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CHAPTER8.TXT
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Chapter 8:
Is it Voluntary?
One of the great deceptions in federal income taxation is
the widespread IRS propaganda that the system is "voluntary".
Commissioners of the IRS have repeatedly published statements to
this effect in all kinds of places like The Federal Register,
annual reports to Congress, various instruction booklets and
other printed materials. Even the Supreme Court has joined the
cadre (cacophony?) of federal government officials who admit,
when cornered, that it is voluntary. So, this "voluntary" thing
has not been a mistake or an occasional slip here and there; it
has been the consistent policy of top officials of the Internal
Revenue Service, the Justice Department and the Supreme Court,
believe it or not. A thorough sampling of these admissions is
now in order.
In 1953, Mr. Dwight E. Avis, head of the Alcohol and Tobacco
Tax Division of the Bureau of Internal Revenue, made the
following remarkable statement to a subcommittee of the Committee
on Ways and Means in the House of Representatives:
Let me point this out now: Your income tax is 100 percent
voluntary tax, and your liquor tax is 100 percent enforced
tax. Now, the situation is as different as day and night.
[Internal Revenue Investigation]
[Hearings before a Subcommittee of the ]
[Committee on Ways and Means]
[Feb. 3 thru Mar. 13, 1953, emphasis added]
In 1971, the following quote was found in the IRS
instruction booklet for Form 1040:
Each year American taxpayers voluntarily file their tax
returns and make a special effort to pay the taxes they owe.
[emphasis added]
In 1974, Donald C. Alexander, Commissioner of Internal
Revenue, published the following statement in the March 25 issue
of The Federal Register:
The mission of the Service is to encourage and achieve the
highest possible degree of voluntary compliance with the tax
laws and regulations ....
[emphasis added]
Page 8 - 1 of 16
The Federal Zone:
One year later, in 1975, his successor, Mortimer Caplin
authored the following statement in the Internal Revenue Audit
Manual:
Our tax system is based on individual self-assessment and
voluntary compliance.
[emphasis added]
In 1980, yet another IRS Commissioner, Jerome Kurtz (their
turnover is high) issued a similar statement in their Internal
Revenue Annual Report:
The IRS's primary task is to collect taxes under a voluntary
compliance system.
[emphasis added]
Even the Supreme Court of the United States has held that
the system of federal income taxation is voluntary:
Our tax system is based upon voluntary assessment and
payment, not upon distraint.
[Flora vs United States, 362 U.S. 145]
[emphasis added]
The dictionary defines "distraint" to mean the act or action of
distraining, that is, seizing by distress, levying a distress, or
taking property by force.
IRS Publication 21 is widely distributed to high schools.
It acknowledges that compliance with a law that requires the
filing of returns is voluntary. (Get to those young minds early,
and it's easier to wash their brains later on in life.) At the
same time, it suggests that the filing of a return is mandatory,
as follows:
Two aspects of the Federal income tax system -- voluntary
compliance with the law and self-assessment of tax -- make
it important for you to understand your rights and
responsibilities as a taxpayer. "Voluntary compliance"
places on the taxpayer the responsibility for filing an
income tax return. You must decide whether the law requires
you to file a return. If it does, you must file your return
by the date it is due.
[emphasis added]
Page 8 - 2 of 16
Is It Voluntary?
Perhaps one of the most famous quotes on this question came
from Roger M. Olsen, Assistant Attorney General, Tax Division,
Department of Justice, Washington, D.C. On Saturday, May 9,
1987, author, colleague and constitutional authority Godfrey
Lehman was in the audience when Olsen told an assemblage of tax
lawyers:
We encourage voluntary compliance by scaring the heck out of
you!
[emphasis added]
This was a remarkable admission by an Assistant Attorney General
in the Justice Department, or the "Just Us" department, as they
have come to be known in certain circles of the well informed.
What gives? Are there any bases in law for concluding that
federal income taxes are truly voluntary, in the everyday garden
variety of the term? Yes, there are several. Some of these
reasons may be "old hat" to those of you who are in these certain
circles. Other reasons may come as a total shock, particularly
because the federal government has been guilty of systematic
fraud against the American people. Let us begin with this fraud.
