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Tag Archives: F.I.C.A.

THE SEARCH FOR LIABILITY IN THE INTERNAL REVENUE CODE

The Internal Revenue Code has been written intentionally to deceive.  It represents the pinnacle, the highest point, of achievement by the powers behind the bankruptcy of the United States.  To learn how to read the Internal Revenue Code, one must first establish exactly what is the basis of liability.

Before beginning the navigation through the dreaded Internal Revenue Code for the source of liability, the reader should understand the fundamentals involved.  If you have read the main page of this Blog, “The Social Security Scam” at http://wp.me/PCW6e-E you will already be familiar with the fundamentals.

Fundamental #1 – internal revenue is a part of the customs.  Customs gains revenue for the government by collecting importing duties from foreign countries.  Internal revenue gains revenue for the government by collecting importing duties from the U.S. possessions – thus a source of “internal revenue” from the government’s point of view.  In other words, internal revenue is under the foreign commerce clause. The Constitution in Article I, section 8 grants the federal government jurisdiction over foreign commerce, interstate commerce, and trade with the Indians.  The three commerce jurisdictions are cited separately in title 28 USC, “Judiciary and Judicial Procedure”, chapter 85, “District Courts; Jurisdiction”.  Section 1336, “Surface Board Transportation Orders”, which was renamed from “Interstate Commerce Commission’s Orders” in late 1995, is the interstate commerce jurisdiction.  Section 1362, “Indian Tribes”, is obviously the trade with the Indians commerce jurisdiction.  Section 1340, “Internal revenue; customs duties”, is the foreign commerce jurisdiction.  The federal government has no jurisdiction over intrastate commerce because the Declaration of Independence is the organic law of the land and its main tenet is that “all men are created equal”.  To make the importing of articles from the U.S. possessions fall under the foreign commerce clause, the U.S. possessions are treated as foreign countries (see 26 USC §§ 2014(g), 865(i)(3), and 872(b)(7) for examples).  Article IV, section 3 of the Constitution grants the federal government total jurisdiction over its own possessions and territories.

Fundamental #2 – the jurisdiction of the internal revenue laws is within the U.S. possessions and territories.  This follows naturally from the first fundamental since “internal revenue” is based upon the collection of duties on importing from the U.S. possessions.  Since “internal revenue” is a certain part of the customs, title 19 USC, “Customs duties”, section 1317, “Tobacco products; supplies for certain vessels and aircraft”, subsection (a) states in part; “…jurisdiction of the internal-revenue laws of the United States, as defined by section 2197(a) of title 26…”.  This is the statute that states where to find the actual definition of the jurisdiction of the internal revenue laws, which is at title 26, section 2197(a) – this section is from the 1939 Code.  Both fundamental #1 and #2 are evidenced on the Post “Internal Revenue Jurisdiction”, http://wp.me/pCW6e-3Z of this Blog.  The jurisdiction is cited to be “within the external boundaries of the United States”, which is obviously the opposite of “within the internal boundaries of the United States” – in other words, the possessions and territories of the United States.

Fundamental #3 – “Internal duties” were initiated in America by an unconstitutional Act of Congress approved on March 3, 1791 – the tax on stills and the stills’ product, alcohol.  This was a tax on an intrastate commerce activity which is unconstitutional – I am challenging the constitutionality of this Act of Congress and the courts have so far failed to do their sworn duty.  See more of this on the Post “The Whiskey Rebellion”, http://wp.me/pCW6e-1b of this Blog.  This Act of Congress stated that the collectors of this tax would be the same as those already charged with the collection of the previous revenue acts – these revenue officers were within the customs since the only revenue acts to that point in time were based upon importing and tonnage.  This is why “internal revenue” is within the customs as evidenced in fundamental #1 above.  The importing of certain alcoholic articles within the U.S. possessions is now the basis of “internal duties” – this was finalized with the Twenty First Amendment that ended the preplanned Prohibition in 1933 when the gov’t was officially bankrupted by the FED.

Fundamental #4 – The income tax only applies to collectors/assessors of “internal duties”.  See the actual law at the Post “The Income Tax and the Act of Congress that Established It”, http://wp.me/pCW6e-4A of this Blog.  The Act of Congress approved on August 5, 1861, “An Act to provide increased Revenue from Imports, to pay Interest on the Public Debt, and for other Purposes”, was an act that concerned importing duties and it is within this Act that the income tax was first established.  The collectors of “internal duties” are within the Customs, as evidenced by the Act of Congress approved on March 3, 1791, that initiated “internal duties” within America – therefore, the ATF is within the Customs.  The income tax only applies to those who are collectors/assessors of “internal duties” as evidenced by the Act of Congress approved on August 5, 1861, that created the income tax – the IRS is also within the Customs.                                                                                                                                             Under Title 31 U.S.C. “Money and Finance”, Subtitle I “General”, Chapter 3 “Department of the Treasury”, Subchapter I “Organization” is listed the various bureaus and services within the Department of Treasury.  The sections are as follows:

Sec. 301  Department of the Treasury.  Sec. 302  Treasury of the United States.  Sec. 303  Bureau of Engraving and Printing.  Sec. 304  Bureau of the Mint.  Sec. 305  Federal Financing.  Sec. 306  Fiscal Service.  Sec. 307  Office of the Comptroller of the Currency.  Sec. 308  United States Customs Service.  Sec. 309  Office of  Thrift Supervision.  Sec. 310  Continuing in office.

Conspicuous by their absence are the Internal Revenue Service, as well as The Bureau of Alcohol, Tobacco, and Firearms.  The very first section above (Sec. 301) includes a reference to the Internal Revenue Service in subsection (f)(2), yet the I.R.S. is not listed as a department of the U.S. Treasury.  The reason that the I.R.S. and the A.T.F. are not listed separately is because they are within the United States Customs Service.

Fundamental #5 – The “Form SS-5” that one uses to apply for a S.S.# is a federal employment form.  The federal employee is known as the “taxpayer”.  A “taxpayer” is defined at 26 CFR 2.1-1(a)(5) as a member of the Merchant Marine.  The applicant for a S.S.# has joined a partnership and the S.S.# is the individual’s identification number within the partnership.  The Merchant Marine is involved in foreign commerce.  In addition, applying for a S.S.# causes the applicant to be treated as a “U.S. shareholder” (as will be evidenced in this Post) to whom is attributed an undistributed dividend that includes the requisite income from the collection of “internal duties” that subjects the “U.S. shareholder” to the income tax through the subterfuge of the Social Security Scam.  This undistributed dividend is described in the statutes at 26 USC, “Internal Revenue Code”, chapter 2, “Tax on Self-employment Income”, section 1402, “Definitions”, subsection (a), “Net earnings from self-employment”, where it states, in part, “…plus his distributive share (whether or not distributed) of income or loss described in section 702(a)(8) from any trade or business carried on by a partnership of which he is a member…”.  The makeup of this undistributed dividend will be evidenced below.

LET’S OPEN UP THE INTERNAL REVENUE CODE

Within the table of contents of the Internal Revenue Code is chapter 78, “Discovery of Liability and Enforcement of Title”.  This is a very important chapter, but, of course, the legislative draftsmen have buried this chapter with other “miscellaneous provisions” of the Code.  (One must remember that the Internal Revenue Code is just what it says it is – a code.  It is not meant to be understood by a casual reader – in fact, it is not meant to be understood at all.)  The Internal Revenue Code starts out with Subtitle A, “Income Taxes”, as if all of the thousand of pages in the rest of the Code are just to be ignored.  However, as evidenced above, the income tax only applies to the collectors/assessors of “internal duties”.  Foreign commerce is basically admiralty law, which is a fancy name for pirate law, hence a “Code”.

Within chapter 78, “Discovery of Liability and Enforcement of Title” are the following subchapters:  Subchapter A, “Examination and Inspection”, Subchapter B, “General Powers and Duties”, [Subchapter C which is repealed], and Subchapter D, “Possessions”.

The first two subchapters, “Examination and Inspection”, and “General Powers and Duties”, obviously have to do with the “Enforcement of Title” part of the chapter heading.  Since subchapter C is repealed, that leaves only subchapter D, “Possessions”, for the “Discovery of Liability” part of the chapter heading.  This is in harmony with Fundamentals #1 and #2 above.

There are five sections of code within Subchapter D, “Possessions”:  Section 7651, “Administration and collection of taxes in possessions”, section 7652, “Shipments to the United States”, section 7653, “Shipments from the United States”, section 7654, “Coordination of United States and certain possession individual income taxes”, and section 7655, “Cross references”.

Under section 7655, “Cross references”, it lists both FICA and self-employment taxes as U.S. possession taxes.  This is because the federal government has no intrastate commerce jurisdiction because “all men are created equal”, but does have jurisdiction over its own possessions as granted by Article IV, section 3 of the Constitution.

