What you're swearing to when you sign a 1040

[Famspear]

Saturday, June 9, 2007
From Famspear

Dear Mr. Bulten: Off the top of my head (just kidding), one of the issues addressed in Downes v. Bidwell, 182 U.S. 244 (1901), was whether a Federal statute imposing a duty or impost on products shipped from Puerto Rico to the United States (in this case, from Puerto Rico to the Port of New York) violated the Constitutional provision that all imposts and duties be “uniform” throughout the United States. The Court also was asked to decide whether the same statute improperly required vessels moving from one state to another state to enter, clear, or pay duties in the other state (in this case, a ship moving from Puerto Rico to New York), in violation of the Constitution.

The Court in Downes v. Bidwell ruled that the statute was valid. The Court stated that “while[,] in an international sense[,] Porto Rico [i.e., Puerto Rico] was not a foreign country, since it was subject to the sovereignty of and was owned by the United States, it was foreign to the United States in a domestic sense, because the island had not been incorporated into the United States, but was merely appurtenant thereto as a possession.” 182 U.S. at 341-42. The Court concluded that because Puerto Rico was “foreign” to the United States in the DOMESTIC sense, Congress did indeed have the power to impose the “impost” on goods shipped from Puerto Rico to New York, and that the impost did not violate the Constitutional requirement that imposts be “uniform” throughout the United States.

No, the Court in Downes v. Bidwell did not rule on the meaning of the term “state” as used in the Internal Revenue Code of 1939 or in the 1954/1986 Code, or in any other INCOME TAX law.

Whether raised in pleadings or arguments or not, the meaning of the term "state" was never discussed in the Court's opinion in Brushaber. The three fundamental holdings of Brushaber may be roughly summarized as:

----(1) The income taxes imposed under the Revenue Act of 1913, although unapportioned, are not unconstitutional, as the Sixteenth Amendment removes any requirement that an income tax be apportioned.

----(2) The Revenue Act of 1913 does not violate the Fifth Amendment's prohibition against the government taking property without due process of law.

----(3) The Revenue Act of 1913 does not violate the uniformity clause of Article I, section 8 of the U.S. Constitution.

Moving along to other matters: For purposes of the Federal income tax, as we all know the term “United States,” when used in a geographic sense, means the fifty states and the District of Columbia, and the terms “includes” and “including” are terms of expansion, not of limitation. See generally 26 USC 7701(a)(9) and (10), and 7701(b). And just in case you’re thinking of raising an argument to the contrary, please be advised that you’re wasting your time. The statutes mean what they say, and whether the point has been “hotly debated” or not, no court has ever come close to accepting the hilarious, nonsensical, daffy, meritless argument that, for Federal income tax purposes, the term “state” could somehow exclude the fifty states.

--Yours, Famspear

[webhick]

Which 50 states?

Mental State
Emotional State
Physical State
Gaseous State
Chemical State
Liquid State
Solid State
State of Mind
State of Being
State of Existence
State of Consciousness
State of Confusion
State of Excitement
State of Affairs
And 36 States of Undress.

[Famspear]

Dear Mr. Bulten:

I know this is probably already posted by others somewhere in Quatloos, and I've also discussed this in another place, but I'll reiterate that the United States Supreme Court has already indicated, in the context of taxation, that the term "includes" in the Internal Revenue Code section 7701 is indeed a term of expansion, not a term of exclusivity. See generally Sims v. United States, 359 U.S. 108, 79 S. Ct. 641, 59-1 U.S. Tax Cas. (CCH) paragr. 9338 (1959).

Similarly, in the case of United States v. Condo, the United States Court of Appeals for the Ninth Circuit stated:

----"[the taxpayer's] other tax theories are equally frivolous. His assertion that 26 U.S.C. 7343 only applies to business entities and their employees ignores the word 'includes' in the statute delineating the class of persons liable. The word 'includes' expands, not limits, the definition of 'person' to these entities." United States v. Condo, 85-1 U.S. Tax Cas. (CCH) paragr. 9273 (9th Cir. 1984).