Reach in your wallet and pull out a dollar bill. Already,
you have a big problem in your hands. Read what it says on the
front of your dollar bill. It says "Federal Reserve Note".
First of all, the Federal Reserve is not "federal". It is no
more federal than Federal Express or Federated Department Stores.
For detailed proof, see Lewis vs United States, 680 F.2d 1239
(9th Circuit, 1982). There is no government copyright or
trademark on using the word "federal".
Secondly, there is no "reserve". Federal Reserve banks are
privileged to loan money they don't have. This is called
"fractional reserve" banking. Thirdly, Federal Reserve Notes are
not real promissory notes, because they do not promise to pay
anything, like gold, or silver, or something else with real
substance.
The Federal Reserve system was conceived by a conspiracy of
bankers and politicians who met secretly off the coast of Georgia
to create the Federal Reserve Act. This Act of Congress was
designed to remove the Constitution as a constraint on the
financial operations of the U.S. government. It created a
private credit monopoly which Congressman Louis T. McFadden once
called "one of the most corrupt institutions the world has ever
known". Congressman McFadden was Chairman of the House Banking
and Currency Committee from 1920 to 1933.
The operations of the Federal Reserve are complicated and
secretive. For example, this huge syndicate of private banks has
never been publicly audited. I will do my best to simplify its
operations for you. The Federal Reserve System was set up to
encourage Congress to spend money it doesn't have -- lots of it.
Page 8 - 3 of 16
The Federal Zone:
Rather than honestly taxing Americans for all the money it wants
to spend, Congress runs up a huge deficit which it covers by
printing ink on paper and calling them bonds, or Treasury Bills.
Some of these T-bills are purchased by hard-working
Americans like you and me, with money that we obtained from real
labor, something that has real value. But the deficits have
become so huge, the wage earners do not have enough money to
purchase all these bonds every year. So, Congress walks across
the street and offers these bonds to the Federal Reserve. The
FED says, "Sure, we'll buy those bonds. Your interest rate is
8.25, or 9 and a half. Take it or leave it." Congress always
takes it, because there's nobody else with that kind of money.
Remember, the Federal Reserve is a private credit monopoly.
Now, what does the FED use to purchase those bonds? They
create money out of thin air, using bookkeeping entries to
manufacture credit out of nothing. They used to do it with pen
and ink, then typewriters, and now computers do the job. This
artificial money would normally create very rapid inflation.
This happened in Germany just prior to World War II, when Louis
McFadden was a Congressman. It eventually took a wheel barrow
full of Deutsche marks just to buy one loaf of bread. Imagine
that, if you can!
The bankers realized that a mechanism was needed to withdraw
this artificial money out of circulation as quickly as it was put
into circulation. Enter the Internal Revenue Service. The IRS
is really a collection agency for the Federal Reserve. The FED
pumps money into the economy, and the IRS sucks it out of the
economy, like two pumps working in tandem. This has the effect
of artificially maintaining the purchasing power of this "fiat
money", as it is called by monetary experts.
This is one of the primary purposes of the income tax. We
know this to be true, because a man named Beardsley Ruml
explained it clearly in an essay he published in the magazine
American Affairs in January of 1946. Beardsley Ruml was Chairman
of the Federal Reserve Bank of New York, so he was in a position
to know. The shocking fact is that Federal income taxes do not
pay for any government services; they are used to make interest
payments on the federal debt. These interest payments are now
approaching 40 percent of the annual federal budget.
The Federal Reserve Act is unconstitutional for many
reasons, foremost among which is that Congress delegated to a
private corporation a power which Congress never had, that is, to
counterfeit money. It is unlawful for Congress to exercise a
power which is not authorized to it by the Constitution. The
people, you and I, and the 50 States reserve all powers not
expressly delegated to the federal government.
Congress got hooked on this sweetheart deal and started
spending money so fast, it quickly bankrupted the federal
Page 8 - 4 of 16
Is It Voluntary?
government. This may also come as a shock to many of you. And
you might feel that what I am about to say is paranoid or crazy.