The Parallel Table of Authorities and Rules lists specifically the regulation(s) from the Code of Federal Regulations (CFR) that implement a statute from the United States Code (USC), when such is needed.  In other words, not every statute from the USC is included if it is self-implementing.  Since the Code has evidenced that subchapter D, “Possessions”, is the source of liability, it is necessary to look to the implementing regulations for the USC sections 7651 through 7655 which comprise subchapter D.

The Parallel Table of Authorities and Rules lists that sections 7651, “Administration and collection of taxes in possessions”, and 7652, “Shipments to the United States”, are implemented by title 27 CFR parts 26 and 41.  Section 7652 is then also implemented by title 27 CFR parts 17 and 275.  Section 7653, “Shipments from the United States”, is implemented by title 27 CFR part 70.  Section 7654, “Coordination of United States and certain possession individual income taxes”, is implemented by title 26 CFR parts 1 and 602.  Section 7655 is self-implementing and needs no cite from the Parallel Table.

This is very enlightening.  Sections 7651, 7652, and 7653 are implemented by various parts of title 27 CFR, “Alcohol, Tobacco Products and Firearms”.  This is verification of Fundamental #3 above – “internal duties” are based upon the unconstitutional Act of Congress approved on March 3, 1791, that taxed stills and the stills’ product, alcohol.  It is also very enlightening to see that section 7654, “Coordination of United States and certain possession individual income taxes”, is implemented by title CFR 26, part 1, which is “income taxes”.  This verifies that income taxes are within the jurisdiction of the possessions, which it has to be as part of internal revenue.

Now note that section 7651, “Administration and collection of taxes in possessions”, and section 7652, “Shipments to the United States”, are both implemented by title 27 CFR parts 26 and 41.  Section 7652, “Shipments to the United States”, represents importing.  Section 7653, “Shipments from the United States”, represents exporting and, therefore, is not tied to section 7651, “Administration and collection of taxes in possessions”.  Fundamental #1 is that internal revenue is within the customs, foreign commerce, which is based upon importing duties.  The Parallel Table has evidenced this by the regulations that implement both section 7651, “Administration and collection of taxes in possessions”, and section 7652, “Shipments to the United States”, which represents importing.

Going further into the regulations, part 26 of title 27 CFR is “Liquors and Articles from Puerto Rico and the Virgin Islands”.  Part 41 of title 27 CFR is “Importation of Tobacco Products, Cigarette Papers and Tubes, and Processed Tobacco”.  Part 41 goes right to the heart of things – importation.  The ATF includes alcohol, tobacco, and firearms.  Each of these is based upon Acts of Congress that piggyback upon the unconstitutional Act of Congress that initiated “internal duties” in America.  This is most obviously apparent with the federal government’s constant intrusion into an individual’s right to bear arms which is prohibited by the Second Amendment.  The federal government cannot require a sovereign American to register a firearm as this would constitute an infringement on the firearms’ owner.  However, an applicant for a S.S.# has become a federal employee and, as such, the government can pass laws that regulate firearms possession by its own employees.

It is necessary to dig deeper into the actual regulations within title 27 CFR, “Alcohol, Tobacco Products and Firearms”, part 26, “Liquors and Articles from Puerto Rico and the Virgin Islands”.  Title 27 part 26.11, “Meaning of Terms”, lists a lot of very important definitions.  For instance, in the heading of title 27 CFR part 26, the term “article” is defined here as beer, wine, distilled spirits, industrial spirits, and denatured spirits.  Once again it is important to understand that when the government defines a “term” it must remain within the government’s limited jurisdiction.  So “articles” does not mean just anything, but only something that includes alcohol.  Of course, the very basis of importing alcoholic articles is the unconstitutional Act of Congress approved March 3, 1791, which initiated “internal duties” in America – but as this Act has never been heretofore challenged as to its constitutionality, the government has gone forward with its subterfuge.

But of the utmost importance for everyone to see is the following “term” defined under title 27 CFR part 26:  “Revenue Officer – any duly authorized Commonwealth Internal Revenue Agent of the Department of Treasury of Puerto Rico”.  Here’s another very important “term”:  “Secretary – Secretary of the Treasury of Puerto Rico”.  This is more evidence to verify Fundamentals #1 and #2 above.

The most important term is also defined within title 27 CFR part 26.111:  “Taxpayer – A taxpayer is a person who is liable for excise tax under 26 USC 7652 under the same Employer Identification Number as defined in 26 CFR 301.7701-12”.  The definition is buried deep in the implementing regulations concerning the importing of  “articles” (within title 27 CFR, “Alcohol, Tobacco Products and Firearms”) pursuant to 26 USC 7652, “Shipments to the United States” – this is what a “taxpayer” actually is.  Note that this definition of “taxpayer” establishes liability since it was found in the regulations within title 27 CFR that implement subchapter D, “Possessions”, of chapter 78, “Discovery of Liability and Enforcement of Title”, of title 26 USC, “Internal Revenue Code”.  The definition of “taxpayer” at 26 CFR 2.1-1(a)(5) that references the Merchant Marine is the definition as used throughout the Code (title 26) and the regulations for the calculation of taxes as cited at 26 CFR 2.1-1(b).  One definition of the term “taxpayer” establishes liability in title 27 while the other definition of the term “taxpayer” is used for all calculation of taxes in title 26.  Liability is established as a “taxpayer” importing “articles” (“internal duties”) within the jurisdiction of title 27 CFR, “Alcohol, Tobacco Products, and Firearms”.  Then the collectors/assessors of “internal duties” become liable for the income tax.

As evidenced above, 26 USC section 7652, “Shipments to the United States”, is also implemented by title 27 part 17 which is “Drawback on Taxpaid Distilled Spirits Used in Manufacturing Nonbeverage Products”.  Drawback may only occur with respect to articles upon which internal revenue taxes have already been paid.  This applies to warehouses specifically built for internal revenue, just as there are warehouses for customs.  When an article upon which internal revenue taxes have been previously paid is now to be shipped to somewhere beyond the jurisdiction of the internal revenue laws, the taxes are returned (minus a charge for the warehouse’s use) as a drawback.

Title 26 USC section 7653, “Shipments from the United States”, is implemented by title 27 part 70 “Procedure and Administration”.  This is “Procedure and Administration” within title 27 CFR, “Alcohol, Tobacco Products and Firearms”.

The law itself has evidenced that the basis of liability for title 26 USC, “Internal Revenue Code”, is found in the implementing regulations for title 27 CFR, “Alcohol, Tobacco Products and Firearms”.  Only the collectors/assessors of “internal duties” are liable for income taxes.  Fundamental #4 has been proven by the correlation between the USC and the CFR, as they had to do since the income tax was within the Act of Congress approved on August 5, 1861, “An Act to provide increased Revenue from Imports, to pay Interest on the Public Debt, and for other Purposes” – an Act having to do with importing.

Even though the Act of Congress approved on March 3, 1791, is unconstitutional and, in addition, hides the fact that the basis of the ATF and the IRS are within the Customs, it would appear that the income tax within the internal revenue laws would not have anything to do with a sovereign American.

The Declaration of Independence is the organic law of the land and its main tenet is that “all men are created equal”.  Under such a tenet no American or group of Americans, including some group of Americans called government, may ever initiate force or fraud against any other American or group of Americans.  This is the basis of individual sovereignty.  The Constitution was adopted to form a government that would uphold this tenet.

The Constitution acknowledges this where in Article I, section 8 it grants the federal government jurisdiction over foreign commerce, interstate commerce, and trade with the Indians.  The federal government has no jurisdiction over intrastate commerce since the law is based upon the tenet that “all men are created equal”.  The Constitution is subordinate to the Declaration of Independence and, therefore, cannot be amended in any way that would violate the tenet that “all men are created equal”.  The individual American is sovereign, not the federal government.  See the following Supreme Court decisions that uphold the sovereignty of the individual – United States v. Lee, 106 U.S. 196, Hale v. Henkle, 201 U.S. 43, Julliard v. Greenman, 110 U.S. 421, Chisholm v. Georgia, 1 L.Ed. (2 Dall.) 415.

The Founding Fathers fought to set up a country founded by the most important document ever crafted – the Declaration of Independence which declares that “all men are created equal”.  This is the basis of individual sovereignty.  All other countries at that time were literally owned by the monarchy (or dictatorship) of that country.

The Founding Fathers then fought to adopt the Constitution to form a government that would uphold that most important tenet – “all men are created equal”.  A government was formed to protect the rights of the individual sovereign.

Name which of the Founding Fathers would have ever run to the federal government for any kind of insurance or health assistance – NOT ONE!!

The Federal Reserve was established in 1913 and immediately set to work to bankrupt the United States government.  The FED caused the great Wall Street crash and the depression.  If you don’t believe the previous sentence, then go to this cite from Congressman Louis T. McFadden of Pennsylvania made on the Floor of the House of Representatives in 1934:  http://www.freedomdomain.com/Redemption/mcfadden1.html and read for yourself what was said that day in Congress.

