July 4, 2007

Andrew Jackson

White House

Washington, DC

Dear Andy:

            Thank you for your request regarding my opinion related to liability in the Internal Revenue Code.

            I want to inform you that I am not an attorney but I am an experienced paralegal with over twelve years of experience in litigating with the IRS.  I also have a Master of Arts in Communication and I have been writing letters on the syntax of the Internal Revenue Code for five years. I currently have six published wins on my own case in the Tenth Circuit Court of Appeals against the IRS.  The cases are as follows:

            1.  Church of World Peace, Inc. v. IRS, 715 F.2d 492.

            2.  United States v. Church of World Peace, 775 F.2d 265.

            3.  Conklin v. United States, 812 F.2d 1318.

            4.  U. S. v. Church of World Peace, 878 F.2d 1281

            5.  Tavery v. United States, 897 F.2d 1032

            6.  Conklin v. C.I.R., 897 F2d 1027.

            Back in the late 70's, I set up a home church, donated to it and took a tax deduction.  The IRS attacked me and I have been winning ever since.  Several years ago I got back over $15,000 in a refund lawsuit.

            I have discovered very interesting issues about the Income Tax and for five years I have offered a reward of $50,000 to anyone who can show me the following:

            1.  What statute makes me liable to pay an income tax.

     2.  How  I can file a tax return without waiving my Fifth Amendment Rights.

            To date, no one has taken me up on the offer.  Since I am not an attorney, I suggest that you consult with an attorney and see if I am right.  If your attorney can prove me wrong, you can win the $50,000.  My opinion follows:

            My opinion is: You are NOT made liable to pay an  income tax under Title 26, the Income Tax Code.  The  reason is that the Internal Revenue

Code (The Tax Law)  does not contain a code section (statute/law) that states  such a requirement.  Furthermore, the filing of an income  tax return is "voluntary." However, if you do not  volunteer, the IRS can file a return for you under 26 USC  6020(B)  and they can collect from you using a variety of  procedures which the courts will support; therefore, it  is important that individuals who choose not to  voluntarily waive their Fifth Amendment Rights by filing  1040 Returns, post a bond against any 6020(B) assessment  if they wish to avoid assessment difficulty in the  future.

           I can certainly appreciate your need for information on the subject of federal income taxes, a subject that "naturally" fosters substantial confusion among the public. While your question appears simple and basic enough, it mandates a course of analysis that takes us to the very source of the tax law, an area that few professionals dare to tread as it takes careful, orderly analysis.  I believe I have succeeded in cutting through the maze of confusion surrounding the tax laws to arrive at the correct conclusion: INDIVIDUALS ARE NOT REQUIRED TO FILE AN INCOME TAX RETURN FORM 1040. FILING THESE RETURNS IS COMPLETELY VOLUNTARY.

           The key to "cutting through the maze" is knowing where to start cutting. If someone handed you the 2,000- page Internal Revenue Code and said, "Go find the code section that requires one to file a return," would you, as a lay person, know where to start looking? The Code contains over 10,000 code sections! Here's how you start - you must follow the directions in the Internal Revenue Service's official publication to the public, known as Notice #609.  This notice directs you to specific code sections in the Internal Revenue Code on this matter.

           Before we look at the Internal Revenue Code sections given us by the IRS, let me acquaint you with the background to Notice #609 which is entitled, "Privacy Act and Paperwork Reduction Act Notice." The IRS is required to send you this Notice #6O9 by the Privacy Act Law of 1974 (5USC 552a, Public Law 93-574), which states in Sec. 5(e)(1):

           "Each agency that maintains a system of records shall...

     (3)  Inform each individual whom it asks to supply information...

          (a)  The authority which authorizes the solicitation of the information and whether disclosure of such information is mandatory or voluntary,

          (b)  The principle purpose or purposes for which the information is intended to be used,

          (c)  The routine uses which may be made of the information,

          (d)  The effects on him, if any, of not providing all or any part of the requested information..."

           Based on the above requirements we can now look at the IRS' Notice #609 and go directly to their reference to their legal right to ask for information, which states:

          "Our legal right to ask for information is Internal Revenue Code sections 6001, 6011 and 6012 and their regulations. They say that you must file a return or statement with us for any tax you are liable for." (emphasis added)

            In the second sentence, the IRS is in effect saying that IF you are "liable" (responsible) by statute for a particular kind of tax, you must then file. Let's take a look at the three code sections quoted above:

     SEC. 6001.                       NOTICE OR REGULATIONS REQUIRING RECORDS, STATEMENTS, AND SPECIAL RETURNS.

          Every person liable for any tax imposed by this title, or for the collection thereof, shall keep such records, render such statements, make such returns, and comply with such rules and regulations as the Secretary may from time to time prescribe.  Whenever in the judgment of the Secretary it is necessary, he may require any person, by notice served upon such person or by regulations, to make such return, render such statements, or keep such records, as the Secretary deems sufficient to show whether or not such person is liable for tax under this title. The only record which an employer shall be required to keep under this section in connection with charged tips shall be charge receipts and copies of statements furnished by employees under section 6053(a).

     SEC. 6011.                       GENERAL REQUIREMENT OF RETURN, STATEMENT, OR LIST.

          (a)  General Rule. When required by regulations prescribed by the Secretary any person made liable for any tax imposed by this title, or for 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 and regulations.

            SEC. 6012.     PERSONS REQUIRED TO MAKE RETURNS OF INCOME

          (a) General Rule. Returns with respect to income taxes under subtitle A shall be made by the following:

          (1)(A) Every individual having for the taxable year gross income which equals or exceeds the exemption amount, except that a return shall not be required of an individual --

           Note that Sec. 6001 refers to "Every person liable for any tax imposed by (the Code)...." and Sec. 6011 refers to "...any person made liable for any tax imposed by (the Code)...." Also note that neither of these two code sections state who is liable (responsible) for submitting an income tax return, form 1040.  Again, Notice #6O9 says that these code sections state "that you must file a return or statement with us for any tax you are liable for." This means that before there can be a lawful requirement for you to file a return, you must be found to be liable or responsible as the individual designated to complete the return for the particular type of tax the IRS is attempting to collect.

           At this point, allow me to rephrase your question to me in your letter to assist you in focusing on my answer and conclusion:

          Am I, as an individual, liable to pay the income tax or responsible to file (by any Internal Revenue Code statute) an individual income tax return form 1040?