We felt this way too when we first discovered it. We couldn't
believe it. So we investigated. Our research discovered that
the bankers foreclosed the United States Treasury no later than
the year 1933. They called the loans and confiscated all the
gold then being held by the U.S. Treasury.
An Act of Congress caused all that gold to be transferred to
the Federal Reserve banks. Remember, those are private banks,
and the Treasury Department is not the U.S. Treasury Department.
If you need proof, try enclosing a check payable to the "U.S.
Treasury Department" with your next tax return. Notice also that
IRS stationery says "Department of the Treasury" and not the
"U.S. Department of the Treasury".
To secure the rest of their debt, Congress then liened, in
effect, on the future property and earnings of all the American
people, through Social Security taxes, payroll withholding taxes,
inheritance taxes, and the like. Congress mortgaged the American
people, using our labor and our property as collateral.
What Congress did was analogous to this: I walk into a
large department store and see a new toaster I want. I tell the
sales person to ship it to my home tomorrow, and to send the bill
to Willie Brown. Now, when Willie Brown gets the bill for this
toaster, he's going to be pretty mad, and rightly so. He didn't
order the toaster; he doesn't own the toaster; he wasn't a
party to the toaster transaction. In fact, he didn't even know
about it. And yet, I am holding him responsible to pay for the
toaster. In this example, I am Congress; the department store
is the Federal Reserve; and Willie Brown represents the American
People (some of the time).
This is fraud, because Congress did not openly and freely
disclose the real reasons for its actions. Lack of full
disclosure is grounds for fraud in any contract. The Uniform
Commercial Code says so. And yet, all Americans are being
unlawfully enslaved by this fraud, to help discharge the debt
which Congress has tried to impose upon all of us. (Rumor has it
that the New York banking establishment refers to our money as
Federal Reserve Accounting Unit Devices, F-R-A-U-D. Film at 11.)
Your "income" is private property. Absent an apportioned
direct tax, or some commercial agreement to the contrary, the
federal government is not empowered to obtain a controlling
interest in, or otherwise lien on private property so as to
compel a private Citizen's specific performance to any third-
party debt or obligation. Moreover, it is a well established
principle in law that government cannot tax a Sovereign State
Citizen for freely exercising a right guaranteed by the U.S.
Constitution. The acquisition and exchange of private property
is such a right. The pursuit of common-law occupations is
another such right.
Page 8 - 5 of 16
The Federal Zone:
Now, if you want to "volunteer" to help reduce the national
debt, you may, and Congress will of course accept your "gift"
without question. You have the right to volunteer yourself as a
third-party to the outstanding principal debt which Congress has
amassed. As a "principal" in your own right, you have the right
to obligate yourself as a "performance unit" on the national debt
(unlike so many Americans whose birth certificates have ended up,
without their knowledge, in the hands of the International
Monetary Fund in Brussels, Belgium. See Appendix T if you decide
to revoke your birth certificate.) Thus obligated, you will have
turned yourself into someone who is subject to all the rules and
regulations which have been established by the Secretary of the
Treasury to discharge the massive federal debt. But, as long as
you remain a Sovereign State Citizen, who is neither a resident
nor a citizen of the United States**, and as long as you do not
derive income from sources inside the United States** or from a
U.S.** trade or business, you are completely outside the
jurisdiction of the federal zone. The federal debt is not your
burden to carry.
You cannot be compelled, at law, to perform under any third-
party debt or obligation. If you are ever so compelled, it is
extortion, or "tax-tortion" as Godfrey Lehman calls it. You are
not only the victim of extortion. You are also the victim of a
massive fiscal fraud which Congress and other officials of the
federal government have perpetrated upon Sovereign State Citizens
at least since 1913, the year the Federal Reserve Act was passed
into law, and also the year the so-called 16th Amendment was
simply "declared" into law: two pumps, working in tandem, one
pumping money and credit into the economy, the other sucking it
out of the economy. The Rothschild-Hamilton money and banking
system, as it is called, is older than everyone alive.
