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IRS Agent

The following is an alleged letter from an Enrolled Agent (i.e. someone with demonstrated technical expertise in interpreting and administering the Internal Revenue Code), who lays the ground work for why the average citizen is not required to pay federal income taxes.  It is interesting reading, but no guarantees are made as to its accuracy.  This is again one of those areas where anyone must do their own research, assume their own responsibility for any subsequent actions, and abide by the outcomes.



The information contained within the pages of this website is for educational purposes only.  Nothing set forth herein is intended to be legal advice or able to be construed as such.  This discussion is private in entirety and non-negotiable between the parties.  Anyone acting on any of the contents herein does so solely on the basis of her or his own volition and at his or her own risk.  Everyone has the duty and absolute right to think, evaluate, research, learn, and act autonomously.  Inasmuch as Law equates to the “right” to use deadly force (destructive violence), it would appear prudent for anyone to refrain from adopting any course of action without first understanding the basis and reasons thereof and how to defend it if challenged.


 April 16, 1997

At your request I have researched the Internal Revenue Code (Title 26 U.S.C.) relative to an individual income tax return.  I cannot tell you not to file an income tax return unless you have no tax liability.  Each person involved, on his/her own, must make this determination.

First let me tell you something about myself I am an Enrolled Agent.  Enrolled Agents are defined in the IRS Regulations Circular 230 as a person who has demonstrated technical competence in interpreting and administering the Internal Revenue Code and regulations thereunder.  This person has passed a strenuous test in all areas of taxation administered by the Internal Revenue Service.  Enrolled Agents are licensed by the Treasury Department and must continue to show proficiency in the tax laws and regulations with documented continuing professional education hours in order to maintain their licenses.  

There are two important issues that you need to address.  What is the subject of the tax?  Where is the liability for that tax? These questions are addressed more in detail later in this research letter.  Let us look at some statutes that might concern you.  Lets start with the failure to file return, supply information, or pay tax, as stated in section 7203 as follows:  

§ 7203, Willful failure to file return, supply information, or pay tax:  

Any person required under this title to pay any estimated tax or tax, or required by this title or by regulations made under authority thereof to make a return, keep any records, or supply any information, who willfully fails to pay such estimated tax or tax, make such return, keep such records, or supply such information, at the time or times required by law or regulations, shall, in addition to other penalties provided by law, be guilty of a misdemeanor and, upon conviction thereof, shall be fined not more Than $25,000 ($100,000 in the case of a corporation), or imprisoned not more than 1 year, or both, together with the costs of prosecution, in the case of any person with respect to who there is a failure to pay any estimated tax, this section shall not apply to such person with respect to such failure if there is no addition to tax under section 6654 or 6655 with respect to such failure.  In The case of a willful violation of any provision of section 60501, the first sentence of this section shall be applied by substituting “5 years” for “1 year”.  

As you can see, there are two essential elements that must be present.  First, you must be required to pay a tax, or be liable for paying a tax.  This means it is a crime only if you are a person required by law or regulation to pay a tax, file a return or keep such records.  It is, therefore, important to determine if you are a person “required” to perform these functions.  This will be the first subject discussed in this letter.  

The government has to prove these elements in order to subject you to punishment.  They must first prove you had ‘taxable income”, that you are “liable” for a tax, and that the “liability” made you a “required person.”  If any of these elements cannot be proven, you cannot be subject to punishment.  

Let’s first see whether or not you are a “person Liable.”  To start with, I look at the two code sections that address this issue under:  Title 3, Section 552a (e) (3) [[The Privacy Act], and title 44, Section 3504 (c)(3)(C) [[The Paperwork Reduction Act].  

The Privacy Act states that the Agency requesting information must:  

(3) inform each individual who it asks to supply information, on the form which it uses to collect the information or on a separate form that can be retained by the individual---  

(A)  the authority (Either granted by statute, or by executive order of the President) which authorizes the solicitation of the information and whether disclosure of such information is mandatory or voluntary;

(B)  the principal purpose for which the information  is intended to be used;

(C) the routine uses which may be made of the information, as published pursuant to paragraph (4)(D) of the subsection; and

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

The Paperwork Reduction Act states that the Director of the Office of Management and Budget must include with his/her information request:  “a statement to inform the person reviewing the request why the information is being collected, how it is to be used, and whether responses to the request are voluntary, required to obtain a benefit, or mandatory...”  