            The answer is "No," based on the first two code sections (6001 and 6011) the IRS referred us to in their Notice #609. And from reading section 6012, the answer is still "NO" as the word "liable" is not even mentioned there. I'll comment more on 6012 later.

            The emphasis, for the moment, is on sections 6001 and 6011 and whether or not an individual is "liable" or "made liable." Both sections refer to a person being "liable for any tax imposed by this title." Obviously, these sections are directing you to go elsewhere in the Internal Revenue Code (Title 26) to find a "tax imposed" and a code section describing who is "liable" for the tax imposed. Thus we go to another part of the Code, "Subtitle A, Income Taxes, Chapter 1, Part I - Tax Imposed on Individuals." In sections 1(a) through 1(d) taxes are imposed on "taxable income" of various individuals, e.g., married, single, etc, but there is no mention of the individuals being "liable" or responsible to file in these sections or any other subsequent code sections in all of Subtitle A, "Income Taxes."

             The conclusion, then, is that there is no code section that makes one liable in Subtitle A, Income Taxes, or in Subtitle F, code sections 6001, 6011 and 6012. By the way, Subtitle F is entitled, "Procedure and Administration" which infers that "procedurally," there is a sequence of steps that the IRS must follow in their tax collection "administration, i.e., they must first show the individual to be "liable" or "made liable" (as set forth in sections 6001 and 6011) before the individual can be shown to have a "tax liability" (some undetermined amount based on "gross income;" as set forth in Section 6012). In other words, Section 6012 comes into play as the second administrative step by the IRS only after they have satisfied the first step. Section 6012 begins a series of steps involved in the calculation of one's "tax  liability." Said another way, you cannot have a tax liability and be required to pay a tax if you have not first been found to be "liable."  And to emphasize the obvious, there is no way Section 6012 can make you "liable!"

            Therefore, the IRS is "stopped dead in their administrative tracks" at the first step and cannot legally enforce assessment and collection of any individual income tax at all on a form 1040. The first sentence of section 6012 confirms this as it refers to "income taxes under Subtitle A." And since no one is made liable under Subtitle A for the filing of income tax returns, section 6012 becomes immediately and entirely irrelevant as a "second administrative step."

            What I have just conveyed to you is not theory...it is fact.  The administrative procedure set forth by the Privacy Act Notice is the same for the other types of tax found in the code as there are code sections that determine and describe who is liable to file and pay the tax. Here are some examples:

            Sec. 4401(a) imposes a tax on wagers (gambling bets) and

             Sec. 4401(c) sets the requirement for who shall be liable for the tax; that is, who shall pay the tax:

           Sec. 4401(a) states:

          "Each person who is engaged in the business of accepting wagers shall be liable for and shall pay the tax under this subchapter. . ."

           Other sections of the Code specifically impose a tax, and then distinctly specify who is liable to pay the tax:

           Sec. 4261(a) imposes a tax, and

           Sec. 4261(d) specifies who is liable to pay it.

           Sec. 4611(a) imposes a tax and

     Sec. 4611(d)(1)(2)(3) specifies three separate persons who are liable to pay it.

     Sec. 4971(a) imposes a tax and specifies who is liable to pay it.

           Sec. 4986(a) imposes a tax and

           Sec. 4986(b) specifies who is liable to pay it.

           Sec. 5001(a) imposes a tax and

           Sec. 5005(a) specifies who is liable to pay it.

           From this foundation, we can compare the sections in Subchapter A, Income Taxes:

          Sec. 1(a) "There is hereby imposed on the taxable income of every married individual who makes a single return jointly with his spouse under Sec. 6013, and every surviving spouse, a tax . . ."

          Sec. 1(b) "There is hereby imposed on the taxable income of every individual who is the head of a household ... a tax ..."

          Sec. 1(c): "There is hereby imposed on the taxable income of every married individual who does not make a single return jointly ... a tax ..."

            Again, as you can see, the tax imposed in each of the above sections is on "taxable income" a technical, legal term and not specifically on any individual. No specific section can be found that specifies who is liable for each of these income tax sections. But it is obvious that there are quite a number of individuals that are liable to file returns for various taxes in the code.  These individuals are known as "taxpayers." This term has a special and technical definition in the Code:

            Sec. 1313(b) defines "taxpayer" this way:

          "Notwithstanding Sec. 7701(a)(14) the term 'taxpayer' means any person subject to a tax under the applicable revenue law." and Sec. 7701(a)(14) says:

          "the term 'taxpayer' means any person subject to any internal revenue tax."

           Essentially, in order for an individual to be a "taxpayer," he would have had to become liable (pursuant to 6001 and 6011) from some section of the Code other than Section 1. But there are no such sections.

           What I am saying here is that an individual becomes a "taxpayer" (subject to the tax laws) the instant he becomes "liable" to make the return. Until that point in time, the individual remains "exempt from taxation." As the Supreme Court said, the language of the taxing statutes must be clear and cannot be enlarged by implication:

          "Keeping in mind the well settled rule that the citizen is exempt from taxation unless the same is imposed by clear and unequivocable language, and that where the construction of a tax law is doubtful, the doubt is to be resolved in favor of those upon whom the tax is sought to be laid..."

          Spreckles Sugar Refining Co. v. McClain, 192 U.S. 397 at 416; 24 S.Ct. at 382 (1904); 48 L. Ed. 496.

                        and:

          "In the interpretation of statutes levying taxes it is the established rule not to extend their provisions, by implication, beyond the clear import of the language used, are to enlarge their operations so as to embrace matters not specifically pointed out. In case of doubt they are construed most strongly against the Government and in favor of the citizen."

          Gould v. Gould, 245 U.S. 151, 153 (1917); 38 S.Ct. 53; 62 L.Ed. 211.

           As you might agree, the taxing statutes given us by the IRS in their Privacy Act Notice are as "clear as mud" to the average layperson reading it for the first time, not knowing how to analyze and focus on the essential aspects.  But with my step by step analysis thus far, we have accomplished "major surgery" in cutting through the IRS' maze of confusion with respect to whether or not individuals are "liable" or "responsible" to make tax returns.  It has become obvious that for most individuals, Code Section 6012 is not relevant...that it is merely a "red herring," a distraction, that the IRS threw in to heighten the maze of confusion which they constructed. The IRS threw in section 6012 in October, 1986, and for all the years prior to 1986, their Privacy Act Notice only consisted of section 6001 and 6011 which refers, of course, to the primary issue of whether one is "liable" to make the return.