The constitutional experts and experienced staff at the
National Commodity and Barter Association in Denver, Colorado
have done a fine job of summarizing "voluntary compliance" in one
of their aging flyers that is still circulating:
The term "voluntary compliance" appears to be contradictory,
but careful analysis shows the words to be accurate and
appropriate. An act is voluntary when one does it of his
own free will, not because he is forced by law to do it. If
a law applies to an individual, his compliance with the law
is mandatory, not voluntary. However, individuals engaged
in occupations of common right are not subject to the income
(excise) tax. For them, compliance with the law is
voluntary, not mandatory, because the law does not apply to
them.
[brochure entitled Must You Pay Income Tax?]
So, now you know at least some of the many reasons why
federal officials admit that income taxes are voluntary. It's a
deception, because they will admit that it's voluntary, but they
Page 8 - 6 of 16
Is It Voluntary?
won't tell you why. Quite possibly, they don't even know why
because they, too, have been deceived. When the U.S. Treasury's
gold was transferred into the vaults of the Federal Reserve
banks, lots of people were deceived into believing that Uncle Sam
was simply moving that gold out of his right hand and into his
left hand. Many of those deceived were Uncle Sam's employees.
Only an elite few really knew that the Federal Reserve was
established as a private corporation, a Class A common stock
corporation, to be exact.
Are there any other reasons, like this, why federal income
taxes are voluntary? Yes. In previous chapters, the concepts of
"U.S.** resident", "nonresident", "U.S.** citizen", and "alien"
were explored in some detail. Nonresident aliens with respect to
the federal zone are required to pay taxes only on income derived
from sources within that zone. Those sources may be a "U.S.**"
trade or business, "U.S.**" corporations which sell stocks and
bonds and pay dividends, or employment with the federal
government.
Doing business with the federal zone is your option; it's
voluntary. Nobody is compelling you to buy stock from a domestic
"U.S.**" corporation. Nobody is compelling you to derive income
from a "U.S.**" trade or business. Nobody is compelling you to
work for the federal government. But, if you choose to do so,
then you will be held liable for federal taxes on the "privilege"
of deriving income from these sources, because these sources are
situated inside a zone over which the Congress has exclusive
legislative jurisdiction. That is, Congress can do pretty much
whatever it wants inside that zone. If you don't like the tax
rates, then don't choose a U.S.** trade or business. If you
don't want to reside inside their zone, then move somewhere else.
If you don't want to be one of their "citizens", then expatriate.
Remember, involuntary servitude is forbidden everywhere in this
land, even within the federal zone. It's relatively simple, when
the boundaries and authorities of the federal zone are taken into
full account, the Account for Better Citizenship.
When I say that Congress can do pretty much whatever it
wants inside the federal zone, I mean to say that Congress is
free to create a system of democratic socialism within that zone
(see Appendix W). Outside the federal zone, Congress is bound by
the chains of the Constitution to guarantee a Republic to the 50
States. Social Security is perhaps the most glaring example of a
"voluntary" system offered by the democratic socialists who
actually write the laws. These socialists then pay the "law
makers" to vote for the laws, even though the real "makers" are
not the ones who do the actual voting. (If you want to have some
fun, ask your representatives in the House or Senate if they've
ever read Title 26, and if so, how much of it they have read and
understood.) The actual scope of Social Security is limited to
the federal zone, except for those outside the zone who wish to
partake of its "benefits" knowingly, intentionally, and
voluntarily. Ralph F. Whittington nails it down as follows:
Page 8 - 7 of 16
The Federal Zone:
Do you now understand that the Social Security Act was
written under the authority of Article 1, Section 8, Clause
17, and Article 4, Section 3, Clause 2, of the Constitution,
exclusive authority given to the Congress by "WE THE PEOPLE"
???
The "USE" of a Social Security Account Number is evidence of
the following:
1. You are a card carrying and practicing member of
National Socialism.
2. You have voluntarily derogated your "Sovereignty", and
make public and notorious declaration that you prefer
to have the protection of Congress, and prefer to be a
"Subject" under the "Exclusive Powers" of Congress and
the Bureaucrats that have been assigned certain duties
by Congress.
