Illegal Income Tax?

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Submitted by greekfire on July 8, 2007 - 10:10am

I came across an intriguing video about the legality of the income tax. It is titled "America: Freedom to Fascism" and is produced by Aaron Russo. Here is the link to Part 1. You can get to the other parts from here. I tried to access the full version, but it was apparently removed from Google Video. Talk about coincidence.

http://youtube.com/watch?v=MuE8PpnsevM

The short of it is that the government, or IRS, was never officially authorized to tax a person's labor via an income tax (form 1040). The 16th Amendment, the Income Tax Amendment, was never officially ratified. Apparently there is not a law on the books that authorizes this form of taxation. The theme of the video is that the bankers and politicians have conspired to pass the Federal Reserve Act unconstitutionally...giving them the right to produce dollars.

I think this is a very intriguing video.

What do you think?

Submitted by 4plexowner on July 8, 2007 - 10:47am.

Read "The Creature from Jekyll Island: A Second Look at the Federal Reserve" by G. Edward Griffin

truly an eye-opener - should be required reading for all Americans - Americans don't read anymore so Aaron Russo and Michael Moore are trying to reach them where they live - sitting on their brains in front of the TV

Submitted by NeetaT on July 8, 2007 - 10:55am.

None of that information matters to me, because I still have to pay taxes. If I could forgo paying taxes and not be reminded that I didn't, it would matter to me.

Submitted by blue_sky on July 8, 2007 - 10:58am.

News flash: not everything on the internet is true.

Go get an attorney's opinion
http://evans-legal.com/dan/tpfaq.html

In particular:
http://evans-legal.com/dan/tpfaq.html#ra...

and
http://evans-legal.com/dan/tpfaq.html#co...

Submitted by greekfire on July 8, 2007 - 12:16pm.

"News flash: not everything on the internet is true."

Yet you cite references from the Internet yourself. I am not saying I agree or disagree with the video. If you watch the videos they have several attorneys that specialize in this field speak on the topic. In fact, one of the protagonists in the video was a former IRS tax specialist, or something like that. So it's not as though these statements are being made by a bunch of kooks.

Submitted by blue_sky on July 8, 2007 - 12:43pm.

"Yet you cite references from the Internet yourself."

All right, I recommend you pull the court's ruling yourself, here's the relevant case: U.S. v. Thomas, 788 F.2d 1250 (7th Cir. 1986), cert. den. 107 S.Ct. 187 (1986).

Or, if that's too much work, how about reading page 46 of the St. Louis Bar Journal, Vol 53, No. 1. Also available on the internet for your convenience, though I'm sure you can get your local library to dig up a copy in case you have reason to believe this is a forgery:

www.bamsl.org/members/barjournal/summer%...

You can also find a rundown of all of this from the IRS, who has to deal with this bullshit daily and references to all the relevant case law:

http://www.irs.gov/taxpros/article/0,,id...

"So it's not as though these statements are being made by a bunch of kooks."

Compare the images at 0:40 in your video with this lawsuit: http://www.usdoj.gov/tax/txdv04752.htm .

Submitted by DrChaos on July 8, 2007 - 12:49pm.

Uh, in reality, those statements ARE being made by a bunch of kooks since there is objectively documented, enormous legal precedent against their inane arguments.

None of these 'tax protesters' with their silly ideas win. They aren't after any grand, righteous, legal principle, they just don't want to pay what they owe.

If a state legislature thought that it really did not ratify the 16th Amendment, they would have so voted and made it clear. None has done so.

On the other hand, videos like this may enhance business prospects for private lawyers who take on the deluded tax protester's cases. For money up front, no doubt.

Submitted by no_such_reality on July 8, 2007 - 1:01pm.

Two thoughts:

1. Don't pay your income tax, you'll find out how unsuccessful debate of the legality is.

2. Think of the alternatives. We could replace income tax with an asset tax. Imagine a National Real and Intangiable Property tax of 3% on the assessed value of your home, car, boat, stocks, bonds, CDs, mutual funds, 67 inch LCD TV...

Submitted by blue_sky on July 8, 2007 - 1:14pm.

"None of these 'tax protesters' with their silly ideas win. They aren't after any grand, righteous, legal principle, they just don't want to pay what they owe."

You missed an important point, they also want to sell you something:

http://www.thelawthatneverwas.com/CyberM...
http://www.thelawthatneverwas.com/CyberM...
http://www.thelawthatneverwas.com/CyberM...

Submitted by DrChaos on July 8, 2007 - 1:25pm.

We could replace income tax with an asset tax. Imagine a National Real and Intangiable Property tax of 3% on the assessed value of your home, car, boat, stocks, bonds, CDs, mutual funds, 67 inch LCD TV.