           You can see the importance of understanding the meaning of the term "liable," and how it is a critical element in the IRS' taxing procedure. You can see how it is a false premise to believe that one automatically becomes "liable" because he made income. To prove this fallacy, we look at the Gift Tax. The donor or giver of the monetary gift is liable for the tax, not the recipient. Section 2502(c) verifies this. In other words, it does not matter if you made a ton of "income", 'YOU ARE NOT LIABLE BECAUSE THE CODE DOES NOT MAKE YOU LIABLE, THEREFORE, YOU ARE NOT REQUIRED TO DO ANYTHING. That is, you are not required to "make returns, keep records, or make statements" to or for the IRS

           I've pointed out and explained to you the basic fact that you are not liable by statute. There is, however, another way that you can be "made liable" (as referred to in section 6011). You can volunteer. You can, by your actions, consent to be liable (responsible) for both the tax return and the tax liability. How do you volunteer to become liable? Simple...just sign your name on a government form known as a 1040 Individual Income tax return. In one fell swoop of your own pen, you have just been "made liable" (as it says in section 6011 of the code) and you now take on the distinguished status and title of "taxpayer." As a "taxpayer," guess what the IRS has in store for you, what with their myriad of statutory penalties and impositions. Remember the definition of "taxpayer?" You are "subject to" - perhaps "subjected to" would be more appropo.

           The Appeals Court said it clearly as a principle of law:

          "When one files a tax return showing taxes due, he has, presumably, assessed himself and is content to become liable for the tax, and to pay it either when it is due according to statute, or when he can get the money together.  Lyddon & Company v. U.S., 158 F.Supp.  951, at 953

           This cite also refers to the principle of "self- assessment," which simply means that you want to make the IRS' job of collecting taxes much easier by doing all the paperwork and calculations by yourself. Since you now know there is no absolutely no Internal Revenue Code Section that requires you to file (says that you, as an individual are "liable")-a section that says you are liable to file a return, then it is obviously a voluntary act.  The fact that filing a return is voluntary is easily verified by reading the various IRS Commissioners' statements over the years and the IRS' Mission statement itself, entered into law (The Federal Register) in March of 1974.  Just a few of these statements follow:

          "Each year American taxpayers voluntarily file their tax returns and make a special effort to pay the taxes they owe." Johnnie M. Walters, IRS Commissioner (1971 Internal Revenue 1040 Booklet)

          "Our tax system is based on individual self assessment and voluntary compliance."

          Mortimer Caplin, IRS Commissioner (1975 Internal Revenue Audit Manual)

          "The mission of the Service is to encourage and achieve the highest possible degree of voluntary compliance.

          Donald C. Alexander, IRS Commissioner (Federal Register, March, 1974)

          "The IRS's primary task is to collect taxes under a voluntary compliance system."

          Jerome Kurtz, IRS Commissioner (1980 Internal Revenue Annual Report)

            "We have a voluntary compliance system"

          Fred Goldberg, IRS Commissioner (Ted Koppel show, ABC news, April 13, 1990)

            And, from the highest authority, the United States Supreme Court:

          "Our system of taxation is based upon voluntary assessment and payment, not upon distraint." (emphasis added)

            Flora v. U.S., 362 U.S. 145, 176 (1959)

            This principle of law, i.e., that our tax system is based upon voluntary assessment has been emphasized and relied upon in subsequent appellate court cases also. The reason that the courts and the IRS advise that it is voluntary, is that if it were mandatory, there would be a violation of your rights, particularly, the First, Fourth and Fifth.

            The First Amendment involves your freedom to speak. It also includes your right not to speak (to your government on a form 1040). Forcing you to speak on a 1040 would violate your First Amendment Right.

            The Fourth Amendment is your right to privacy - your right to be secure in your person and papers. Compelling you to produce your personal financial information and records, etc., without a lawful court order would violate your Fourth Amendment right.

            The Fifth Amendment states that "No person...shall be compelled in any criminal case to be a witness against himself," This simply means that you cannot be compelled to give information (on a form 1040): as that act is equivalent to being a witness against yourself. The IRS can take any information you give them and turn around and use it against you under any circumstances, both civilly and criminally. In an instant, they can have you under criminal investigation and potential indictment. Therefore, compelling you to give information (evidence) against yourself would violate your Fifth Amendment right.

            Code section 6103(h) and (j) says that tax returns and return information may be given to the U.S. Attorney and Justice Department for criminal prosecution. In fact, even the IRS' Privacy Act Notice so states: "We may give the information to the Department of Justice and to other Federal agencies, as provided by law." Obviously, this is a warning to you...almost like a "Miranda Warning." If you choose to disregard the warning and waive your right to remain silent and your right to privacy, understand that it is your choice...solely. Now you know why "our system of taxation is based on voluntary assessment and payment." You also know why you were never made "liable" by the code in the first place. By making you liable, the IRS would have created a full requirement for you to submit information on the 1040, thereby "compelling you to be a witness against yourself," in direct violation of your rights.

            You can see now that it is essential that you know and understand your Constitutional rights. Integral to your own "research" on the income tax is that you obtain a copy of the United States Constitution and study not only the entire Bill of Rights but also the relevant Articles on taxation. In this opinion letter I have covered what I believe to be the essential elements of the requirements of the income tax system. They are relatively simple, as you have seen, once analyzed and broken down to the elements.

            Again, we started (and ended) with the IRS' own Privacy Act Notice to you whereby the IRS "tried" to comply with the requirements of the Privacy Act Law of 1974. Their efficiency in doing so left a lot to be desired as their Notice #609 fell short, particularly in telling you plainly whether you were "liable" or not, i.e., whether you were required to give the requested information or not. For those who even take the time to read this important IRS notice, it is confusing and misleading, at best.  The clearest aspect of their notice was their telling you that they can give the information to the Department of Justice and to other federal agencies.