The argument that the term "state" as used in Federal income tax law means only the District of Columbia and the territories was specifically rejected by the United States Court of Appeals for the Eleventh Circuit in United States v. Ward, 833 F.2d 1538 (11th Cir. 1987), 88-1 U.S. Tax Cas. (CCH) paragr. 9177, cert. denied, 485 U.S. 1022 (1988).

Similarly, in the case of ''Nieman v. Commissioner'', the taxpayer argued that "Congress excludes the 50 States from the definition of "United States", for the purposes of 26 U.S.C., Subtitle A." The United States Tax Court rejected that argument, stating:

----"Petitioner attempts to argue an absurd proposition, essentially that the State of Illinois is not part of the United States. His hope is that he will find some semantic technicality which will render him exempt from Federal income tax, which applies generally to all U.S. citizens and residents. Suffice it to say, we find no support in any of the authorities petitioner cites for his position that he is not subject to Federal income tax on income he earned in Illinois." Nieman v. Commissioner, 66 T.C.M. (CCH) 1340, T.C. Memo 1993-533, CCH Dec. 49,403(M) (1993).

--Yours, Famspear

[Famspear]

PS - Mr. Bulten:

We're well aware that you're not looking for cases like the one with the Illinois quote. But there it is. Indeed, that's part of the problem you've been having; , you're trying to avoid accepting the holdings in the cases, because all the holdings go against your arguments. Yours, Famspear

[Famspear]

PS - In my citation to 7701(b) above (definition of "includes" and "including"), I am of course referring to 7701(b) when the Sims case was decided. The citation would now be 7701(c) (for tax years that begin after January 1, 1985, I think). --Famspear

[Paul]

in Downes v. Bidwell, 182 U.S. 244 (1901), was whether a Federal statute imposing a duty or impost on products shipped from Puerto Rico to the United States (in this case, from Puerto Rico to the Port of New York) violated the Constitutional provision that all imposts and duties be “uniform” throughout the United States. The Court also was asked to decide whether the same statute improperly required vessels moving from one state to another state to enter, clear, or pay duties in the other state (in this case, a ship moving from Puerto Rico to New York), in violation of the Constitution.

And, for extra credit, tell us how Mr. Dooley summarized that case.

[LPC]

Sometimes "United States" means only federal land.

No.

Never in the history of the United States has the phrase "United States" been construed to refer to only to territories or other lands owned by the government of the United States and excluded the states of the United States.

To prove me wrong, all you have to do is find a case that contradicts me.

For example, in Downes v. Bidwell, the question was whether Puerto Rico (or other territories of the United States) should be considered part of the "United States." The fact that the states of the United States are part of the United States was never questioned.

And don't bother to cite Ellis v. United States, 206 U.S. 246 (1907). You've provided the quote that "It is unnecessary to lay special stress on the title to the soil in which the channels were dug, but it may be noticed that it was not in the United States." 206 U.S. at 259. But that quotation was part of a statement that the United States did not *OWN* the land in question. The court went on to conclude that the land in question nevertheless *belonged* to the United States.

"The improvement of a harbor may consist in the erection of structures as well as in the widening of a channel, or the explosion of a rock. It is unnecessary to lay special stress on the title to the soil in which the channels were dug, but it may be noticed that it was not in the United States. The language of the acts is 'public works of the United States.' As the works are things upon which the labor is expended, the most natural meaning of 'of the United States' is 'belonging to the United States.'"

[LPC]

My advice to clients (gained from bitter personal experience) is NEVER, EVER submit separate returns in the same envelope. Do nothing to confuse the letter opener dweebs at the Service Center.

I agree.

Lawyers like to submit estate tax returns with cover letters, and I used to do that until I learned from an IRS official that even a cover letter can slow down return processing, because the dweeb opening the envelope is likely to see the letter and put the entire package (letter, return, and attachments) in the pile for "correspondence" instead of the pile for returns. The official advice was that, if you *must* include a cover letter for a return, make it the *last* page of the return, not the first.

And I think that's good advice.

