Presentment I – Historical Events Leading Up To The Passage Of The Sixteenth Amendment As The Powers That Be Would Have Us To Believe

Please see below an overview of the Income Tax laws leading up to the ratification of the Sixteenth Amendment as the powers that be would have us understand it.

16th Amendment to the U.S. Constitution: Federal Income Tax (1913)” “Passed by Congress on July 2, 1909, and ratified February 3, 1913, the 16th amendment established Congress’s right to impose a Federal income tax.

Far-reaching in its social as well as its economic impact, the income tax amendment became part of the Constitution by a curious series of events culminating in a bit of political maneuvering that went awry. The financial requirements of the Civil War prompted the first American income tax in 1861. At first, Congress placed a flat 3-percent tax on all incomes over $800 and later modified this principle to include a graduated tax. Congress repealed the income tax in 1872, but the concept did not disappear. After the Civil War, the growing industrial and financial markets of the eastern United States generally prospered. But the farmers of the south and west suffered from low prices for their farm products, while they were forced to pay high prices for manufactured goods. Throughout the 1860s, 1870s, and 1880s, farmers formed such political organizations as the Grange, the Greenback Party, the National Farmers’ Alliance, and the People’s (Populist) Party. All of these groups advocated many reforms (see the Interstate Commerce Act) considered radical for the times, including a graduated income tax.

In 1894, as part of a high tariff bill, Congress enacted a 2-percent tax on income over $4,000. The tax was almost immediately struck down by a five-to-four decision of the Supreme Court, even though the Court had upheld the constitutionality of the Civil War tax as recently as 1881. Although farm organizations denounced the Court’s decision as a prime example of the alliance of government and business against the farmer, a general return of prosperity around the turn of the century softened the demand for reform. Democratic Party Platforms under the leadership of three-time Presidential candidate William Jennings Bryan, however, consistently included an income tax plank, and the progressive wing of the Republican Party also espoused the concept.

In 1909 progressives in Congress again attached a provision for an income tax to a tariff bill. Conservatives, hoping to kill the idea for good, proposed a constitutional amendment enacting such a tax; they believed an amendment would never receive ratification by three-fourths of the states. Much to their surprise, the amendment was ratified by one state legislature after another, and on February 25, 1913, with the certification by Secretary of State Philander C. Knox, the 16th amendment took effect.

Yet in 1913, due to generous exemptions and deductions, less than 1 percent of the population paid income taxes at the rate of only 1 percent of net income. This document settled the constitutional question of how to tax income and, by so doing, effected dramatic changes in the American way of life.”

Below please find the fruits of many years of research pertaining to the constitutional authority for the U.S. Congress to tax the earnings of State citizens within the States of the Union. We will show you our sources for the information we offer on this site with a brief history of each. This will build a foundation upon which we build our presentment of information for our State Government Representatives and Senators. Our intention is to bring them face to face with the truth about the history and purpose of the Sixteenth Amendment and why it is their responsibility to see that that understanding is corrected ASAP!!!!

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

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

Presentment II – Chief Cornerstone and Building Block for Presentment of Information Regarding the History and Purpose of the Sixteenth Amendment.

Why do you pay “Income Tax” on your earnings? Most people will respond like this. “Because I have To pay them.” But is that really the truth?

Our State legislatures believe that the Sixteenth Amendment gave Congress the authority to tax our earnings. This group is established to broadcast far and wide the truth about the History and Purpose of the Sixteenth Amendment. You have been invited to this group in hopes that you will see the benefit of our endeavors as they relate to your
financial well being as well as the financial well being of our State governments. If you decide that the fire is too hot or our goals are too risky for your “safe zone”, simply request to leave the group.
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Our second presentment of information is a joint resolution issued by the House of Representatives and the Senate of the U.S. Congress. This information is good for distribution to State legislatures and to the public at large. Lets take it to them!!

PRESENTMENT II.

AUTHORIZATION
PUBLIC LAW 91–589, 84 STAT. 1585, 2 U.S.C. § 168
JOINT RESOLUTION Authorizing the preparation and printing of a revised
edition of the Constitution of the United States of America—Analysis and
Interpretation, of decennial revised editions thereof, and of biennial cumulative
supplements to such revised editions.