Prohibition was put into place by the Eighteenth Amendment in 1919 to await the preplanned bankruptcy of the government.  Then as the bankruptcy was being administered, the Prohibition was repealed by the Twenty First Amendment in 1933.  This allowed the government to move all the internal revenue laws to the U.S. possessions.  The following statutes evidence this:

Title 48 USC, “Territories and Insular Possessions”, Section 734a, “Extension of industrial alcohol and internal revenue laws to Puerto Rico”, reads, in part as follows:  “Title III of the National Prohibition Act, as amended, and all provisions of the internal revenue laws relating to the enforcement thereof, are extended to and made applicable to Puerto Rico from and after August 27, 1935.”.

Title 48 USC, “Territories and Insular Possessions”, Section 1402, “Extension of industrial alcohol and internal revenue laws to Virgin Islands”, reads, in part as follows:  “Title III of the National Prohibition Act, as amended, and all provisions of the internal revenue laws relating to the enforcement thereof, are extended to and made applicable to the Virgin Islands from and after August 27, 1935.”.

Both of these sections from title 48 USC, “Territories and Insular Possessions”, have this note included:

“The National Prohibition Act, as amended, referred to in text, is act Oct. 28, 1919, ch. 85, 41 Stat. 305, as amended.  Title III of such Act was classified principally to chapter 3 (Sec. 71 et seq.) of title 27, Intoxicating Liquors, and was omitted from the Code in view of the incorporation of such provisions in the Internal Revenue Code of 1939, and subsequently into the Internal Revenue Code of 1986.”

The Twenty First Amendment repealed the Eighteenth Amendment and by doing so abolished the Prohibition in America.  Title III of the National Prohibition Act, which was abolished by the Twenty First Amendment in the States, was extended to Puerto Rico and the Virgin Islands.  Then the provisions were incorporated into the Internal Revenue Code – more evidence that internal revenue jurisdiction is within the U.S. possessions.  And since Article IV, section 3 of the Constitution grants the federal government control over its possessions, the prohibition laws may still be administered within its possessions.

Social Security was created in 1935.  Then the Merchant Marine Act of 1936 was created.  Combine the existing internal revenue laws together with the FICA tax from Social Security and the Merchant Marine Act of 1936 and you get the Internal Revenue Code of 1939.

The Founding Fathers established a government with absolutely no nexus with sovereign Americans, but then we Americans threw everything away by running to the federal government for insurance and health coverage.  How disgusted must the Founding Fathers be at this time??

We Americans applied to the federal government, now owned by the FED, for Social Security through the FICA tax, which as evidenced above, is a U.S. possession tax as stated at 26 USC section 7655, “Cross references”, from subchapter D, “Possessions”, of chapter 78, “Discovery of Liability and Enforcement of Title”, within title 26 USC, “Internal Revenue Code”.

Since the federal government has no nexus with a sovereign American, the government cannot offer FICA directly to a sovereign American.  Remember that everything that has to do with liability must come from subchapter D, “Possessions”, within chapter 78, “Discovery of Liability and Enforcement of Title”.  Section 7655, “Cross references”, states that FICA is a U.S. possession tax and that it is found in chapter 21.  Chapter 21 is within subtitle C, “Employment Taxes”, of title 26 USC, “Internal Revenue Code”.  Section 3121, “Definitions”, within chapter 21 is the next step in finding out how sovereign Americans became liable for the income tax, a tax on collectors/assessors of “internal duties”.

So the question remains, how could a sovereign American ever be eligible for Social Security?  This is where the concept of  “Agreements entered into by American employers with respect to foreign affiliates” comes into play as defined at title 26 USC section 3121(l).  An “American employer” (defined at 26 USC Section 3121(h)) is further defined under 26 USC Section 3121(l) as having a foreign subsidiary and that wants to extend the insurance system established by title II of the Social Security Act (FICA) to the U.S. citizens who are employed by its foreign affiliate.  Doesn’t that sound like a wonderful, caring “American employer”?  The regulations under this section at 26 CFR 31.3121(l) direct to more regulations at 26 CFR 36.3121(l)-0.  It is here that it states that the “American employer” has made an agreement with the IRS to extend the insurance coverage of Social Security, through FICA, to employees of a foreign subsidiary of the “American employer”.  This is the hidden connection between an American and the IRS.  The federal government does not have jurisdiction over a free, sovereign American so it cannot write laws that subject an American to any duty because “all men are created equal”.  The government (actually the owner of the government, the FED) has created the “American employer”, which is exactly what it says it is, an employer of Americans, in order to initiate the Social Security Scam.  Remember, the government is just made up of other Americans, so since “all men are created equal”, the government cannot write laws that require Americans to do anything under the threat of force.  We Americans cannot convey any right that we do not have ourselves to any government agent.  Every other American can vote against one other single American, but at no time can that majority use force against that other single American because “all men are created equal”.  The ultimate minority is the individual and holding up the rights of the individual is the government’s job.  Any group of Americans is composed of individual Americans, so when the government is doing its job all Americans have their rights protected.  There can be no “right” of any kind for any group – only the rights of the individual.  It makes no difference what your sexual orientation is, it makes no difference what your religious preferences are, it makes no difference what your ethnic background is, it makes no difference what your financial situation is, it makes no difference whatever, since “all men are created equal” and, therefore, all Americans have the same individual sovereign rights.  The government and the FED actually seem to be the only entities that do understand that “all men are created equal” (isn’t that a crazy realization?!), otherwise the convoluted, deceitful nature of the Internal Revenue Code would not be required, the Social Security Scam would not have been needed, and they wouldn’t have had to rely on an unconstitutional law to use subterfuge to hide the jurisdiction of the ATF and the IRS in foreign commerce (internal revenue) regulations.

The definition of “taxpayer” at 26 CFR 2.1-1(a)(5) states that it means that a citizen has established a construction reserve fund under the provisions of section 511 of the Merchant Marine Act.  Section 511 of the Merchant Marine Act sets up the provisions of what is known as a controlled corporation at 26 CFR 2.1-27, “Controlled Corporation”.  This matches the description of the American employer – a domestic corporation that owns a foreign affiliate.  So the American employer has a controlled corporation – the foreign affiliate.  The “taxpayer” definition also states that a “taxpayer” may be a partnership.

By applying for a Social Security number on the “Form SS-5”, an American has now become a “taxpayer” – an employee of the foreign affiliate of the American employer.  Further, the applicant for a S.S.# is also treated as an employee of the “American employer” as well, thus a member of the Merchant Marine.  Title 26, section 406, “Employees of foreign affiliates covered by section 3121(l) agreements”, subsection (a), “Treatment as employees of American employer”, states, in part:  “an individual who is a citizen or resident of the United States and who is an employee of a foreign affiliate (as defined in section 3121(l)(6)) of such American employer shall be treated as an employee of such American employer…”.  This section concerns deferred compensation, such as pension, profit sharing, stock bonus plans, etc.  Further, by checking the box “U.S. citizen” on the “Form SS-5”, the applicant has given the government prima facie evidence that said applicant has U.S. possession citizenship.  A “U.S. citizen” is exemplified at 26 CFR 25.2501-1(c) as a person born in one of the States who then establishes a residence in a U.S. possession (Puerto Rico is cited in the example) and, further, acquires U.S. possession citizenship (Puerto Rican citizenship is cited in the example).  The combination of the terms “U.S. citizen” and “taxpayer” is known as a “U.S. resident”.  This is defined at title 26 USC Sec. 865(g).  A “U.S. citizen”, in other words, a person born in one of the sovereign states who then establishes a residence in a U.S. possession and further acquires U.S. possession citizenship, who now resides in the United States would be a foreigner since the U.S. possessions are treated as foreign countries (see Fundamental #1 above).  Now it has often been said that ignorance of the law is no excuse – but these terms that the government uses have been created to make sure that everyone is ignorant of the actual law.  The only thing that the government has preached is that “all taxpayers must file income tax returns”, but the government has buried the terms “taxpayer”, “U.S. citizen”, and “U.S. resident” deep in the regulations and statutes.  For more information concerning the terms “U.S. citizen”,  “U.S. resident”, and “taxpayer” see the post titled “The U.S. Resident” at http://wp.me/pCW6e-3g on the “Posts for freedom” page of this Blog.  The recent Census questionnaire was addressed to “RESIDENT”.  The Census Bureau is within the Department of Commerce.  Title 15 USC, “Commerce and Trade”, is implemented by title 15 CFR, “Commerce and Foreign Trade”.  That’s why the questionnaire didn’t simply ask for the number of people living at a specific place as the government was granted the right to do in the Constitution (known as enumeration in Article I, section 2 of the Constitution).  The Census was questioning the government’s own employees involved in foreign commerce – the Merchant Marine.  It may ask nearly anything under this (false) presumption.

