Frivolous position: The “United States” consists only of the District of Columbia, federal territories, and the federal enclaves
IRS STATEMENT:
C. The Meaning of Certain Terms Used in the Internal Revenue Code
2. Contention: The “United States” consists only of the District of Columbia, federal territories, and federal enclaves
Some individuals and groups argue that the United States consists only of the District of Columbia, federal territories (e.g., Puerto Rico, Guam, etc.), and federal enclaves (e.g., American Indian reservations, military bases, etc.) and does not include the “sovereign” states. According to this argument, if a taxpayer does not live within the “United States,” as so defined, he is not subject to the federal tax laws.
The Law: The Internal Revenue Code imposes a federal income tax upon all United States citizens and residents, not just those who reside in the District of Columbia, federal territories, and federal enclaves. “[F]or nearly a century, the Supreme Court has recognized that the sixteenth amendment authorizes a direct nonapportioned tax upon United States citizens throughout the nation, not just in federal enclaves.” Taliaferro v. Freeman, 595 F. App’x 961, 963 (11th Cir. 2014) (internal brackets and citation omitted). Courts have uniformly rejected this frivolous contention, and the IRS has warned taxpayers of the consequences of making this frivolous argument. Rev. Rul. 2006-18, 2006-1 C.B. 743; Notice 2010-33, 2010-17 I.R.B. 609.
Relevant Case Law:
United States v. Cooper, 170 F.3d 691 (7th Cir. 1999) – the Seventh Circuit sanctioned Cooper for filing a frivolous appeal wherein he argued that only residents of Washington, D.C. and other federal enclaves are subject to the federal tax laws because they alone are citizens of the United States.
United States v. Mundt, 29 F.3d 233, 237 (6th Cir. 1994) – the Sixth Circuit rejected the “patently frivolous” argument that defendant was not a resident of any “federal zone” and therefore not subject to federal income tax laws.
In re Becraft, 885 F.2d 547, 549 n.2 (9th Cir. 1989) – the Ninth Circuit imposed monetary damages on Becraft, an attorney, based on his advocacy of frivolous claims, such as that federal laws apply only to United States territories and the District of Columbia, which the court found had “no semblance of merit.”
United States v. Ward, 833 F.2d 1538, 1539 (11th Cir. 1987) – the Eleventh Circuit rejected as a “twisted conclusion” the contention “that the United States has jurisdiction over only Washington, D.C., the federal enclaves within the states, and the territories and possessions of the United States,” and affirmed a conviction for tax evasion.
Wnuck v. Commissioner, 136 T.C. 498 (2011) – the court described in detail why a misreading of an employment tax provision that includes Puerto Rico, the Virgin Islands, Guam, and American Samoa within the term “United States” was frivolous and imposed a $5,000 penalty under section 6673 for maintaining this and other frivolous arguments.
Other Cases:
Waltner v. Commissioner, T.C. Memo. 2014-35, 107 T.C.M. (CCH) 1189 (2014); Tiernan v. United States, 113 Fed. Cl. 528 (2013); Holmes v. Commissioner, T.C. Memo. 2010-42, 99 T.C.M. (CCH) 1165 (2010); Ulloa v. Commissioner, T.C. Memo. 2010-68, 99 T.C.M. (CCH) 1280 (2010).
REBUTTAL:
SOURCE: Rebutted Version of the IRS Publication: “The Truth About Frivolous Tax Arguments”, Form #08.005, Section C.2; https://sedm.org/Forms/08-PolicyDocs/friv_tax_rebuts.pdf
What makes a person subject to the tax laws is a legal “domicile” or “residence” within the state in question. The U.S. Supreme Court confirmed this when it said:
“Thus, the Court has frequently held that domicile or residence, more substantial than mere presence in transit or sojourn, is an adequate basis for taxation, including income, property, and death taxes. Since the Fourteenth Amendment makes one a citizen of the state wherein he resides, the fact of residence creates universally reciprocal duties of protection by the state and of allegiance and support by the citizen. The latter obviously includes a duty to pay taxes, and their nature and measure is largely a political matter. Of course, the situs of property may tax it regardless of the citizenship, domicile, or residence of the owner, the most obvious illustration being a tax on realty laid by the state in which the realty is located.”
