How SIMPLE Income Tax Would be if the IRS Told THE WHOLE TRUTH in their publications and forms
1. Introduction
A frequent complaint most people have about the income tax is that it is SO COMPLICATED and convoluted to understand and comply with. About this subject, we remind our readers, however, that ALL of this needless complexity is a product of a desire on the part of the IRS to:
- Deceive or convince those who are not subject to it into volunteering.
- Deceive or convince third parties into becoming voluntary enforcers.
- Create a system of privilege that benefits the voluntary enforcers so that the IRS doesn’t have to enforce and social pressure becomes the main vehicle of enforcement.
In doing the above, a favorite tactic of the IRS, the DOJ, and the courts is to tell the truth but omit the WHOLE truth. By that we mean they omit ANYTHING that would reduce or extinguish their revenues by either shrinking their audience or raising their costs. We call these issues “third rail issues” on this website as documented in:
Third Rail Government Issues, Form #08.032
https://sedm.org/Forms/08-PolicyDocs/ThirdRailIssues.pdf
2. Main third rail issues they are hiding in the compliance process
There are FIVE main third rail issues they are hiding from their regulations and publications:
- American nationals are VOLUNTEERS, because the only liability statute is that of withholding agents for “nonresident aliens” who are also aliens in 26 U.S.C. §1461. See:
How American Nationals Volunteer to Pay Income Tax, Form #08.024
https://sedm.org/Forms/08-PolicyDocs/HowYouVolForIncomeTax.pdf - Not all “nonresident aliens” are aliens. American nationals are included too.
2.1. There are SIX types of nonresident aliens, one of which is American nationals. See:
Writing Conventions on this Website, Section 7: Types of Nonresident Aliens, FTSIG
https://ftsig.org/introduction/writing-conventions-on-this-website/#7._Types
2.2. You can BE a “nonresident alien” and an American national WITHOUT being a CIVIL “U.S. citizen” or CIVIL “U.S. person”. - American nationals are NOT subject to “foreign person” withholding under 26 U.S.C. §1441 so they don’t need to submit a W-8 or W-9 whenever they interact with people who want to pay them anything. See:
W-8SUB, Form #04.231
https://sedm.org/Forms/04-Tax/2-Withholding/W-8SUB.pdf - When American nationals file the 1040NR:
4.1. They do NOT need to complete Schedules OI or NEC, because these are ONLY for aliens. 26 C.F.R. §1.6012-1(b) even tells you that you don’t need any schedules if you have not gross income and attach an 8275 explanation to the return. See:
Microsoft Copilot: Schedule NEC DOES NOT apply to U.S. Nationals, FTSIG
https://ftsig.org/microsoft-copilot-schedule-nec-does-not-apply-to-u-s-nationals/
4.2. They are not mentioned directly in the 1040NR instructions, and only referenced when being claimed as dependents.
4.3. They can only file the 1040NR and would be misrepresenting their domicile to file the 1040 if they are domiciled within the exclusive jurisdiction of a state. They don’t have a choice to file the 1040 unless they are abroad or situated on land not protected by the constitution. See:
PROOF OF FACTS: Enforcing INVOLUNTARY “resident alien” status against those with a CIVILLY foreign domicile is criminal identity theft, FTSIG
https://ftsig.org/proof-of-facts-enforcing-involuntary-resident-alien-status-against-those-with-a-civilly-foreign-domicile-is-criminal-identity-theft/
4.4. Nearly everything “effectively connected” on the 1040NR is a VOLUNTARY privilege you can opt out of. As such, any income you put there is a DONATION. The are rare but avoidable exceptions under 26 U.S.C. §864, such as partnerships with U.S. persons, FIRPTA elections, and student aliens. The exceptions are discussed in:
The Truth About “Effectively Connecting”, Form #05.056
https://sedm.org/Forms/05-MemLaw/EffectivelyConnected.pdf - NONE of the services or privileges that the income tax pays for are expressly authorized by the constitution. Thus:
5.1. It is a violation of the constitution to offer those services or enforce the payment of them.
5.2. Any attempt to offer said services or privileges is purely private commercial activity not protected by official, judicial, or sovereign immunity.
5.3. It is an abuse of equity jurisdiction to pursue a reimbursement for such services or privileges within the exclusive jurisdiction of a constitutional state.
On that last item above, the Founding Fathers said:
It has been urged and echoed, that the power “to lay and collect taxes, duties, imposts, and excises, to pay the debts, and provide for the common defense and general welfare of the United States,” amounts to an unlimited commission to exercise every power which may be alleged to be necessary for the common defense or general welfare. No stronger proof could be given of the distress under which these writers labor for objections, than their stooping to such a misconstruction. Had no other enumeration or definition of the powers of the Congress been found in the Constitution, than the general expressions just cited, the authors of the objection might have had some color for it… For what purpose could the enumeration of particular powers be inserted, if these and all others were meant to be included in the preceding general power? Nothing is more natural nor common than first to use a general phrase, and then to explain and qualify it by a recital of particulars… But what would have been thought of that assembly, if, attaching themselves to these general expressions, and disregarding the specifications which ascertain and limit their import, they had exercised an unlimited power of providing for the common defense and general welfare? (Federalists #41)
[Federalist #41. Saturday, January 19, 1788, James Madison]
Congress has not unlimited powers to provide for the general welfare, but only those specifically enumerated.