When a sovereign American applies for a Social Security number on the “Form SS-5”, he has unwittingly become an employee for the foreign subsidiary of an “American employer”, which itself is a partnership.  The sovereign American is also treated as an employee of the American employer as evidenced above at 26 USC section 406, “Employees of foreign affiliates covered by section 3121(l) agreements”.  A “taxpayer” is a federal employee under the provisions section 511 of the Merchant Marine Act of 1936.  The Social Security number is the partner’s identification number within the partnership.

As evidenced above, once an American has applied for a S.S.#, said American is now considered a “U.S. resident”.  Everything must be based upon liability, so going back to subchapter D, “Possessions”, within chapter 78, “Discovery of Liability and Enforcement of Title”, of title 26 USC, “The Internal Revenue Code”, leads us to section 7654 “Coordination of United States and certain possession individual income taxes”.  Under subsection (e), “Regulations”, it states, in part, “The Secretary shall prescribe such regulations as may be necessary to carry out the provisions of this section and sections 931 and 932…and prescribing the information which the individuals to whom such sections may apply shall furnish to the Secretary.”  This leads to sections 931 and 932.

Section 931, “Income from sources within Guam, American Samoa, or the Northern Mariana Islands” is for U.S. possession income from these possessions.  Section 932, “Coordination of United States and Virgin Islands income taxes”, subsection (a), “Treatment of United States residents”, is the entry point for Americans who have applied for a S.S.# on “Form SS-5” by checking the box labeled “U.S. citizen” – the combination of both “taxpayer” and “U.S. citizen” is the “U.S. resident”.

Title 26 USC section 932(e), “Special rule for applying section to tax imposed in Virgin Islands”, cites to section 934.  Title 26 USC section 934, “Limitation on reduction in income tax liability incurred to the Virgin Islands”, subsection (b), “Reductions permitted with respect to certain income”, (3), “Special rule for non-United States income of certain foreign corporations”, (B), “Qualified foreign corporation”, in turn, cites to 26 USC section 958 (section 934 also cites to Title 48, “Territories and Insular Possessions”, as well, where it leads to the indictment process within the Virgin Islands for income taxes).  Below is a selected part of section 958, “Rules for determining stock ownership”:

“(b) Constructive ownership                                                For purposes of sections 951(b), 954(d)(3), 956(c)(2), and 957, section 318(a) (relating to constructive ownership of stock) shall apply to the extent that the effect is to treat any United States person as a United States shareholder within the meaning of section 951(b), to treat a person as a related person within the meaning of section 954(d)(3), to treat the stock of a domestic corporation as owned by a United States shareholder of the controlled foreign corporation for purposes of section 956(c)(2), or to treat a foreign corporation as a controlled foreign corporation under section 957, except that – … (3) In applying subparagraph (C) of section 318(a)(2), the phrase ”10 percent” shall be substituted for the phrase ”50 percent” used in subparagraph (C).”

As cited above within §958(b) a United States person is treated as a “United States shareholder” as defined in §951(b).  Both of the terms “United States citizen” and “United States resident” are considered to be a “United States person” (See Title 26 U.S.C. §7701(a)(30)).  Also within §958(b) is the provision to treat the stock of a domestic corporation as owned by a “United States shareholder” of the controlled foreign corporation, and the provision to treat a foreign corporation as a controlled corporation.  This sets up all of the necessary requirements under section 511 of the Merchant Marine Act to apply to the American employer and the shareholders of the foreign affiliate of the American employer.

Section 958, “Rules for determining stock ownership”, and the sections referenced from 26 USC §958(b) listed above – §951, “Amounts included in gross income of United States shareholders”, §954, “Foreign base company income”, §956, “Investment of earnings in United States property”, and §957, “Controlled foreign corporations; United States persons” are all within “Subpart F – Controlled Foreign Corporations” of Part III, “Income from Sources Without the United States”, of subchapter N, “Tax Based on Income From Sources Within or Without the United States”, of chapter 1, “Normal Taxes and Surtaxes”, of title 26 USC, “Internal Revenue Code”.  The nature of a controlled corporation is defined in Section 511 of the Merchant Marine Act of 1936 as referenced within the definition of “taxpayer” at 26 CFR 2.1-27.  What is known as “Subpart F income” is what makes up the undistributed dividend that all “U.S. residents”, as “U.S. shareholders”, receive as self-employment income (as noted above in Fundamental #5).

Now back again to subchapter D, “Possessions”, section 7655, “Cross references”, where it states that the self-employment tax is a U.S. possession tax.  To restate the last part of Fundamental #5 – This undistributed dividend is described in the statutes at 26 USC, “Internal Revenue Code”, chapter 2, “Tax on Self-employment Income”, section 1402, “Definitions”, subsection (a), “Net earnings from self-employment”, where it states, in part, “…plus his distributive share (whether or not distributed) of income or loss described in section 702(a)(8) from any trade or business carried on by a partnership of which he is a member…”.  The definition of “taxpayer” states that it may include a partnership.  By applying for a S.S.#, the applicant has joined a partnership, the S.S.# being the applicant’s partnership identification number.  The definition of “Net earnings from self-employment”, cited above (26 USC section 1402(a)), references to section 702, “Income and credits of partner”, within subchapter K, “Partners and partnerships”, from chapter 1, “Normal Taxes and Surtaxes”, of subtitle A, “Income Taxes”, of title 26 USC, “Internal Revenue Code”.

Your S.S.# is your partnership number, so subchapter K, “Partners and partnerships”, is then where one finds the next connection to the requirement to file an income tax return.  The first section in subchapter K is section 701, “Partners, not partnership, subject to tax”.  It states that partners, not partnerships, are liable for income tax only in their individual capacity.  Partnerships have no liability for income tax, they simply determine the overall profit or loss which is then attributable to the individual partners based upon the partner’s percentage of ownership of the partnership.  Section 702, “Income and credits of partner” (referenced within section 1402(a) above), subsection (a), “General rule”, states, in part:  “In determining his income tax, each partner shall take into account separately his distributive share of the partnership’s…” and then cites various gains, losses, dividends, and taxes, etc.  Paragraph (6) states:  “taxes, described in section 901, paid or accrued to foreign countries and to possessions of the United States”.  FICA is a U.S. possession tax as cited in 26 USC section 7655, “Cross references”, from subchapter D, “Possessions”, within chapter 78, “Discovery of Liability and Enforcement of Title”, so as it states in 26 USC section 702 (a)(6) each partner shall take into account separately his distributive share of the partnership’s taxes described in section 901 paid or accrued to possessions of the United States.

Section 703, “Partnership computations”, subsection (b), “Elections of the partnership”, states:  “Any election affecting the computation of taxable income derived from a partnership shall be made by the partnership, except that any election under … (3) section 901 (relating to taxes of foreign countries and possessions of the United States), shall be made by each partner separately.”

The Code has now led us to section 901, “Taxes of foreign countries and of possessions of United States”.  Subsection (a), “Allowance of credit”, cites that this section allows credits against the income tax and is limited by section 904, plus, in the case of a corporation, the taxes deemed to have been paid under sections 902 and 960 are allowed as credits.

Section 901, “Taxes of foreign countries and of possessions of United States”, is within “Subchapter N – Tax Based on Income From Sources Within or Without the United States”, Part III, “Income from Sources Without the United States”, Subpart A, “Foreign Tax Credit”.  Also within Part III, “Income from Sources Without the United States”, is subpart B, “Earned Income of Citizens or Residents of United States”, where the earned income credit and the housing credit are cited.  When one takes an earned income credit, or other credit, it is a foreign tax credit since the U.S. possessions are treated as foreign countries (see Fundamental # 1), and also because internal revenue is within foreign commerce.  A “taxpayer” is in the Merchant Marine involved in foreign commerce.  A “U.S. citizen” has U.S. possession citizenship.  Also within Part III, “Income from Sources Without the United States”, is subpart D, “Possessions of the United States”, which includes the previously cited sections 931 and 932, the entry points from section 7654, “Coordination of United States and certain possession individual income taxes”, of subchapter D, “Possessions”, within chapter 78, “Discovery of Liability and Enforcement of Title”.  Subpart D also includes section 934, that was cited as limiting section 932 above and that led to section 958 which is within subpart F, “Controlled Foreign Corporations”, which includes the sections 951 through 965.