          I would like to again point out that on the whole, our system of tax laws is deplorably confusing to everyone, even the IRS. A recent poll, whose results were nationally publicized this year, showed that the IRS  was incorrect 39% of the time in their answers to fairly simple questions posed by citizens. Equally "unfortunate," is that the professional community is confounded by the code and the various tax reform acts heaped upon them.  This problem was apparent a decade ago when the Chief Justice of the Supreme Court of West Virginia, Richard Neely, commented on taxes in his book, "How Courts Govern America." He said, "In 1978, I attended a seminar on federal estate and gift tax sponsored by the American Law Institute, where the Internal Revenue Service lawyers responsible for this area frankly confessed that they did not understand the Tax Reform Act of 1976...Not only did they not understand the law, they opined that the Congress which wrote it did not understand it and that the courts would seem to understand it only because the courts make it up as they went along and pretend to understand it."

            Also, during the Nixon Administration, Johnnie M. Walters, IRS Commissioner at that time, made a pitch for simplicity.  Walters said, "I do not care whether it is a flat tax, a value-added tax, or a consumption tax, the complexities and perceptions of our present system are causing larger numbers to wander off the reservation.  We cannot afford that." The tax laws were complicated then, as they are now. There has never been such a thing as tax "reform!"

            So what is the government's posture today, after having admitted that the income tax system is voluntary? The government is desperate...based on remarks such as that from Roger M. Olsen, Assistant Attorney General, Tax Division, Department of Justice, where he said last May (to a group of professionals), "We encourage voluntary compliance by scaring the heck out of you." Olsen, in so many words, is not only admitting that the system is voluntary, he is admitting that the tax system today can only "work" if they use Gestapo tactics against the American people.

            President Reagan himself spoke out in a speech in May of 1985 when he said, "The current (tax) system just doesn't work anymore." He further said, "Our federal tax system is, in short, utterly impossible, utterly unjust and completely counter-productive." He went on to infer that the "system itself is a cheat.", IRS  Commissioner Roscoe Egger (1984), also expressed this truth when he said in Nov. of 1984, "Any tax practitioner, any tax administrator, any taxpayer who has worked with the Internal Revenue Code knows that it is probably the biggest 'mishmash' of statutes imaginable.  Congress, various Administrations and all the special interest groups have tinkered with it over the years, and now a huge assortment of special interest and pet economic theories have been woven into the great hodge-podge that is today's Internal Revenue Code." Members of Congress are cheating the middle-income citizens and placing the tax burden upon them. The United States Supreme Court hit the nail on the head as long ago as 1974, in the case of Loan Association v. Topeka:

          "To lay with one hand the power of the government on the property of the citizen, and with the other to bestow it on favored individuals...is none the less robbery because it is done under the forms of law and is called taxation."

            Members of Congress are cheating and robbing the majority of citizens, the middle-income class and placing a tremendous tax burden upon them. This unfairness has reached epidemic proportions.  Special interest groups are still being catered to. Recently, a top Philadelphia newspaper ran a feature story exposing how certain Congressmen, through their tax-bill writing committees, offered tens of billions of dollars in tax dollar savings to the rich and powerful. Secret exemptions included in a "tax shelter investment" bill resulted in a $47 million break for friends of George Bush and George Shultz! Briefly, the story goes like this: A 562 foot passenger liner was bought in 1980 and was turned into a state of the art ship at a cost of $47 million. It was offered to a group of wealthy investors as a "tax shelter investment" and operated at an artificial loss -- for tax purposes -- of $436 million in '84 and '85. When the tax reform act of '86 made major changes (amendments) in the laws detrimental to artificial losses, this "elite" group needed "help"....An amendment was provided and is found in the 925 page Tax Reform Act as follows:

          ... The amendment made by section 201 shall not apply to a 562 foot passenger cruise ship, which was purchased in 1980 for the purpose of returning the vessel to the United States service, the approximate cost of refurbishment of which is approximately $47 million".....

            The beneficiaries of his huge tax break are none other than the Bechtel family, who just happens be the former employers of George Shultz! I could go on with other detailed examples of "criminal" activity practiced daily by our elected public servants in Congress, but I do not want to digress too far from the primary issues in this letter.

            The reason I am enlightening you with news of Congress' and the IRS' scams is because you need to be aware of the "larger picture," particularly if all of what I have said is totally new to you. By being knowledgeable you are in a better position to help correct some of the problems and wrongdoing that are being perpetrated in America today. The solutions have to do with how you exercise your God-given rights on a private and public basis.

            I have discussed subjects that are "controversial' and be aware that certain ignorant bureaucrats...the IRS, for example, may not always treat you kindly, particularly if you decide not to file tax returns or volunteer for audits. But do not allow yourself to be intimidated by any bureaucrat at anytime. Knowledge of the law breeds confidence, and confidently exercising your Constitutional rights is essential to maintaining your freedom and protection against bureaucrats who violate due process of law.

            If you are contemplating a "non-filer" position, please exercise "due diligence." Seek a number of professional opinions and continue your research in good faith as there is always new information to strengthen your foundation of knowledge. Be sure that the advice you receive is sound and credible. Do not, for example, settle for verbal, off-the-cuff remarks. If a professional is not willing to put his advice in writing and substantiate it with sound, detailed legal analysis, steer clear of him, as any advice he could give you would tend to be unreliable.

            As a final point, even the IRS will not claim responsibility for their advice to you on the Code, especially when they are dead wrong. President Reagan attested to this when he said in a 1984 Associated Press (AP) release:

               "The government has the nerve to tell the people of the country, 'you figure out how much you owe us - and we can't help you because our people don't understand it either (the Code) - and if you make a mistake, we'll make you pay a penalty for making the mistake.'"

            And to further ensconce themselves in their "ivory tower," the IRS came up with Publication 17; which states:

          "The publication covers some subjects on which certain courts have taken positions more favorable to the taxpayers than the official position of the Service.  Until these interpretations are resolved by higher court decisions, or otherwise, the publication will continue to present the viewpoint of the Service,"

           The above is a disclaimer  and it is also a tacit admission that IRS publications do not necessarily present the law, but only the law as they want you to understand it.

           The final twist in the IRS maze comes in IRS Publication 21, where they essentially tell you that you  must decide whether you are required to file or not. Ultimately, the decision of whether to file tax returns is truly your responsibility.

            In this letter I have given you my opinion, i.e., that you are not liable for the Federal Income Tax by statute and you are not required to waive your Fifth Amendment Rights on a 1040 Return, and I have substantiated my suggestions so that you may fully rely on it and utilize it as a springboard to further your knowledge and research in this area.