Now, here we have two statutes directing the government to tell us whether giving the IRS an income tax return is voluntary or mandatory.  The IRS responds to the directives of the Privacy Act and paperwork Reduction Act Notice with the following statement:  

“Our legal right to ask for information is Internal Revenue Code section 6001, 6011 and 6012(a) and their regulations.  They say that you must file a return or statement with us for any tax you are liable for. Your response is mandatory under these sections.”  I have to point out to you that the IRS again used the word “liable for”.  

Now, let’s look at the Internal Revenue Code to see what it has to say.  The two sections 6001 and 6011 follow as written the code of 1994.  

§ 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 roles 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 returns, 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 records which an employer shall be required to keep under this section in connection with charged tips shall be charge receipts, records necessary to comply with section 6053(c), and copies of statements furnished by employees under section 6053(a).  

§6011.  General requirement of return, statement, or list

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

In these two sections we are instructed to file a return or statement for any tax we are liable for. Indeed, section 6001 refers to “Every person liable for any tax imposed by [The Internal Revenue Code]...” and section 6011 refers to “...any person made liable for any tax imposed by [the Internal Revenue Code]...”  But, as you can see, nowhere in either of these two sections are we told who is liable for, in this case, the income tax.  The government has in effect, told us that a response is mandatory if we are liable for the tax, but neglected to tell us whether or not we are liable for the tax.  The government has been very explicit in telling us that a response, either a return or statement, is mandatory for any tax that we are liable for;  however, the government has remained silent in telling us who is liable for the tax.  Thus, even after reading the government’s official notices under the Privacy Act and paperwork Reduction Act, we still do no know if an income tax return is required of us.  In my opinion, by maintaining silence on this central issue, the government has not complied with either the spirit or the letter of the law of the two Acts.  This opinion is shared by courts as well:  [emphasis added]  

“Silence’ is species of conduct, and constitutes an implied representation of the existence of facts in question...  When silence is of such character and under such circumstances that it would become a fraud... it will operate as an estoppel.”  [Carmine v. Bowen, 64 AT.932]

Since the government has not told you whether you are required to file an income tax return, you have asked me to research this matter.  Since you must be a “person liable” to be a “person required”, lets address this issue.

The right to tax comes from the United States Constitution, the supreme law of the land, which authorizes the federal government to impose two broad categories of taxes: direct taxes under Article I, Section 2 and Article I, Section 9, and indirect taxes under Article I, Section 8.  Direct taxes are required to be apportioned among the states, while indirect taxes must be uniform throughout the United States.  

Briefly, a direct tax is a tax on an ownership interest which the owner cannot pass on, while an indirect tax is on an event where the transaction and the impact of the tax can be passed on, in whole or in part, to others. In order for a tax to fall into the indirect tax category the individual liable for the tax cannot be the ultimate, final consumer.  This is so since the one paying the tax can then add it on to the price of the thing being taxed and recover it (pass it on) when it is sold.  The ultimate, final consumer would have no way to recover (pass on) the tax, so any tax which the ultimate, final consumer is liable for would be a direct tax based on an ownership interest.

“The Sixteenth Amendment does not extend the power of taxation to new or excepted subjects” [Pack v. Lowe, 247 U.S. 165]

“The Sixteenth Amendment conferred no new power of taxation” [Stanton V. Baltic Mining Co., 240 US.103,at 112].

“The individual unlike the corporation, cannot be taxed for the mere privilege of existing., The corporation is an artificial entity which owes its existence in charter powers to the State, but the individual’s right to live and own property are natural Rights for which an excise cannot be imposed.”  [Redfield v fisher, 292 P.813, at 819].

 “Neither can the tax be sustained on the [natural] person, measured by income.  Such a tax would be, by nature, a capitation rather than an excise.”  [Peck v Lowe, 247 US. 165.]