[Miller Brothers Co. v. Maryland, 347 U.S. 340 (1954)]
A person can have a domicile in a place without actually physically living there. Within law, however, a person can have only ONE legal domicile:
“domicile. A person’s legal home. That place where a man has his true, fixed, and permanent home and principal establishment, and to which whenever he is absent he has the intention of returning. Smith v. Smith, 206 Pa.Super. 310m 213 A.2d. 94. Generally, physical presence within a state and the intention to make it one’s home are the requisites of establishing a “domicile” therein. The permanent residence of a person or the place to which he intends to return even though he may actually reside elsewhere. A person may have more than one residence but only one domicile. The legal domicile of a person is important since it, rather than the actual residence, often controls the jurisdiction of the taxing authorities and determines where a person may exercise the privilege of voting and other legal rights and privileges.“
[Black’s Law Dictionary, Sixth Edition, p. 485]
A person physically present in a state of the Union can, for instance, can maintain a legal “residence” in the District of Columbia while his legal domicile is elsewhere. This would be accomplished under the provisions of 26 U.S.C. §6013(g) or 26 U.S.C. §7701(b)(4) by making an “election”. That election would be accomplished by:
- Signing and submitting an IRS Form 1040, instead of the proper IRS Form 1040NR and assessing oneself with a liability, even if they in fact do not have one.
- Signing and submitting an IRS Form W-4 to procure “social insurance”.
- By filling out any federal form and identifying themselves as an “individual”. An “individual” is defined in the Privacy Act, 5 U.S.C. §552a(a)(2) as a “citizen” or “permanent resident” of the United States (federal zone). What these two groups of persons have in common is a legal “domicile” or “residence” in the District of Columbia, which is what the “United States” is defined as in 26 U.S.C. §7701(a)(9) and (a)(10) . Consequently, a person who identifies themselves as an “individual” is a “taxpayer” by implication. The IRS Form W-8BEN, for instance, uses the term “individual” as the only option available for human beings to describe themselves. This is a TRAP, and anyone who fills out this form without lining out “individual” and replacing it with “transient foreigner” is nominating themselves not only to be an “individual”, but also to be a federal public official. The Privacy Act definition above appears in Title 5 of the U.S. Code, which is entitled “Government Organization and Employees”. You can’t be an “individual” without being a government employee or agent. Furthermore, once they nominate themselves to be an “individual” by filling out a federal form and indicating they are “individuals”, then under the provisions of 26 U.S.C. §7701(a)(39) and 26 U.S.C. §7408(c ), their effective “residence” or “domicile” again shifts to the District of Columbia. Their identity has effectively been “legally kidnapped” if this transformation occurred without the knowledge and informed consent of the subject, in violation of 18 U.S.C. §1201.
- Having an information return filed against oneself and not rebutting it, including IRS Forms W-2, 1042-S, 1098, or 1099. An information return creates a prima facie presumption, under 26 U.S.C. §6041 that the person it was filed against is engaged in a “trade or business”. A “trade or business” is legally defined in 26 U.S.C. §7701(a)(26) as “the functions of a public office”. Since 4 U.S.C. §72 requires all “public offices” be only in the District of Columbia, then they essentially acquiesced to being treated as a person with a residence in the District of Columbia. That “residence” applies while they are exercising the official duties of the “public office”, because they are representing the “United States Government” as a “public official”. That government is a federal corporation whose legal domicile is in the District of Columbia, and therefore they take on the legal character of the party they represent as a “public officer”. Under Federal Rule of Civil Procedure 17(b) confirms that the capacity to sue or be sued in the case of a person acting as an officer of a corporation are determined by the laws of the place where the corporation was formed, which in the case of the federal government is the District of Columbia.
