The Income Tax Is and Always Has Been on Nothing But Voluntary Privileges

By ftsig-admin | July 15, 2025

The income tax under I.R.C. Subtitle A is and always has been upon VOLUNTARY privileges that you have to ask for and receive. Thus, it is avoidable. That’s the nature of all excise taxable privileges:

The tax under consideration, as we have construed the statute, may be described as an excise upon the particular privilege of doing business in a corporate capacity, i.e., with the advantages which arise from corporate or quasi-corporate organization; or, when applied to insurance companies, for doing the business of such companies. As was said in the Thomas Case, 192 U.S. 363 supra, the requirement to pay such taxes involves the exercise of  [*152]  privileges, and the element of absolute and unavoidable demand is lacking. If business is not done in the manner described in the statute, no tax is payable.

[Flint v. Stone Tracy Co, 220 U.S. 107, 151-152 (1911)]

The METHOD of “doing business in a corporate capacity” is done mainly through the mechanism of the “domestic” construct found in 26 U.S.C. §7701(a)(4). “Created or organized” is the moniker for that method.

You can see this mechanism in action in the VERY FIRST income tax return available on the IRS website after the FIRST income tax was instituted to fund the Civil War in 1862:

IRS Form 1040, 1864
https://www.irs.gov/pub/irs-prior/f1040–1864.pdf

More like the above at:

Prior Year Products, IRS
https://www.irs.gov/prior-year-forms-and-instructions

The above tax was a tax on “gross receipts”, not PROFIT. Recall that the constitutional definition of “income” means PROFIT and never a return of CAPITAL.

DEFINITIONS: “income”, FTSIG
https://ftsig.org/definitions-income/

If they tax the capital, meaning PRIVATE property, they are STEALING private property, which is unconstitutional on land within a constitutional state protected from direct taxes under Article 1, Section 2, Clause 3 and Article 1, Section 9, Clause 4 of the Constitution. Thus, this tax cannot apply to a state domiciled party standing on land protected by the constitution WITHOUT some kind of VOLUNTARY election. That ELECTION is called a “privilege”.

DEFINITIONS: “privilege”, FTSIG
https://ftsig.org/definitions-privilege/

EVEN back in 1864 after the FIRST income tax was instituted in 1861, the income tax was a tax on the PRIVILEGE of being a CIVIL citizen. That “citizen” was legislatively created and therefore OWNED by Congress as public property. As the owner, they make all the rules for those who invoke or receive the benefit of the status. So in effect, they are RENTING out the status, which is property. The obligations and privileges that ATTACH to the status and which are enforced through the courts are ALSO property. The problem is that such PRIVILEGES can only be offered where constitutional rights DO NOT exist. Otherwise, the government would be making a profitable business out of ALIENATING rights that are SUPPOSED to be UNALIENABLE. Thus, they make a business out of doing the OPPOSITE of what governments are created to do: Protecting PRIVATE property and PRIVATE rights by never allowing them to be converted to PUBLIC property and PUBLIC rights. A government that does the OPPOSITE is not a government at all, but an ANTI-GOVERNMENT or DE FACTO government, as described in:

De Facto Government Scam, Form #05.043
https://sedm.org/Forms/05-MemLaw/DeFactoGov.pdf

EVEN BACK THEN, the VERY first income tax was on the SAME thing it is on NOW: “trade or business”. See for yourself:

Revenue Act of 1862, 12 Stat. 432
https://constitutionresearch.org/1-Law/uslaw/sal/sal.htm

That’s the SAME “trade or business” that is STILL a PRIVILEGE TODAY! See:

  1. The “Trade or Business” Scam, Form #05.001
    https://sedm.org/Forms/05-MemLaw/TradeOrBusScam.pdf
  2. The Truth About “Effectively Connecting”, Form #05.056
    https://sedm.org/Forms/05-MemLaw/EffectivelyConnected.pdf

Thus, we don’t really even need to obsess about the definition of “United States” in 26 U.S.C. §7701(a)(9) and (a)(10) to know that the I.R.C. Subtitle income tax can’t apply to those standing on land protected by the constitution WITHOUT CONSENT or an ELECTION of some kind. We don’t have to obsess over how “includes” trickery might expand that definition either. All we have to know is WHAT constitutes an election and how to AVOID elections, as documented in:

Catalog of Elections and Entity Types in the Internal Revenue Code, FTSIG
https://ftsig.org/catalog-of-elections-in-the-internal-revenue-code/

These privileges as PUBLIC property give rise to an equitable obligation to reimburse the creator and owner for the cost of DELIVERING the privileges. Here’s how Scotus puts this:

The obligation of one domiciled within a state to pay taxes there, arises from unilateral action of the state government in the exercise of the most plenary of sovereign powers, that to raise revenue to defray the expenses of government and to distribute its burdens equably among those who enjoy its benefits. Hence, domicile in itself establishes a basis for taxation. Enjoyment of the privileges of residence within the state, and the attendant right to invoke the protection of its laws, are inseparable from the responsibility for sharing the costs of government. See Fidelity & Columbia Trust Co. v. Louisville, 245 U.S. 54, 58; Maguire v. Trefry, 253 U.S. 12, 14, 17; Kirtland v. Hotchkiss, 100 U.S. 491, 498; Shaffer v. Carter, 252 U.S. 37, 50. The Federal Constitution imposes on the states no particular modes of taxation, and apart from the specific grant to the federal government of the exclusive 280*280 power to levy certain limited classes of taxes and to regulate interstate and foreign commerce, it leaves the states unrestricted in their power to tax those domiciled within them, so long as the tax imposed is upon property within the state or on privileges enjoyed there, and is not so palpably arbitrary or unreasonable as to infringe the Fourteenth Amendment. Kirtland v. Hotchkiss, supra.

[Lawrence v. State Tax Commission, 286 U.S. 276 (1932); SOURCE: https://scholar.google.com/scholar_case?case=10241277000101996613]

Notice the use of the word “equably”. They are talking about EQUITY. And by that, they mean PAYING YOUR OWN WAY and behaving RESPONSIBLY.

You must SEEK the above privileges to incur an obligation to PAY for the privileges. The privilege above in the case of STATE income tax is VOLUNTARY domicile. Those with a VOLUNTARY domicile therefore become BUYERS under the U.C.C. The government then is the Merchant offering the CIVIL SERVICES incident to said domicile. If you don’t want domicile and don’t have it, they can’t enforce the payment for those services. The PROBLEM with this “business model” for government is precisely this:

NONE of the “civil services” offered by any government that are PAID for by the income tax are EVER “expressly authorized” by any constitution! Offering them therefore is not only UNCONSTITUTIONAL, but betrays that any entity identifying itself as a “government” that offers them is engaged in PRIVATE business activity that CANNOT and SHOULD NOT be protected by official, judicial, or sovereign immunity. It is an ABUSE of judicial discretion to PROTECT such activity or to treat those engaging in them as a “government”!

They are also charging you essentially for “civil services” with no real benefit. This is because if you had just filed as a nonresident alien to begin with, you could have EXCLUDED all your earnings from taxation without NEEDING a privileged “deduction” or “exemption”:

“For thus says the Lord: “You have sold yourselves for nothing, And you shall be redeemed without money.”
[Isaiah 52:3, Bible, NKJV]

So the income tax is really just DECEPTION and TRICKERY. IRS=Individuals Representing Satan. Here is what our most revered founding father said about the tendency to engage in such deception by offering civil services people don’t want and FORCING them to pay for them. The NOTES written at the Constitutional Convention by this founding fathers formed the BASIS for the writing of the constitution. He of all people would know what was “contemplated by its creator”:

“With respect to the words general welfare, I have always regarded them as qualified by the detail of powers connected with them. To take them in a literal and unlimited sense would be a metamorphosis of the Constitution into a character which there is a host of proofs was not contemplated by its creator.”

“If Congress can employ money indefinitely to the general welfare, and are the sole and supreme judges of the general welfare, they may take the care of religion into their own hands; they may appoint teachers in every State, county and parish and pay them out of their public treasury; they may take into their own hands the education of children, establishing in like manner schools throughout the Union; they may assume the provision of the poor; they may undertake the regulation of all roads other than post-roads; in short, every thing, from the highest object of state legislation down to the most minute object of police, would be thrown under the power of Congress…. Were the power of Congress to be established in the latitude contended for, it would subvert the very foundations, and transmute the very nature of the limited Government established by the people of America.”

“If Congress can do whatever in their discretion can be done by money, and will promote the general welfare, the government is no longer a limited one possessing enumerated powers, but an indefinite one subject to particular exceptions.”

[James Madison. House of Representatives, February 7, 1792, On the Cod Fishery Bill, granting Bounties; More quotes like this later in section 5.1]

THE+IRS=THEIRS. They can only tax property that is THEIRS. You make it THEIR property by donating it through an election, INVISIBLY with word of art sleight of hand. Otherwise, they would be STEALING. Or at least renting out OTHER people’s property/STOLEN property. Income tax is just rent on the use of property that doesn’t belong to you.

