In 1986, 99.5 million Americans were tricked into filing and paying federal income taxes when legally; they didn't have to do either. If this statement shocks you, it is only because you and the rest of the nation have been thoroughly deceived by the federal government (with federal courts playing the key role), and an army of accountants, lawyers, and other tax preparers. All of these have a vested interest in keeping you ignorant concerning the real nature of federal income taxes.
That an entire nation of supposedly intelligent human beings could be so thoroughly hood winked, must rank as the greatest and most spectacular hoax of all time, with the phenomenon of millions of Americans scurrying to IRS offices each April 15th comparable to lemmings marching into the sea.
The fact is no provision of the Internal Revenue Code requires anyone to file or pay income taxes. This tax, unlike other internal revenue taxes, is strictly (censored voluntary). This is because a compulsory income tax would violate the Constitution's three taxing clauses, the Bill of Rights and the 16th Amendment-all of which impose restrictions on the government's power and ability to tax income in ways few Americans understand. So, in order for the income tax not to be unconstitutional it had to be written on a noncompulsory basis. However, in order to deceive Americans of this, as well as provide federal courts and the IRS with deceptive passages on which to hang illegal prosecutions and illegal seizures, the Internal Revenue Code was written to make paying income taxes appear mandatory. The government succeeded in doing this by tricking the public into believing that those enforcement provisions of the Code, that apply to other, non-voluntary taxes (such as alcohol and tobacco taxes), also apply to income taxes when in fact, they do not. However, despite such trickery, the IRS still admits that our "income tax laws"' are purely VOLUNTARY!
Indeed, every official IRS pronouncement on this issue admits to the voluntary nature of the income tax, as the following quotations and government documents prove.
"The IRS' primary task is to collect taxes under a voluntary compliance system." (emphasis added)
- Jerome Kurtz
Internal Revenue Annual Report, 1980
"Our tax system is based on individual self-assessment and voluntary compliance." (emphasis added)
- Mortimer Caplin
Internal Revenue Audit Manual, 1975
"Each year American taxpayers voluntarily file their tax returns and make a special effort to pay the taxes they owe." (emphasis added)
-Johnnie M. Walters
Internal Revenue 1040 Booklet, 1971
"Because the American tax system is based on voluntary compliance and self-assessment, each year taxpayers make their own determination of their tax liability' and file returns reporting the correct tax. (emphasis added)
- WELCOME to the United States of America
Form 1-357, Re. 7-19-80, the United States
Department of Justice, Immigration
and Naturalization Service
Additional proof of the voluntary nature of income taxes can be found in the IRS' own regulations. For example, under Section 601.601, which deals with "Objectives and Standards for Publication" we find the following:
The purpose of publishing revenue rulings and revenue procedures in the Internal Revenue Bulletin is to promote correct and uniform applications of the tax laws by the Internal Revenue Service employees and to assist taxpayers in attaining maximum voluntary compliance. (emphasis added)
On July 8, 1981 the Controller General of the United States issued a report entitled Illegal Tax Protesters Threaten Tax System (GGD-81-83)3, which, on its cover, warned that illegal tax protesters threatened our tax system because they represent a threat to our nation's voluntary tax system. (emphasis added)
Figure 1-1 contains the entire introductory statement of Commissioner Jerome Kurtz that appeared in the 1979 IRS Annual Report in which Kurtz mentions the voluntary nature of income taxes no less than six times, and comments that in 1978 "individuals voluntarily [emphasis added] reported nearly $1.1 trillion in income...." Don't you think that Kurtz knows the difference between "voluntary" and "mandatory," and if he thought that people were required to file he certainly wouldn't claim they did so "voluntarily"? How many of those who Kurtz claimed filed "voluntarily," actually believed they did so "voluntarily," as opposed to believing that they were required to do so?
Figure 1-2 is an excerpt from the Federal Register, Vol. 39, No. 62, dated March 29,1974 which explains that the IRS' "mission...is to encourage ... voluntary compliance."