          Since I am not an attorney, but a paralegal, I must advise you to seek legal counsel from a licensed attorney on the above issues.  I must also advise you that, even though there is no statute that makes individuals liable to pay an income tax and since a requirement to file returns would have serious Fifth Amendment contradictions, the IRS will continue through double-speak and brute force to enforce the concept that individuals are "required" to voluntarily waive their Constitutional Rights and assesses themselves. Remember also, that individuals who do not file may be subject to criminal and civil penalties in spite of the above argument if the IRS claims that they owe substantial taxes.  For this reason, I suggest that if you are an employee, you allow the employer to send withholding to the IRS on your behalf and if you are an independent contractor, working on a 1099, I suggest that you post a bond against any assessment that the IRS may make for you under 26 USC 6020B.  If you wish to contest issues with the IRS, you will then be in an offensive position instead of a defensive position.

           Since we are a Nation of Sheep, I don't expect the situation to change anytime soon.  If you find an attorney or anyone else that can prove I am wrong, please let me know.

           If you have any further questions, please do not hesitate to contact me.

Sincerely,

William T. Conklin, M. A.

July 4, 2007

Ben Franklin

Philadelphia, Penn

Dear Ben:

Thank you for your recent request concerning  the definition  of certain words and phrases found in I.R.S.  publications,  various code sections of the Internal Revenue Code  (Title  26)  and in relevant court cases.

 First,  allow me to share my professional background with  you.  I am a communication expert and have made an extensive  study of the morpho-syntax of English, i.e.,  that branch of  linguistics that deals  with the  internal  structure  and  forms  of words: with syntax, it forms a division of  grammar.  ("syntax" deals with the relationship of words in  sentence structure).    My work also involves  the  study of  the meanings of words and phrases as they are used in  context in English composition.    I have a Master's Degree  from  the  University of Colorado in Communications and I  have over fourteen  years  of experience  teaching English  and Communications at the elementary,  junior-high,  high  school, and College levels.

 I can appreciate your confusion in attempting to understand  the  thoughts  and  meanings  the  I.R.S.  is trying to  convey to you!

 Actually, you are not alone.  In fact, you are in the  illustrious company of former I.R.S.  Commissioner Roscoe  Egger, Jr., who said on Nov. 30, 1984,  "Any tax  practitioner,  any tax administrator, any taxpayer who has  worked with the Internal Revenue Code knows that  it  is  probably the biggest 'mishmash' of statutes imaginable."

 President  Ronald  Reagan  also  empathizes with you  based on his public statement in 1984,  "the government has  the nerve to tell the people of the country,  'you figure  out how much you owe us and we can't help you because our  people don't understand it (the I.R.S. Code) either  and if  you make a mistake, we'll make you pay  a  penalty  for  making  the mistake.'" There you have it, our top officials  honestly admit that the Code and the tax laws are  unintelligible; they ought to know they deal with the  problem day in and day out!

 I would like to advise you at the outset that much of the  I.R.S.'  literature is unclear and misleading.  Over the  years I have read a large volume of I.R.S.  literature and  publications,  and have found  a substantial  amount of  printed matter, i.e.,  the I.R. Code, I.R.S. Publications  and Notices,  etc., that can easily be misconstrued  by  laypersons.  Along with a detailed response to your request,  this letter also serves as a warning:  BEWARE OF EVERYTHING  YOU READ THAT IS PUBLISHED BY THE  I.R.S.  Always go  to the authorities,  i.e.,  reference  materials  and appropriate professionals for true  clarification.

 I am not an attorney, and due to the fact that we are  dealing, on  occasion,  with certain Internal Revenue Code  sections,  it would be advisable also to obtain an  attorney's legal opinion  as to the meanings  of certain  code sections.  Incidentally, I also respond to attorneys as  I receive their requests concerning the  meaning of  certain  words and phrases in these code sections.

 For   the  purpose  of  this  opinion,   three sources  for  the definitions were used.  They are:

           1.  Webster's New Universal Unabridged Dictionary

                                    Deluxe Second Edition

           2.  Black's Law Dictionary

                                    Fifth Edition

           3.  The Internal Revenue Code of 1954 (1987 Edition)

 My opinion follows each set of definitions given for  each word or phrase.

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 voluntary - context:  "Our system of taxation is  based upon voluntary assessment and payment, not distraint."

          (Flora v. U.S., 362 U.S. 145)

      Webster's p. 2049

      1.  brought about by one's own free choice; given or done of one's own free will; freely chosen or undertaken.

      7.  arising in the mind without external constraint; spontaneous.

      8.  in law, (a) acting or done without compulsion or persuasion;

      Black's Law p. 1413

                        Unconstrained by interference; unimpelled by another's influence; spontaneous; Acting of oneself.  Coker v.  State, 199 Ga. 20, 33; S.E. 2nd 171, 174.

      I.R. Code (contains no definition)

 In my opinion,  the word "voluntary" means something  done  by an act of free choice.

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 compliance - context:  "Our tax system is based on individual self assessment and voluntary compliance." (Mortimer Caplin, former I.R.S.  Commissioner)

      Webster's p. 371

               1.  the act of complying; a yielding, as to a request, wish, desire, demand or proposal; concession; submission.

               Black's Law p. 258

                   Submission, obedience, conformance.

               I.R. Code (contains no definition)

 In my opinion, the word "compliance" means obeying  or yielding to something.

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 voluntary compliance - (context:  see above)  Note: There is no definition of this phrase from any source.  Therefore my opinion is based on  the definition of each separate word.

 In my opinion, the phrase "voluntary compliance" means  freedom to  choose  whether  or  not to assess oneself or to  yield to a self-assessment system.  Before the term  "compliance" can come into play, practically,  a  person  must  have first "volunteered" to  assess himself a tax,  otherwise, "compliance" remains  a moot issue.   In other  words, compliance, presumably with tax laws, is irrelevant  unless one volunteers to  assess  oneself and submit said  self  assessment  to  the Internal Revenue Service,  as the  terms operate sequentially.

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 required - context:  "ALSO, ANSWER THE QUESTIONS ON THE BACK IF YOU ARE NOT REQUIRED TO FILE A RETURN FOR THE TAX PERIOD SHOWN."  (I.R.S. form letter request for information re.

