alpert@nanook.DEC (11/28/84)
*** Things the IRS won't tell you ******************************* #5 ***
Sorry for the delay in getting this out, but things have been rather
hectic and these articles take a non-trivial amount of time to prepare.
Warning: this note is over 240 lines long.
DISCLAIMER: The following information is true to the best of my
knowledge, and is presented for informational purposes only. I do not
suggest that anyone take any action solely on the basis of these articles,
much more detailed information and support is necessary.
CREDIT: This note is derived from articles appearing in Vol. 2, #5 (1984)
of the "Schiff Report", published by Freedom Books, P.O. Box 5303,
Hamden, CT 06518.
>>>>>>> FLAME ON! <<<<<<
*** The IRS Cannot Legally Assess You ***
As we have previously discussed, the IRS Code does NOT establish an
income tax liability for anyone. Even if the Secretary *were* authorized
to assess an income tax, if no liability is created, no one need pay
such an assessment! The key point is that while liablity for other types
of taxes are specifically provided for, (pardon the repitition here)
NO such liability is established for "income" taxes. For, example:
TOBACCO PRODUCTS:
Sec. 5703. Liability for tax and method of payment
(a) Liability for tax.
(1) Original Liability. The manufacturer or importer
of tobacco products and cigarette papers and tubes
SHALL BE LIABLE for the taxes imposed thereon by
Section 5701.
ALCOHOL:
Sec. 5005. Persons Liable for Tax.
(a) General.
The distiller or importer of distilled spirits SHALL BE
LIABLE for the taxes imposed thereon by section 5001(a).
(Note that the use of "SHALL" in the above statutes does not conflict
with provisions of the Constitution, therefore the Supreme Court decisions
regarding the usage of "SHALL" (which we have discussed in previous articles)
do not apply here.)
These statutes clearly impose a liability for those types of taxes. However,
in regards to "income" taxes, close examination of the Code reveals that
not even the assessment of "income" taxes is authorized. To understand this,
it is necessary to take a close look at Code section 6201(a), which we
previously examined in the first article of this series. When the information
in parenthesis is omitted, we have:
"The Secretary is authorised ... to make the ... assessments of
all taxes ... imposed by this title, or accruing under any former
internal revenue law, WHICH HAVE NOT BEEN DULY PAID BY STAMP at
the time and in the manner provided by law"
It is now clear that this section only authorizes the Secretary to assess
taxes which have "not been duly paid by stamp", that is, those
exise taxes which are paid by stamp -- alcohol, tobacco, etc. In addition,
if you refer back to section 6201(a)(1), the Secretary is given permission
to:
"assess all taxes determined by the taxpayer or by the Secretary
AS TO WHICH RETURNS OR LISTS ARE MADE under this title."
The authority of the Secretary to assess is therein limited to ONLY those
cases where "returns or lists are made". In other words, if no "returns
or lists" are made by the "taxpayer", the Secretary has no authority under
this section to assess any tax! This is further confirmed by section
6201(a)(2), the relevant parts of which state:
"Whenever any article upon which a tax is required to be paid
by means of A STAMP is sold or removed ... without the use of
a proper stamp, it shall be the duty of the Secretary ... TO
ESTIMATE THE AMOUNT OF THE TAX which has been omitted to be
paid and to make assessment therefore upon the persons ...
LIABLE for such tax"
NOWHERE in all of chapter 63 (which deals with assessments) is there
any similar language that grants the Secretary the authority to
"estimate" and "make assessments" in connection with "income" taxes
when "returns or lists" are not made by the taxpayer! And of course,
nowhere in the Code is the word "liablity" used in connection with income
taxes as it is used for stamp taxes. Efforts by the government to assess
individuals who have not filed are blatantly illegal.
You may have also heard of the IRS making a "net worth return". To do this,
the IRS estimates an individual's tax "liability" by analyzing theoretical
changes in his assets, position, and/or style of living. Can anyone find
any section in Chapter 63 of the Code that permits the IRs to make such
estimates? No, because "estimates" only apply to a "tax required to be
paid by means of a stamp."
It is obvious that when we deal with the Federal government we are dealing
with liars, bandits, and thieves.
*** IRS Code Admits: No one is liable for an income tax ***
We have seen that the Code does not establish any liablity with respect to
an "income" tax nor establish any requirement that any "return" pertaining
to such a tax be filed. The Code even admits this! Naturally, the admission
is made grudgingly and in a manner which is difficult to detect. The following
Code sections are relevant to this discussion:
6011. General requirement of return, statement, or list.
(a) General Rule.
When required by regulations prescribed by the Secretary any
person MADE LIABLE for any tax imposed by this title, or for the
collection thereof, shall make a return or statement according to
the forms and regulations prescribed by the Secretary. Every
person required to make a return or statement shall include therein
the information required by such forms or regulations.
(f) Income, estate, and gift taxes.
For REQUIREMENT that returns of income, estate, and gift taxes
be made whether or not there is a TAX LIABILITY, see sections
6012 to 6019, inclusive.
Sec. 6012 Persons required to make returns of income.
(a) General rule.