Only if it would be apportioned to the states by population, determined by census.

Would hurt low wealth states. Unclear how state residency would work for corporations----would Delaware corporations get away with a really low tax since the money would be in Delaware, but not much population?

Submitted by Duck on July 8, 2007 - 2:12pm.

I have two relatives that apparently had been following this kook's advice for several years and not paying taxes. They are now both in a world of hurt since the IRS has finally caught up to them.

Submitted by greekfire on July 8, 2007 - 2:28pm.

"There is no Constitutional basis for a tax on the wages of Americans living and working in the 50 states of the Union. Period, end of story." - (1) Peter Gibbons, Tax Attorney

Aaron Russo: "There is no law that requires someone to file a 1040"
(2) Ron Paul, R-Texas: "No there isn't."

(3) Dr. Edwin Vieira, PhD, JD (both from Harvard). Apparently this chap is a noted expert on Constitutional law.

Peter Gibbons, Ron Paul, and Dr. Vieira are three well-qualified individuals on this topic. I don't know every little nuance about them, but I wouldn't go so far as to call them kooks, would you?

You have presented some interesting counter points so far, but can you provide the specific law that states that US citizens have to pay a tax on their personal wages/file a 1040?

Submitted by blue_sky on July 8, 2007 - 2:56pm.

"You have presented some interesting counter points so far, but can you provide the specific law that states that US citizens have to pay a tax on their personal wages/file a 1040?"

You are correct that there is no law saying you have to file a 1040. That's because there's a more general law that says you have to file. Laws don't generally specify form numbers, note the language of "according to the forms and regulations prescribed by the Secretary"

Here is the Internal Revenue Code, downloadable from the house of representatives:

http://uscode.house.gov/download/title_2...

Quoting section 6011(a):

"STATUTE

(a) General rule
When required by regulations prescribed by the Secretary any person made liable for any tax imposed by this title, or with respect to the collection thereof, shall make a return or statement according to the forms and regulations prescribed by the Secretary. Every person required to make a return or statement shall include therein the information required by such forms or regulations."

Submitted by greekfire on July 8, 2007 - 3:12pm.

What I've come across so far is that there are technicalities in the definition of "income" and in whether the tax is direct or not. The tax protesters argue that the tax must be apportioned to the 50 states, and that income is defined as gains and profits, rather than wages from labor.

Submitted by DrChaos on July 8, 2007 - 5:24pm.

Regardless of technicalities, income whatever its source, including income which is compensation for labor, has been unanimously been ruled as potentially taxable.

The 16th Amendment abolished the requirement for apportionment, which was its entire purpose.

The original reference cited (Tax protestor faq) is comprehensive in rebutting all sorts of such silly arguments.

Also, realize that a Federal agency operating under a law authorized by Congress may make regulations to properly enforce and put into action the law enacted by Congress. (Consider environmental & safety regulations, e.g. Does Congress have to approve or deny every drug with a new law? No, they tell the FDA to make the decision. Is that illegal? No.)

So there need not be a specific law in black letter which says that you must file a 1040 (surely the number of the tax forms are not generally specified by Congress), but the IRS's power to compel information sufficient to carry out its operation as outlined by Congress is clear. The IRS has standing to obtain that information and impose penalties for failure to do so, and all courts have found this to be legal.

And case law is law that people must obey as well.

The law is not some inane computer program that James T Kirk can cleverly cause to self-destruct with some convoluted linguistic legalisms.

It is the intent of Congress that people pay taxes, and it is legal for Congress to have that power, and compel people to do so.

Submitted by trex on July 8, 2007 - 9:10pm.

Who cares if it is legal or not? The bottom line is that most of us aren't anarchists, and like the idea of having a federal government. If it isn't legal, it should be. Aircraft carriers are expensive.

There are plenty of no-government, tax free places in the world for anyone that hates income tax. Try moving to Somalia, or the parts of Colombia that the FARC controls.

Submitted by greekfire on July 9, 2007 - 1:12am.

"Who cares if it is legal or not?"

Are you kidding me?

Wanting the government to act within the bounds set forth in the Constitution is not anarchy.

I wasn't looking for language specifically dealing with a 1040, I just included that for reference. From what I have gathered so far, the Supreme Court ruled in 1916 that the 16th Amendment gave Congress no new powers of taxation. And "income", as defined in the Eisner v Montgomery case, is based on corporate gains or profits. I guess this is one of the arguments used by tax protesters.

I don't necessarily subscribe to all of the viewpoints from the video, but I do find it thought-provoking. If nothing else, it has made me research our laws.