[LPC]

So we must abide by the definition of "United States" in Chapter 21. I suppose you think it's easy to find some court case that states that, for purposes of IRC Chapter 21, the "United States" includes the fifty states. Keep in mind that I'm not looking for generic TC statements that it's absurd to consider Illinois essentially not part of the United States, or generic statements that inclusion is limitedly expansive. Keep in mind that Dan's representation of frivolous position (3) from notice 2007-30 as quoted at http://evans-legal.com/dan/tpfaq.html#USdef is incomplete.

Got one?

How about this one:

C. The Court Lacks Territorial Jurisdiction.

Again, this argument is without merit. Citing 26 U.S.C. § 3121(e)(1) & (2), the respondent argues that the IRS was without territorial jurisdiction to issue the summons in this case because the Internal Revenue Code only applies to individuals living in one of the territories specifically mentioned in that rule. Unfortunately, the respondent has misinterpreted the statute. This rule, appearing in the "definitions" section, says that the "term 'State' includes the District of Columbia, the Commonwealth of Puerto Rico, the Virgin Islands, Guam, or American Samoa" (emphasis added). This is a rule of inclusion, not exclusion. Nowhere in this rule does it exclude the fifty United States from the definition of "State" under the Internal Revenue Code. To interpret the rule this way would be absurd.

United States v. Teresa Hopper, 2005 TNT 215-10, No. 05-MC-172 (U.S.D.C. E.D.N.Y. 10/29/2005).

[Famspear]

Dear Mr. Bulten: I’d like to expand on LPC’s comments about your reference to the Ellis case. As LPC illustrated, you appear to be deliberately trying to use the Ellis case as an example of a case where the meaning of the term “United States” was supposedly a “hotly debated point of law.” Here is what you said:

-----“[ . . . ] up until Alaska and Hawaii joined us (after all the relevant legislation had been passed), the question of the meaning of "United States" was often a hotly debated point of law which varied from law to law. For instance, "It is unnecessary to lay special stress on the title to the soil in which the channels were dug [Boston], but it may be noticed that it was not in the United States", Ellis v US, 206 US 246, 259.”

First of all, the term “United States” is used, in some provisions, in a “geographic” sense, and, in other provisions, is used in a “political entity” sense. The term is used in a geographic sense to mean a certain physical area on the Planet Earth. The term is used in a political entity sense to mean a particular nation, or the government of that nation.

All this relates to your apparent belief (a false one) that the term “United States” -- when used in the Internal Revenue Code -- could somehow exclude the fifty states, a tired old tax protester argument. Before we get back to the Ellis case, let’s look at some actual Internal Revenue Code uses of the term “United States.”

The term “United States” is used in the “political entity” sense in section 7422(f)(1), which provides (in part):

-----“A suit or proceeding referred to in subsection (a) may be maintained only against the United States and not against any officer or employee of the United States (or former officer or employee) or his personal representative.”

Of course, section 7422(f)(1) is not talking about someone suing a physical, “geographical area” on the Planet Earth – that would be silly. The statute is talking about suing a political entity – in a tax refund suit filed against a government.

Now, compare that to Internal Revenue Code section 861(a) (a favorite of many tax protesters), which provides (in part):

-----“The following items of gross income shall be treated as income from sources within the United States:

----------“[ . . . ] (3) Compensation for labor or personal services performed in the United States [ . . . ]”

In section 861(a)(3), the term “United States” is used in a geographic sense – to describe labor, etc., performed “within” a certain geographical area on the Planet Earth.

Now look at Internal Revenue Code section 7701(a)(9), which provides:

-----“The term ‘United States’ when used in a geographical sense includes only the States and the District of Columbia.”

Now let’s look again at Ellis v. United States, 206 U.S. 246 (1907). This was a criminal case. In relevant part, various defendants were charged with violating an 1892 Federal statute. Among other things, the statute made it unlawful for a construction contractor “upon any of the public works of the United States or the District [of Columbia],” in the words of the Court, to employ certain laborers or mechanics to work more than eight hours a day. Various defendants were convicted of violating the statute, and they challenged the constitutionality of the statute on a variety of grounds. The public works in question happened to involve the digging of certain channels in Boston Harbor (within the physical, geographic area of the United States). In interpreting the phrase “upon any of the public works”, the Court stated:

-----“It is unnecessary to lay special stress on the title to the soil in which the channels were dug, but it may be noticed that it was not in the United States. The language of the acts is 'public works of the United States.' As the works are things upon which the labor is expended, the most natural meaning of 'of the United States' is 'belonging to the United States.'”

