Thanks for the additional information Author #2. I sure wish my friend knew of this and SEDM's site a couple of years ago.

The State busted him for filing a incorrect FEDERAL, (not State) W-4. claimed he filed the FEDERAL form and broke state law by claiming 99 dependents. He is now a feleon, spent 90 days in min. security jail, was slammed with a huge penality by the IRS once he got railroaded through the state court system.

He was denied all his rights, rushed through the trial, slam, bam, thankyou sir, go to jail.

He said he couldn't find a lawyer in the state that would defend him, because the zealous judges would impose sanction on them. What a great court system!

I agree with you, learn the law and defend yourself. Why pay a “member of the court” to defend you.

From what I've been able to discover, each state's tax regulations “piggyback” off the federal regulations.

Here's the other document I mentioned bing. I haven't had too much time to go over it carefully yet:

State Taxation of Federal Obligations

Frankly, although we have great respect for the FTB legal staff, we're

puzzled as to why they think that the U.S. laws and Constitution do not

apply to California. So…, we have written to the FTB asking for the

reasons why 31 USC Section 3124(a) and the U.S. Constitution are

subordinate to California [tax codes]. – Speidell's California

Taxletter, 8/1/88

As the King of Siam said, “'tis a puzzlement”. We would add to Speidell's

statement the question, “Why does the FTB think that California law does not

apply to them?”

Gross income does not include income which this State is prohibited from

taxing under the Constitution or laws of the United States of America…

California Revenue and Taxation Code 17133

… obligations of the United States Government are exempt from taxation

by a State or political subdivision of a State. The exemption applied

to each form of taxation that would require the obligation, the interest

on the obligation, or both,.. 31 USC 3124(a)

The controlling revenue law in California, and the Franchise Tax Board is

violating state law as well as Federal law in their depredations on the

citizens of this state.

The bureaucratic agencies, not the people, not the people's representatives

who write the laws in Sacramento, rule here in California. The never-to-be-

sufficiently-damned 1982 Dauberger Opinion of the California State Board of

Equalization (BOE), cited Smith v. Davis, 3323 US 111 (1944), Julliard v.

Greenman, 110 US 421 (1884), and former 31 USC 425 (current 31 USC 5154) as

their authority to tax United States currency (Federal Reserve notes are

Federal obligations under 18 USC 8 and 12 USC 411). This opinion is

administrative drivel; a piece of a code here, a piece of case law there.

The chutzpah of the board was blatant when it did not cite all the words of

31 USC 425. It is basic Supreme Court case law that all of the words of a

statute or code have significance. Those who have studied the authorities

cited in “Dauberger” already know that they do not lend any credence to the

contention of the BOE that the FTB is acting lawfully in collecting state

income taxes from individuals. The statute,

… circulating notes of national banking associations and United States

legal tender notes and other notes and certificates of the United States

payable on demand and circulating or intended to circulate as currency

and gold, silver, or other coin shall be subject to taxation as money on

hand or on deposit under the laws of any State or Territory… (Aug.

13, 1894 ch.281, 28 Stat. 278)

from which 31 USC 425 was created, is a specific waiver of the tax exempt

status of Federal obligations which the Georgia State property tax upheld in

the Smith v. Davis case fit like a glove. It is important that Smith v.

Davis was a case involving a Georgia State property tax, a type of tax that

comes within the meaning of the specific waiver, unlike a State income tax

which does not. Before the 1894 statute, U.S. currency was totally exempt

from State taxation; see Julliard v. Greenman, 110 US 421, 448, 449 (1884), a

case cited by the BOE which does not support the BOE opinion; and New York v.

Supervisors, 74 US 26 (1869).

The status of a money on hand tax is provided for in section 212, in part 2

(property taxes) of the California Revenue and Taxation Code. The State

income tax is provided for under part 10 of the Revenue and Taxation Code.

They are two different animals.

Smith v. Davis was cited by the BOE as authority that federal tax exempt

status applies only to interest-bearing notes. This is based on statements

taken out of context. The full context of the case vitiates the contention.