“Income has been taken to mean the same thing as used in the Corporate excise Tax of 1909 (36 Stat.112).  The individual worker does not receive a profit or gain from his/her labors - merely an equal exchange of funds for services.”  [Brushaber v. Union Pacific R R US. 1, 17, 36S.CT.236,24t].  

“The taxpayer must be liable for the tax.  Tax liability is a condition precedent to the demand.  Merely demanding payment, even repeatedly, does not cause liability”  {Bothke v. Terry, 713 F. 2d 1405, at 1414 (1983)].  

“The Treasury Department cannot, by interpretive regulations, make income of that which is not income within the meaning of the revenue acts of Congress, nor can Congress, without apportionment, tax as income that which is not income within the meaning of the Sixteenth Amendment.” {Helvering v. Edison Bros. Stores, 133 F.2d 575].  [emphasis added]

Also, please note the voluntary nature of Social Security or the use of the W-4?  The only place in the code that addresses the Social Security issue is in Title 26 U.S.C. subtitle C, chapter 21 (Social Security Tax Act) of the Internal Revenue Code starting in subchapter A. Subtitle C includes sections 3101 through 3510 of Title 26 U.S.C..

The first issue is whether subtitle C is relative / jurisdictional to you.  To make this determination please note in Subtitle C at subchapter c, §3121, which has specific definitions which relate to Social Security.  In this jurisdictional section at 3121(e) State, United States and citizens reads as follows:

3121. Definitions...  

(e) State, United States, and Citizen  

For purposes of this chapter-  

(1) State

The term ’State” includes the District of Columbia, the Commonwealth of Puerto Rico, the Virgin Island, Guam, and American Samoa.  

(2) United States

The term “United States” when used in a geographical sense include the commonwealth of Puerto Rico, the Virgin Island, Guam, and American Samoa. An individual who is a citizen of the Commonwealth of Puerto Rico (but not otherwise a citizen of the United States) shall be considered, for purposes of this section, as a citizen of the United States.

The jurisdiction in this section is very specific as you can see.  Because there is no section that makes it mandatory in the 50 Union States it must be voluntary for citizens in these States.  [emphasis added]

To better understand these provisions, and the different jurisdictions, you have to understand that Congress creates laws for TWO distinct and separate jurisdictions:

1) Washington DC, enclaves in the 50 states (i.e.: land that has been ceded by the State to the federal government), and the territories and possessions, such as Puerto Rico, Virgin Island, Guam, etc.

2) The 50 states.

The principal difference in the jurisdictions is that the Constitution for the United States of America has to be strictly adhered to in making laws that affect the 50 states.  However, in Washington, D. C., enclaves and territories, Congress has EXCLUSIVE jurisdiction, which means they can make any law they want to; the Constitution is not considered. (Article 1, Section 8 US Const).  See also CAHA v U.S. 152 U.S. 211:

The laws of Congress in respect to those matters (outside of Constitutionally delegated powers) do not extend into the territorial limits of the states, but have force only in the District of Columbia, and other places within the exclusive jurisdiction of the national government.” [emphasis added]

DOWNES v.BIDWELL, 182 U.S. 244 is also very explicit:  

“Constitutional restrictions and limitations were not applicable to the area of lands, enclaves, territories and possessions over which Congress had exclusive legislative authority.”

The Supreme Court has ruled consistently on this issue ever since America’s inception.  In fact, the latest case was U.S. v. LOPEZ, 115 5. CT.1624 (1995).  The Court ruled a law applicable in Washington, D. C. was not applicable in San Antonio, Texas, because it did not conform to Constitutional restrictions.

Since an income tax is a tax on income created by a transaction which is (and must be) directly associated with, or effectively connected with, some particular type of revenue-taxable “privileged” activity [ i.e. alcohol, firearms, tobacco, or other privileged activity or excise], the Internal Revenue Code and its implementing and controlling federal regulations must specify the particular type or kind of tax arising from a revenue-taxable, privileged activity that makes one a “person liable” or “made liable”.  For example, Internal Revenue Code Section 5005 establishes that liability for the tax on distilled spirits is placed on the distiller or the importer.  Section 5043 places the liability for the tax from wine, on the proprietor of the bonded wine cellar or on the importer.  Section 5703 places the liability for the tax on cigars and cigarettes on the manufacturer or importer.  Also to be classified as an indirect tax, the individual liable for the tax must not be the ultimate, final consumer.