Subtitle A of the I.R.C. is primarily a tax on the excise taxable activity called a “trade or business”, which is a “public office”. That “public office” is in the United States government. Everything that goes on an IRS Form 1040 is income “effectively connected with a trade or business”. The form is completed by “individuals”, which means federal employees or public officials who work for the government and have a domicile in the District of Columbia, which is what the term “United States” is defined as in 26 U.S.C. §7701(a)(9) and (a)(10). It doesn’t matter where such a person lives or works because the tax is on an activity, not a person. When they signed the W-4, 26 C.F.R. §31.3401(a)-3(a) says that they signed an agreement or contract. That contract made them into federal “public officials” and they became effectively “Kelly Girls” who are on loan to a private employer. They have a new boss, and that boss is Uncle Sam. Uncles Sam had to become their new employer in order to pay them any kind of benefits. The U.S. Supreme Court confirmed this by saying that the U.S. government can only spend tax money on a “public purpose”, and paying money to private individuals who are not federal employees is NOT a “public purpose”
“The power to tax is, therefore, the strongest, the most pervading of all powers of government, reaching directly or indirectly to all classes of the people. It was said by Chief Justice Marshall, in the case of McCulloch v. Md., 4 Wheat. 431, that the power to tax is the power to destroy. A striking instance of the truth of the proposition is seen in the fact that the existing tax of ten per cent, imposed by the United States on the circulation of all other banks than the National Banks, drove out of existence every *state bank of circulation within a year or two after its passage. This power can be readily employed against one class of individuals and in favor of another, so as to ruin the one class and give unlimited wealth and prosperity to the other, if there is no implied limitation of the uses for which the power may be exercised.
To lay, with one hand, the power of the government on the property of the citizen, and with the other to bestow it upon favored individuals to aid private enterprises and build up private fortunes, is none the less a robbery because it is done under the forms of law and is called taxation. This is not legislation. It is a decree under legislative forms.
Nor is it taxation. ‘A tax,’ says Webster’s Dictionary, ‘is a rate or sum of money assessed on the person or property of a citizen by government for the use of the nation or State.’ ‘Taxes are burdens or charges imposed by the Legislature upon persons or property to raise money for public purposes.’ Cooley, Const. Lim., 479.
Coulter, J., in Northern Liberties v. St. John’s Church, 13 Pa. St., 104 says, very forcibly, ‘I think the common mind has everywhere taken in the understanding that taxes are a public imposition, levied by authority of the government for the purposes of carrying on the government in all its machinery and operations—that they are imposed for a public purpose.’ See, also Pray v. Northern Liberties, 31 Pa.St., 69; Matter of Mayor of N.Y., 11 Johns., 77; Camden v. Allen, 2 Dutch., 398; Sharpless v. Mayor, supra; Hanson v. Vernon, 27 Ia., 47; Whiting v. Fond du Lac, supra.”
[Loan Association v. Topeka, 20 Wall. 655 (1874)]
__________________________________________________________________________________________
“A tax, in the general understanding of the term and as used in the constitution, signifies an exaction for the support of the government. The word has never thought to connote the expropriation of money from one group for the benefit of another.”
Private individuals cannot lawfully accept any kind of payments from the federal government derived from taxes, because taxes can only be spent on a “public purpose”
“Public purpose. In the law of taxation, eminent domain, etc., this is a term of classification to distinguish the objects for which, according to settled usage, the government is to provide, from those which, by the like usage, are left to private interest, inclination, or liberality. The constitutional requirement that the purpose of any tax, police regulation, or particular exertion of the power of eminent domain shall be the convenience, safety, or welfare of the entire community and not the welfare of a specific individual or class of persons [such as, for instance, federal benefit recipients as individuals]. “Public purpose” that will justify expenditure of public money generally means such an activity as will serve as benefit to community as a body and which at same time is directly related function of government. Pack v. Southwestern Bell Tel. & Tel. Co., 215 Tenn. 503, 387 S.W.2d. 789, 794.