You, Mr. Bulten, are incorrectly ignoring the last sentence in the quote, and you are implying that the other language should be interpreted as: “It is unnecessary to lay special stress on the title to the soil in which the channels were dug, but it may be noticed that it [the soil in Boston Harbor] was not [located] in the [geographic area called the] United States.” By ignoring the Court’s language that immediately follows – regarding the natural meaning of the term “United States” as used in that statute -- you are creating a false impression that the Court was using the term in a geographic sense, and you are creating the false impression that whether Massachusetts was located in the United States was a contested issue in the Ellis case.

Here again is what you, Mr. Bulten, stated above:

-----“[ . . . ] up until Alaska and Hawaii joined us (after all the relevant legislation had been passed), the question of the meaning of "United States" was often a hotly debated point of law which varied from law to law. For instance, "It is unnecessary to lay special stress on the title to the soil in which the channels were dug [Boston], but it may be noticed that it was not in the United States", Ellis v US, 206 US 246, 259.”

What the Court was REALLY saying in Ellis was: “It is unnecessary to lay special stress on the title to the soil in which the channels were dug, but it may be noticed that it [title to the soil] was not [vested] in the United States.” Contrary to your implication, no one in the Ellis case tried to make the laughable argument that any of the soil in Boston Harbor, or in Massachusetts (or in any other state), was not part of the “United States” -- and no one was debating the meaning of the term “United States.” Mr. Bulten, you are quite wrong.

And, at the expense of becoming tiresome, I would also point out that Ellis was not a tax case – much less a Federal income tax case. The word “tax” is not found in the Court’s opinion. –Yours, Famspear

[Famspear]

Dear Mr. Bulten: Also, I should clarify something I said above. The Court in Ellis was not interpreting the meaning of the term "United States" itself. The Court was interpreting the phrase "OF the United States" - and stated that this phrase meant "BELONGING TO the United States." Essentially, the term really being interpreted was the word "OF" -- not the phrase "United States." Yours, Famspear

[John J. Bulten]

Nowhere in this rule does it exclude the fifty United States from the definition of "State" under the Internal Revenue Code. To interpret the rule this way would be absurd.

Dan, it does not exclude, neither does it include. Back to your NY District cases again, I see.

Famspear, you have demonstrated that the "case law" is ambiguous, that you may read "in the United States" in that "law" as nongeographical as well as in the more natural geographical sense. It is clear that when this "law" says "in the United States", it is equated with "belonging to the United States", but it is not stated whether this is by the route "geographically within US-owned territory" or "titled in the name of the US". (I was not asking about the act which provided the unauthoritative phrase "of the United States", since this was authoritatively interpreted by superior case law as both "in" and "belonging to" the US.) So can you provide me with some authoritative source for interpreting this ambiguity in your primary authority?

Never in the history of the United States has the phrase "United States" been construed to refer [] only to territories or other lands owned by the government of the United States and excluded the [union] states of the United States. To prove me wrong, all you have to do is find a case that contradicts me.

That sounds like a fun and worthy research project for somewhere in the middle of my priority list. Obviously I don't have explicit cases immediately at hand (beyond Ellis), or I would not have stated the principle with such tentative support. I'll get back to you sometime. Don't keep the crickets waiting up for me though.

[Famspear]

Dear Mr. Bulten: You say:

----"It is clear that when this "law" says "in the United States", it is equated with "belonging to the United States", but it is not stated whether this is by the route "geographically within US-owned territory" or "titled in the name of the US". (I was not asking about the act which provided the unauthoritative phrase "of the United States", since this was authoritatively interpreted by superior case law as both "in" and "belonging to" the US.)"

What in the world do you think you are trying to say? Take a deep breath.