There must be an underlying basis of importing for the internal revenue laws to confer jurisdiction to the courts.  As evidenced in Fundamental #1, title 28 USC, “Judiciary and Judicial Procedure”, chapter 85, “District Courts; Jurisdiction”, section 1340, “Internal revenue; customs duties”, is foreign commerce which is based upon importing duties.  Part of the basis of the undistributed dividend that all “U.S. residents”, as “U.S. shareholders”, have attributed to them, are the income taxes paid by the controlled foreign corporation of the domestic corporation (the American employer).  The regulations under the self-employment statute, 26 U.S.C. §1402, cited within Fundamental #5 above, allow for a partnership to be treated as a corporation without affecting the self-employment directive in the statute concerning the distributive share of the partner.  This is found at 26 C.F.R. 1.1402 (a)-2(g).  Isn’t that convenient?  This allows the American employer to be treated as a partnership for the sake of the Social Security Scam, and to be treated as a corporation whenever the government has reason to do so.

As cited above, section 1402 under the self-employment tax provisions (all S.S.# applicants are self-employed as individual partners – the undistributed dividend is considered self-employment income), cited to section 702 under the partnership provisions (all S.S.# applicants are in a partnership), which in turn cited to section 901 under the foreign and U.S. possession tax provisions (all S.S.# applicants signed up for FICA, a U.S. possession tax), which in turn cited to section 902.  Under title 26 USC §902, “Deemed paid credit where domestic corporation owns 10 percent or more of voting stock of foreign corporation”, a domestic corporation that owns part of a foreign corporation is deemed to have paid a percentage of the foreign corporation’s income taxes.  As evidenced above, income taxes are paid by collectors of “internal duties”.  The foreign controlled corporation has been involved in shipping within the jurisdiction of the internal revenue laws, coastwise trade, and that includes importing “articles” (within title 27 CFR, “Alcohol, Tobacco Products and Firearms”).  Thus, the foreign controlled corporation is subject to the income tax as a collector/assessor of “internal duties”, the importing of “articles” (within 27 CFR, “Alcohol, Tobacco Products and Firearms”).  Section 902, subsection (c), “Definitions and special rules”, paragraph (8), “Regulations”, refers to section 904, “Limitation on credit”, and also to section 960, “Special rules for foreign tax credit”.  Then under Title 26 U.S.C. §960, “Special rules for foreign tax credit”, if the domestic corporation has included earnings of the foreign corporation, then that amount is deemed a dividend paid to the domestic corporation.  Section 902 stated that a domestic corporation is deemed to have paid a percentage of the foreign corporation’s income tax, so this amounts to the included earnings that section 960 is referring to that is now deemed a dividend paid to the domestic corporation.  Then applying the constructive ownership rules from section 958, “Rules for determining stock ownership”, as cited above, the “U.S. shareholder” (the “U.S. resident”) of the controlled foreign corporation is considered to own the stock of the domestic corporation.  This domestic corporation is the partnership under the self-employment statutes (26 C.F.R. 1.1402 (a)-2(g) as cited above), so the partners have received a dividend.  This undistributed dividend attributed to each partner constitutes the necessary legal requirement to file an I.R.S. Form 1040, since the dividend is based, in part, upon income taxes paid by the controlled foreign corporation of the domestic corporation (the American employer).  The statutes cited here have exported a dividend to all partners of the partnership, otherwise considered to be an American employer – that means all the partners have now become liable for the income tax by receiving income that constitutes being a collector/assessor of “internal duties” (importing of “articles” within title 27 CFR, “Alcohol, Tobacco Products and Firearms”).  Filing an I.R.S. Form 1040 (or having the IRS file a substitute-for-return – of course, the IRS agent is clueless about this underlying self-employment income) is declaring said self-employment income (in the Virgin Islands) and offsetting that income with a foreign tax credit (F.I.C.A.) as cited in section 901, “Taxes of foreign countries and of possessions of United States”.  This filing is registered as a TC-150 Code in the individual’s master file maintained by the I.R.S.  It is within the previously cited section 932, “Coordination of United States and Virgin Islands income taxes”, and section 934, “Limitation on reduction in income tax liability incurred to the Virgin Islands”, where the exact breakdown of income occurs – what is liable to the Virgin Islands as self-employment income.

The undistributed dividend that was included in the definition of self-employment income is from the partnership that owns a controlled foreign corporation, so the election from Title 26 U.S.C. §962, “Election by individuals to be subject to tax at corporate rates”, now applies.  There are many provisions of the internal revenue code that use the word “elect” or “election” as if the “taxpayer” is aware of all of this subterfuge.  The election occurred automatically upon filing a Form 1040 or the IRS filing a substitute-for-return.  So once you filed a Form 1040, you elected to have this undistributed dividend taxed at the corporate rate.  Isn’t that nice of the government to allow the undistributed dividend to be taxed at the lower corporate rate?  You weren’t even aware of this dividend, since it was undistributed, yet you elected to be subject to the corporate rate for tax purposes.  What this does is allow the corporation tax laws to be incorporated into an individual’s tax return.

The regulations from the CFR under this statute now apply the corporate tax rates on the shareholder’s dividend.  The regulations at 26 CFR 1.962-1(b)(2)(i) reference to §904 and §960(a)(1), two sections of the Code already cited.  The regulations under 26 C.F.R. 1.962-1(b)(2)(ii) direct that the term “domestic corporation” as used in §960(a)(1) and §78, and that the term “corporation” as used in §901, shall be treated as referring to such shareholder.  This means that even supposed tax professionals would not be aware of the fact that where section 901 uses the term “corporation” it actually is to be treated as referring to a shareholder.  However, this follows logically from section 703, “Partnership computations”, as cited above, where it directed that the partners of the partnership must use section 901 separately as partners.  The partners of the partnership are “U.S. residents” and pursuant to section 958, “Rules for determining stock ownership”, all “U.S. residents” are treated as “U.S. shareholders”.

Title 26 USC §901, “Taxes of foreign countries and of possessions of United States”, is limited by 26 USC §904 which is “Limitation on credit”.  Title 26 USC §960 is “Special rules for foreign tax credit”.  Title 26 USC §78 is “Dividends received from certain foreign corporations by domestic corporations choosing foreign tax credit”.  These are the key sections that are behind the filing of an I.R.S. Form 1040.

It is this self-employment income and the offsetting foreign tax credit (FICA) that is the basis used within Title 26 USC §901 “Taxes of foreign countries and of possessions of United States”.  Since the regulations under 26 CFR 1.962-1(b)(2)(ii), cited above, state that for the purposes of applying §960(a)(1) the term “corporation” as used in §901 shall refer to the “shareholder”, this section now applies to “U.S. shareholders”.  Under 26 §901, subsection (m), “Cross references” is the following:  “(1) For right of each partner to make election under this section, see section 703(b)”.  The Code has come full circle – 901(m) references 703(b) and, as evidenced above, 703(b)(3) stated that for calculation of taxable income, section 901 was to be used by the partners separately.

When the IRS sends out a letter of inquiry, the letterhead states “Small Business/Self-Employed Division”.  All S.S.# applicants are partners of a partnership and are being attributed an undistributed dividend that is considered self-employment income.  The IRS has been telling you what it is doing, although the IRS employees are clueless.  They have no idea why their own letterhead states what it does.  An individual whose only income is derived as an employee of a corporation will be contacted by the IRS’s “Small Business/Self-Employed Division”.

Here’s the regulation that clinches the deal from title 26:  26 CFR 301.7321-1, “Seizure of property”.  “Any property subject to forfeiture to the United States under any provision of the Code may be seized by the district director or assistant regional commissioner (alcohol, tobacco and firearms).  Upon seizure of property by the district director he shall notify the assistant regional commissioner (alcohol, tobacco and firearms) for the region wherein the district is located who will take charge of the property and arrange for its disposal or retention under the provisions of law and regulations applicable thereto.”

Why would property subject to forfeiture under any provisions of the internal revenue laws be turned over to the assistant regional commissioner (alcohol, tobacco and firearms)?  Because the jurisdiction of internal revenue is based upon the collection of importing duties on “articles” (title 27 CFR, “Alcohol, Tobacco Products and Firearms”) within the U.S. possessions.  “Internal duties” have been promulgated based upon the unconstitutional Act of Congress approved on March 3, 1791, that put an intrastate tax on stills and the stills’ product, alcohol, and hid the fact that the revenue collectors for this tax were within the Customs.

It has been noted by others that in the organizational chart of the Department of Treasury the Internal Revenue Service is not listed under the chain of command of the Under Secretary for Enforcement.  The Internal Revenue Service was only created for the Social Security Scam – it is only referenced in the Code under the regulations concerning the American employer and the contract made between the American employer and the IRS (26 USC sec. 3121(l) and the implementing regulations).  That’s why everything must be turned over to the assistant regional commissioner (alcohol, tobacco and firearms) in the regulation above.  The Alcohol and Tobacco Tax and Trade Bureau is found in the chain of command of the Under Secretary for Enforcement.

Liability is the key issue – without establishing liability there can be no jurisdiction conveyed to the federal courts.  The basis of liability to file an income tax return is found in title 27 CFR, “Alcohol, Tobacco Products, and Firearms” as evidenced above by the Parallel Table of Authorities and Rules.