“Whereas the Constitution of the United States of America—
Analysis and Interpretation, published in 1964 as Senate Document
Numbered 39, Eighty-eighth Congress, serves a very
useful purpose by supplying essential information, not only
to the Members of Congress but also to the public at large;

Whereas such document contains annotations of cases decided
by the Supreme Court of the United States to June 22, 1964;

Whereas many cases bearing significantly upon the analysis and
interpretation of the Constitution have been decided by the
Supreme Court since June 22, 1964;

Whereas the Congress, in recognition of the usefulness of this
type of document, has in the last half century since 1913,
ordered the preparation and printing of revised editions of
such a document on six occasions at intervals of from ten
to fourteen years; and

Whereas the continuing usefulness and importance of such a document
will be greatly enhanced by revision at shorter intervals
on a regular schedule and thus made more readily available
to Members and Committees by means of pocket-part
supplements:

Now, therefore, be it

Resolved by the Senate and House of Representatives of the United
States of America in Congress assembled, That the Librarian
of Congress shall have prepared—
(1) a hardbound revised edition of the Constitution of the United
States of America—Analysis and Interpretation, published
as Senate Document Numbered 39, Eighty-eighth Congress
(referred to hereinafter as the “Constitution Annotated”), which
shall contain annotations of decisions of the Supreme Court
of the United States through the end of the October 1971
term of the Supreme Court, construing provisions of the Constitution;
(2) upon the completion of each of the October 1973, October
1975, October 1977, and October 1979 terms of the Su-
preme Court, a cumulative pocket-part supplement to the
hardbound revised edition of the Constitution Annotated prepared
pursuant to clause (1), which shall contain cumulative
annotations of all such decisions rendered by the Supreme
Court after the end of the October 1971 term;
(3) upon the completion of the October 1981 term of the Supreme
Court, and upon the completion of each tenth October
term of the Supreme Court thereafter, a hardbound decennial
revised edition of the Constitution Annotated, which
shall contain annotations of all decisions theretofore rendered
by the Supreme Court construing provisions of the Constitution;”

(Construing provisions of the Constitution – to give meaning to or to interpret the provisions of the Constitution.)

As per this Joint Resolution, we are sharing this essential information revealed in the analysis and interpretation of United States Supreme Court cases giving meaning to and or interpreting the provisions of the Sixteenth Amendment to the Constitution for the United States of America.

Be Blessed

Presentment III – History and purpose of the Sixteenth Amendment

Below please find an excerpt from ‘The Constitution of the United States of America, Analysis and Interpretation” that shows the History and Purpose of the Sixteenth Amendment to the Constitution of the United States of America, prepared by the Congressional Research Service at the request of a Joint Resolution of the House of Representatives and the Senate of the United States in Congress.

A thorough examination will prove that the Income Tax is a tax on Corporate income rather than a tax on the earnings of State Citizens.

Your State Representatives and Senators believe the Sixteenth Amendment gave Congress power to tax our earnings.  The United States Supreme Court says otherwise!!

 