Submitted by Michelle Steffes on July 9, 2007 - 2:47am.

Michelle Steffes

I remember a friend of mine talking about these things about 15 years ago. Same argument, the income tax was illegal. He had a "CPA" which was willing to help him pay no taxes if my friend gave him 25% of his income (in lieu of about a 40% income tax). He would have to get rid of all his bank accounts and other such things. This is probably the same scam. It takes about 3 to 5 years for the IRS to figure out you stopped paying taxes and by that time the "CPA" would be long gone.

Submitted by RottedOak on July 9, 2007 - 7:17am.

Please note that if you try to use any of the typical tax protest arguments (no law requires filing, etc.) as a basis for failure to file, the IRS will assess a substantial additional penalty for taking a "frivolous position" against filing. These arguments get traction on discussion boards and in ordinary conversation because most people don't have the detailed knowledge of constitutional and statute law to refute them, but in court they will just make the judge mad at you for wasting the court's time.

Submitted by rankandfile on July 9, 2007 - 11:12pm.

RottedOak looks down his nose as he describes the inability of the masses to have detailed knowledge of "constitutional and statute law". Since he is so well steeped in these fields, perhaps he can enlighten all of us serfs by providing us with the specific law that grants the power for the federal government to charge a direct, unapportioned tax on the labor and wages of the American people. Just show me the law, RottedOak, and we serfs will go away.

Others use terms like kook to describe people who question and challenge the government and laws that we live under. Rather than do their own due diligence, they take the easier, more politically-correct route and resort to name calling.

If they had done their due diligence, they would know that the 16th Amendment was hastily ratified in December of 1913 at a time when most of the US Congressmen were at home spending the Christmas holiday with their families. They will also know that there were no fewer than 8 Supreme Court cases from 1916 to 1923 that came to the conclusion that the 16th Amendment did not grant the government with the right for ANY NEW TAXES. I.e., the taxation laws were as they always have been since the formation of the Constitution: the government has the right to tax corporate gains and profits, but it does not have the right to tax the labor and wages of the American people.

For those who are bathing in the IRS Koolaid, a person's labor was originally considered their own private property. A person performs a service for someone and in turn gets a wage for it. THIS IS PRIVATE PROPERTY. The government does not have the right to tax it. Corporate gains and profits, on the other hand, are fair game.

To RottedOak and others blinded by years of IRS dogma, please do not label and denigrate those who question the status quo as "kooks" who have "silly" arguments. These people can, sometimes, be the very people who are on your side; yet you don't even know it...at least not yet. Again, I ask, just show us the specific law and we will go away.

Submitted by Borat on July 9, 2007 - 11:06pm.

Ron Paul puts it very well in his interview in that movie. He says something like -- "well, they say there's a law, so even though they can't show it to you, they have all the guns and they can put you in jail if you don't pay." So regardless of whether or not it's illegal it is still in effect. As if illegality ever stopped a government from doing anything! Hell, Cheney now exists in an undefined quantum state, neither in the executive or legislative branch but simultaneously in both -- except when he's not. And Scooter gets to scoot after he obstructs justice. And Clinton pardons Marc Rich in 2000 after Scooter pleaded his case (it's true!) Iran/Contra, Watergate, etc... etc... ad nauseum. Anyway, you get the idea. Maybe it is illegal but that's what governments specialize in -- illegal activities; they'll still throw your ass in lockup if you don't pay.

Submitted by surveyor on July 10, 2007 - 9:12am.

avoiding taxes

There are easier and much more legal ways to avoid paying taxes than the methods shown here. At the end of it, which would you rather have? Fighting the IRS or firm legal ground?

Submitted by drunkle on July 10, 2007 - 2:08pm.

funny... taxes on corporations and "income", but not on wages sounds fair to me. loops holes and evasions for corporations and capital gains whilst wages are taxed doesnt.

Submitted by Michelle Steffes on July 10, 2007 - 2:52pm.

Michelle Steffes

Geekfire and rankandfile, the specific law that authorizes the collection of taxes is this. We have all agreed to be bound by what nine men and women in Washington tell us is the law and they have said that the government can collect these taxes. If you do not like this fact then propose a better one or even better you should reread Plato's Crito

http://classics.mit.edu/Plato/crito.html

It describes what one should do if they disagree with the law.

Also, it does not matter what the Supreme Court decided in 1916, just like it doesn't matter what the Supreme Court decided in 1986 when in 2003 Lawrence v. Texas overturned Bowers v Hardwick

http://en.wikipedia.org/wiki/Lawrence_v....