Looking at Smith v. Davis 323 US 111 (1944), on page 116 of the case, at

footnote 6 at the bottom of the page, the Court states:

The only Treasury notes that could be included within the section 3701 [of

the Revised Statutes, which was the predecessor to current 31 USC 3124] are

interest-bearing ones in light of the provisions of the Act of Aug. 13, 1894,

28 Stat 278 Chap 281, 31 USC 425, [current section 5154] allowing notes and

certificates payable on demand and circulating as currency to be taxed by the

states.

In 1944, a note was either payable on demand, or interest-bearing. The Court

had not conceived of the type of “note” that is now circulating. Under the

wording and intent of the statute the exempt status of current notes have not

been waived at all, and if they were redeemable in specie, they still would

not be subject to a state income tax under the terms of the waiver. At

page117 of the case, the Court says, “It is unnecessary to extend such tax

exemption, at least through statutory interpretation, to non-interest-bearing

claims or obligations which the United States does not use or need for credit

purposes.” The “notes” now circulating are used for credit purposes just as

the greenbacks issued during the civil war were issued for credit purposes

because they were not payable on demand until January 1, 1879, and the

“notes” now circulating are not currently payable on demand. A note is

either payable on demand or it is a credit instrument. The Congressmen who

issued the civil war notes that were not redeemable until years after, and

the Congressmen who wrote the 1894 law that was used by the Court in Smith v.

Davis to make its determination, understood that fact, Congressmen during the

civil war and who wrote the 1894 statute called the notes issued during the

war a “forced loan”. They were credit instruments which the nation used for

credit purposes until they became redeemable. Nor can a statement that

Federal Reserve notes are not interest bearing survive close examination. 31

USC 5119 (:cool:(1) is the list of all the non-interest bearing debts of the

United States; Federal Reserve notes, in general, are not on that list.

The state income tax does not fall within the limitations and qualifications

of the waiver created by the 1894 statute. See also Beery v. County of Los

Angeles, 116 C.A.2d 290, 296, 299 (1954),

The question is whether the taxes herein were levied in accordance with

the permission granted by the Congress. The conditions imposed by the

Congress, with respect to permission to tax, were: that the money to be

taxed shall be taxed as money on hand or on deposit…

and Hibernia Savings Society v. San Francisco, 200 US 310, 316; and the

Congressional Record of July and August, 1894 (H.R. 4326) for further

authority explaining this statute. The Court determinations, the intent of

Congress displayed in the Congressional Record, and the wording of the

statute itself are clearly in agreement; there is no ambiguity or

contradiction.

The right of taxation, where it exists, is necessarily unlimited in its

nature. It carries with it inherently the power to embarrass and

destroy.

It is well settled that the States cannot exercise this authority in

respect to any of the instrumentalities which the General Government may

create for the performance of its constitutional functions. It is

equally well settled, that this exemption may be waived wholly, or with

such limitations and qualifications as may be deemed proper, by the law

making power of the nation; but the waiver must be clear, and every well

grounded doubt upon the subject should be resolved in faver of the

exemption. Austin v. Aldermen of Boston, 74 US (7 Wall) 694, 699

(1869).

31 USC 3124 is the general statement of exemption of Federal obligations from

state taxation, subject to specific waiver. Waivers of the tax exempt status

of Federal instrumentalities are strictly interpreted. See Oklahoma v.

Barnsdall Corp., 296 US 521. There is no Congressional waiver of the tax

exempt status of United States currency or Federal Reserve notes which allows

a state income tax on individuals, and the agencies have yet to cite a

general waiver or a specific waiver which allows such a tax.

We have a much lower respect for the opinions of the legal staffs of the

agencies than does `Spidell's' taxletter and we say that any case law they

cite in support of their positions on any subject should not be taken at face

value, but should be studied closely to determine whether the agency is

citing a case in the correct context and for the force of the reasoning of

the justices who made the decision. It is the natural tendency of government

officials to expand their power at the people's expense.

The state “taxes” you because they have the power on their side. The law has

nothing to do with it. This is nothing more than an exaction in the guise of

a tax.

[Edited from `American Information Network Newsletter', Sep/Oct 1988]

Bing,

Thankyou for the kind words of encouragement. I've been doing searches on the site most of the morning, gathering data and forms. I won't cave into these crooks. Especially now, since I've been getting more information on how I've beell lied to all these years.

🙂

One topic I didn't mention in the earlier post is the UCC. I believe we must know how to use the UCC. Once we learn, we will be better able to win the battle.