Analysis and Interpretation of Cases Construing Sixteenth Amendment

INCOME TAX

SIXTEENTH AMENDMENT

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

INCOME TAX

History and Purpose of the Amendment

The ratification of the Sixteenth Amendment was the direct consequence of the Court’s 1895 decision in Pollock v. Farmers’ Loan & Trust Co.1 holding unconstitutional Congress’s attempt of the previous year to tax incomes uniformly throughout the United States.2 A tax on incomes derived from property,3 the Court declared, was a “direct tax,” which Congress, under the terms of Article I, § 2, and § 9, could impose only by the rule of apportionment according to population. Scarcely fifteen years earlier the Justices had unanimously sustained 4 the collection of a similar tax during the Civil War,5 the only other occasion preceding the Sixteenth Amendment in which Congress had used this method of raising revenue.6 During the years between the Pollock decision in 1895 and the ratification of the Sixteenth Amendment in 1913, the Court gave evidence of a greater awareness of the dangerous consequences to national solvency that Pollock threatened, and partially circumvented the threat, either by taking refuge in redefinitions of “direct tax” or by emphasizing the history of excise taxation. Thus, in a series of cases, notably Nicol v. Ames,7 Knowlton v. Moore,8 and Patton v. Brady,9 the Court held the following taxes to have been levied merely upon one of the “incidents of ownership” and hence to be excises: a tax that involved affixing revenue stamps to memoranda evidencing the sale of merchandise on commodity exchanges, an inheritance tax, and a war revenue tax upon tobacco on which the hitherto imposed excise tax had already been paid and that was held by the manufacturer for resale. Under this approach, the Court found it possible to sustain a corporate income tax as an excise “measured by income” on the privilege of doing business in corporate form.10 The adoption of the Sixteenth Amendment, however, put an end to speculation whether the Court, unaided by constitutional amendment, would persist along these lines of construction until it had reversed its holding in Pollock. Indeed, in its initial appraisal 11 of the Amendment, it classified income taxes as being inherently “indirect.” “[T]he command of the Amendment that all income taxes shall not be subject to apportionment by a consideration of the sources from which the taxed income may be derived, forbids the application to such taxes of the rule applied in the Pollock Case by which alone such taxes were removed from the great class of excises, duties and imports subject to the rule of uniformity and were placed under the other or direct class.” 12 “[T]he Sixteenth Amendment conferred no new power of taxation but simply prohibited the previous complete and plenary power of income taxation possessed by Congress from the beginning from being taken out of the category of indirect taxation to which it inherently belonged . . . .” 13

Income Subject to Taxation

Building upon definitions formulated in cases construing the Corporation Tax Act of 1909,14 the Court initially described income as the “gain derived from capital, from labor, or from both combined,” inclusive of the “profit gained through a sale or conversion of capital assets”; 15 in the following array of factual situations it subsequently applied this definition to achieve results that have been productive of extended controversy.  ……………………………………………………………………………………………………

Foot Notes:

1 157 U.S. 429 (1895); 158 U.S. 601 (1895).  2 Ch. 349, § 27, 28 Stat. 509, 553.        3. The Court conceded that taxes on incomes from “professions, trades, employments, or vocations” levied by this act were excise taxes and therefore valid. The entire statute, however, was voided on the ground that Congress never intended to permit the entire “burden of the tax to be borne by professions, trades, employments, or vocations” after real estate and personal property had been exempted, 158 U.S. at 635.  4 Springer v. United States, 102 U.S. 586 (1881). 5 Ch. 173, § 116, 13 Stat. 223, 281 (1864).  6 For an account of the Pollock decision, see “From the Hylton to the Pollock Case,” under Art. I, § 9, cl. 4, supra. 7 173 U.S. 509 (1899).   8 178 U.S. 41 (1900).

9 184 U.S. 608 (1902). 10 Flint v. Stone Tracy Co., 220 U.S. 107 (1911). 11 Brushaber v. Union Pac. R.R., 240 U.S. 1 (1916); Stanton v. Baltic Mining Co., 240 U.S. 103 (1916); Tyee Realty Co. v. Anderson, 240 U.S. 115 (1916). 12 Brushaber v. Union Pac. R.R., 240 U.S. 1, 18–19 (1916). 13 Stanton v. Baltic Mining Co., 240 U.S. 103, 112 (1916). 14 Stratton’s Independence, Ltd. v. Howbert, 231 U.S. 399 (1913); Doyle v. Mitchell Bros. Co., 247 U.S. 179 (1918). 15 Eisner v. Macomber, 252 U.S. 189, 207 (1920); Bowers v. Kerbaugh-Empire Co., 271 U.S. 170 (1926).

Presentment IV – Definition of Income

Collect Taxes On Whose Income!

Below please find excerpts from US Supreme Court Cases analyzed and interpreted by the Congressional Research Service for Senate Document 112 – 9 reflecting the true meaning of the term “Income” as it is used in the Sixteenth Amendment.

Black’s Law Dictionary defines an excise as:

Excise taxes are taxes “laid upon the manufacture, sale or consumption of  commodities within the country, upon licenses to pursue certain occupations, and upon corporate privileges. ” Flint v. Stone Tracy Co., 220 U.S. 107, 31 S.Ct. 342, 349 (1911); or a tax on privileges, syn. “privilege tax”.