Figures 1-3 are reproductions from the IRS' latest issue of Understanding Taxes, a slick teaching syllabus sent to our public schools so that the brainwashing of the American public can start at an early age. The syllabus seeks to dupe students into believing that they are required to pay income taxes by using such deceptive language as [note F]: "taxpayers are responsible for paying income taxes as income is earned through withholding." Why doesn't it say that taxpayers are required? The syllabus reluctantly admits the voluntary nature of the income tax no less than three times (at A, E and H) but, referring to the statements at A and B:
(a) How can students "understand the [meaning of] "voluntary compliance" if there are "consequences" for "non-compliance"? (Note how the government specifically avoids saying that "penalties" apply!)
(b) How can there be legal "consequences" if "taxpayers voluntarily report income to the government..."
Even the Supreme Court in Flora V. United States, (as previously noted) recognized and commented on the voluntary nature of the income tax.
You can check with as many dictionaries as you like, and you will find that the word "voluntary" means something done of one's own free will, and without legal obligation. So if compliance with "income tax laws" is required, why would commissioner after commissioner claim that filing is voluntary if it were not? Do you really believe that "voluntary compliance" can mean the same thing as "compulsory compliance"? And if compliance with "income tax laws" is required, i.e. compulsory, why would all of these government documents claim otherwise?
THE MEANING OF VOLUNTARY
COMPLIANCE AND SELF-ASSESSMENT
While the reader might need to have the meaning of "self assessment" explained, the meaning of "voluntary compliance" should be perfectly clear. "Voluntary compliance", can only mean that compliance with "income tax laws" is voluntary and that you can comply or not comply as you choose. Actually the term "voluntary compliance" makes no sense. If something is "voluntary," then the word "compliance" is superfluous. If, on the other hand, "compliance" is compulsory, then any use of the word "voluntary" is nonsensical. It should be perfectly evident why the government contrived this self-contradictory expression. Have you ever heard of it in connection with anything else? The government feared that if it correctly used the solitary word "voluntary" to describe federal income taxes, the nature of the tax would become immediately apparent. So it added the word "compliance," seeking, in this way, to fool the public by the mandatory meaning that word conveys. The government relied on an ingenuous public not to notice that the preceding word, "voluntary," rendered the latter word, "compliance," meaningless. And the American public, in overwhelming measure, didn't let the government down!
Actually, the government is very careful not to officially misrepresent, the voluntary nature of the tax nor to officially tell the public that anything about it is "required." Instead, the government relies on a myriad of misleading techniques that enable it to accomplish the same thing.
One such example is shown in Figure 1-3. Note how the government, even when telling school children that the income tax is voluntary, simultaneously seeks to persuade them that it is not. It does this by discussing the tax in terms that make it sound compulsory, but really do not make it so. With practice, you will be able to spot these deceptions in all government documents. For now, I will help you-though little help should be necessary on this point.
Note that instead of telling readers that Americans are required to file and pay income taxes (if this were really the case), the government seeks to mislead them on this issue by appearing to warn them (at B) about the "consequences for citizens and society of noncompliance"; and that (at C) the "Students will define noncompliance with federal income tax laws as illegal and list the results of noncompliance." Notice it will be the "students" who will define "noncompliance ... as illegal,"- not the government! The government, of course, knows that "noncompliance" is not illegal so it cannot "define" it in this manner. But the government is nevertheless able to convey this by its use of some verbal sleight of hand that neither, the teacher or students will ever notice. The government has truly raised the level of deception to a veritable art form.
At D, the government seeks to mislead students by using such mumbo-jumbo as citizens having an "obligation ... to comply with tax policy decisions." Try figuring out what that means, while you also try figuring out what an inferred legal "obligation to comply" means-when "compliance" is admittedly voluntary.