In support of this, look at some closely related taxes. Section 2502(c) establishes liability  for the gift tax on the donor, the one giving the gift, not the donee, the one receiving the gift.

Section 2002 establishes liability for the estate tax on the executioner, not on the inheritors receiving the property.  “Section 2002, liability for payment.  The tax imposed by this chapter shall be paid by the executor.”

Since you must be liable for an income tax on your own income, neither section 6001 nor 6011 require you to file an income tax return.  However, I want to continue and discuss 6012,  which is the section many believe require income tax returns be filed.  [emphasis added]

§ 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--  

(I) who is not mauled (determined by applying section 7703), is not a surviving spouse (as defined in section 2(a)), is not a head of a household (as defined in section 2 (b)), and for the taxable year has gross income of less than the sum of the exemption amount plus the basic standard deduction applicable to such an individual,  

(ii) Who is a head of a household (as a defined) and for the taxable year has gross income of less than the sum of the exemption amount plus the basic standard deduction applicable to such an individual,  

(iii) who is a surviving spouse (as so defined) and for the taxable year has gross income of less than the sum of the exemption amount plus the basic standard deduction applicable to such an individual, or  

(iv) Who is entitled to make a joint return and whose gross income, when combined with the gross income of this spouse, is, for the taxable year, less than the sum of twice the exemption amount plus the basic standard deduction applicable to a joint return, but only if such individual and his spouse, at the close of the taxable year, had the same household as their home.  

To determine who must make returns lets see what type of taxes can be assessed, by whom and for what classification of tax.  For this we must go to Section 6201 Assessment Authority, which reads as follows:

§ 6201. Assessment Authority  

(a) Authority of Secretary  

The Secretary is authorized and required to make the inquiries, determinations, and assessments of all taxes (including interest, additional amounts, additions to the tax, and assessable penalties) imposed by this title, or accruing under any former internal revenue law, which have not been duty paid by stamp at the time and in the manner provided by law.  

Such authority shall extend to and include the following:  

(1) Taxes Shown On Return  

The Secretary shall assess all taxes determined by the taxpayer or by the Secretary as to which returns or lists are made under this title.  

(2) Unpaid Taxes Payable By Stamp...  

TITLE 26 U.S.C. § 6201 gives the secretary the authority to assess taxes not duly paid by stamp or by the individual who has assessed himself, i.e.: voluntary tax.  Stamp taxes are associated with subtitle E of the Internal Revenue Code Title 26 or Title 27.  i.e.: Alcohol, Tobacco and Firearms. Here, again, you have to determine what activity you are involved in and does this activity pay taxes by stamp.  

The First Amendment of the Constitution of the United States protects the freedom of speech and of the press.  The freedom to speak, you must understand, also involves the freedom not to speak.  If you do not have the right not to speak, (i.e.-- if the government could compel you to speak) then you have no freedom of speech.  Since this right extends to printed and written materials, you have a First Amendment Right not to fill out government forms and not to give the government information.  

The Fourth Amendment of the Constitution of the United States protects your privacy.  You have a Fourth Amendment Right to keep your personal financial affairs private, and not to voluntarily give that information to the government.  The Fourth Amendment provides that if the government wants to examine your books and records, a court order must be obtained.  The mailing of a tax form along with instructions on how to complete it is not, for Fourth Amendment purposes, a valid order compelling a response.  [emphasis added]  

The Fifth Amendment of the Constitution of the United States protects you as well, stating;  

“No person shall ... be compelled in any criminal case to be a witness against himself”  

The fifth amendment seems to apply only to criminal matters, but the Supreme Court ruled in McCarthy v. Arndstein, 266 US. 34, that the fifth amendment “applies alike to criminal and civil proceedings.”  Similar rulings have stated;  

“There can be no question that one who files a return under oath is a witness within the meaning of the Amendment.” [Sullivan v. United States, 15 F. 2Nd 809],  


“The information revealed in the preparation and filing of an income tax return is, for Fifth Amendment analysis.  “The testimony of a “witness” as that term issued herein.” [Garner v. United States, 424 US. 648].  