The Supreme Court case specifically referenced by Black’s, has provided a clear and definite scope of the excise taxing authority. In Flint v. Stone Tracy Co., 220 U.S. 107 (1911)ill, the Supreme Court held that:

“Duties and imposts are terms commonly applied to levies made by governments on the importation or exportation of commodities. Excises are “taxes laid upon the manufacture, sale or consumption of commodities within the country, upon licenses to pursue certain occupations, and upon corporate privileges … the requirement to pay such taxes involves the exercise of the privilege and if business is not done in the manner described no tax is payable …it is the privilege which is the subject of the tax and not the mere buying, selling or handling of goods. ” Cooley, Const. Lim., 7th ed., 680.” Flint, supra, at 151

Merchants’ Loan & Trust Co. v. Smietanka 255 U.S. 509 (1921) “It is obvious that these decisions in principle rule the case at bar if the word “income” has the same meaning in the Income Tax Act of 1913 that it had in the Corporation Excise Tax Act of 1909, and that it has the same scope of meaning was in effect decided in Southern Pacific Co. v. Lowe 247 U.S. 330, 335, where it was assumed for the purposes of decision that there was no difference in its meaning as used in the act of 1909 and in the Income Tax Act of 1913. There can be no doubt that the word must be given the same meaning and content in the Income Tax Acts of 1916 and 1917 that it had in the act of 1913. When to this we add that in Eisner v. Macomber, supra, a case arising under the same Income Tax Act of 1916 which is here involved, the definition of “income” which was applied was adopted from Strattons’ Independence v. Howbert, arising under the Corporation Excise Tax Act of 1909, with the addition that it should include “profit gained through sale or conversion of capital assets,” there would seem to be no room to doubt that the word must be given the same meaning in all the Income Tax Acts of Congress that was given to it in the Corporation Excise Tax Act, and that what that meaning is has now become definitely settled by decisions of this Court.”

So let’s examine the Corporate Tax Act of 1909 (36 Stat. 11, 112).  It states:

“That every corporation, joint stock company or association, organized for profit and having a capital stock represented by shares … now or hereafter organized under the laws of the United State or of any State … shall be subject to pay annually a special excise tax with respect to carrying on or doing business by such corporation … equivalent to one per centum on the entire net income over and above five thousand dollars received by it from all sources during such  year….”

The Supreme Court identifies that the constitutional justification for the corporate “income tax”, is as an indirect excise tax “imposed with respect to the doing of business in corporate form”, just as it has been defined under Flint two years   earlier.

As the court noted in US. v. Ballard 535 F.2d 400 at page 404, the word “income” is not actually defined in the Internal Revenue Code. However, the Supreme Court has consistently defined it in a number of cases. In Stratton’s Independence v. Howbert, 231 U.S. 399 (1913), the court wrote:

“As has been repeatedly remarked, the corporation tax act of 1909 was not intended to be and is not, in any proper sense, an income tax law. This court has decided in the Pollock Case that the income tax of 1894 amounted in effect to a direct tax upon property, and was invalid because not apportioned according to population, as prescribed by the Constitution. The act of 1909 avoided this difficulty by imposing not an income tax, but an excise tax upon the conduct of business in a corporate capacity, measuring, however, the amount of tax by the income of the corporation, . . .”

“Evidently Congress adopted the income as the measure of the tax to be imposed with respect to the doing of business in corporate form because it desired that the excise should be imposed, approximately at least, with regard to the  amount  of  benefit  presumably derived by  such  corporations  from the  current  operations  of the government. In Flint v. Stone Tracy Co. 220 U.S. 107, 165 , 55 S. L. ed. 107, 419,  31  Sup.  Ct.  Rep. 342, Ann. Cas. 1912 B. 1312, it was held that Congress, in exercising the right to tax a legitimate subject of taxation as a franchise or privilege, was not debarred by the Constitution from measuring the taxation by the total  income,  although  derived  in part from property which, considered by itself, was not  taxable.  It was  reasonable  that  Congress should fix upon gross income, without  distinction  as to  source,  as a convenient and sufficiently accurate index of the importance of the business transacted.” Stratton’s Independence, Ltd.  V  Howbert,  231 U.S. 399, at 416 -417 (1913)

And the Supreme Court tells us again in Eisner vs. Macomber,_252 U.S.  189 (1920), on page   205, that:

“The Sixteenth Amendment  must  be construed  in connection  with the taxing  clauses  of  the original Constitution and the effect attributed to them before the amendment was  adopted. In Pollock v. Farmers’ Loan & Trust Co., 158 U.S. 601 , 15 Sup. Ct. 912, under the Act of August 27, 1894 (28 Stat. 509, 553, c.  349, 27),  it was  held  that  taxes  upon rents and profits of real estate and upon returns  from  investments  of  personal  property were in effect direct taxes upon the property from which such income arose, imposed by reason of ownership; and that Congress could not impose such taxes without apportioning them among the states according to population, as required by  article  1, 2,  cl.  3,  and section 9, cl. 4, of the original  Constitution.

Afterwards, and evidently in recognition of the limitation upon the taxing power of Congress thus determined, the Sixteenth Amendment was adopted, in words lucidly expressing the object to be accomplished:

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

As repeatedly held, this did not extend the taxing power to new subjects (citizens of the States), but merely removed the necessity which otherwise might  exist for an apportionment  among the states  of taxes laid on income. Brushaber v. Union Pacific R. R. Co., 240 U.S. 1 , 17-19, 36 Sup.  Ct. 236, Ann. Cas. 1917B, 713, L. R. A. 1917D, 414; Stanton v. Baltic  Mining  Co., 240  U.S.  103 ,  112 et seq., 36 Sup. Ct. 278; Peck & Co.  v.  Lowe,  247 U.S.  165,  172 ,  173 S., 38 Sup. Ct. 432.

After examining dictionaries in common use (Bouv. L. D.; Standard Diet.; Webster’s Intemat. Diet.; Century Diet.), we find little to add to the succinct definition adopted in two cases arising under the Corporation Tax Act of 1909 (Stratton’s Independence v. Howbert, 231 U.S. 399, 415 , 34 S. Sup. Ct. 136, 140 [58 L. Ed. 285]; Doyle v. Mitchell Bros. Co.,

247 U.S. 179, 185 , 38 S. Sup. Ct. 467, 469 [62 L. Ed. 1054]), ‘Income may be defined as the gain derived from capital, from labor, or from both combined,’ provided it be understood to include profit gained through a sale or conversion of capital assets, to which it was applied  in the Doyle Case, 247 U.S.  183, 185 , 38 S. Sup. Ct. 467, 469  (62 L.   Ed. 1054).

“Certainly the term “income” has no broader meaning in the 1913 Act than in that of  1909 (See Stratton’s Independence v. Howbert, 231 U.S. 399, 416, 417), and for the present purpose we assume there is no difference in its meaning as used in the two acts. Southern Pacific  v.Lowe, 247 U.S. 330 (1918)      619

And before the 1921 Act this Court has indicated (see Eisner v. Macomber, 252 U.S. 189, 207), what it later held, that “income, “as used in the revenue acts taxing income, adopted since the Sixteenth Amendment, has the same meaning that it had in the Act of 1909. Merchant’s Loan &Y Trust Co. v. Smientanka, 255 U.S 509, 519; see Southern  Pacific  Co. v. Lowe, 247 U.S. 330, 335 Burnet  v. Harmel,    287 U.S. 103, (1932)

“Whatever difficulty there may be about a precise and scientific definition of ‘income,’ it imports, as used here, something entirely distinct from principal or capital either as a subject of taxation or as a measure of the tax; conveying rather the idea of gain  or increase ARISING FROM CORPORATE ACTIVITIES. As was said in Stratton’s Independence v. Howbert, 231 U.S. 399, 415 , 34 S. Sup. Ct. 136: ‘Income may be defined as the gain derived from capital, from labor, or from both combined.”‘ Doyle v. Mitchell Bros., 247 U.S. 179, (1918)

In Flint v. Stone Tracy  Co. 220 U.S. 107, 165, 55 S.L. ed. 107, 419, 31 Sup. Ct. Rep. 342, 1912 B. 1312, it was held that Congress, in exercising the right to tax a legitimate subject of taxation as a franchise or privilege, was not debarred by the Constitution from measuring the taxation by the total income, although derived in part from property which, considered by itself, was not taxable.” Stratton ‘s Independence, Ltd. V. Howbert, 231 U.S. 399, 417.