3. You make a public and notorious declaration that you
are a "Taxpayer", and will follow the rules as laid
down in the United States Code Title 26 (Tax Code), and
the various other Laws which are written for
enforcement upon the "Subjects of Congress".
4. The use of your Social Security Account Number is
evidence of your FRANCHISE with the Federal Government,
a Franchise that provides you with Privileges and
Advantages, protected by the Federal Government.
5. Makes you, voluntarily, a "United States** Person" (per
definition). See 26 U.S.C., Sec. 7701(a)(30).
6. You have rejected the protections of the Constitution
for a dole, and prefer to be judged in the "King's
Court" if you violate any of his rules.
[The Omnibus, pages 73-74]
[emphasis in original]
Thus, if you are participating knowingly, voluntarily, and
intentionally in the "Franchise" called "Social Security", then
your participation is evidence that you have volunteered to
classify yourself as a "taxpayer", as that term is defined in the
Internal Revenue Code. Under the "Law of Presumption", your use
of a social security number can be seen by the federal government
as prima facie evidence that you have opted to obtain benefits
from the federal zone. If you are not participating knowingly,
voluntarily and intentionally, then the government's presumption
can be rebutted. Aside from creating money via fractional
counterfeits, how else do you think the Feds obtain the money
which they pay to "benefit" recipients? Contrary to federal
propaganda, there still is no free lunch.
Page 8 - 8 of 16
Is It Voluntary?
Remember, there is no "reserve", not in the Federal Reserve,
and certainly not in Social Security. As the famous "baby boom"
advances in age, this generational cohort is acting like a "pig
in a python" to devastate the fiscal integrity of the entire
Social Security system. Perhaps you thought that Social Security
was really an insurance fund, like an annuity. That's another
grand deception (and fraud), the details of which are also beyond
the scope of this chapter. Funds have not been "set aside" for
you. Social Security is a TAX, and it says so in the law. It's
a tax with a bear trap hidden in the bushes. That bear trap
converts you from a Sovereign into a subject. Now that you know,
you may want to consider changing your status, while you still
can. At the very least, continue to educate yourself about this.
There is yet another reason why federal income taxes are
voluntary. The Internal Revenue Code says that nonresident
aliens may "elect" to be treated as "residents". Think back to
The Matrix. If you are a nonresident alien, you are in row 2,
column 2. Now think of it as a game of checkers, on a board with
only four squares. It's your move. If you volunteer to move
from the square at row 2/column 2 to any other square, you will
thereby incur a tax liability. According to Publication 519, an
alien may be both a resident alien and a nonresident alien during
the same tax year:
This usually occurs for the year you arrive in or depart
from the United States**.
[Publication 519, U.S. Tax Guide for Aliens, page 3]
Such an alien is called a "dual status" alien.
A nonresident alien can also "elect" or volunteer to be
treated as a resident alien. My reading of the law and the
related publications leads me to conclude that this "election" is
available only to a nonresident alien who is married, but I am
open to persuasion on this point. Specifically, the IRC has this
to say about "elections":
Election to Treat Nonresident Alien Individual as Resident
of the United States**. --
(1) In General. -- A nonresident alien individual with
respect to whom this subsection is in effect for the
taxable year shall be treated as a resident of the
United States** --
(A) for purposes of chapters 1 and 5 for all of such
taxable year, and
[continued ...]
Page 8 - 9 of 16
The Federal Zone:
(B) for purposes of chapter 24 (relating to wage
withholding) for payments of wages made during
such taxable year.
(2) Individuals with Respect to Whom This Subsection is in
Effect. -- This subsection shall be in effect with
respect to any individual who, at the close of the
taxable year for which an election under this
subsection was made, was a nonresident alien individual
married to a citizen or resident of the United
States**, if both of them made such election to have
the benefits of this subsection apply to them.