Since you can’t be compelled to be a witness against yourself, and since the Supreme Court has twice held that the filing of an income tax return is an act of being a witness against one’s self, it follows that any statute compelling the filing of an income tax return would violate the protections of the Fifth Amendment.  [emphasis added]

The effect of the government’s actions has been noted by the Supreme Court:

“Because of what appears to be a lawful command on the surface, many citizens, because of their respect for what only appears to be law, are cunningly coerced into waving their rights due to ignorance.” [U.S. v. Minker, 350 US.179, at 187].

Section 6012, moreover, specifies a condition that must be met before the income tax return “shall be made”.  The individual has to have “for the taxable year a gross income of the exemption amount or more”.  Based on the following code sections, I will show you where no individual has any item of gross income that is includable:  

First, look at the definition of “taxable year”.  

§ 7701. Definitions.  

(a) When used in this title, where not otherwise distinctly expressed or manifestly incompatible with the intent thereof--...  

(23)  Taxable year. -- The term “Taxable year” means the calendar year, or the fiscal year ending during such calendar year, upon the basis of which the taxable income is computed under subtitle A.  “Taxable year” means, in the case of a return made for a fractional part of a year under the provisions of subtitle A or under regulations prescribed by the Secretary, the period for which such return is made.  (Section 441 (b) also defines Taxable year: For purposes of this subtitle, the term “taxable year” means -- (1) “the taxpayer’s annual accounting period”).  

The definition of “taxable year” is important since the law requires that taxable income is to be computed on the basis of a taxable year:  

“Section 441 (a) COMPUTATION OF TAXABLE INCOME--- Taxable income shall be computed on the basis of the taxpayer’s taxable year.”  

Now let’s look at the definition of “taxpayer’ and ‘person”:  

§ 7701 Definitions  

(a) When used in this title, where not otherwise distinctly expressed or manifestly incompatible with the intent thereof--  

(1) Person -- The term “person”  shall be construed to mean and include an individual, a trust, estate, partnership, association, company or corporation. [Which are only artificial, not natural, person and/or human being.]  

(14) TAXPAYER-- The term “taxpayer” means any person subject to any internal revenue tax.

So, by substituting  the term “person subject to any internal revenue tax” for the term “taxpayer” in section 441 (a), the section requires the tax to be computed on the basis of the taxable year of the person subject to the income tax, Using the same substitutions as above, you find:  

§ 451.  

(a) General rule. -- The amount of any item of gross income shall be included in the gross income for the taxable year in which received by the taxpayer, unless, under the method of accounting used in computing taxable income, such amount is to be properly accounted for as of a different period.  

The point is this:  Taxable income is required to be computed on the basis of the taxable year of the person subject to the income tax. If the person does not have a liability, he cannot have a taxable year in which any amount can be included.  [emphasis added]  

Based on all the above, it is my professional opinion, supported by the Court in U.S. v Flora, 362 US, 145. At 176, that the filing of an individual income tax return is voluntary.  [emphasis added]  

Quoting the Court:  “Our system of taxation is based on voluntary assessment and payment, not upon distraint.” [U.S. v Flora, id.]  

Also, by testimony of Mr. Avis before Congressional subcommittee hearings on the Internal Revenue Investigation:  “Your income tax is 100 percent voluntary tax, and your liquor tax is 100 percent enforced tax.  Now, the situation is as different as night and day.” (Exhibit A)

You may be asking yourself why is it that so many people file tax returns each year?  Let me give you a statement by Adolph Hitler, “If you tell or report a lie often enough and long enough people will eventually believe  it.”  This is what has happened to the people of the United States of America. Every year the IRS sends millions of forms to people, along with instructions, on how to fill them out.  The people do not question the form nor do they determine if there is a liability, but just fill in the lines and send them back with whatever money the form requires.  No one ever asks what law requires them to fill out this form and does it apply to them.  