The Parallel Table of Authorities and Rules will now be useful in exposing that title 27 CFR, “Alcohol, Tobacco Products, and Firearms”, is the basis for nearly all of the provisions of subtitle F, “Procedure and Administration”, within title 26 USC, “Internal Revenue”.

Subtitle F, “Procedure and Administration”, includes sections 6001 through 7874.

Let’s start right off with section 6001, “Notice or regulations requiring records, statements, and special returns”.  The IRS Privacy Act notice included in the instructions for the Form 1040 states that it has the authority to ask for the information based upon sections 6001, 6011, and 6012.

Section 6001, “Notice or regulations requiring records, statements, and special returns”, of title 26 USC is implemented by regulations from both 26 CFR (“Internal Revenue”) and 27 CFR (“Alcohol, Tobacco Products and Firearms”).  Section 6011, “General requirements of return, statement, or list”, is also implemented by regulations from both 26 CFR and 27 CFR.  These are the very first two statutes within subtitle F, “Procedure and Administration”.  Both require implementation by regulations within title 27 CFR, “Alcohol, Tobacco Products, and Firearms”, as well as regulations within title 26 CFR, “Internal Revenue”.  This is because anything to do with the income tax is based upon the collection/assessment of “internal duties”, the importing of “articles” (title 27 CFR, “Alcohol, Tobacco Products and Firearms”) within the U.S. possessions.

Section 6020, “Returns prepared for or executed by Secretary”, is only implemented by title 27 CFR parts 53 and 70.  As noted above, 26 USC section 7653, “Shipments from the United States”, within subchapter D, “Possessions”, within chapter 78, “Discovery of Liability and Enforcement of Title”, is implemented by title 27 part 70 “Procedure and Administration”.  This is “Procedure and Administration” within title 27 CFR, “Alcohol, Tobacco Products, and Firearms”.  The Secretary is preparing and executing returns within internal revenue based upon authority from title 27 CFR.

Let’s look at all of the sections that have to do with the IRS’s underlying authority for assessments, penalties, interest, levy, liens, additions, agreements, forfeitures, civil actions, and enforcement to see what regulations implement these internal revenue statutes.

Title 26 USC, “Internal Revenue Code”, section 6201, “Assessment authority”, is only implemented by title 27 CFR part 70.

Title 26 section 6301, “Collection authority”, is only implemented by title 27 CFR part 53.

Title 26 section 6321, “Lien for taxes”, is only implemented by title 27 CFR part 70.

Title 26 section 6331, “Levy and distraint”, is only implemented by title 27 CFR part 70.

Title 26 section 6601, “Interest on underpayment, nonpayment, or extensions of time for payment, of tax”, is only implemented by title 27 CFR part 70.

Title 26 section 6651, “Failure to file tax return”, (this is under chapter 68, “Additions to the tax, additional amounts, and assessable penalties”, not the misdemeanor charge found at section 7203) is only implemented by title 27 CFR parts 24, 25, 31, and 70.

Title 26 section 6671, “Rules for application of assessable penalties”, is only implemented by title 27 CFR part 70.

Title 26 section 6701, “Penalties for aiding and abetting understatement of tax liability”, is only implemented by title 27 CFR part 70.

Title 26 section 7011, “Registration – persons paying a special tax”, is only implemented by title 27 CFR parts 17, 19, 22, 24, 25, 31, 44, 70, and 270.

Title 26 section 7121, “Closing agreements”, is only implemented by title 27 CFR part 70.

Title 26 section 7122, “Compromises”, is only implemented by title 27 CFR part 70.

Title 26 section 7302, “Property used in violation of internal revenue laws”, is only implemented by title 27 CFR part 72.

Title 26 section 7322, “Delivery of seized personal property to U.S. marshal”, is only implemented by title 27 CFR part 72.

Title 26 section 7323, “Judicial action to enforce forfeiture”, is only implemented by title 27 CFR part 70.

Title 26 section 7401, “Authorization” (this is under chapter 76, “Judicial proceedings”), is only implemented by title 27 CFR part 70.

Title 26 section 7403, “Action to enforce lien or to subject property to payment of tax”, is only implemented by title 27 CFR part 70.

Title 26 section 7505, “Sale of personal property acquired by the United States”, is only implemented by title 27 CFR 70.

Title 26 section 7510, “Exemption from tax of domestic goods purchased for United States”, is only implemented by title 27 part 19.  This section reads as follows:  “The privilege existing by provision of law on December 1, 1873, or thereafter of purchasing supplies of goods imported from foreign countries for the use of the United States, duty free, shall be extended, under such regulations as the Secretary may subscribe, to all articles of domestic production which are subject to tax by the provisions of this title.”  This statute is as close as the legislative draftsmen come to coming out and saying that internal revenue laws are based upon importing.  A “duty” is a term used in importing.  Extending the privilege of purchasing supplies from foreign countries duty free to articles of domestic production means that the United States may import “articles” from the U.S. possessions duty free as well.  And the term “articles” hides the actual relation to title 27 CFR, “Alcohol, Tobacco Products and Firearms”.

Title 26, “Internal Revenue Code”, chapter 78, “Discovery of Liability and Enforcement of Title”, subchapter A, “Examination and Inspection”, includes the sections 7601 through 7613.  These are some of the most basic sections of law of enforcement.

Title 26 section 7601, “Canvass of districts for taxable persons and objects”, is only implemented by title 27 CFR part 70.

Title 26 section 7602, “Examination of books and witnesses”, is only implemented by title 27 CFR parts 29, 46, 70, and 296.

Title 26 section 7603, “Service of summons”, is only implemented by title 27 CFR part 70.

Title 26 section 7604, “Enforcement of summons”, is only implemented by title 27 CFR part 70.

Title 26 section 7605, “Time and place of examination”, is only implemented by title 27 part 70.

Title 26 section 7606, “Entry of premises for examination of taxable objects”, is only implemented by title 27 CFR parts 24, 25, 41, 44, 45, 46, 70, 270, 275, and 296.

Title 26 section 7608, “Authority of internal revenue enforcement officers”, is only implemented by title 27 CFR parts 70 and 296.  The very authority of internal revenue enforcement officers is implemented from title 27, not title 26!  Only the importing of “articles” (title 27 CFR, “Alcohol, Tobacco Products and Firearms”) gives jurisdiction to the internal revenue enforcement officers.  Don’t expect your local IRS office to understand any of this.

The last statute that will be listed here says it all.  Under title 26 USC, chapter 80, “General rules”, is section 7851, “Applicability of revenue laws”, which is only implemented by title 27 CFR part 24.

There are many more statutes from subtitle F, “Administration and Procedure”, that are implemented only by title 27 CFR, but the above list addresses the IRS’s underlying authority for assessments, penalties, interest, levy, liens, additions, agreements, forfeitures, civil actions, and enforcement – all of the above listed statutes are implemented only by title 27 CFR.

Fundamental #1 through Fundamental #5 have been evidenced by the actual statutes from the United States Code and their implementing regulations from the Code of Federal Regulations.

Let’s put everything into one sentence:  The only way that a sovereign American can be subject to the income tax, the second plank of the Communist Manifesto, is to be considered a foreigner living in America who is involved in foreign commerce within the U.S. possessions collecting importing duties as a member of the Merchant Marine on “articles” within the jurisdiction of title 27 CFR, “Alcohol, Tobacco Products, and Firearms”.  That’s a bit much to say, but it isn’t easy to subjugate an entire country of sovereign Americans.

The Social Security Scam was established to do all of the above by having sovereign Americans apply for a S.S.# on the “Form SS-5” as an employee of a foreign affiliate of a domestic corporation, what is known as an “American employer”.

Since the earnings must be foreign to be under the government’s foreign commerce jurisdiction, the income taxes paid by the foreign affiliate are treated as a credit attributable to the domestic corporation, the “American employer”, as stated in 26 USC §902, “Deemed paid credit where domestic corporation owns 10 percent or more of voting stock of foreign corporation”.  Then at 26 USC §960, “Special rules for foreign tax credit”, the credit is then treated as a dividend from the foreign affiliate to the domestic corporation.  Since an American applicant for a S.S.# becomes a “U.S. resident”, the entry point to the Internal Revenue Code is at 26 USC §932, “Coordination of United States and Virgin Islands income taxes”, subsection (a), “Treatment of U.S. residents”, which is limited by §934, “Limitation on reduction in income tax liability incurred to the Virgin Islands”, which, in turn, cites to §958, “Rules for determining stock ownership”.  Under §958, all “U.S. residents” become “U.S. shareholders” of the foreign affiliate, along with all of the necessary rules to fit the requirements under section 511 of the Merchant Marine Act of 1936 (where the definition of “taxpayer” is found), including that the foreign affiliate be treated as a controlled corporation.  Section 958 also states that the “U.S. shareholder” of the foreign controlled corporation is treated as owning the stock of the domestic corporation.  This means that the dividend to the domestic corporation, the “American employer”, which is considered a partnership, is now attributable to all of the partners of the partnership – the S.S.# is the individual’s identification # within the partnership.  All partners have been attributed a dividend (although it remains undistributed so no one is aware of it) that conveys the requisite income to trigger the requirement to file an income tax return.