[26 USC 6013(g)]
[emphasis added]
The Instructions for IRS Form 1040NR, U.S. Nonresident Alien
Income Tax Return, shed more light on these "election returns":
Election to be Taxed as a Resident Alien
Under some circumstances you can elect to be taxed as a
U.S.** resident for the whole year. You can make this
election if either of the following applies to you:
- You were a nonresident alien on the last day of the tax
year, and your spouse was a U.S.** citizen or resident
alien on the last day of the tax year.
- You were a nonresident alien at the beginning of the
tax year, but you were a resident alien on the last day
of the tax year and your spouse was a U.S.** citizen or
resident alien on the last day of the tax year. (This
also applies if both you and your spouse were
nonresident aliens at the beginning of the tax year and
both were resident aliens at the end of the tax year.)
If you elect in 1990 to be taxed as a U.S.** resident, you
and your spouse must file a joint return on Form 1040 or
1040A for 1990. Your worldwide income for the whole year
will be taxed under U.S.** tax laws. You must agree to keep
the records, books, and other information needed to figure
the tax. If you made the election in an earlier year, you
may file a joint return or separate return on Form 1040 or
1040A for 1990. Your worldwide income for the whole year
must be included whether you file a joint or separate
return.
[Instructions for Form 1040NR, page 2]
[emphasis added]
Page 8 - 10 of 16
Is It Voluntary?
If nonresident aliens "elect" to be treated as "resident"
aliens, they are thereby required to file IRS Form 1040 or 1040A
instead of Form 1040NR. Filing Form 1040 or 1040A can be taken
by the government as prima facie evidence that you want to be
treated as a "resident". This, in turn, allows the government to
presume that you have volunteered to be treated as a "taxpayer",
that is, one who is entitled to the "benefits", and subject to
the liabilities, of the federal zone's legislative democracy.
The chain of cause and effect is clarified considerably by
couching the discussion in terms of The Matrix: four-square
checkers (like candidate Richard M. Nixon's famous pet dog).
Author and scholar Lori Jacques has summarized it succinctly as
follows:
IR Code Sec. 6013(g) grants an election to treat nonresident
alien spouse as resident of the United States**. If the
nonresident alien individual makes this election by filing a
1040 form, then returns must be filed for the current year
and all subsequent years until the election is terminated.
[United States Citizen vs. National of the United States]
[page 40, emphasis added]
Again, an "election" can be terminated voluntarily. This
termination is described in the IRC as follows:
Termination of Election. -- An election under this
subsection shall terminate at the earliest of the following
times:
(A) Revocation by Taxpayers. -- If either taxpayer revokes
the election, as of the first taxable year for which
the last day prescribed by law for filing the return of
tax under chapter 1 has not yet occurred. ...
[26 USC 6013(g)(4)]
We have not taken the time to determine if there are similar
provisions in the IRC and its regulations for unmarried
nonresident aliens. (Remember, the statute has 2,000 pages and
the regulations have 6,000 pages.) Author Lori Jacques has taken
note of the CFR provisions for terminating "voluntary"
withholding, which may be effective in this case. An affidavit
is attached to an individual's Form W-4, specifying the name,
address and social security number of the employee making the
request, the name and address of the employer, and a statement
that the employee desires to terminate withholding of federal
income tax and desires that the agreement terminate on a specific
date. The report by Lori Jacques goes on to explain:
Page 8 - 11 of 16
The Federal Zone:
This arrangement can be found in 2 USC 60 for the Congress.
Possibly the same format could be used, thereby revoking a
presumed election to be treated as "resident of the United
States**."
For the nonresident alien's exemption from withholding and
taxation to apply, a statement is to be made stating the
kind of exclusion claim.
(1) No income from United States** source
(2) No income from effectively connected United States**
source
(3) No income from a trade or business conducted within the
United States**
(4) Income excluded under "fundamental law"
[United States Citizen vs. National of the United States]
[page 40, emphasis added]
A close examination of the CFR regulations for terminating
voluntary withholding reveals a trap, however. A number of
natural born Sovereign State Citizens have been misled by well
intended but ignorant Patriots who thought they had found in
those regulations a method to stop paycheck withholding, without
any adverse consequences. This method is the infamous section
"1441" of the CFR:
1.1441-5 Claiming to be a person not subject to withholding.