These privileges are more than just in INCENTIVE to enter the franchise and lock you in. They are there for VERY practical reasons. Namely:

They are there by necessity so that government has standing to sue to recover value for consideration given under rules of equity. Without legitimate consideration, enforcing the payment of taxes would be THEFT in violation of 5A. Unfortunately, its a very unequal adhesion contract.

Because it’s an unequal adhesion contract, there is ALWAYS unjust enrichment on THEIR part. They try to flip that around by calling it a quasi-contract. That shifts the burden of proof from them proving they provided equal consideration to YOU having to prove a NEGATIVE, which is that you DID NOT receive consideration.

Microsoft Copilot

QUESTION:

What are the elements to DISPROVE the existence of a “quasi-contract”?

ANSWER:

To disprove the existence of a quasi-contract, you’ll want to challenge the foundational elements that courts rely on to impose such obligations. A quasi-contract isn’t a real contract — it’s a legal construct used to prevent unjust enrichment. So, disproving it means showing that the conditions for unjust enrichment or equitable restitution aren’t met.

Key Elements to Challenge

To defeat a quasi-contract claim, focus on undermining these four core elements:

  1. No Benefit Conferred
    • Argue that the defendant did not receive any tangible benefit from the plaintiff.
    • Example: Services were offered but not accepted or used.
  2. No Knowledge or Awareness of Benefit
    • Show that the defendant was unaware of the benefit being conferred.
    • Courts typically require that the defendant knowingly accepted the benefit.
  3. No Expectation of Compensation
    • Demonstrate that the plaintiff did not reasonably expect payment.
    • If the benefit was intended as a gift or gratuitous act, no quasi-contract arises.
  4. Retention of Benefit Not Unjust
    • Argue that retaining the benefit is fair under the circumstances.
    • For instance, if the plaintiff acted voluntarily or negligently, the defendant may not be liable.

Additional Defenses

  • Existence of a Valid Contract If a real contract (express or implied-in-fact) governs the same subject matter, a quasi-contract cannot be imposed.
  • Legal Remedy Already Available If the plaintiff has another legal avenue (e.g., breach of contract), courts may reject quasi-contract claims.
  • Mistake or Misunderstanding Not Attributable to Defendant If the benefit was conferred due to the plaintiff’s error, and the defendant did not exploit it, restitution may not be warranted.

The burden of proof in all quasi-contractual actions is “a FAILURE of consideration” on YOUR part. You can NEVER satisfy the burden or proving a negative such as that. So they always win.

So this is really just a war of the Merchants under the U.C.C. as we point out in:

Path to Freedom, Form #09.015, Section 5.5-5.7
https://sedm.org/Forms/09-Procs/PathToFreedom.pdf

The 1040NR attachment makes you the only merchant, so the filer is not their customer nor can they charge the filer for anything or claim recoverable consideration since you rejected all privileges. You’re the ONLY merchant renting THEM your private property, which flips the relationship and shifts the burden of proof from you back to them. See:

1040NR Attachment, Form #09.077
https://sedm.org/Forms/09-Procs/1040NR-Attachment.pdf

There are scenarios, HOWEVER, where gross receipts taxes, being the UNCONSTITUTIONAL DIRECT TAXES that they are, are CONSTITUTIONAL:

  1. Those waiving constitutional protections by pursing privileged U.S. person status. The equivalent of a FULL TIME Effectively Connected election by a nonresident alien.
  2. NRA nationals making Effectively Connected (EC) elections.
  3. NRA aliens abroad.
  4. Federal enclaves.
  5. Territories & possessions.
  6. PRIVILEGED American nationals abroad like IRC 911.

You can SEE Microsoft Copilot ADMITTING that the above are the ONLY proper subjects of the income tax in the following AMAZING interchange:

Microsoft Copilot: Unconstitutional Conditions Doctrine applied to Federal and State Income Taxation, FTSIG
https://ftsig.org/microsoft-copilot-unconstitutional-conditions-doctrine-applied-to-federal-and-state-income-taxation/

HOWEVER, the income tax in I.R.C. Subtitle A NEVER applies within the exclusive jurisdiction of a constitutional state involving American nationals who have made NO elections and rejected ALL privileges. This is why we go to such GREAT lengths to reject all privileges on the 1040NR attachment and emphasize that we are standing on land protected by the constitution.

There are LOTS of ways judges will try to WIGGLE out of admitting that the income tax is an unconstitutional direct tax since it is UNAVOIDABLY upon GROSS receipts. Below are a few examples:

Microsoft Copilot: Is the income tax a DIRECT tax or an INDIRECT tax?, FTSIG
https://ftsig.org/microsoft-copilot-is-the-income-tax-a-direct-tax-or-an-indirect-tax/

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