Continuing with its deception, the government states (at I) that "Students will determine, given sufficient information, whether an individual is required to file a return." So this is how the government deceitfully infers that filing is "required" knowing full well that it is not, and provides another example of the technique referred to earlier. The government, of course, knows full well that it cannot legally tell the students who, "is required to file" (unless it says, "nobody"). So it relies on the students misleading each other-under the influence of their own trusted teacher, who is also totally convinced that filing is mandatory and therefore files regularly. Since the teacher will not be dissuaded from this belief, regardless of how many times the syllabus says that such filing is voluntary, he or she' will be instrumental in fooling her pupils.
Using the public to fool the public is an important aspect of the government's program of deception. In addition, it would never dawn on those school children (who undoubtedly infuse Washington politicians with the same honesty that they associate with George Washington and the cherry tree) that their own government would deliberately seek to deceive them in the manner the syllabus is intended to do. As the government relies on the nation's school teachers to mislead children right in their own classrooms, so too does the government rely on and utilize the nation's media-converting it into a virtual monolithic government propaganda agency. This vast media network is harnessed to work the American public into a virtual filing frenzy around April 15th, little realizing that it has been actually duped into duping the public in like manner.
Interestingly enough (at G), the syllabus correctly states that employees (though the syllabus uses the tricky legal term "taxpayers") "use form W-4 to tell their employers how much to withhold from their pay for taxes." This is an accurate acknowledgement by the IRS that under the "law," it is the employee who supposedly "tells" the employer how much to deduct, and not the other way around. In practice, however, the IRS totally disregards this principle and sends unsigned, computerized letters (see Figure 2-2 in Chapter 2) to employers telling them to disregard what their employees "tell" them to deduct, and to deduct instead, what nameless and faceless IRS employees instruct them to deduct. This is a clear-cut example of how a correct IRS policy statement is illegally disregarded by the Service in practice.
"STRENGTHENING VOLUNTARY COMPLIANCE"
In a 200 page study entitled Internal Revenue Service Strategic Plan (Document 69415-85) the IRS provided the nation with a sterling example of "double think," since the document outlined new and "strategic initiatives for strengthening voluntary compliance." Now ask yourself precisely how does a government go about "strengthening" something that is "voluntary"? Roscoe Egger, the IRS Commissioner responsible for the "Strategic Plan," explained that one of the principle reasons for the "Plan" was the problems caused by so called "tax protesters." However, throughout that document Mr. Egger consistently refers and admits to the voluntary nature of the income tax. For example:
External environmental indicators and internal compliance measures reflect a continuing decline in the extent to which taxpayers are willing or able to voluntarily comply with the federal tax laws.
Tax law changes are occurring with greater frequency ... to achieve national socio-economic goals... These frequent changes have materially increased the complexity of tax administration, and may adversely affect voluntary compliance.
With the decline in voluntary compliance in a period of budgetary constraints, the IRS must find ways to increase "presence" and to selectively apply resources to produce effective results.
The enactment of state statutes designed to ensure the filing of appropriate returns in connection with the pursuit of business activities clearly strengthens voluntary compliance.
It is important that Public Affairs do more to assist in improving voluntary compliance.
Issues: (1) What steps can the IRS take to stem or reverse this decline in voluntary compliance? (emphasis added throughout)
Obviously, one of the "steps" that the government decided to take to "stem"...and "reverse"... the "decline in voluntary compliance," was to step up the illegal prosecutions of those unwilling to "volunteer."
In Figure 1-4 I have reproduced the entire introduction to the chapter entitled "Strengthening Voluntary Compliance" just in case you thought Animal Farm was fiction.
CONFUSING THE PUBLIC ON THE MEANING OF "VOLUNTARY COMPLIANCE"
In addition to using deliberately deceptive (though technically not false) language in its official publications, IRS employees (from the top to the bottom) lie profusely (though some are obviously just merely ignorant concerning the "law" that they believe they are enforcing) in letters and conversations with the public and in all tax prosecutions and civil litigation. In all of my civil and criminal litigation I never once have come across an attorney for either the IRS or the tax division of the Justice Department who told the truth about federal income taxes. (Numerous examples appear in following chapters.)