However, as the entire Social Security Scam is based upon the unconstitutional Act of Congress approved on March 3, 1791, it becomes obvious that the bankers were plotting the government’s bankruptcy since the beginning of this country.  Alexander Hamilton was the bankers’ man within the Founding Fathers and he authored the unconstitutional Act of Congress approved on March 3, 1791.

The Declaration of Independence states:  “But when a long Train of Abuses and Usurpations, pursuing invariably the same Object, evinces a Design to reduce them under absolute Despotism, it is their Right, it is their Duty, to throw off such Government, and to provide new Guards for their future Security.”

It is time to abolish Social Security.  Social Security certainly fits the description above from the Declaration of Independence – a long train of abuses and usurpations pursuing invariably the same object, evincing a design to reduce Americans under absolute Despotism.

There are a couple of things that can also be gleaned from the above statutes.  The undistributed dividend is described in the statutes at 26 USC, “Internal Revenue Code”, chapter 2, “Tax on Self-employment Income”, section 1402, “Definitions”, subsection (a), “Net earnings from self-employment”, where it states, in part, “…plus his distributive share (whether or not distributed) of income or loss described in section 702(a)(8) from any trade or business carried on by a partnership of which he is a member…”.

The phrase “trade or business” is used in the above definition concerning the partnership.  Title 26 USC §162, “Trade or business expenses”, subsection (d), “Capital contributions to Federal National Mortgage Association”, states:  “For purposes of this subtitle, whenever the amount of capital contributions evidenced by a share of stock issued pursuant to section 303 (c) of the Federal National Mortgage Association Charter Act (12 U.S.C., sec. 1718) exceeds the fair market value of the stock as of the issue date of such stock, the initial holder of the stock shall treat the excess as ordinary and necessary expenses paid or incurred during the taxable year in carrying on a trade or business.”

Why would the value of stock of the Federal National Mortgage Association, otherwise known as Fannie Mae, be considered ordinary and necessary expenses paid or incurred?  Shouldn’t stock valuation be within capital gain or loss?  The only way this can be within the law is if Fannie Mae is tied into the American employer within the Social Security Scam.  Remember that under title 26 USC §958, “Rules for determining stock ownership”, all “U.S. residents” are treated as “U.S. shareholders” of the foreign affiliate and, as well, as owners of the stock of the domestic corporation.

Fannie Mae and Freddie Mac are involved in “low income” housing.  Obviously, to determine “low income”, they must be within something to do with the income tax within the Social Security Scam.

And considering “capital gain” and “ordinary income” leads to title 26 USC section 7518, “Tax incentives relating to merchant marine construction funds”.  Remember that a “taxpayer” is defined at 26 CFR 2.1-1(a)(5) as someone establishing (or seeking to establish) a construction reserve fund within the provisions of section 511 of the Merchant Marine Act of 1936.  Title 26 USC section 7518, “Tax incentives relating to merchant marine construction funds”, subsection (d), “Establishment of accounts”, paragraph (1), “In general”, states:  “Within a construction fund 3 accounts shall be maintained: (A) the capital account, (B) the capital gain account and, (C) the ordinary income account.”  Paragraph (2), “Capital account”, describes what a capital account actually is.  Paragraph (3), “Capital gains account”, describes what a capital gain account actually is.  And paragraph (4), “Ordinary income account”, describes what an ordinary income account actually is.  All S.S.# applicants are in the Merchant Marine.  Don’t expect anyone at the local IRS office to understand that they are working under an agreement with an American employer to extend FICA to the employees of the American employer’s foreign affiliate, “taxpayers”, otherwise known as the Merchant Marine.  Yet the very definitions that the IRS employees bandy about, such as capital account, capital gain account, and ordinary income account are only defined within the Merchant Marine construction fund.  And, of course, section 7518, “Tax incentives relating to merchant marine construction funds”, that establishes these accounts is within chapter 77, “Miscellaneous Provisions”.  Why, pay no attention to the thousands of pages of the Internal Revenue Code, just read the first chapter and give us all of your money.  What business is it of yours what’s in miscellaneous provisions of the Code?

Also within the above dissertation was the cite to title 26 USC §902, “Deemed paid credit where domestic corporation owns 10 percent or more of voting stock of foreign corporation”.  If one reads further into the statute, there is more involved than just the domestic corporation that owns a foreign corporation.  Therein are cites to lower tier corporations as well.  All throughout the Code are references to second tier, third tier, and other types of daisy chains of corporations.  The government is being used by the FED to control which corporations get favorable treatment and which don’t.  And, of course, it’s the financial services industry (banks) that are cited within section 904, “Limitation on credit”, which is cited from section 902.  Further in the Code are special considerations for the oil corporations and the mineral mining corporations.  It’s time to abolish Social Security and quit feeding the FED and its puppet, the United States government.

One final note needs to be addressed here.  The Parallel Table of Authorities and Rules is the basis of finding the implementing regulations for the statutes within subchapter D, “Possessions”, of chapter 78, “Discovery of Liability and Enforcement of Title”, within title 26, “Internal Revenue Code”.  Those were the sections of Code 7651 through 7655.  These sections are also implemented by title 40 CFR part 76.  Title 40 USC, “Public Buildings, Property, and Works”, is implemented by title 40 CFR, “Protection of Environment”.  Since Article IV, section 3 of the Constitution grants the federal government control of its possessions, title 40 represents the government’s property.  Title 40 CFR, “Protection of Environment”, part 76, “Acid Rain Nitrous Oxides Emission Reduction Program”, is where the government has put into place laws concerning coal burning residue.  FICA is an employee tax for railroads on a coal mine.  See the Post, “What is FICA”, at http://wp.me/pCW6e-5i for more details.  So the Environmental Protection Agency (EPA) is charged with protecting government property.  The EPA is also cited under title 41 USC, “Public Contracts”, which is implemented by title 41 CFR, “Public Contracts and Property Management”.  Any property that the government owns can be environmentally controlled under the EPA.  Since everyone is considered a “U.S. citizen”, this has led to more encroachment of powers by the government through the Social Security Scam.

THERE IS MUCH MORE FOR ALL AMERICANS TO LEARN!!

THE NEW WORLD ORDER IS BEING PAID FOR BY “TAXPAYERS”!

I have written a memorandum titled “The United States Doesn’t Own the Mississippi River” which exposes the entire history of the New World.  What Americans have been taught is a fairy tale.  I have cited the actual statutes, regulations, and other official documents that reveal exactly what has been going on behind the scenes.  Here is the order form:

Order Form

Order Form

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          Americans have been brainwashed to believe that Social Security is a social-insurance program run by the federal government for the benefit of all Americans.  After applying for a Social Security number, all Social Security enrollees are liable for the Federal Insurance Contributions Act tax, or F.I.C.A.     

          What exactly is F.I.C.A.?

          Title 26 U.S.C., Internal Revenue”, chapter 21 is titled “Federal Insurance Contributions Act”.  This chapter spans the numerical sections in the 3100’s of the current Internal Revenue Code, specifically sections 3101, 3102, 3111, 3112, 3121, 3122, 3123, 3124, 3125, 3126, 3127, and 3128.  Title 26 U.S.C. chapter 22 is titled “Railroad Retirement Tax Act” and it spans the numerical sections in the 3200’s of the current Internal Revenue Code, specifically sections 3201, 3202, 3211, 3212, 3221, 3231, 3232, 3233, and 3241.  These chapters are within subtitle C, “Employment Taxes”, of the current version (1986) of title 26 U.S.C. “Internal Revenue”.    

          The corresponding code sections from the 1939 version of title 26 U.S.C., “Internal Revenue”, are illuminating.  Chapter 9 under Subtitle B, “Miscellaneous Taxes”, of the 1939 Code is titled “Employment Taxes”.  Within chapter 9, “Employment Taxes”, is subchapter A, “Employment by Others than Carriers”, which is comprised of the section numbers within the 1400’s of the 1939 Code and correspond to the section numbers within the 3100’s of the 1986 Code – “F.I.C.A.”.  Also within chapter 9, “Employment Taxes”, is subchapter B, “Employment by Carriers”, which is comprised of the section numbers within the 1500’s of the 1939 Code and correspond to the section numbers within the 3200’s of the 1986 Code – “Railroad Retirement Tax Act”.  See the link to a table that lists these corresponding section numbers:  Cross Reference from 1939 to 1954 Internal Revenue Codes.

