Chapter 12 of the TRUTH!
Once you decide whether or not you are liable for an income tax, then you can decide if you are going to file a return or not. My recommendation is that if you are liable, then file a return.
But if you are NOT liable, then what do you do? Won't the IRS come after you if you don't file, even if you are not liable? The answer is yes. You claimed, under penalty of perjury, on past returns, that you were a 'taxpayer', subject to the Internal Revenue Code, and the IRS wants to keep you in that category. It is very important to keep yourself out of the category of "taxpayer". If you remember, a taxpayer is a person who is someone who is engaged in a taxable activity, which makes them liable for a tax and subject to the Internal Revenue Code. The IRS automatically presumes that everyone with s Social Security number is a corporate taxpayer until proven otherwise, which is why you have a business designation on your Individual Master File at the IRS. Sort of like guilty until proven innocent. You have to rebut their presumption every year, and notify them of your correct status, preferably BEFORE they contact you with their presumption that you are a taxpayer. You will notice that when they write to you they always address you as "taxpayer". Dear Taxpayer, we have not received your return for this year.
If you agree with the 'presumption' of the IRS and do not challenge (rebut) their label of taxpayer, that means that you accept their label and are 'presumed' liable. In the legal system, if the IRS presumes you are liable, then you are, whether you are or not. It's up you to rebut their presumption and prove them wrong. The Tax Reform and Restructuring Act of 1998, made a change in the right direction. Now the burden of proof is on the IRS, IF you rebut (challenge) their presumptions. We'll see if the IRS agrees with that or not. That's why it is important to ALWAYS reply to any correspondence you receive from the IRS. Even when you do, they will claim that you did not, so send everything by either registered or certified mail with a return receipt, so you can show proof of mailing. Make sure all correspondence with the IRS is sent by registered or certified mail with return receipt. Otherwise they may throw your documents away and claim they never got them. Remember, these are your public servants and you know how hard it is to find decent help these days!
What happens when you fill out a W-4 withholding statement with your employer? We learned earlier that withholding statements only apply to 'employees' of the government, and to their 'employers'. If you filled out a W-4 then you have declared, under penalty of perjury, that you are a 'employee' taxpayer. This form can be used against you in court to prove the IRS's presumption that you are a taxpayer, liable for a tax. After all, you swore, under penalty of perjury, that the form was correct. You wouldn't lie under oath would you? Even if you sign the form, and fit the exempt category, then you are still putting yourself in the taxpayer category.
If you file a tax return and sign it, right above your signature you are swearing that everything on the form is true and correct, that you are a taxpayer and are engaged in a taxable activity. You even list what you believe to be the taxable activity, to the right of your name, under occupation. Would you fill out and send in a corporate tax return, signed under penalty of perjury, if you were not liable for a corporate tax? Even if you had no corporate income?
Did you send in a corporation tax return last year? If not, why not? You say because you were not liable for corporation taxes, since you were not a corporation. Did your mother register for selective service last year? No. Why not? Because the law didn't apply to her? The IRS wants everyone to think that the tax laws apply to everyone, regardless, and they DO, through the power of presumption. They want you to believe that ALL income, from whatever source, is taxable with a direct tax without apportionment. We know better now, don't we.
But what if the IRS was convinced that you were a corporation and then wanted to know why you didn't file a corporation tax return? What would you do? Can you prove that you are not a corporation? How would you prove it?
It is not easy to prove a negative, the nonexistence of something. Can you prove you are not liable for an income tax? Can you prove that Santa Claus does not exist? Lots of children believe in him. There is a lot of 'presumption' (unchallenged legal proof) to show that he does exist. I can even produce photographs of him.
The only thing you can do, is place the burden back on the IRS, and make them prove their 'presumption' that you are a taxpayer. How do you do that? The only way you can do that is to make statements that they have to prove or disprove. For example, you claim that you are not liable for an income tax, and therefore not subject to the internal revenue code. One way to state that claim would be to file a return and claim zero taxable income and also file a Form 8275 - Disclosure Statement as part of your return. As part of the disclosure statement you will submit a notarized affidavit quoting all the legal references that you relied on in making your determination. After all you are just relying on Supreme Court decisions as to the definition of income. And you had no income as defined. Now they have documented, recorded proof that they have to prove wrong. How can they claim that you are filing a frivolous return then?? If they ignore or reject your return, then they would have to give you a 'notice of deficiency' claiming how much income they think you had, and then you would have to go to tax court and make your income claims.
The advantage of filing a return is that it starts the 3 year statute of limitations running. If they do not challenge your return in that time then never can.
In the disclosure statement rescind your signature (not the returns themselves) on previously filed tax returns. The reason for this was because you filed all those returns under penalty of perjury, and they can be used against you in court to prove you believed you were liable for a tax. By rescinding your signature on those past returns, they cannot legally be used against you.
The IRS uses presumption to prove their claims. Remember, a fact 'presumed' to be true, IS true, if not rebutted. Presumption is used when you have no other evidence to rely on. If they presume you are liable first, then you are, until you prove otherwise by rebutting their presumption. Or if the IRS cannot rebut your proofs, then they may just pull out their guns and say, "Sorry buddy, you are right, but hand over your money anyway!" Remember the rule of the old west!
So, if you decide you are NOT liable for a tax and are NOT going to file, here is a way to protect yourself. Remember this is not legal advice. These are just biased personal opinions from your buddy, helping you get educated. Use them at your own risk!
The second way to protect yourself is to expatriate from the
United States, and repatriate to the United States of America.