As a matter of fact you probably have heard about people who believe the Constitution is a living document and so what it says today (or in 1916) will be different that what it says in the future (see Grutter v Bollinger) where Justice O'Conner decided that affirmative action is constitutional now but won't be in 50 years.

http://www.law.cornell.edu/supct/html/02...

So again the specific law that authorizes the IRS to collect taxes is the 16th Amendment to the Constitution which the current Supreme Court believes was correctly ratified and says they can collect the taxes.

Submitted by RottedOak on July 10, 2007 - 5:41pm.

My, my, rankandfile, that's a lot of venom towards me for simply pointing out the fact that trying to use these arguments in a tax case will not work and will result in additional penalties. I didn't call anyone serfs or kooks or silly. Others have already pointed to the very detailed "Tax Protester FAQ" at http://evans-legal.com/dan/tpfaq.html, which addresses all of the specific arguments you bring up, so I won't repeat most of it. I will point out the rather clear language of the 16th Amendment itself:

"The Congress shall have power to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several States, and without regard to any census or enumeration."

Note the words "from whatever source derived" (no exception for labor and wages). The reason the courts ruled that the amendment didn't create any new taxing power is because they held that Congress always had the power to tax incomes -- the issue clarified in the amendment is that this could be done without regard to "apportionment among the several States."

I'd prefer that the income tax be abolished, but that doesn't mean I will swallow every argument someone tries to make against it. The arguments made in this thread (and elsewhere) claiming that the US Constitution doesn't allow an income tax, etc., are entirely unconvincing to me.

Submitted by DrChaos on July 11, 2007 - 12:06am.

I.e., the taxation laws were as they always have been since the formation of the Constitution: the government has the right to tax corporate gains and profits, but it does not have the right to tax the labor and wages of the American people.

This is incorrect.


“The power, in the eighth section of the first article, to lay and collect taxes, included a power to lay direct taxes, (whether capitation, or any other) and also duties, imposes, and excises; and every other species or kind of tax whatsoever, and called by any other name. ... I consider the Constitution to stand in this manner. A general power is given to Congress, to lay and collect taxes, of every kind or nature, without any restraint, except only on exports...”
Justice Chase, Hylton vs United States (1796).


“It was, however, obviously the intention of the framers of the Constitution, that Congress should possess full power over every species of taxable property, except exports. The term taxes, is generical, and was made use of to vest in Congress plenary authority in all cases of taxation.”

Justice Patterson, Hylton vs United States (1796).

He was a member of the Constitutional Convention so he knews what was intended.

From the beginning, the Constitution gave Congress "plenary authority" to tax as it so votes, with virtually no restriction, except prohibiting taxation of exports.

If wages were intended to be excluded, then why wasn't this mentioned?

Indeed it was later ruled that Congress retains power to tax things and actions which even Constitutionally are 'regulated' by the States and not Congress.

In 1895 or so there was a confusing Supreme Court decision which appeared to change the status of compensation for wages to a direct tax (as it was understood to be indirect previously) and thereby require apportionment---this was rectified by the 16th Amendment to go back to the previous understanding and explicitly remove apportionment requirement for incomes. No matter what, incomes were always potentially taxable in some form since the adoption of the Constititution.

In this language "direct taxes" means property taxes, in essence, and the US does not now generally impose such taxes.

There is NO ambiguity in Constitutional, statutory or case law.

In sum, the only restrictions are exactly as they were in 1791:

1) direct taxes: apportionment by state population

2) indirect taxes: rule of uniformity (can't vote for a specific person to have a higher tax than somebody else versus a specific condition).

3) no taxation of exports

and otherwise Congress has unrestricted taxation authority in all forms over everything.

For only practical reasons it seems likely that incomes as we know it were not taxed back then.

Typically governments taxed specific government-required functionality ('stamp duty', i.e. like a fee for transfering title of property, etc.) because that is where government officials specifically interacted with the people, or directly and objectively observable permanent property (acres of land, agricultural or industrial production).

The government had to tax in a way which was not incredibly easy to cheat on.

Submitted by greekfire on July 11, 2007 - 8:19pm.

I would not go as far as rankandfile in my argument against the income tax. I have faith that our government took (and continues to take) the necessary steps to ensure that all forms of taxation are legal in the eyes of our Constitution. My main point was to provoke thought on the subject - which is exactly what occurred with me when I came across the videos.

Submitted by AEHaines on November 25, 2007 - 12:13am.

Perhaps we are all asking the wrong question about this subject. It is not a matter of right or wrong, but a matter of what we plan to do about it. When the income tax was first administered Congress had originally intended that it be a tax shifted more toward the wealthy, and had set exemptions to protect the lower classes.