The term is synonymous with governmental purpose. As employed to denote the objects for which taxes may be levied, it has no relation to the urgency of the public need or to the extent of the public benefit which is to follow; the essential requisite being that a public service or use shall affect the inhabitants as a community, and not merely as individuals. A public purpose or public business has for its objective the promotion of the public health, safety, morals, general welfare, security, prosperity, and contentment of all the inhabitants or residents within a given political division, as, for example, a state, the sovereign powers of which are exercised to promote such public purpose or public business.”
[Black’s Law Dictionary, Sixth Edition, p. 1231, Emphasis added]
Therefore, you can’t accept any federal benefit, including Medicare, Social Security, Unemployment compensation, etc. WITHOUT being a federal “employee” or “public official” engaged in an excise taxable “trade or business”. That “public official” now works as a fiduciary and “trustee” for the public at large:
“As expressed otherwise, the powers delegated to a public officer are held in trust for the people and are to be exercised in behalf of the government or of all citizens who may need the intervention of the officer. [1] Furthermore, the view has been expressed that all public officers, within whatever branch and whatever level of government, and whatever be their private vocations, are trustees of the people, and accordingly labor under every disability and prohibition imposed by law upon trustees relative to the making of personal financial gain from a discharge of their trusts. [2] That is, a public officer occupies a fiduciary relationship to the political entity on whose behalf he or she serves. [3] and owes a fiduciary duty to the public. [4] It has been said that the fiduciary responsibilities of a public officer cannot be less than those of a private individual. [5] Furthermore, it has been stated that any enterprise undertaken by the public official which tends to weaken public confidence and undermine the sense of security for individual rights is against public policy.[6]”
[63C Am.Jur.2d, Public Officers and Employees, §247 (1999)]
The term “trade or business”, therefore is synonymous with federal contracts and employment. When you sign the W-4 as a private worker, you just became a federal contractor. This is also confirmed by the Privacy Act, 5 U.S.C. §552a(a)(13), which defines “federal personnel” as including anyone entitled to receive any federal benefit.
TITLE 5 > PART I > CHAPTER 5 > SUBCHAPTER II > § 552a
§ 552a. Records maintained on individuals
(a) Definitions.— For purposes of this section—
(13) the term “Federal personnel” means officers and employees of the Government of the United States, members of the uniformed services (including members of the Reserve Components), individuals entitled to receive immediate or deferred retirement benefits under any retirement program of the Government of the United States (including survivor benefits).
The above is why former President Ronald Reagan said the following:
“The taxpayer– that’s someone who works for the federal government but doesn’t have to take the civil service examination.”
[President Ronald W. Reagan]
Getting back to the subject of the above IRS statement, if you work for the “United States” as a “public official”, then YOU ARE THE UNITED STATES, wherever you are. When you are exercising the official duties of a “public office” regardless of where you are located, including outside of the “federal zone”, then you are part of the “United States”. The United States is legally defined as a federal corporation . 28 U.S.C. §3002(15)(A). Therefore, you are “an officer of a corporation” who:
- Effectively become federal “employees” under 26 C.F.R. §31.3401(c)-1 and “subcontractors” for the federal government.
- Are completely subject to federal jurisdiction without the need for implementing regulations published in the Federal Register, as revealed under 44 U.S.C. §1505(a)(1), 5 U.S.C. §552(a)(1), and 5 U.S.C. §553(a)(2).
- Are subject to penalties and the criminal provisions of the Internal Revenue Code while acting as “public officers”. Both 26 U.S.C. §6671(b) and 26 U.S.C. §7343 define “person” as an officer of a corporation, and that corporation is the federal government, which is defined in 28 U.S.C. §3002(15)(A) as a federal corporation.
- Are withholding agents who are liable under 26 U.S.C. §1461, because they are nonresident aliens who must withhold federal kickbacks and send them to the IRS.
- Are “transferees” and “fiduciaries” over federal payments under 26 U.S.C. §§6901 and 6903.