You change your citizenship status from U.S. citizen to American
Citizen. After all, you were born an American Citizen and later
contracted to be a U.S. citizen. You are just breaking that contract
Most of us were brought up in public schools saying the pledge of allegiance. It says, I pledge allegiance, to the flag, of the United States of America, and to the Republic for which it stands, one nation, under God, indivisible, with liberty and justice for all. You broke this pledge when you unknowingly contracted to be a U.S. citizen, and not you are now just retaking this pledge.
The income tax regulations state:
26 CFR 1.1-1 Income Tax on individuals.
(a) General rule. (1) Section 1 of the Code imposes an income tax on the income of every individual whom is a citizen or resident of the United States and, to the extent provided by section 871(b) or 877(b), on the income of a non-resident alien individual. The tax imposed is upon taxable income . . .
(b) Citizens or residents of the United States liable to tax. In general, all citizens of the United States, wherever resident, and all resident alien individuals are liable to the income taxes imposed by the Code whether the income is received from sources within or without the United States.
Are you a United States citizen with income from anywhere in the world? Remember the Supreme Court definition of income! That alone makes you non-taxable. But are you a resident of the United States? Let's look at the definitions again:
IRC 7701. Definitions.
(9) United States. The term "United States" when used in a geographical sense includes only the States and the District of Columbia.
(10) State. The term "State" shall be construed to include the District of Columbia, where such construction is necessary to carry out provisions of this title.
You can see that the definition of United States, 'includes only' states and D.C. And the definition of "state" includes D.C., which would exclude anything that was not in the same category. There is no reference to the 50 states. D.C. is federal property, just like the territories and possessions. So, unless you live in one of those you would not be a resident of the U.S. either. Remember, legally, when the word 'includes' is used in a definition, it includes other things within the meaning of the term defined, but excludes everything else. Are the 50 states within the meaning of the District of Columbia? Only if the 50 republics were federal states.
Then are you a non-resident alien? Let's look at that definition:
IRC 7701(b)(1)(B) Nonresident alien. An individual is a nonresident alien if such individual is neither a citizen of the United States nor a resident of the United States.
But if the IRS refuses to acknowledge Supreme Court decisions, and the statutes and regulations, and rejects those arguments as against public policy, then you would have to prove that you are not a U.S. citizen or resident. Can you do that? If so, how? That can be done by Expatriation/Repatriation, from the U.S. to America. This can be done in 30 days. Once you do that then you are not a citizen or resident of the United States, as defined.
But doesn't the IRC impose a tax on the income of an individual who expatriates to avoid tax for 10 years after the expatriation? Yes it does at IRC 877. But these are exceptions in 877(c) that state:
IRC 877(c) Tax avoidance not presumed in certain cases.
(1) In general. Subsection (a)(2) shall not apply to an individual if--
(A) such individual is described in a subparagraph of paragraph (2) of this subsection,
(2) Individuals described. (A) Dual citizenship. etc. An individual is described in this subparagraph if -
(i) the individual became at birth a citizen of the United States and a citizen of another country and continues to be a citizen of such other country,
Did you ever give up your American Citizenship? When you contracted to be a U.S. citizen, did that nullify your American Citizenship? No! You had dual citizenship all the time. You are just dropping the less desirable one. Details on the Expatriation/Repatriation process are found in the last chapter.
An important note about amended returns needs to be made. You
have a statutory 'right' to amend a return ONLY before April 15
of the year the return is due. After April 15, that right becomes
a privilege. The courts have ruled "that an amended return
filed after the due date may be accepted, rejected, or ignored
by the IRS at its sole discretion, and in the absence of an abuse
of discretion, the courts will not grant relief to the taxpayer."
In the ordinary case, the amended return will be accepted by the
IRS if it is filed within three years from the due date, or within
two years from the date the tax is paid, if not paid with the
original return, whichever is later. There is no statute that
allows an amended return after the due date of the original return.
So what it boils down to is, don't file a return in the first place, if you are not liable for a tax, because the chances of amending it successfully, and getting a refund, are very slim. Do whatever you can to prevent any income from being reported to the IRS on W-2's, 1099's, etc. These information returns provide the IRS's presumption of taxable income.
You may ask, even if I am not liable for a federal income tax, what about state income tax? The Colorado Revised Statutes say:
CRS 39-22-104. Income tax imposed on individual, estates, and trusts. . . . a tax of 5% is imposed on the federal taxable income as determined pursuant to section 63 of the internal revenue code, of every individual, estate and trust.
Very simply, if you are not liable for a federal income tax, you are not liable for a state income tax, because the state income tax is a flat percentage of the federal tax. Although the statute quoted is from Colorado, every state has a similar statute on the books. Why is that? Can't the states pass their own tax if they want to? Yes, they can, but they are lazy. It is easier to let the federal government do all the audits, and write all the tax laws, and then just say "Me too! I want a percentage based on the federal tax." Besides, under martial law, the states ARE just a part of the federal government, so why not just use the same statutes?
So not only can you give yourself a tax free federal raise, by not filing a return, you also give yourself another 5% raise on top of the federal by not filing a state return. You don't owe the money anyway. Give yourself a 25-30% tax free raise!
Many people have decided to drop out of an oppressive tax system. Some have been successful, and many have been severely injured financially, myself included, back when I was ignorant. Losses with the IRS and the courts are mainly due to ignorance of your rights. If you claim them properly and don't use frivolous arguments, your chances of divorcing the IRS are Excellent! BUT, this information applies ONLY as long as the government upholds the laws as written. If they ignore the laws, then ANYTHING goes! Be prepared!
Be on the offensive, not the defensive.
When the average person is given the choice between freedom and a free lunch, most will choose the free lunch. Which is it for you?
Learn the TRUTH , and the TRUTH will set you free from the IRS!
Table of contents / Chapter 13