                        Form 1040)

      Webster's p. 1538 (require)

      1.  to demand; to ask or claim as by right or authority;

      3.  to order; to command; to call upon to do something;

      Black's Law p. 1172 (require)

                        to direct, order, demand, instruct, command, claim as by right or authority.

      I.R. Code (contains no definition)

 In my opinion,  "required" means when  one  is compelled  to  do something by written authority;  in this case, file a tax  return.

 Further, when something is "required" by law,  there is  usually a corresponding  penalty attached for not doing the  "required" act. As a check,  you may want to see whether  there is a penalty for not filing an income tax return.

 must - context:  "You must fill in all parts of the tax form that apply to you."  (I.R.S. Notice 609, Rev.  Oct. 1986)

      Webster's p. 1185

                        an auxiliary used with the infinitive of various verbs to express: (a) compulsion, obligation, requirement, or necessity; as, I must pay her; (b) probability; as, then you must be my cousin; (c) certainty or inevitability; as, it must have rained while we were in.

      Black's Law p. 919

                        This word, like the word "shall" is primarily of mandatory effect (cite omitted)...and in that sense is

                        used in antithesis to "may."  But this meaning of the word is not the only one, and it is often used in a merely directory sense, and consequently is a synonym for the word "may" not only in the permissive sense of that word, but also in the mandatory sense which it sometimes has.

      I.R. Code (contains no definition)

 In  my  opinion,  the  word  "must,"  in this context,  imparts a  mandatory effect.    However, in legal usage the  word "must" is often synonymously used for the word "may,"  according to Black's Law above.    Apparently the word  "must" is  a  key word and  I believe it would be prudent  for you to consult with legal counsel for  its  legal  meaning whenever  it  appears, especially in statutes. __________________________________________________

 may - context:  "However, we may give you other notices if we have to examine your return or collect any tax, interest, or penalties." (I.R.S. Privacy Act Notice 609, Rev. Oct.  1986)

      Webster's p. 1113

                        (b) possibility or likelihood; as, it may rain; (c) permission or chance; as, you may go; (e) wish, hope or prayer.

      Black's Law p. 883

                        An auxiliary verb qualifying the meaning of another verb by expressing ability, competency, liberty, permission,  possibility,                                                   probability or contingency,(cite omitted).   Regardless of the instrument, however, whether constitution, statute, deed, contract or             whatever, courts not infrequently construe 'may' as "shall" or "must"   to the end that justice may not be a slave to grammar.  However, as                                                                 a general rule, the word "may" will not be treated as a word of                                                                       command unless there is something in context or subject matter of                                                                        act to indicate that it was used in such sense.  (cite omitted)  In     construction of statutes and presumably in construction of federal     rules the word "may" as opposed to "shall" is indicative of discretion           or choice between two or more alternatives, but context in which                                                                     word appears must be the controlling factor.  (cite omitted)

                        I.R. Code (contains no definition)

 In my opinion,  the word "may" means having a free choice  between two or more alternatives.

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 shall - context:  "Returns with respect to income taxes under  Subtitle A shall be made by the following:..." (Sec. 6012, I.R. Code as referred to by I.R.  Privacy Act

                        Notice 609, Rev. Oct. 1986)

      Webster's p. 1666

                        (a) to express futurity in the first person, and determination, compulsion, obligation, or necessity in the second and third persons;

      Black's Law p. 1233

                        As used in statutes, contracts or the like, this word is generally imperative or mandatory in common ordinary parlance, and in its ordinary signification, the term

                        "shall" is a word of command, and one which has always or which must be given a compulsory meaning; as denoting

                        obligation.  It has a peremptory meaning, and it is  generally imperative or mandatory.  It has the invariable  significance of                                                     excluding the idea of discretion, and has the significance of       operating to impose a duty which may be enforced, particularly if       public policy is in favor of this meaning, or when addressed to public               officials, or where a public interest is involved, or where the public or                                                                   person have rights which ought to be exercised or enforced, unless                                                     a contrary intent appears.  People v.  O'Rourke, 124 Cal.  App 752,                                                      13P.2d 989, 992.

                        But it may be construed as merely permissive or directory (as equivalent to "may,") to carry out the legislative intention and in cases where no right or benefit to anyone depends on its being taken in the imperative sense, and where no public or private right

                        is impaired by its interpretation in the other sense.

                        Wisdom v. Board of Sup'rs of Polk County, 236 Iowa 669, 19 N.W.2d 602, 607, 608.

      I.R. Code (contains no definition)

 In  my  opinion,  the  word  "shall"    is generally used in  the  permissive sense (first person) and is mandatory when  used in the second or third person.  However, in legal  usage, as it is used in the above statutory context, the  word "shall" could mean "may" if a right is impaired or  violated (See Black's Law above).  For a  complete  understanding  of  what "shall" means in this legal context,  I suggest you consult further with an attorney.

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 assessment - context:  "Our system of taxation is

                        based upon voluntary assessment and payment, not upon distraint."  (Flora v. U.S., 362 U.S. 145)

      Webster's p. 112 (assessment)

      2.  a method or schedule of assessing

      3.  an amount assessed

      Webster's p. 112 (assess)

      1.  to set or fix a certain sum against, as a tax, fine or special payment; as to assess each citizen in due proportion;

      Black's Law p. 106 (assessment)

                        It is often used in connection with assessing property taxes or levying of property taxes.  Also, the amount                                                   assessed. Taxation:  The process whereby the Internal Revenue                                                  Service imposes an additional tax liability.  If, for  example, the IRS                                            audits a taxpayer's income tax return and finds gross income                                                          understated or deductions overstated, it will assess a deficiency in                                          the amount of the tax that should have been paid in light of the                                                 adjustments made.

     Black's Law p. 106 (assess)

                      To ascertain; fix the value of.  To impose a pecuniary (monetary) payment upon persons or property.  To tax.

     I.R. Code (contains no definition)

In my opinion,  the word "assessment," as used in the above legal citation,  means  the  process  or method by which a tax due is ascertained,  i.e.,  by the individual "self assessment" method (see next definition).  In another context, the word "assessment" could mean "I.R.S. assessment."