"In view of the increased cost of living at this day, as compared with other times, the difference between either of those amounts and $4,000 is not so great as to justify the courts in striking down all of the income tax provisions. The basis upon which such exemptions rest is that the general welfare requires that in taxing incomes such exemption should be made as will fairly cover the annual expenses of the average family, and thus prevent the members of such families becoming a charge upon the public."
POLLOCK v. FARMERS' LOAN & TRUST CO., Cite as 3 AFTR 2602 (15 Sup.Ct. 912), 05/20/1895

Translated to todays current value of the dollar, the amount of $4,000 then would transmit to close to $100,000 in todays standards on the CPI.

http://measuringworth.com/calculators/us...

So the question must be asked when 80% of our taxes are payed by 20% of the population, why is the exploition of the underclasses being allowed when it is not nessecary? Not to mention over $1 trillion a year goes unnaccounted for. Google it, "rumsfield on CBS"

More over, I suppose most of you didn't know that the IRS has, for over the last 20 years, had the Tax Courts have rulings go unpublished. A good old supreme court ruling fixed this in 2003. ESTATE OF KANTER v. COMM

On top of this the Supreme Court ruled that unpublished rulings may now be cited in federal cases. "Rule 32.1". This includes tax cases. Why would the IRS request rulings go unpublished if they've always won?

People this is not a question of material trivialites, this is a question of democracy. When the income tax was first administed, congress took every effort to protect the rights of the middle class. Somewhere this has changed. When the freedom of the middle class is imposed, and only by stict dedication to work and nothing else happens, then democracy has fallen. When the people have lost their freedom, their freedom to time, then the people effectivly stop running the government.

In Orswell's nightmare, the ruling class had total control over the weak. This was possible because the "proles" were always keep ignorant, never questioned, and were merely concerned with trying to live. The main character, Winston, believe with all his heart, that only through the strenght of the lower class could cause change. Sadly, the arguement was always against each other an not together.

This is the problem we face today. We have failed to address the real issues, and learned to depend on those that do not matter. Democracy is the real loss, not the money. I suggest you all start realizing this, or perhaps soon enough, we may start saying the income tax is "doubleplusbad".

Submitted by mglsharkson on November 25, 2007 - 10:54am.

When the first taxes hit in the early 1900's (ignoring the civil war taxes) the income tax was aim at the wealthy, plus the return was a size of a postcard! A straight flat tax. Now as we know you need advisor's in both taxes and business to legally spread your wealth, increase deductions, and reduce your taxes. Add in the state cut (about 9%), sales tax, gas tax, etc. most middle class people hit about 40 - 50% in California.

One guy was mention in the press, gets over 80k in K-1 income from rentals, makes no salary so tax wise pays very little and qualified for the poor tax credit! Rather then avoid taxes he just played by the rules and beat the gov at their own game! The paper tried to make him look bad, heck I applauded the guy!

I know many people that tried the "pay no tax I am not a citizen" method, they cave in after a few years. When the IRS grabs your home, business or show up with guns and flak jackets to collect back taxes most people do cave. All true by the way as told to me by several people that tried it!

Better to learn the rules and work within the system. By the way, recent study I heard on the radio showed Brazil had the highest tax system of the world at 120% because so many people cheat and go underground. In Italy, the business taxes are so high you hire a legal rep every year just to negotiate with the government how much you need to legal pay.

In Australia (back when I was there 20 yrs ago, heard it has not change much) once you hit 30k you hit 50% tax right so everybody goes underground, cash only. You find American kids working as maids, cleaners, repairing highways in the hot sun since the locals don't want to work ("get off the dole, mate") since they make money not doing anything. They get paid to go to school, more if they stay on the dole and don't pay tax!

And France where at age 30 you can retire at 80% of pay from the state and get another job!

So it is tough here but worse elsewhere!

mglsharkson

Submitted by greekfire on November 26, 2007 - 1:45pm.

The Boston Tea Party's main theme was "no taxation without representation". At the time, Great Britain was taxing the colonies and not giving them representation in Parliament. I think that a similar sentiment can be applied to the graduated income tax. The wealthy are taxed much higher than the poor and middle class and therefore get (or feel they deserve to get) a say in government that is commensurate to the amount of taxes they pay. I am nowhere near wealthy and I do not think it is right that some are taxed more than others. The wealthy are going to get theirs either way, and it is the poor and middle-class people, who cannot afford formal tax help, that end up losing out.

An earlier poster mentioned that the first tax returns were the size of a postcard. The Declaration of Independence, the document that freed our country, can fit into a shirt pocket. The IRS tax code, meanwhile, is over 40,000 pages and growing.

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