 

Be Blessed

Presentment V – Scope of IRS “Income Tax” Collecting Authority

Internal Revenue Service

Please find below proof documents showing the authority of the Internal Revenue Service to enforce provisions of the Internal Revenue Code.  If you have questions or comments please leave them in the “Comment” section for this post.

Exhibit A

Title 26U.S. CodeInternal Revenue Code     https://www.law.cornell.edu/uscode/text/26

The Internal Revenue Code (IRC) is the body of law that codifies all federal tax laws, including income, estate, gift, excise, alcohol, tobacco, and employment taxes.  Jul 18, 2017.

Please note that there are five different kinds of taxes, Subtitle A – E, and only one Procedure and Administration Subtitle, Subtitle F.  How do we know which subsections of Subtitle F apply to each of the five different kinds of taxes?

U.S. Code: Title 26 – INTERNAL REVENUE CODE

 

Exhibit B

Tax Code, Regulations

https://www.irs.gov/privacy-disclosure/tax-code-regulations-and-official-guidance

Internal Revenue Code

Federal tax law begins with the Internal Revenue Code (IRC), enacted by Congress in Title 26 of the United States Code (26 U.S.C.).

Treasury (Tax) Regulations

Treasury regulations (26 C.F.R.)–commonly referred to as Federal tax regulations–pick up where the Internal Revenue Code (IRC) leaves off by providing the official interpretation of the IRC by the U.S. Department of the Treasury.

 

Exhibit C

Internal Revenue Service – Procedural Rules

https://www.law.cornell.edu/cfr/text/26/601.101

26 CFR 601.101 – Introduction.

  • 601.101 Introduction.

(a)General. The Internal Revenue Service is a bureau of the Department of the Treasury under the immediate direction of the Commissioner of Internal Revenue. The Commissioner has general superintendence of the assessment and collection of all taxes imposed by any law providing internal revenue. The Internal Revenue Service is the agency by which these functions are performed. Within an internal revenue district the internal revenue laws are administered by a district director of internal revenue. The Director, Foreign Operations District, administers the internal revenue laws applicable to taxpayers residing or doing business abroad, foreign taxpayers deriving income from sources within the United States, and taxpayers who are required to withhold tax on certain payments to nonresident aliens and foreign corporations, provided the books and records of those taxpayers are located outside the United States. For purposes of these procedural rules any reference to a district director or a district office includes the Director, Foreign Operations District, or the District Office, Foreign Operations District, if appropriate. Generally, the procedural rules of the Service are based on the Internal Revenue Code of 1939 and the Internal Revenue Code of 1954, and the procedural rules in this part apply to the taxes imposed by both Codes except to the extent specifically stated or where the procedure under one Code is incompatible with the procedure under the other Code. Reference to sections of the Code are references to the Internal Revenue Code of 1954, unless otherwise expressly indicated.

(b)Scope. This part sets forth the procedural rules of the Internal Revenue Service respecting all taxes administered by the Service, and supersedes the previously published statement (26 CFR (1949 ed., Part 300-End) Parts 600 and 601) with respect to such procedural rules. Subpart A provides a descriptive statement of the general course and method by which the Service’s functions are channeled and determined, insofar as such functions relate generally to the assessment, collection, and enforcement of internal revenue taxes. Certain provisions special to particular taxes are separately described in Subpart D of this part. Conference and practice requirements of the Internal Revenue Service are contained in Subpart E of this part. Specific matters not generally involved in the assessment, collection, and enforcement functions are separately described in Subpart B of this part. A description of the rule making functions of the Department of the Treasury with respect to internal revenue tax matters is contained in Subpart F of this part.Subpart G of this part relates to matters of official record in the Internal Revenue Service and the extent to which records and documents are subject to publication or open to public inspection. This part does not contain a detailed discussion of the substantive provisions pertaining to any particular tax or the procedures relating thereto, and for such information it is necessary that reference be made to the applicable provisions of law and the regulations promulgated thereunder. The regulations relating to the taxes administered by the Service are contained in title 26 of the Code of Federal Regulations.