They are not to do anything they please to provide for the general welfare, but only to lay taxes for that purpose. To consider the latter phrase not as describing the purpose of the first, but as giving a distinct and independent power to do any act they please which may be good for the Union, would render all the preceding and subsequent enumerations of power completely useless. It would reduce the whole instrument to a single phrase, that of instituting a Congress with power to do whatever would be for the good of the United States; and as they would be the sole judges of the good or evil, it would be also a power to do whatever evil they please…. Certainly no such universal power was meant to be given them. It was intended to lace them up straightly within the enumerated powers and those without which, as means, these powers could not be carried into effect.
That of instituting a Congress with power to do whatever would be for the good of the United States; and, as they would be the sole judges of the good or evil, it would be also a power to do whatever evil they please.
[Thomas Jefferson: Opinion on National Bank, 1791. ME 3:148; SOURCE: http://famguardian.org/Subjects/Politics/ThomasJefferson/jeff1020.htm and
http://thefederalistpapers.org/founders/jefferson/thomas-jefferson-opinion-on-national-bank-1791]
“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]
Because the IRS refuses to admit or expose or act upon the things above, they have to play games during the filing and collection process. Those games include:
- Because key exculpatory issues are censored and omitted from IRS publications and forms, you have to attach notes explaining your position that shouldn’t even be necessary. This:
1.1. Needlessly adds way more complexity to the filing.
1.2. Delays processing.
1.3. Invites frivolous penalties because you may make a mistake in the attachment that has been labeled a frivolous position. - Because of the needless complexity:
2.1. IRS personnel have a large repertoire of excuses they can blame their failure to provide a refund on.
2.2. These excuses provide a wide “plausible deniability defense” so that they don’t have to take responsibility for actually doing the right thing and honoring the law as documented here. - When you file your return and you OVERPAY by donating income in the “effectively connected” section, they will say NOTHING because it benefits them.
- If you miss something that was reported by third parties as “income” on your return, they won’t know whether it belongs on the Schedule NEC or the 1040-NR and will hold up your return until YOU decide where to put it, even though it might go on NEITHER of these if you are an American national who makes not election.
- If you were naive enough to unknowingly make any of the above “elections”, they may call you in for an audit to see if they can FURTHER exploit your legal ignorance to get even MORE revenue from the innocent and the ignorant.
The above gameplaying is what we call “hide and seek”, and they let YOU do all the seeking of your options because there is a vacuum of information about how NOT to consent or elect. IRS wants to make your election INVISIBLE so you think you HAVE to elect. We also call this “legal peek-aboo”, and they mix it with a lot of equivocation so you’ll throw up your hands and hand it over to HR-BLOCK, or some other “expert” who will sell you down the river to protect their livelihood. HR-Block, BTW, doesn’t do 1040-NRs domestically. HR block will tell you that 1040NR is only for abroad, and that you ought to be filing the 1040 instead. Otherwise, you would NEVER need their services. American nationals who know the law, know their rights, and CONSENT or ELECT NOTHING are actually a THREAT to their business model, folks.
3. How SIMPLE filing of the 1040NR would be if all the third rail issues mentioned in the previous section were admitted in IRS publications
If ALL the third rail issues deliberately omitted from IRS publications in the previous section were openly recognized, filing an income tax return for most Americans would be HYPER-SIMPLIFIED and result in almost NO REVENUE to the IRS:
- The 1040NR form would warn those who are American nationals that the “effectively connected” section is a DONATION of private property to a PUBLIC use to procure the BENEFITS of a franchise called “trade or business”. There are rare exceptions such as partnerships with U.S. persons, FIRPTA elections, and student aliens. See:
The Truth About “Effectively Connecting”, Form #05.056
https://sedm.org/Forms/05-MemLaw/EffectivelyConnected.pdf - The Schedule OI and NEC would indicate that they are NOT for American nationals and only for POLITICALLY “foreign persons” born in another country, not CIVILLY foreign American Nationals with a foreign domicile. Thus, American nationals would stop filling them out.
- The Payments section of the 1040NR form would have a place to indicate that amounts withheld or reported were WRONGFULLY withheld or reported because you were NOT subject to withholding as an American national who made no elections. Thus, IRS would have to warn those who did the reporting and withholding NOT to do so after receiving your filing. The unlawful withholding (THEFT) and false reporting would then have to STOP. See:
https://www.irs.gov/forms-pubs/about-form-1040-nr
4. The RESULT of telling the truth and simplifying filing and withholding procedures
The result of the above would be that:
- The vast majority of American nationals would file mainly to get their unlawfully withheld amounts back at the end of the year.
- The false reporting that gave rise to the need to file would quickly diminish as the IRS notified those doing the illegal withholding and reporting to stop. IRS could use your report of illegal withholding or false reporting on the 1040NR as the evidentiary basis to notify withholding agents to follow the law by stopping withholding and reporting.
- When American nationals try to do business or open financial accounts within the exclusive jurisdiction of states of they Union, they would simply have to provide proof they were born in the country and no withholding paperwork would be required. If they are American nationals, they could still be offered the option to VOLUNTEER for the “U.S. person” office if they want by submitting the W-9, but no one in their right mind would volunteer at that point.