Originally published March 18 2008
Americans Question the Legality of the Income Tax
by Barbara L. Minton
(NaturalNews) There's nothing that gets me all tingly like the coming of spring. It's always been my favorite time of the year. Just one problem stands between me and total rapture – the need to complete a tax return and file it along with the money I always owe. This year the filing of the tax return feels particularly odious, because this year is when I began to find out that there is no law that actually requires me to file a return, and no law that actually requires me to pay tax on what I earn.
It all began when I saw the feature film/documentary, America: Freedom to Fascism directed by six time academy award nominee Aaron Russo, a self-described freedom fighter. The troublesome central point of this film is that Americans are not required by law to pay a federal income tax. It is overwhelming to think that such a fraud as this could have been perpetuated on the American people for so long. In the film, Russo expresses this feeling to IRS employees and simply asks them to cite where it says an unapportioned income tax is required of all of us. And incredibly, they can't.
One telling segment involves Sheldon Cohen, former IRS commissioner, who goes so far as to reject Supreme Court rulings and the Constitution as benchmarks over what is legal with regard to taxation. The film also includes interviews with members of the Tax Honesty Movement as well as former IRS agents who concur that there is no law on the books that requires any US citizen to send the government part of his hard earned paycheck. Russo also highlights court cases where those accused of tax evasion have won their cases precisely because the prosecution could not provide evidence of a legal federal income tax law.
The film hammers you again and again with endless examples of people who figured out what was up and have not paid taxes for years. By the time it's over, you feel like a big fool who has thrown money away year after year for nothing.
Since feeling foolish doesn't do much for my ego, I got online to see for myself that there really is a law the says I have to pay income tax. Here's what I found.
The Case of Joe Banister
On June 23, 2005, a federal jury found former IRS Criminal Division Special Agent and CPA Joseph Banister not guilty of all counts of criminal tax fraud and conspiracy related to actions he took on behalf of a California business owner who had openly defied the IRS over several years by discontinuing withholding of income and employment taxes from the paychecks of his employees.
The Department of Justice was unable to present any evidence that Banister had either acted in a conspiracy or had acted unlawfully when he advised Thompson that based on findings from his legal research, he had no obligation to withhold taxes from his employees. The Justice Department also concluded that when Banister filed corrected tax returns for Thompson claiming that Thompson's taxable income was zero, rather than the $42,251 he had claimed on his first filing, he was operating within the framework of the law.
Banister, who was forced to resign from the IRS in 1999 after questioning IRS officials about their legal authority, gave Thompson's employees a presentation in 2000 detaining his investigative research of US tax law. Findings were that not only did the IRS lack any authority to impose income taxes on workers, but there was no legal requirement for the business to withhold any taxes from the employee's paychecks.
Banister is reportedly part of a nationwide effort seeking to force the US government to respond to a series of detailed legal Petitions for Redress of Grievances directly challenging the authority of the IRS. The We The People Foundation has initiated a landmark lawsuit with 2000 plaintiffs against the government because it has refused to answer the Petitions. This Right-To-Petition lawsuit, of which Banister is a plaintiff, is the first time in the history of the US that the courts have been asked to define the meaning of the final ten words of the First Amendment.
Conclusions of the We The People Foundation
The website of the We The People Foundation begins with the premise that there is no law that requires most citizens to file and pay federal income taxes. They summarize the key steps of their argument:
There is a federal law that imposes a requirement upon some citizens and foreigners to file and pay an income tax. The question is, to what proportion of citizens does the requirement apply? We The People answers that question with an examination of statutes and regulations, despite the lack of direction supplied by the IRS.
They conclude that "no tax liability applies to the vast majority of citizens, who have been misled into believing they must file and pay income taxes noted in section 61, the section that calls for determination of "gross income". Instead, tax liability applies to US citizens only insofar as they have foreign earned income. This tax liability also applies to aliens and foreign companies doing business in the US. In fact, the Secretary of the Treasury acknowledged that Form 255 was the form most frequently required to be filed by citizens, and only if they had foreign income.
They elaborate, "We can see that the government, by means of such a circuitous and disconnected trail of rules and regulations, has made it extremely difficult for most ordinary people to figure out that they are not liable for the income tax. We can see that the government is duping most people into voluntarily filing returns, assessing themselves, waiving their 5th amendment rights, and erroneously paying an income tax for which they are not liable." They note that statutes and regulations for other taxes are clearly stated, without ambiguity, concluding that "This trickery and deception serves a function of avoiding violations of the Constitution which would be more transparent otherwise."
Additionally, they conclude that "employers are being duped into submitting false information about most employees, withholding their money, making it appear they are liable, and thereby putting them on the defensive, since they must then dispute that their wages are taxable."
Finally, a look at the laws regarding liability for the Social Security tax reveals that they are derived from the International Labor Agreement of the 1930s and do not apply to most US citizens, but to aliens and to some citizens based on foreign income or income from US overseas possessions.
And Then There's Irwin Schiff
Irwin Schiff is billed as the nation's leading authority on income tax and how the government illegally collects it. He is the motivating factor of the Tax Honest Movement, and claims to have written more books on the subject than any other American. His most recent book The Federal Mafia promises to show you how you can immediately stop having income taxes taken from your pay, get back every dime you paid in income taxes this year, stop IRS agents from seizing your property because they have no power to do so, and break "offer and compromise" agreements you might have made with the IRS, since these agreements were entered into on the basis of fraud and intimidation.
Among the arguments raised by Schiff are: (1) that no statutory deficiency in Federal income tax can exist until an assessment has been made (2) that no tax assessment can be made unless a tax return has been voluntarily filed (3) that the IRS, in enforcing the income tax seeks to impose a tax not authorized by the taxing clauses of the US Constitution (4) that the US has no jurisdiction, and (5) that the US Tax Court is not a court.
Another argument made by Schiff is that on the Form 1040, you should report 'zero' income regardless of how much you received in: wages, commissions, interest, alimony, capital gains or from operating a business. For tax purposes, 'income' only means corporate 'profit'. Therefore, no individual receives anything that is reportable as 'income'. This argument has been rejected by the lower courts, as well as the US court of appeals.
What Schiff is seeking to accomplish will not be accomplished easily. In the 1970's, Schiff made an appearance on The Tomorrow Show where he argued his views on federal income tax. This appearance was followed six days later by his being charged for willful failure to file tax returns, for which he was convicted. During the 1980's and 90's additional convictions were obtained and upheld, proving that what Schiff is seeking to do will not be done easily.
In February, 2006, at the age of 78 years, Schiff was sentenced to 12 years, 7 months in prison and was ordered to pay over $4.2 million in restitution to the IRS. He was also sentenced to an additional 12 months for contempt of court.
About the authorBarbara is a school psychologist, a published author in the area of personal finance, a breast cancer survivor using "alternative" treatments, a born existentialist, and a student of nature and all things natural.
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