Every court that has decided the issue has ruled that for purposes of imposing Federal income taxes under the Internal Revenue Code of 1986, the term "United States" means the fifty states and the District of Columbia. Read the statute. The argument, if anyone has the temerity to make it, that the term "United States" somehow excludes ANY STATE WHATSOEVER (take your pick: Alabama, New York, whatever) is absolutely without merit. No court has ever ruled that the term "United States" excludes any of the "states." Plenty of cases on point have already been posted. Do you want us to repeat them?

Do you think you're fooling somebody? Look, Mr. Bulten, I hope you have noticed that you have virtually no credibility here in Quatloos. Anyone who has been contributing here even for only a few weeks can see that. I can also see that your credibility was shot long before I came here.

I guess it's great that you enjoy being humiliated over and over in front of other people here. I have previously said that I agree with you that there is too much vituperation here, but I cannot prevent you from persistently humiliating yourself, since that seems to be the repetitive, albeit perhaps unintentional, result of your behavior here.

At this point, the only way for you to build credibility (if indeed that is even what you desire) is to acknowledge your mistakes and show others here that you are trying to understand how the tax law works. Of course, if you are not interested in building your own credibility here, that's a different matter.

You cannot teach us the law, Mr. Bulten. You will never persuade a person learned in the law -- at least one who also happens to enjoy the benefits of a normal psychological mind -- with your arguments. And we, the contributors who understand tax law, are not here to persuade you about what the law is. We are here to teach. Whether you accept our teaching is your business. -- Yours, Famspear

[David Merrill]

There's been a bunch of hooey on various threads, espoused by various tax deniers and fellow travelers, about how signing a 1040 (somehow labeled a "jurat") means you endorse the fact that the figure you're reporting on line 7 is "wages." (There are variants of this stance, but what follows applies regardless.)

A quick glance at an actual 1040 shows that you're reporting "Wages, salaries, tips, etc." It also tells you to "attach Form(s) W-2."

So, signing the form under penalty of perjury is not tantamount to agreeing that what you earned was wages. It might have been a tip. It might have been et cetera. The implication is pretty clear that it ought to agree with what's printed on your W-2(s).

Now, suppose you whited out the verbiage on line 7 and claimed the money reported as paid to you on your W-2(s) wasn't wages. Say you wrote in "glubglub" instead.

But you reported every penny.

I'm willing to bet the IRS would accept your claim of glubglub rather than "wages, salary, tips, etc." on line 7 so long as you reported it. You could then sue for a refund in Tax Court under your theory that glubglub shouldn't be taxed.

That's not what tax deniers do. They enter "0" on line 7 because glubglub isn't "wages, salary, tips, etc." Or at least they don't believe it is, so they won't swear to it under the "jurat." But it seems to me the "etc." covers a whole lot besides "wages."

Redeem lawful money directly through non-endorsement of private credit.

If the wages are paid in lawful money instead of FRNs, they are not taxable.



Regards,

David Merrill.

[Dezcad]

If the wages are paid in lawful money instead of FRNs, they are not taxable.

You forgot to cite the case that held this. If I remember correctly, it was the Motor Scooter vs. Jesus case.

But I could be wrong. If I am wrong David, could you help me out and tell me the case, I'd be much obliged.

[David Merrill]

If the wages are paid in lawful money instead of FRNs, they are not taxable.

You forgot to cite the case that held this. If I remember correctly, it was the Motor Scooter vs. Jesus case.

But I could be wrong. If I am wrong David, could you help me out and tell me the case, I'd be much obliged.

It's one of the cases cited in the video.

http://friends-n-family-research.info/F ... cMoney.wmv

[Nikki]

Since you were capable of including it in your recording, you should be able to cite it here and save us the trouble of listening to the computer-generated voice drone on and trying to extract the pearls from the dross.

[David Merrill]

Since you were capable of including it in your recording, you should be able to cite it here and save us the trouble of listening to the computer-generated voice drone on and trying to extract the pearls from the dross.

You are right. That computer voice was probably a mistake. I was at a coffee shop and was listening to the audio file I had made from the text and let one of the suitors view it on my Pocket PC. He marvelled and told me it was a great idea. But for the video I should have had a human voice.