ADDITIONAL COMMENTARY:  In this context,  it is my opinion that the  assessment spoken of is the "self" assessment method  as the assessment is described as "voluntary,"  which means  the free choice of an individual to decide whether or not to assess a tax on his income),  as opposed to a tax assessment on income made by the  I.R.S.  and  billed to the taxpayer (as described in Black's Law above).

Note, however, that the definition of "assessment" in Black's Law   is defined only  as  "imposing) an additional  tax liability" against  the  taxpayer based on a determined "deficiency" (the amount of income tax still due and owing). In other words, there is no description in this definition of an "initial or "original" income tax assessment that was imposed by the I.R.S.  or  by the individual (i.e., self assessment).

                      In any event,  I feel it important to inform you of the two methods of assessment:  1) a voluntary, self assessment, and  2)  an I.R.S.  assessment  made  after  a voluntary, self assessment  is  made by the individual and the I.R.S. determines that the self assessment (resulting amount) was deficient.  For further enlightenment on these assessment methods I recommend you seek legal counsel.

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self assessment - context:  "Our tax system is based on individual self assessment and voluntary compliance."

                      (Mortimer Caplin, former I.R.S. Commissioner)

                      Note:  There is no definition of this term from any source.

In  my  opinion,  the  term  "self  assessment" means a method of ascertaining an amount of tax where  the amount  is determined solely  by the individual through his own  efforts to assess this tax upon his property,  i.e.,  income,  AFTER he has voluntarily decided  to  do  so.    "Self assessment,"  in  my opinion, is synonymous with "voluntary assessment" (as found in the Flora v.  U.S. court case above for "assessment")

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NOTE:         IN  THE REMAINING PORTION OF THIS OPINION I WILL ADDRESS THOSE WORDS,  SENTENCES AND QUESTIONS (FROM YOUR LIST) THAT COME FROM  THE  I.R.S.'  PRIVACY ACT NOTICE 609 AND THOSE CODE SECTIONS THE  NOTICE REFERRED YOU TO.

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person - context (1):  "Every person liable for any tax imposed by this title, or for the collection thereof, shall keep such records, render such statements...,"

                      (Portion of Sec. 6001, Chap. 61, I.R. Code)

     context (2):  "Any person required under this title to pay any estimated tax, or required by this title or by regulations made under authority thereof to make a return...," (Portion of Sec. 7203, Chap. 75, I.R. Code)

     Webster's p. 1338

     1.  an individual human being, especially as distinguished from a thing or lower animal; an individual man, woman or child.

     6.  in law, any individual or incorporated group having certain legal  rights and responsibilities.

     Black's Law p. 1028

                      In general usage, a human being (i.e., natural person), though by statute term may include a firm, labor organizations, partnerships, associations, corporations,

                      legal representatives, trustees, trustees in bankruptcy, or receivers.

     I.R. Code, context (1):  Definition found in "Chapter 79.--

                      Definitions"*

                      Sec. 7701(a)(1) Person. The term "person" shall be construed to mean and include an individual, a trust, estate, partnership, association, company or corporation.

           *Chapter 61 is the I.R. Code chapter containing code sections 6001 and 6011 in which context the word "person" is found.  Definitions for certain words in each chapter are usually found within the chapter. The word "person," however, is not defined in Chapter 61, thus, Chapter 79's definition holds.

     I.R. Code, context (2):  Definition found in Chapter 75. Sec. 7343.  Definition of term "person." The term "person" as used in this chapter includes an officer or employee of a corporation, or a member or employee of a partnership, who as such officer, employee, or member is under a duty to perform the act

                      in respect of which the violation occurs.

context (1):  In my opinion,  the term "person" as used  in Sec. 6001  means  all of the entities listed in the definition of Sec.  7701(a)(1).   The definition or  answer you specifically seek, however, depends on your "status," i.e., the descriptive title of who   you  are  (nature, purpose and  function, being major characteristics of who you are).   For the sake of rendering you an   answer,   albeit hypothetical,   I  say  that you  are an "individual," based solely on my brief assumption that you are  a "live, breathing, walking,  talking,  thinking" human being and because  you  signed  your  name  on  a  letter without having "President" or "Inc." after your name!

context (2):  In my opinion, the meaning of the term "person" as used in Sec. 7203 is limited to the legal definition set forth in Sec.  7343 (see above) for two reasons.  First, there is no other definition for the term in Chapter 75, and second, within Sec.  7343 itself, the term "person" is construed to be limited to mean only an officer or employee of a corporation, (etc.) - by the use of the word "includes" preceding "officer or employee." In this context,  the  word  "includes"   by definition from Black's Law, means to "confine within,  contain," thus restricting the meaning to only that which is stated in the definition of the term.

NOTE:         FROM THIS POINT FORWARD,  FOR FORMATTING PURPOSES, YOUR QUESTIONS ARE PRESENTED IN STATEMENT FORM:

 Definition of the word "liable" and meaning of the first sentence of I.R. Code Section 6001.

liable - context:  "Every person liable for any tax imposed by this title, or for the collection thereof, shall keep such records, render such statements, make such returns, and comply with such rules and regulations as the Secretary from time to time prescribe...."

                      (Portion of Sec. 6001, Chap. 61, I.R. Code)

     Webster's p. 1042

     1.  legally bound; answerable; responsible;

     Black's Law p. 824

                      Bound or obliged in law or equity; responsible; chargeable; answerable; compellable to make satisfaction, compensation or restitution.

     I.R. Code (contains no definition)

In my opinion,  the word "liable" means "responsible" and "bound by  law."   This sentence points out that if a person is "liable" responsible),  and the title (an I.R.  Code section) designates said  person  as "liable" (bound by law), then he must do those things, i.e., keep such records, make such returns, etc.,  as set forth in Sec. 6001.  Without careful scrutiny an individual could believe  that  the  word "liable" means "to owe" and that he must "pay" (a tax).  The code section does not discuss the payment of taxes, rather it serves to give the reader a clue as to what he must do if he determines he is the "person liable."

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                      The I.R.S. Privacy Act Notice referred you first to Code Sec. 6001.  The question is whether this code section specifies that you are the person "liable."

In  my opinion,  Sec.  6001 does not state that you are a "person liable."    It  is  non-specific.  The phrase, "Every person liable..."  does  not specify that you are the individual that is "liable" or that  you belong to a category or group of "person(s)  liable."    Rather  the section implies that  you have to look elsewhere in the "title" (Code) in order to find where  you are "bound by law" - specifically described as the "person liable" to collect  taxes  (if  you are an employer),  keep records, render statements,  make returns,  and comply  with  certain rules and regulations.