38 FR 4955, Feb. 23, 1973 and 41 FR 20880, May 21, 1976, as amended at 45 FR 7251, Feb. 1, 1980; 49 FR 36498, Sept. 18, 1984; T.D. 8685, 61 FR 58008, Nov. 12, 1996]

If you want to determine which parts of the IRC the IRS has authority to administer, you must first determine where the regulations for that section of the IRC are found.  If the regulations are not found in Title 26 of the Code of Federal Regulations then the IRS has no authority to administer that section.

The Parallel Table of Authorities and Rules will allow you to determine which Sections of the IRC the IRS has authority to enforce.

Exhibit D

Parallel Table of Authorities and Rules

https://www.law.cornell.edu/ptoa/uscode

Please note:

  1. The column at the left is the Subsection of the Internal Revenue Code (IRC) in question.
  2. The center column shows the Code of Federal Regulations (CFR) Title that interprets the corresponding section of the IRC.
  3. The column to the right shows the part of the CFR Title that relates to the IRC Subsection in question.

Presentment VI – Current Method of Collecting “Income Tax” From State Citizens

The Internal Revenue Code (IRC) is the body of law that codifies all federal tax laws, including income, estate, gift, excise, alcohol, tobacco, and employment taxes.  Jul 18, 2017.

Please note that there are five different kinds of taxes listed on the Internal Revenue Code 1st page, found on the “About” page, Subtitle A – E, and only one Procedure and Administration Subtitle, Subtitle F.  How do we know which subsections of Subtitle F relate to the taxes that are administered by the Internal Revenue Service (IRS) and which subsections apply to each of the five different kinds of taxes?

According to the Internal Revenue Service Federal Tax Law begins with the Internal Revenue Code, enacted by Congress in Title 26 of the United States Code.  They also tell us that the Code of Federal Regulations is the official interpretation of the Internal Revenue Code by the U.S. Department of the Treasury.   If we want to inquire about the meaning or the true intent of a section of the IRC, we must turn to the Code of Federal Regulations (CFR) that gives the true intent of that section.  If we need to know which bureau of the Department of the Treasury has authority to enforce that particular section, we must turn to the CFR.

If we want to know what sections of the IRC the Internal Revenue Service administers, we must also turn to the CFR.  In CFR 26, 601.101 (b) we find these words, “The regulations relating to the taxes administered by the Service (IRS) are contained in title 26 of the Code of Federal Regulations.”

In other words, if the IRS has authority to administer a code section, its regulation will be found in Title 26 of the Code of Federal Regulations.  We can say the same thing in another way – If the IRS gives a section of the IRC as their authority to take action and its regulation is not found in Title 26, CFR, it is attempting to take action that it has no authority to take.

Please find below Sections of the IRC that the IRS gives as their authority to take actions in the process of collecting Income Taxes from the citizens of the States in the Union.

I am listing the IRC Section, Description and CFR Title giving the regulations for that Section of the IRC.  Please check the Table of Parallel Authorities in Presentment VIII to verify the following.

IRC, 26, 6151                      Time and Place for Paying                      CFR Title 27

IRC, 26, 6201                      Assessment Authority                               CFR Title 27

IRC, 26, 6301                      Collection Authority                                  CFR Title 27

IRC, 26, 6331                      Levy and Distraint                                      CFR Title 27

IRC, 26, 6601                      Interest                                                         CFR Title 27

IRC, 26, 6651                      Failure to File Return or Pay Tax            CFR Title 27

IRC, 26, 6671                      Penalties                                                       CFR Title 27

As you can see, the sections of the IRC that the IRS gives as its authority to take the collection actions against the citizens of the States in the Union are not found in CFR Title 26.

To understand the true meaning of the IRC sections listed above we must read the Sections of CFR Title 27 that relate to that IRC Section.  You will see that they do not apply to the citizens of the Stats unless they are dealing in Alcohol, Tobacco or Firearms.

Everything you need to know to verify this presentment of information is listed on this site in Presentment VIII.

If you have trouble understanding this presentment of information, post your concerns on the “Comment” section.

Be Blessed

Presentment VII – Why should the State Governments Address the Unconstitutional Federal Income Taxation of Their Citizens Earnings?

In order to answer this question we will review the history and purpose of the Sixteenth Amendment.