However I have had a lot more compliments than complaints.

I enjoy extracting the citation from other sources here on Quatloos like Wserra's cases. Listening to the justices of the Tenth Circuit obfuscate the nature of lawful money was much more enjoyable.

viewtopic.php?t=816&start=15

The justices had to make the FRNs into lawful money (upon Rickman's bond; not by Congress' definition) in order to color lawful money taxable. Otherwise the citation is right there on the US notes and FRNs;

THIS NOTE IS LEGAL TENDER FOR ALL DEBTS PUBLIC AND PRIVATE

The nature of US obligations, US notes shall be lawful money, means they are non-taxable.

It is also to be noted that Congress Has already come to grips with the question whether United States notes are legal tender in 31 U.S.C. s 452, which provides:

United States notes shall be lawful money, and a legal tender in payment of all debts, public and private, within the United States, except for duties on imports and interest on the public debt...

Which is why I titled the video Public Money v Private Credit instead of Lawful Money v Private Credit.

What I found most enjoyable was Kimokeo agreeing that FRNs are not lawful money.

If the government prints $10,000...it is really adding about $90,000 to the money supply. Banks have to keep 10% of their deposits on reserves, and can lend the rest out. So they can lend $9000 of the $10,000 printed, and then $8100 of the $9000, etc. Unless someone puts the money under their bed, the process will work until it caps out around 90k...

Every indorsement of a bill of exchange is considered as a new bill.

The truth is the truth Nikki. And you all know it. It is quite fascinating that you deny such obvious things in front of your noses just to be argumentative.




Regards,

David Merrill.

[David Merrill]

If the wages are paid in lawful money instead of FRNs, they are not taxable.

You forgot to cite the case that held this. If I remember correctly, it was the Motor Scooter vs. Jesus case.

But I could be wrong. If I am wrong David, could you help me out and tell me the case, I'd be much obliged.

I found a recent opinion:

When any (informed man) receives a check, regardless who it is from, family, friends, job. . .etc, non-endorse the back, either in writing or with a stamp (a stamp reinforces your point, but writing will do) and you are correcting the error on the front, and also redeeming the FRNs into USNs (United States Notes) which are public money, and therefore NON-TAXABLE. FRNs are private "money" or more accurately called credit. By accepting and using private credit, you are legally obligated to pay federal tax. This is in accordance with the common law maxim, he who recieves the benefit allows bears the burden.

Also, by redeeming FRNs, you are reducing the amount of private credit in the system, as the fed must reduce the private money supply, and therefore the national debt, by the amount redeemed.

Thank you for the video, David. Incredible with lots of information. I highly suggest ALL (informed men) download and watch this 30 minute video and buy the Red Amendment (read 14th Amendment slave; the two go hand in hand.

Regards,

David Merrill.

[notorial dissent]

Redeem lawful money directly through non-endorsement of private credit.
For one thing you cannot endorse currency, and for anther this is pure malarky.

If the wages are paid in lawful money instead of FRNs, they are not taxable.
And what cranberry bush did you unearth that from under? Aside from being the total bilge, it doesn’t matter if you are paid in cumquats, you are still liable for the dollar value of what you were paid. The taxable event is you getting paid, not you cashing the check, so all your voodoo about redeeming currency is just more nonsense.

The justices had to make the FRNs into lawful money (upon Rickman's bond; not by Congress' definition) in order to color lawful money taxable. Otherwise the citation is right there on the US notes and FRNs;

More of your lack of reading comprehension showing, Rickman was claiming he couldn’t pay his taxes because FRN’s were not lawful money, and the courts told him in great detail not only that he was WRONG, but that they were not only legal tender, by statute, but were lawful money by definition, and by court concurrence, something you keep trying to ignore. There was no bond involved, just your delusions.

The nature of US obligations, US notes shall be lawful money, means they are non-taxable.

Wrong again, that only applies to securities, not currency, and US Notes-which are no longer in circulation, and FRN’s-which are all that is circulating now, are by law and definition legal tender, lawful money, and currency, not securities.