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                      Definition of the term "made liable" and meaning of the first sentence of I.R. Code Sec. 6011.

made liable - context:  "(a) General Rule.  When required by regulations prescribed by the Secretary any person made  liable for any tax imposed by this title, or for the collection thereof, shall make a return or statement according to the forms and regulations prescribed by the Secretary...." (Portion of Sec. 6011, Chap. 61, I.R.

                      Code)

Note:  There is no definition of this phrase from any source. However, this phrase closely resembles the term "liable" above, which definition serves as a basis for my opinion.

In my opinion,  the phrase "made liable" means, like the above term "liable," that somewhere (elsewhere) in the I.R. Code there may be  a  code section that binds  you  by  law (making you "responsible") to do some or all of the acts set forth in this Sec. 6011.  Like Sec. 6001,  there is no discussion of payment of taxes,  so  we  know  that  the phrase does not imply that one is responsible for payment of taxes.

However, this phrase could also imply that there is more than one way that a person could be "made liable" for any tax imposed, but no explanation is presented in this  section. For example,  a  "voluntary  assessment"  or "self assessment" (words previously defined) by the individual could be tantamount  to him becoming liable,  i.e.,  being "made liable" by his own action.   At this point, I must defer this discussion of the ways or means by which persons are "made liable" as the legal aspects of this subject can be more fully and appropriately advised you by an attorney or tax professional.

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                      The I.R.S. Privacy Act Notice also referred you to Code Sec. 6011.  Your question is whether this section specifies that you are the person "made liable."

In my opinion,  Sec.  6011 does not state that you are the person "made liable."  It is non-specific.  The section implies that you have to look elsewhere in the code to see whether or not you are "made liable" by law.

THESE  ARE  EXCEPTIONS,  BUT  EVEN  SO,  JUST ONE LAW, UNCLEARLY  WRITTEN, CAN CREATE SERIOUS CONFUSION IN  OUR SOCIETY.  I'LL COMMENT FURTHER IN  MY SUMMARY AND CONCLUSION.

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tax liability - (no particular context)  Note: There is no definition of this term from any source.  Therefore, we will look to the definition of "liability:"

liability - 1. the state of being liable. 2. anything for which a person is liable. 3. a debt; -Webster's

liability - It has been defined to mean: all character of debts and obligations (cite omitted) -Black's Law

In  my opinion,  the term "tax liability" means a "tax debt," for example,  a specific dollar amount that is due and owing to the I.R.S.

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                      Difference between the terms "liable for a tax imposed" and "tax liability."

First,  let me briefly explain the term "tax imposed."  To impose  something simply means "to place upon,"  more specifically, "to place  a burden  (tax) upon something." Thus,  being "liable for a tax imposed" means being "responsible for/bound by law" for a tax that has been placed upon some item.  Note that the person liable is distinct from (not the same as) the item upon which  the tax was placed.  Also  be  advised  that the word "tax" as used in Sections 6001 and 6011, is used in a generic sense, that is, for whatever type of tax is being imposed, i.e., alcohol tax, income tax, etc., and does not represent a dollar amount of tax.

"Tax liability," as stated in my opinion immediately above, means a tax "debt" - an amount owed.   There is obviously a substantial difference  between  the two terms.   Another way to describe the difference between the two is that it is possible to be a "person liable" for a type of tax and have no "tax liability" (debt) at all.    But  it is impossible to have a "tax liability" if one is not a "person liable" for that type of tax.  In other words, only a person "liable" or "made  liable"  can  possibly have  a "tax liability."

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tax evasion (no particular context)

     Webster's (contains no definition)

     Black's Law p. 1310

                      Illegally paying less in taxes than the law permits; committing fraud in filing or paying taxes.  Such act is a crime under I.R. Code Sec. 7201.

     I.R. Code (contains no definition)

In  my opinion,  "tax evasion" is when one fills out a tax return and lies  (commits  "fraud")  with respect  to  the information rendered on his tax return.   Most people are aware, if they have filed income tax returns,  that  they sign  such returns under  "penalties  of  perjury"  a sworn oath that they are telling the truth.   Therefore, if they knowingly lie on the return and the result is paying less in taxes,  such act is deemed a crime under I.R.  Code Sec. 7201, "Attempt to evade or defeat a tax" (a felony).

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In  summary  and conclusion,  all of the above- listed definitions from the three authoritative sources are those that I deemed most relevant and appropriate, given the context of the subject words and phrases.

For those words and phrases contained in various Internal Revenue code  sections,  heaviest reliance as to the meaning (my opinion) was given to the definition contained in  the Code due  to the legal nature of the subject words in their specific contexts.

You have noted in this opinion that words such as "must," "shall" and  "person" actually differ radically in meaning, depending on their context.  Meanings differ between Webster's and Black's Law Dictionary for some,  and Black's Law  even presented opposite meanings for some of the words, depending on context and if used in a "legal" sense.

Further,  with respect to the word "person," no definition exists in  Chapter 61,  the chapter that contains code sections 6001 and 6011 in which "person" is found.   I was obliged instead to go to a  more  general  definition  found in  Chapter 79.  Yet, the definition of "person" as used  in section 7203, is  found in Chapter  75  of  the Code,  upon which I based my opinion.  For accuracy in meaning relative to context and subject matter, the definitions  used for the subject words found in the I.R.  Code were taken, when existing,  only from within the same Chapter in which they  resided. Note, also, how the definition of "person" differs radically between Chapter 75 and Chapter 79.  Again, if one is not careful in researching these legal definitions serious mistakes can occur, resulting in serious misunderstanding.

Another  interesting fact is that the Internal Revenue Code, the primary authority on tax law, does not contain the definition of many  important words and  phrases;   for example, the terms "voluntary compliance," "self assessment" and "tax liability," to name a few.  Many I.R.S. publications over the years, including the  mission of  the I.R.S., describe the tax system as one of "voluntary compliance," yet none define or explain the meaning of this very important term.

This lack of  adequate  definitions  (explanation) coupled with inconsistencies  in   meanings  and imparted  to the public in language that is less than clear,  all contribute to the public's resulting confusion and misunderstanding of I