On top of all of this, the government gets total support from a duplicitous federal judiciary, who will not only boldly lie from the bench about alleged "requirements" under our income tax "laws," but in furtherance of the government's mammoth deception, it helps it intimidate the public by conducting illegal trials and by knowingly sending innocent people to jail. So, if our all-powerful federal judiciary is willing to collectively lie about this tax, and to close ranks in sending innocent people to jail-who's going to challenge it on this issue?
It should also be obvious, that if I have to devote the next 200+ pages of this book trying to convince you of something that the government has already told you at least a dozen times is voluntary-then somebody has done a number on your psyche!
The Red Light Story
If you ask the IRS (or anyone else in government for that matter) the meaning of "voluntary compliance" you will get a lot of double talk. When I first concluded that filing income tax returns was voluntary (based on some of the government documents and statements shown herein), I decided to check out my conclusion with the IRS. I called and asked, "Is filing an income tax return based on voluntary compliance?" "It is," I was told. "In that case," I said, "I don't want to volunteer." "You have to volunteer," I was informed. "If I have to volunteer," I replied, "wouldn't that make compliance compulsory and not voluntary?" "No," the agent answered, "voluntary compliance is similar to our motor vehicle laws; you voluntarily stop at a red light-but if you don't, you get a ticket!" I objected to this reasoning by pointing out that if I could be ticketed, stopping at a red light (or obeying other traffic regulations) was compulsory, and not based on "voluntary compliance" at all. "No," the agent insisted, "you stop voluntarily." His reasoning was based on the absurd logic that since nobody was physically in the car making me stop, then I stopped "voluntarily." If that is true, then all criminal laws are based on "voluntary compliance," since nobody physically prevents anyone from committing murder, rape, bank robberies, etc., etc. But law enforcement people never claim that those laws are based on "voluntary compliance."
The agent, of course, was trying to confuse me-although he himself might have been confused. The IRS obviously indoctrinates all new agents with the "red light" story, so that they will be able to confuse the public if the question ever comes up.
Figures 1-5 and 1-6 prove that the government realizes that while income taxes are based on "voluntary compliance," other tax statutes are not. Figure 1-5 contains testimony by Dwight E. Avis, then head of the Alcohol and Tobacco Tax Division of the IRS, given to a House of Representatives Subcommittee of the Committee on Ways and Means when it held hearings on the administration of the internal revenue laws. He states on page 12:
Let me point this out now: Your income tax is 100% voluntary tax, and your liquor tax is 100 percent enforced tax. Now, the situation is as different as night and day. Consequently, your same rules just will not apply... (emphasis added.)
I also recently wrote to the Department of the Treasury, Bureau of Alcohol, Tobacco and Firearms and asked them if those taxes were based on "voluntary compliance." Look what they wrote back (Figure 1-6). They left no doubt that their "collection ... is created by an enactment of law ... (and so) ... compliance automatically becomes mandatory ... (and that) ... in response to [my] specific question, the collection of tobacco and alcohol taxes originates from statutes and, as a result, compliance is mandatory. " Did you notice that I didn't get any "red light" story from them?
Along the same lines, it is obvious that if the Ten Commandments were based on "voluntary compliance," the Bible would have referred to Moses' stone tablets as the Ten Suggestions.
THE MEANING OF SELF-ASSESSMENT
As you will soon discover, federal income taxes, by law, have to be assessed just like city property taxes.' City property taxes, however, are assessed by city assessors, and not by property owners assessing themselves, on the basis of "self-assessment." Cities and towns are empowered by law to assess and levy property taxes-and do not have to rely on the willingness of property owners to voluntarily assess themselves under a system of "self-assessment." But in accordance with the "self-assessment" nature of the income tax, unless Americans voluntarily elect to assess income taxes against themselves (by sending in a tax return and swearing they owe a tax that by statute they cannot possibly owe)-the federal government has no statutory authority to make such an income tax assessment on its own initiative. And without such a voluntary "self-assessment," no income tax, by law, can be owed to the federal government. How the government has been breaking the law in order to illegally assess income taxes on its own initiative (thus disregarding the principle of "self-assessment") is covered in Chapter 5.