(a) Individuals. For purposes of chapter 3 of the Code, an
individual's written statement that he or she is a
citizen or resident of the United States** may be
relied upon by the payer of the income as proof that
such individual is a citizen or resident of the United
States**.
[26 CFR 1.1441-5]
[emphasis added]
In a now famous circular entitled "We Will Pay $10,000 If You Can
Prove the Following Statements of Fact To Be False!", the
Save-A-Patriot Fellowship included the following "fact":
FACT #23: The implementation of IRS Treasury Regulation
1.1441-5 is explained in Publication 515 on page 2: If an
individual gives you [the domestic employer or withholding
agent] a written statement, in duplicate, stating that he or
she is a citizen or resident of the United States, and you
do not know otherwise, you may accept this statement and are
relieved from the duty of withholding the tax.
Page 8 - 12 of 16
Is It Voluntary?
IRS Publication 515 is entitled Withholding of Tax on Nonresident
Aliens and Foreign Corporations, and the Save-A-Patriot quotation
is accurate. However, by referring to The Matrix in chapter 3 of
this book (and on the cover), it should now be obvious why such a
statement is precisely the wrong thing to do. Nonresident aliens
thereby declare themselves to be either citizens of the United
States** or residents of the United States**, voluntarily
rendering themselves liable for federal income taxes. To
underscore why section 1441 is a trap, a Sovereign California
Citizen received the following in a letter from the Employment
Development Department of the State of California after filing a
1441 statement:
Your statement submitted in compliance with Title 26, Code
of Federal Regulations, Section 1.1441-5, specifically
Section 1.1441-5(c) is also noted. Your declaration,
received without a date, has been logged and filed into EDD
records.
[Employment Development Department]
[private communication]
[emphasis added]
Author Lori Jacques summarizes the "1441" statement with
surgical accuracy:
... [I]t seems rather incomprehensible to file a statement
claiming to be a U.S.** citizen (if one is not) making
oneself obligated for a tax on income from whatever source
-- within and without the United States**. Although one
may be exempt from the 30% withholding under this provision,
employers do not withhold a flat 30% rate anyway. Some day
that declaration of U.S.** citizenship will surely come back
to haunt its declarant when the IRS wants the returns and
payment of a graduated tax for all of that undeclared
income.
[A Ticket to Liberty, November 1990 edition, page 45]
There is a much better method for nonresident aliens to stop
withholding. It is called a "Certificate of Exemption from
Withholding in Lieu of W-4". This certificate is authorized by
section 3402(n) of the IRC (see Appendix X). Details for
completing and serving this certificate can also be obtained from
Doc Scott's great book entitled Free at Last -- From the IRS,
listed in the Bibliography (see Appendix N). Be careful to avoid
explicitly declaring yourself as an "employee", however, since
this term has a specific meaning in the IRC. Your certificate is
made so as to be "consistent with" section 3402(n).
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The Federal Zone:
Summary
It is really exciting to discover that federal income taxes
are indeed voluntary for nonresident aliens who derive no income
from sources inside the federal zone. It is equally exciting to
discover that aliens who have "elected" to be "resident aliens"
may also terminate that election. (Terminating an election is
something that most of us would never even think of doing! Let's
all work and pray to ensure it never happens in this country.)
Lastly, is it imperative to understand that the filing of prior
1040 forms can be taken as evidence that a nonresident alien has
elected to be a resident alien, for purposes of federal tax law.
The federal government is thereby entitled to presume that you
are either required to file, or that you have elected to be
treated as one who is required to file, if and when your signed
1040 or 1040A form arrives in a pouch of mail destined for an IRS
Service Center. The Law of Presumption is so important, the next
chapter will be dedicated to this one subject. Even the perjury
oath under which you sign your name on IRS tax forms is a subtle
indicator of your status vis-a-vis the federal zone. For proof,
see Appendix R for the relevant statute from Title 28.
# # #
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Is It Voluntary?
Reader's Notes:
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The Federal Zone:
Reader's Notes:
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