          Therefore the reference to “Carriers” from subchapter B within chapter 9 of the 1939 Code corresponds to the railroads.  A few notes from the 1939 Code specify exactly what “Others than Carriers” are.  Below is the note from the 1939 version of the Code immediately under the title “Subchapter B – Employment by Carriers”: 

                    “Coal-mining employees of railroads, transfer of social insurance and labor relations coverage to laws applicable to coal mining generally from laws applicable to railroad industry by Act Aug. 13, 1940, see note set out under this chapter preceding section 1400.”  See the actual note at this link:  Chapter 9 – subchapter B (1939 Code).  The above note is on the bottom of page 501 of the link.

          The following is part of the note preceding section 1400 as referenced from the above note: 

                    “whether conducted directly by carriers or by subsidiaries of carriers, should for purposes of a social-insurance program and for purposes of labor relations be covered by the system of laws applicable to coal-mining generally rather than the system of laws applicable to the railroad industry.”  See the actual note at this link:  Chapter 9 – subchapter A (1939 Code).  The above note is the last paragraph on page 479 of the link and on to the top of page 480.

          Further research into this Act of Aug.13, 1940, reveals that coal mining operations having a railroad from the tipple to the mine entrance would be considered under the coal mining laws.  In other words, the “Railroad Retirement Tax Act” becomes “F.I.C.A.” when the railroad is on a coal mine from the tipple to the mine entrance.  This explains what the term “Other than Carriers” means – it is a railroad on a coal mine that does not carry passengers as a “Carrier” would.  

          The “Jones Act” of March 4, 1915, (amended June 5, 1920, and again on December 20, 1982) was incorporated into the United States Code at Title 46 U.S.C., “Shipping”, section 688 and was recently (2006) reincorporated at Title 46 U.S.C. Section 30104.  This Act provided that the injury and death benefits of railway workers would apply to seamen.  The railway employee benefits were originally from the Federal Employers’ Liability Acts (Act June 11, 1906, Act April 22, 1908, Act April 5, 1910, and Act August 11, 1939).  The important thing to realize is that these benefits are codified under acts for “Federal Employers” and they apply to federal employees.  The railroads to which the benefits applied were originally federal corporations and the railroads were built through federal land.  Thus, the “Jones Act” preceded the laws that created F.I.C.A. and provided the link that would be used to apply railroad social-insurance and labor-relations laws to seamen.  

         This means that the railroad laws are being used to implement F.I.C.A. after an American applies for a Social Security number.  This is verified by the connection between title 45 U.S.C., “Railroads”, and the implementing regulations from title 45 C.F.R., “Public Welfare”. 

          This Post began with the statement that Americans have been brainwashed to believe that Social Security is a social-insurance program run by the federal government for the benefit of all Americans.  At this point, it is obvious that you have not been fully informed as to what F.I.C.A. is.        

          What you have not been told about Social Security and F.I.C.A. is based upon the following facts and law.  

          The Declaration of Independence is the organic law of the land and it states that “all men are created equal” (and, of course, women) is a self-evident truth.  Therefore, no person or group of persons may initiate force or fraud against any other person or group of persons, including the government.  

          The Constitution is subordinate to the Declaration of Independence and it only grants the federal government jurisdiction over commerce as specified in Article I, Section 8:  “To regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes”.  These jurisdictions are otherwise known as foreign commerce, interstate commerce, and trade with the Indians. 

          The federal government has no jurisdiction over commerce that is intrastate, in other words, commerce that is entirely within a sovereign State.  The Supreme Court has held that sovereignty lies with the individual American.  The two previous sentences are true because of the self-evident truth put forward in the Declaration of Independence that “all men (and women) are created equal”. 

          In the 1930’s the Federal Reserve bankrupted the federal government.  This is evidenced by the law itself:  title 11 U.S.C. “Bankruptcy” is implemented by title 11 C.F.R. “Federal Elections”.  In other words, the federal elections are held to elect a bankruptcy administration.  The C.F.R. (Code of Federal Regulations) was created in 1935 as part of the bankruptcy proceedings.  

          The Federal Reserve is nothing more than an international counterfeiter – printing unbacked paper money.  A real “dollar” is a unit of measure – a “dollar” is defined in the law as a specific amount of gold or silver.  If someone asked you to go the store and buy a “gallon”, what would you buy?  A “gallon” is simply a unit of measure and could apply to nearly any commodity.  A Federal Reserve “dollar” is only backed by debt – it is counterfeit money.  The bankruptcy is therefore a fraud since the federal government never received anything of value – simply unbacked paper money worth only the ink and paper of which it’s made.  

          Since the federal government has no jurisdiction over commerce that is intrastate and, as well, since sovereignty lies with the individual American, bankrupting the federal government did not help the Federal Reserve with its plan to make Americans pay for its interest on its counterfeit money loans to the federal government. 

          However, the bankruptcy of the federal government was long ago preplanned by the international counterfeiters.  They had preplanned the Social Security scam.           

          By applying for a Social Security number, a free sovereign American has made a contract with the federal government.  The federal government can offer no social-insurance program to a sovereign American due to the constraints built into the Constitution which prevent initiatory force, thus precluding any enforcement provisions.  Therefore, the contract that a sovereign American has unwittingly made with the federal government is an employment contract – an American gave away all sovereignty and became a federal employee by applying for a Social Security number.  Think about it – only federal employees are liable for federal employment taxes.  

          In addition, since the federal government’s jurisdiction is limited by the Constitution, the only social-insurance program that it is capable of offering must legally apply within its own limited jurisdiction.  Article IV, Section 3 of the Constitution states, in part:  “The Congress shall have Power to dispose of and make all needed Rules and Regulations respecting the Territory or other Property belonging to the United States…”.  The U.S. possessions and territories are subject to the jurisdiction of the federal government since these areas have not become sovereign States.  This means that F.I.C.A. must be a tax within the jurisdiction of the federal government – within the U.S. possessions (there are no territories currently).  This is stated in the law at Title 26 U.S.C., “Internal Revenue”, Section 7655 “Cross References”, where both F.I.C.A. and the self-employment tax are declared to be U.S. possession taxes. 

          The Public Salary Tax Act of 1939 was approved to allow multiple taxing authorities to tax federal employees, specifically F.I.C.A. within Social Security.  Title 4 U.S.C. Section 111, “Same; taxation affecting Federal employees; income tax”, is part of the codification of the Public Salary Tax Act of 1939.   Under the “Notes of Decisions” within the United States Code following this section is this: 

                    “The Puerto Rican Legislature is a “duly constituted taxing authority” within meaning of this section, whereby the United States consented to the taxation of compensation of federal employees…”.  Rivera v Buscaglia (1944, CA1 Puerto Rico). 

          This means that in addition to becoming a federal employee by applying for a Social Security number, an American enrollee is also presumed to have acquired U.S. possession citizenship.  This type of citizen is defined as a “term” known as a “U.S. citizen” in the law at title 26 U.S.C., “Internal Revenue”, section 2208, “Certain residents of possessions considered citizens of the United States”, and subsection 2501(b), “Certain residents of possessions considered citizens of the United States”.  The “U.S. citizen” is exemplified at 26 C.F.R. 25.2501-1(c) as a citizen born in one of the States who establishes a residence in Puerto Rico and, further, acquires Puerto Rican citizenship.  See the Post titled “U.S. Resident” at http://wp.me/pCW6e-3g on this Blog for more detail concerning “U.S. citizen” and other legal “terms”. 

          How could a “Railroad Retirement Tax Act” that is considered to be “F.I.C.A.” when on a coal mine, and, due to the “Jones Act”, applicable to seamen, have anything to do with applying for Social Security?  As noted above, an American applying for a Social Security number has made a contract with the federal government and become a federal employee.  Specifically, the Social Security enrollee has become a “taxpayer”.  A “taxpayer” is a term within the law defined at Title 26 C.F.R. 2.1-1(a)(5) as a member of the Merchant Marine, in other words, a seaman.  Note at 26 C.F.R. 2.1-1(b) it states that this is the definition for all calculations of taxes throughout the code and the regulations.   

          The federal government is bound by the Constitution, even under bankruptcy.  The federal government must always obey the law, otherwise the government has no legal standing.  The federal government can pass no law that has anything to do with regulating sovereign Americans since the Declaration of Independence states that “all men (and women) are created equal”, thus precluding any enforcement provisions.  But the federal government may make any laws it chooses that apply to its own employees and its own possession citizens.  By creating a contract known as Social Security the owners of the federal government, the Federal Reserve, have made their enslavement of Americans “legal”.  However, a contract that is not entered into knowingly, intelligently, and voluntarily is void ab initio (from the beginning).  

          For a complete understanding of the Social Security scam please see the Page on this Blog titled “The Social Security Scam – Why All Taxpayers Must File Income Tax Returns” at the top of this Post.

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