Therefore, it’s pointless to argue that the “United States” only includes the territories and possessions of the United States and the District of Columbia, and federal areas within the states. The “United States” includes all of its employees and franchises. The IRS Form W-4 is being used illegally as a private contract and private law that “elects” you into a public office. You are the only “voter” and if you sign the form, a cage is reserved for you on the federal plantation. You signed that contract voluntarily to procure the benefits of “social insurance”. By doing so, you yourself became an officer and contractor for the “United States” who is on loan to your private employer for a temporary assignment. Whether you are overseas in that capacity or in a state of the Union, you are still a federal contractor and still “within” the “United States”, because you ARE the United States in the context of any employment or work you perform in the context of that W-4.
The above conclusions are also confirmed by the definition of “United States” found in 26 U.S.C. §7701(a)(9) and (a)(10). That definition qualifies itself by saying “in a geographical sense”:
TITLE 26 > Subtitle F > CHAPTER 79 > Sec. 7701. [Internal Revenue Code]
(a) When used in this title, where not otherwise distinctly expressed or manifestly incompatible with the intent thereof—
(9) United States
The term ”United States” when used in a geographical sense includes only the States and the District of Columbia.
(10) State
The term ”State” shall be construed to include the District of Columbia, where such construction is necessary to carry out provisions of this title.
What the above definitions reveal is that only in a geographical sense does the “United States” mean the District of Columbia. HOWEVER, there are other senses used in the Internal Revenue Code, and at no time that we have found are these other senses either admitted or identified. In fact, we argue that the OTHER sense that the term “United States” is uses is in its context as a federal corporation:
United States Code
TITLE 28 – JUDICIARY AND JUDICIAL PROCEDURE
PART VI – PARTICULAR PROCEEDINGS
CHAPTER 176 – FEDERAL DEBT COLLECTION PROCEDURE
SUBCHAPTER A – DEFINITIONS AND GENERAL PROVISIONS
Sec. 3002. Definitions
(15) ”United States” means –
(A) a Federal corporation;
(B) an agency, department, commission, board, or other entity of the United States; or
(C) an instrumentality of the United States.
The U.S. Supreme Court held that all “taxes” are treated as “debts”. Therefore, when “U.S. Inc.”, the federal corporation, attempts to collect taxes, it is collecting a debt as a federal corporation:
“Even if the judgment is deemed to be colored by the nature of the obligation whose validity it establishes, and we are free to re-examine it, and, if we find it to be based on an obligation penal in character, to refuse to enforce it outside the state where rendered, see Wisconsin v. Pelican Insurance Co., 127 U.S. 265 , 292, et seq. 8 S.Ct. 1370, compare Fauntleroy v. Lum, 210 U.S. 230 , 28 S.Ct. 641, still the obligation to pay taxes is not penal. It is a statutory liability, quasi contractual in nature, enforceable, if there is no exclusive statutory remedy, in the civil courts by the common-law action of debt or indebitatus assumpsit. United States v. Chamberlin, 219 U.S. 250 , 31 S.Ct. 155; Price v. United States, 269 U.S. 492 , 46 S.Ct. 180; Dollar Savings Bank v. United States, 19 Wall. 227; and see Stockwell v. United States, 13 Wall. 531, 542; Meredith v. United States, 13 Pet. 486, 493. This was the rule established in the English courts before the Declaration of Independence. Attorney General v. Weeks, Bunbury’s Exch. Rep. 223; Attorney General v. Jewers and Batty, Bunbury’s Exch. Rep. 225; Attorney General v. Hatton, Bunbury’s Exch. Rep. [296 U.S. 268, 272] 262; Attorney General v. _ _, 2 Ans.Rep. 558; see Comyn’s Digest (Title ‘Dett,’ A, 9); 1 Chitty on Pleading, 123; cf. Attorney General v. Sewell, 4 M.&W. 77. “
[Milwaukee v. White, 296 U.S. 268 (1935)]
Therefore, we allege that the term “United States”, in most cases when it is used, and especially in the context of the term “sources within the United States” as used in 26 U.S.C. §861, really means payments made by “U.S. Inc.” or accepted by its contractors and agents, including those engaged in a “trade or business”. This is also confirmed by 26 U.S.C. §864(c)(3), which states that all income from within the “United States” is effectively connected with an excise taxable activity called a “trade or business”:
TITLE 26 > Subtitle A > CHAPTER 1 > Subchapter N > PART I > § 864
§ 864. Definitions and special rules
(c) Effectively connected income, etc.