The Internal Revenue Service tells us that the U. S. Congress passed the Income Tax Act of 1894 but the Supreme Court ruled it Unconstitutional in 1895.  They also make mention that the Sixteenth Amendment was ratified in 1913 and provided for an income tax to be collected.  They did not give any details about the proceedings leading up to its ratification nor did they give us the definition of the Term “Income”.  The true understanding of the meaning of “income” will go a long way in helping us to understand the true meaning the Sixteenth Amendment.

Following a Joint Resolution of the House of Representatives and the Senate of the United States, the Congressional Research Service (CRS) analyzed and interpreted all of the U. S. Supreme Court cases regarding the Sixteenth Amendment to the Constitution for the United States of America.

According to the CRS “the ratification of the Sixteenth Amendment was the direct consequence of the Court’s 1895 decision in Pollock v. Farmers’ Loan & Trust Co. holding unconstitutional Congress’s attempt of the previous year to tax incomes uniformly throughout the United States. A tax on incomes derived from property, the Court declared, was a “direct tax,” which Congress, under the terms of Article I, § 2, and § 9, could impose only by the rule of apportionment according to population.”                        The Internal Revenue Code contains no provisions for an apportionment among the States.

After  a series of decisions the Supreme Court found it possible to allow an excise (indirect) tax on the privilege of doing business in corporate form with the amount of the tax being based on the amount of corporate income received from that corporate activity, no matter what the source of the income may be.  Congress has always had the power to lay excise taxes from the beginning.

The CRS concludes its interpretation with these words, “The Sixteenth Amendment conferred no new power of taxation but simply prohibited the previous complete and plenary power of income taxation possessed by Congress from the beginning from being taken out of the category of indirect taxation to which it inherently belonged . . . .”

As we can see, the Sixteenth Amendment did not give Congress any new taxing power. The Income Tax is a tax on the privilege of doing business in corporate form.  What it did do was that it prevented Congress from taxing income derived from property because of ownership.  Our earnings are our property and can not be taxed!

Regarding the definition of the term “income”, building upon definitions formulated in cases that gave the meaning of or the interpretation of the Corporation Tax Act of 1909, the Court initially described income as the “gain derived from capital, from labor, or from both combined,” inclusive of the “profit gained through a sale or conversion of capital assets” by corporations.

To address the question of why should the State governments step in and prevent the unconstitutional taxing of their citizens earnings, we must take a look at the U. S. Supreme Court case McCulloch v. Maryland.

In this case the State of Maryland wanted to tax United States chartered banks doing business in Maryland.  The United States objected and it went to the Supreme Court.  In order to settle the dispute the Court had to define the taxing power of both the United States and the States.

In addressing the different aspects of the taxing power of Congress the judge goes on to say that “..an indefinite power of taxation in the Government of the Union might, and probably would, in time, deprive the Governments of the States of the means of providing for their own necessities, and would subject them entirely to the mercy of the National Legislature.”

Has that happened in any of the States in the Union?  Is there any of them that doesn’t rely on the federal government to make ends meet?

The Judge goes on to say “The people of all the States have created the General Government, and have conferred upon it the general power of taxation.  The people of all the States, and the States themselves are represented in Congress, and, by their representatives, exercise this power.  When they tax the chartered institutions of the States, they tax their constituents, and these taxes must be uniform.”

In plain simple terms, when the Federal Government taxes the corporations of a State, it taxes its citizens indirectly.

Let us examine these words of the Court.

“..an indefinite power of taxation in the Government of the Union might , and probably would, in time, deprive the Governments of the States of the means of providing for their own necessities, and would subject them entirely to the mercy of the National Legislature.”

How does the unconstitutional taxing of State citizens’ earnings effect the revenue of the States and deprive the States of the means of providing for their own necessities?  If all the money that now goes to Washington in the form of Income Taxes on individuals earnings stayed in the States where it comes from where would it be spent?  No doubt it would be spent in that State.

How mush revenue would that extra money circulating within the States generate for the States in sales taxes and other taxes that would receive a boost from extra money in circulation.  I can answer that for you.  It would generate enough so that the States would not have to go begging for money from the federal government to make ends meet.

That, my friends, is why the State governments must stand up and put an end to the unconstitutional taxing of our earnings.  It would multiply the buying power for the consumers by billions and free the States from the general government’s overreach.

Be Blessed!