in court that he had the legal and constitutional right to retain IRS agents in custody for operating in his county without his permission—and had done so. QED. (See section 11 for details.)

16. The Alaska Omnibus Act 22 makes a very significant statement in subsection (b): "Section 4262(c)(1) of the Internal Revenue Code of 1954 (definition of ‘continental United States’) is amended to read as follows: ‘(1) The continental United States.—The term "continental United States" means the District of Columbia and the States other than Alaska.’" So, now that Alaska has become a union state it is no longer included in the definition of the "continental United States"—though, by implication, the islands of Hawaii still are. Code definitions, as you know, can mean anything. QED.

17. Somewhat similarly, the Hawaii Omnibus Act 45, calls for "striking out the words ‘for the purchase within the continental limits of the United States of any typewriting machines’ and inserting in lieu thereof ‘for the purchase within the States of the Union and the District of Columbia of any typewriting machines’." For, such machines were bought from both of these new union states, when they were Territories, and, therefore, part of the ‘continental United States.’ Now, as union states they are no longer part of the territorial District United States. QED.

18. I quote the Supreme Court (Elk v. Wilkins), to the effect that: "the phrase ‘subject to the jurisdiction’ relates to time of birth, and one not owing allegiance at birth cannot become a Citizen save by subsequent naturalization….[i.e.] COMPLETELY subject to the political jurisdiction." Not having gone through the 5 year court process to do this, any state Citizen is able to avail him/herself of Form W-8 Certificate of Foreign Status, which s/he gives to her/his employer—the IRS never wants to sees it. The General Instructions read: "Use Form W-8 or a substitute form [i.e., a letter] containing a substantially similar statement to tell the payer…that you are a nonresident alien individual, foreign entity, or exempt foreign person not subject to certain U.S. information return reporting or backup withholding rulesFor purposes of this form, you are an "exempt foreign person" for a calendar year in which: 1. You are a nonresident alien individual…" Notice that the term ‘payer’ is used, not ‘employer,’ which is a ‘painted word’ in tax law, and would not fit in this picture. So, where is the universally applicable income tax for all of America and all its inhabitants? If there were only one United States that the IRC applied to, how can one utilize a Form W-8 to claim that s/he is an NRA, by virtue of working and living in a union state? QED.

19. In 1957 the second volume of an extremely important study, was published by the federal government: Report of the Interdepartmental Committee for the Study of Jurisdiction over Federal Areas with States. A text of the Law of Legislation Jurisdiction. It established, in painstaking detail, that only persons residing within the legislative jurisdiction of the U.S. Congress are ‘residents’ of that jurisdiction—i.e., areU.S. residents.’ It is made exhaustively manifest that this Congress does not extend the jurisdiction of its legislative umbrella beyond the Constitutionally restricted boundaries of territories of the United States, "belonging to" its "exclusive sovereignty" "in all cases whatsoever," e.g., the federal zone (D.C., the federal States, possessions, and enclaves). In other words, the powers of the federal government are limited to and specifically defined at 1:8:17 of the Constitution. And, just as a reminder: "‘Act of Congress’ includes [is restricted to] an act of Congress locally applicable to and in force in the District of Columbia, in Puerto Rico, in a territory or in an insular possession." (Rule 54(c), Federal Rules of Criminal Procedure.’ This takes care of the question as to whether one is a ‘U.S. resident’ or not…just as the preceding paragraph goes a long way in clarifying who is a ‘U.S. citizen.’ QED.

20. In the Internal Revenue Manual, Chapter 1100, Section 1132.75, it states: "The Criminal Investigative Division enforces the criminal statutes applicable to income, estate, gift, employment, and excise tax laws involving [District] United States citizens residing in foreign countries [like Missouri and New Hampshire] and nonresident aliens subject to Federal income tax filing requirements [e.g., Oregonians having federal U.S. source income, say, from Treasury Bonds]. If my bracketed suggestions are not on the mark, then the CID would be acting outside its delegated authority, defined above, and only above, in proceeding as it does. In other words, one could then ask where there is reference to Americans living and working in the USA. The ‘U.S. citizen’ part is explained by everyone’s swearing on a Form 1040 that s/he is ‘U.S. citizen,’ for tax purposes. And, I have established that from the point of view of private international law the union states are 50 countries foreign to one another, as well as to their agency, the District United States. QED.

21. Lastly, the supremely important Brushaber case and the resultant Treasury Decision 2313, of 1916. This can be summarized briefly, without distorting the situation. Frank Brushaber thought that he was outside the tax forum contractus of the federal government, due to his living and working in New York—meaning that he was not a resident in, or of, the U.S., and was alien to its jurisdiction, i.e., a nonresident alien, which this the Court never contested. His error was in believing that the Union Pacific RR Co. was also outside this tax forum. Consequently, in the first sentence he "enjoined the corporation from complying with the income tax provisions of the tariff act of October 3, 1913…" He contended that the Union Pacific was incorporated in a union state. But he overlooked the fact that Utah was still a federal territory in 1862 and, therefore, domestic to the District U.S. Therefore, he was obligated to pay an excise tax (which, incidentally, is what the Brushaber case determined that income tax was) for the privilege of earning money from a corporation resident in the federal zone—i.e., having been incorporated by an act of Congress. It is exceedingly important to note that no money he earned in his home state was exacted, or even mentioned. What this all means is that a state Citizen, who, therefore, is a nonresident alien with respect to the District U.S., has no tax liability if he has no income that is "received from sources within the [District] United States." (26 USC 871(a)(1))…which includes, thereby, being a federal employee. But the real jewel of this whole scenario is Treasury Document 2313, which I have reproduced in the Appendix. It states that it was promulgated specifically to implement the Brushaber case. In crystal clear language, it proceeds along in perfect harmony with the IRC today, as seen in 872 Gross Income: "In the case of a nonresident alien individual…gross income includes only (1) gross income which is derived from sources within the [District] United States… And, of course "[a]n individual is a nonresident alien if such individual is neither a citizen of the [District] United States nor a resident of the [District] United States." (26 USC 7701(b)(1)(B). Because this TD is referencing the Brushaber case exclusively, it can not be disputed, by any logical acrobatics, that Brushaber’s status—i.e., living and working in a union state—was accepted by the Court as exemplifying the criteria that define a nonresident alien. Which status is exactly like that of most Americans today. Otherwise, why was he only obligated to pay income tax on the dividend earnings from a District U.S. corporation, and not on any earnings from his home state, New York. Therefore, when 872, above, says "from sources within the United States" it can only be interpreted to mean ‘within the District U.S.’ QED.

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Last revision: August 14, 2009 08:07 AM
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