While the government can make assessments with respect to other (mandatory) federal taxes, it is legally barred from doing so in connection with income taxes. As a matter of fact, the federal government does not even have the legal authority to even estimate how much income tax a non-filer supposedly owes-let alone harass or prosecute him if he chooses not to voluntarily self-assess himself to pay the tax altogether.
Now that you know the real nature of federal income taxes, we will turn to examining why the tax is voluntary and why it is based on self-assessment. The federal government would dearly love to have it otherwise, but thanks to a Constitution (that is all but dead)-it can't.
NOTES TO CHAPTER 1
1. It is actually incorrect to speak of "income tax laws," since there really aren't any Laws, by definition, are based on compulsory compliance and include penalties for noncompliance. "Laws" based on "voluntary" compliance are not "laws," by definition. Neither the Internal Revenue Code nor the U.S. Criminal Code (as you will discover) contain any penalties in connection with income taxes, which is why compliance with it is voluntary.
2. An example of a false government inference, and from the Justice Department no less. There is no such thing as an income tax "liability" (see Chapter 6), yet this fraudulent claim is constantly repeated in government documents.
3. "Tax protesters" is the word that the government coined to throw the public off the track regarding Americans who have discovered the truth about income taxes: that, under the law, they are not required to file and pay the tax. By this label the public is supposed to believe that "tax protesters" protest the law pursuant to weird and irresponsible ideas; when, in fact, they all obey the law. If they "protest" anything, it is the illegal enforcement.
However, not all "tax protesters" have an equal understanding as to why they are not required to file or pay. Some actually find it inconceivable that the law is actually enforced as illegally as it is, so they incorrectly theorize as to how the government surreptitiously got "jurisdiction" over them, which they then take unnecessary and often bizarre steps to avoid. Others explain their non-tax status in terms far more complex than necessary, and in so doing, actually attribute far more legality to the income tax than it deserves. While some "tax protesters" may be in the wrong pew, they are all in the right church. In describing what "tax protesters" allegedly believe, the government never ascribes to them the reasons presented in this book, but always attributes to them reasons that sound weird and irresponsible. For example, look how Commerce Clearing House describes tax protesters in the Standard Federal Reporter, 73rd Edition:
According to the IRS, the Congress, and the courts, tax protestors represent a major threat to our voluntary compliance system of reporting revenue. To attack the variety of protest activities, significant deterrents to the use of tax protest tactics have been added to the law in the form of an immediately assessable penalty against individuals filing tax protest documents, an imposition of damages for instituting proceedings in the Tax Court primarily for delay, and the imposition of damages where an appeal from the Tax Court is filed merely for delay. Arguments to the effect that the income tax is unconstitutional, or that compliance with the income tax law infringes upon one or more of the tax protestor's constitutional rights have been, summarily rejected by the courts. The constitutional rights which are allegedly violated include the right to freedom of religion, the Fifth Amendment right not to be compelled to bear witness against yourself, the Thirteenth Amendment's prohibition of involuntary servitude, and the claim that the Tax Court is an unconstitutional court. Some arguments have centered on the Federal Reserve System. Other forms of protest, which frequently occur include the submission of a blank tax form by a protestor, the assertion that wages do not constitute income, erroneous claims of deductions, credits, or adjustments to income, and claims by organizations that they qualify as churches.
(As quoted from Paragraphs 400-402A.08)
Note that in describing "tax protesters," the Commerce Clearing House itself admits that the income tax is voluntary, but then refuses to ascribe this as one of the reasons "tax protesters" believe they are not required to pay the tax. Why do you suppose this is?
4. This book contains references to many individuals, including teachers, lawyers, students, etc., which obviously include members of both sexes. For ease in reading, however, (not meant to be discriminatory) I will use simply "he" or "she" rather than the coupled "he/she" when necessary, throughout the remaining chapters.
5. Obviously no one can be required to pay estimated taxes or submit to withholding, since this would amount to paying federal income taxes before they were assessed. (See Chapter 4 for more information.
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