RETURNS WITH RESPECT TO INCOME TAXES UNDER SUBTITLE A SHALL
BE MADE BY THE FOLLOWING:
(1)(A) Every individual having for the taxable year a gross income
of the exemption amount or more, except that a return shall not
be required of an individual (other than an individual described
in subparagraph (c)) --
... < There folllows a list of those "not required" to file > ...
Our journey begins with code section 6011, entitled "General requirement
for return, statement or list". We then go to section 6012, which is entitled
"Persons required to make returns of income". The code actually makes a
distinction between the "general requirement" to file tax returns and the
supposed specific requirement to file tax returns. Why such a distinction?
Why wouldn't the "requirement" to file income tax returns be included in the
GENERAL "requirement" contained in section 6011? Why are there no specific
sections similar to 6012 for tobacco, alcohol, and other exise taxes? In
view of section 6011, why was section 6012 necessary? The answer to this
riddle is provided in the Code itself.
The reason is really quite simple. Section 6011(a) states that "any person
MADE LIABLE" for any tax imposed by this title...shall make a return", thus
clearly establishing that it only applies to those individuals "made liable"
for a tax imposed. If an individual was not "made liable" for a tax, this
section would not require him to do anything. Althought the Code does impose
a tax on "income" in Section 1 (without ever defining "income"), nowhere
does it make anyone "liable" for income taxes and as such, section 6011
cannot possibly require anyone to file an "income" tax return. This is not
the case with various exise taxes because liablities for them are clearly
defined. If anyone were charged (criminally or civilly) for failure to file
a tax return supposedly "required" by section 6011, he could simply state
that he had no liability for such a tax. For this reason, the Government
came up with section 6012, which does not mention anything about a "liability".
Nor does it use the language "required" (we have previously examined the
Supreme Court's decision regarding the use of "shall"). It instead lists
those who shall be "not required" to file. The interesting thing about this
section is that it clarifies the government's intent to deceive the public
about this issue!
As incredible as it sounds, the Code actually (though reluctantly) admits
that this section cannot apply to income taxes and supplies the correct reason.
If you examine section 6011(f), you will see that it states "For requirements
that returns of income, estate, and gift taxes be made WHETHER OR NOT THERE
IS A TAX LIABILITY, see sections 6012 to 6019". Pay particular attention
to the phrase "whether or not there is a tax liablity". The authors of the Code
obviously didn't want to come right out and say "for requirement that returns
of income, estate, or gift taxes, for which there is no liablility, see
sections 6012 through 6019"! That would be too blatantly ridiculous even
for the IRS! The authors of the Code used the words "whether or not" to
both camouflage the meaning of the section and to give the illusion that
an income tax liability exists. They obviously counted on the fact that
anyone reading the Code would assume that he had an income tax liability
and would look to section 6012 for that reason. In this manner, the government
has attempted to put a "liability" into section 6012 by misdirection and
inference. After, who would file an income tax return if he believed that
he was not liable for the tax?
The mere fact that section 6011(f) exists at all is proof that the Government
knew (when the Code was written) that no one could be "liable" for income
taxes and, therefore, no one has to file. They relied on the fact that the
taxpayers would overlook the preposterous alternative suggested in Section
6011(f), and that no one would even question the reason for the two separate
sections.
To prove this, we need only view the absurd situation that Section 6011(f)
proposes. In this hypothetical situation, there are two possiblities:
1) an individual has an income tax liability and is required to
file, or
2) an individual does not have an income tax liablity and is still
required to file.
If an individual did indeed have such a liablity, section 6011 would REQUIRE
him to file a return. Only those individuals without tax liabilities would
have to look to section 6012 for their filing "requirement". Section 6011(f),
however, says that individuals in both categories must "see section 6012...".
If both possibilities really existed, 6011(f) would instruct only those
WITHOUT income tax liabilities to see section 6012, since 6011 by itself would
be sufficient if a "liability" existed. This is proof that the authors of the
Code knew that no individual would be "liable" for income taxes, and that
*everyone* would have to see Section 6012 for their filing "requirement".
It is also obvious that if an individual could be "required" to file an
income tax return without an income tax liability he could also be "required"
to file a tobacco tax return (or any other exise tax return) without having
a tobacco tax liability! Would anyone consider filing such returns if they
were not manufacturers of these products? Of course not! Why then, doesn't
section 6011(f) direct individuals without liabilities for such taxes to
see further sections which *might* require them to file such returns?
The answer is simple: the Code clearly establishes a liablility to file and pay
tobacco, liquor, wagering, and other exise taxes, and only those "made liable"
for them need pay them. It would be absurd to suggest otherwise or even
attempt to confuse anyone with respect to those liabilities. The reason the
Government seeks to confuse citizens with respect to "income" tax "liability"
is that the Code does not (and cannot, for Constitutional reasons) legally
establish any requirement for either filing tax returns or paying income
taxes; it had to concoct sections that would make it *appear* that such
requirements esisted. Sections 6011(f) and 6012 were written to create this
illusion.
<<< FLAME OFF! >>>
=========================================================================
In order to preserve Schiff's observations on the Code sections involved,
the article on "IRS CODE ADMITS..." has not been materially changed from
the original appearing in the Schiff Report.
Bob Alpert
...!decwrl!dec-rhea!dec-nanook!alpert