(3) Other income from sources within United States
All income, gain, or loss from sources within the United States (other than income, gain, or loss to which paragraph (2) applies) shall be treated as effectively connected with the conduct of a trade or business within the United States.
The term “United States” they are referring to above can ONLY mean “U.S. Inc.” and not the “geographical sense”, because it is illegal to otherwise turn labor into an excise taxable “privilege”. Here is some proof from the U.S. Supreme Court:
“Every man has a natural right to the fruits of his own labor, is generally admitted; and no other person can rightfully deprive him of those fruits, and appropriate them against his will…”
[The Antelope, 23 U.S. 66, 10 Wheat 66, 6 L.Ed. 268 (1825)]
An easy way to challenge anyone wants to argue the points we make above is to simply ask the following question:
How can I know WHICH of the two senses the “United States” is used in 26 U.S.C. §864, the geographical sense or the corporate sense, because the statute itself doesn’t do this and 26 U.S.C. §7701(a)(9) and (a)(10) doesn’t say that there are no other senses in which the term “United States” is used other than the geographical sense? Therefore, there must be other possibilities, and in fact, the I.R.C. itself recognizes at least three definitions of “United States” in sections 7701, 4612, and 3121.
If you want to know more about the term “trade or business”, which is the REAL thing being taxed under the Internal Revenue Code, then please refer to the following free and informative article:
The “Trade or Business” Scam, Form #05.001
https://sedm.org/Forms/05-MemLaw/TradeOrBusScam.pdf
FOOTNOTES:
[1] State ex rel. Nagle v. Sullivan, 98 Mont 425, 40 P.2d. 995, 99 A.L.R. 321; Jersey City v. Hague, 18 NJ 584, 115 A2d 8.
[2] Georgia Dep’t of Human Resources v. Sistrunk, 249 Ga. 543, 291 S.E.2d. 524. A public official is held in public trust. Madlener v. Finley (1st Dist) 161 Ill.App.3d. 796, 113 Ill Dec 712, 515 N.E.2d. 697, app gr 117 Ill Dec 226, 520 N.E.2d. 387 and revd on other grounds 128 Ill.2d. 147, 131 Ill Dec 145, 538 N.E.2d. 520.
[3] Chicago Park Dist. v. Kenroy, Inc., 78 Ill.2d. 555, 37 Ill Dec 291, 402 N.E.2d. 181, appeal after remand (1st Dist) 107 Ill.App.3d. 222, 63 Ill Dec 134, 437 N.E.2d. 783.
[4] United States v. Holzer (CA7 Ill) 816 F.2d. 304 and vacated, remanded on other grounds 484 U.S. 807, 98 L.Ed. 2d 18, 108 S.Ct. 53, on remand (CA7 Ill) 840 F.2d. 1343, cert den 486 U.S. 1035, 100 L.Ed. 2d 608, 108 S.Ct. 2022 and (criticized on other grounds by United States v. Osser (CA3 Pa) 864 F.2d. 1056) and (superseded by statute on other grounds as stated in United States v. Little (CA5 Miss) 889 F.2d. 1367) and (among conflicting authorities on other grounds noted in United States v. Boylan (CA1 Mass) 898 F.2d. 230, 29 Fed Rules Evid Serv 1223).
[5] Chicago ex rel. Cohen v. Keane, 64 Ill.2d. 559, 2 Ill Dec 285, 357 N.E.2d. 452, later proceeding (1st Dist) 105 Ill.App.3d. 298, 61 Ill Dec 172, 434 N.E.2d. 325.
[6] Indiana State Ethics Comm’n v. Nelson (Ind App) 656 N.E.2d. 1172, reh gr (Ind App) 659 N.E.2d. 260, reh den (Jan 24, 1996) and transfer den (May 28, 1996).