Furthermore, the Privacy Act Notice says that the government must tell you the effects, if any, if not filing the return.  Until 1981, the Privacy Act Notice read as follows:  “If a return is not filed, or if we don’t receive the information we ask for, the law provides that a penalty may be charged (the “penalty” be a penalty for filing and paying the tax late).  Since 1982 the Privacy Act Notice has been revised reading: “If you do not file a return, do not provide the information we ask for, or provide fraudulent information, the law provides that you may be charged penalties and, in certain cases, you may be subject to criminal prosecution. “ No mention was made in the previous Privacy Act Notice since it only referred to not filing a return or providing information.  Added to the privacy Act Notice in 1982 was a caution about “fraudulent Information” and “in certain cases, you may be subject to criminal prosecution”.  Since it is true that filing a false or fraudulent return is a crime under Code sections 7206 and 7207, the “certain cases” referred to in the later Privacy Act Notice are undoubtedly cases where a false or fraudulent return has been filed;  however, the privacy Act Notice still has not told us that not filing a return is a punishable offense.  

If you remember, at the outset of this letter I said that in order for the government to punish you for not filing an income tax return, certain elements must be present;  they must first prove you had “taxable income”; then, they must prove that income made you “liable” for a tax; next, they must prove that “liability” made you a “required person”, and lastly, that you failed to file a “required return”, and if any one of these elements cannot be proven, you cannot be subject to punishment.  The word ‘willfully”, when used in a criminal statute, means an act done with a bad purpose. Felton v United States, 96 US.699: Potter v United States, 155 US 438: Spurr v United States, 174 US. 728, or without justifiable excuse.  Felton v United States, supra; Williams v People, 26 Colo. 272, 57P.701:  People v . Jewell, 138 Mich. 620, 101 NW 835; St. Louis I. M. & S Ry. Co. V Batesville & W. Tel  Co., 80 Ark. 499, 97 SW 660; Clay v. State, 52 Tex. Cr. 555, 107 8W 1129; or Stubbornly, obstinate, perversely, Wales v. Miner, 89 lad. 118, at 127; Lynch v. Commonwealth, 131 Va. 762; 109 SE. 427; Claus v. Chicago Gt. W. Ry. Co., 136 Iowa 7, 111 N.W. 15; State v. Harwell, 129 N. C. 550; 40 S.E. 48. The word is also employed to characterize a thing done without grounds for believing it is lawful:  Roby v. Newton, 121 Ga. 679, 49 S.E. 694, or conduct marked by a careless disregard whether or not one has the right so to act.  United States v. Philadelphia & R. Ry Co., 223 Fed. 207, at 210; State V. Savra.  129 Iowa 122; 105 N.W. 387; State v. Morgan, 136 N.C. 628, 48 S. F. 670.  

Thus, since the government’s Privacy Act Notice and Paperwork Reduction Act Notice do not meet its intended purpose and does not specifically say the filing an income tax return is required, the courts have recognized that the word “willfully” in these statutes generally connotes a voluntary intentional violation of a known legal duty.  [U.S.v. Bishop, 412 US. 346.]  

The Supreme Court has ruled as recently as January 8, 1991, that a belief that one is not required to file an income tax return, based upon professional advice,  precludes the “willfulness” requirement [Cheek v. U.S., 498 US. 192, at 207 (1991)]  [emphasis added]  

To sum up, the government must prove that you have a liability and they must disprove your claim that you believed filing an income tax return was not required or is voluntary and instead prove that you intentionally did not file one.  This is a decision that you have to make on your own.  If you have a tax liability you will have to file a return.  

With all the facts and evidence presented herein. You should have no problem defending yourself should the government try to criminally prosecute you for not filing an income tax return if you have no liability.  

John J. Schlabach, Enrolled Agent

Enrollment # 50614  


Obviously, the essential question -- not addressed above -- is:

What if the IRS ignores legalities and takes the position that “might makes right”?  


IRS Fraud?         Infernal Revenue Service         Crisis in American Government

Forward to:

HR 2525         The Federal Reserve       


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